
U.S. senators ask consumer watchdog head for details on Equifax probe - rectang
https://www.reuters.com/article/us-usa-equifax-cfpb-lawmakers/u-s-senators-ask-consumer-watchdog-head-for-details-on-equifax-probe-idUSKBN1FS2R1
======
linsomniac
A previous HN discussion, possibly on Equifax now that I think about it, had a
comment recommending the book "The Chickenshit Club", about why the justice
department doesn't prosecute.

I just finished in it a discussion of Enron and their auditors, Arthur
Andersen. The justice department prosecuted Andersen (one of the "big 5"
accounting firms at the time), and there was a lot of backlash about the
Justice Dept "killing Andersen".

The details of it are that Enron was way crooked, lying to investors and the
public saying everything was great, when it wasn't. Andersen audits didn't
reveal this, and also was responsible for increasing document shredding from
80lbs/day to >2,000lbs/day in the few days before the SEC subpoena. And this
was after Andersen had been shown to be negligent in the auditing of Worldcom,
QWest, and Globalcom.

Basically, they recommended fraudulent practices with WorldCom, got caught and
said "We promise we will never do that again" and did it again with Enron.

Justice Dept prosecuted, and then there was all this backlash about the
prosecution.

So, is prosecution of Equifax likely? Seems like we as a country have trained
the government not to.

~~~
creaghpatr
Second the recommendation for Chickenshit Club (also helps interpret the speed
and proceedings of other DOJ cases in play).

Equifax is largely embedded in our business/credit infrastructure and there
would be collateral consequences for all of the businesses who would have to
change as a result of their punishment/demise. This in no way absolves them
from responsibility but DOJ pragmatism towards corporations is they way it
goes, for now.

If AWS (for example) experienced some significant breach, would the DOJ and/or
the public want them punished out of existence? Execs go to jail vs. large
corporate fine? Should punitive damages go towards patching the breach or
refunding customers? It's a delicate balance and I'm personally undecided on
how to scope the fix, even after reading Chickenshit Club.

~~~
cat199
1775 USA: If we don't like the king, we shouldn't get rid of the monarchy -
think of the impacts to the wider society!

2018 USA: If we don't like the executive, we shouldn't get rid of foocorp -
think of the impacts to the wider society!

systemic/structural answers to specific problems are rarely the solution, but
they sure do help you avoid the cost of dealing with the specific problem..

~~~
arca_vorago
"We need to look forward, not behind"...

I hate that attitude so much.

~~~
IntronExon
Anyone who tries to convince you to not study history is _not_ looking out for
your best interests.

------
tptacek
"US senators" here referring to most of the minority party, and none of the
majority party, meaning nothing is likely to come of this until after 2018.

~~~
protomyth
_The letter, which was dated Feb. 7, was led by Hawaii 's Democratic Senator
Brian Schatz and signed by 29 Democrats, including all those on the Senate
Banking Committee, and two independents._ per Reuters, but no actual letter
text.

~~~
tptacek
Right, but the two I's caucus with the Democrats.

There's an argument to be made that the Democrats (who I'm a stalwart
supporter of) have happily polarized this issue, rather than doing something
more quiet while collecting bipartisan support. That what they're doing
_looks_ helpful but really isn't.

~~~
protomyth
Well, yeah. In the 90's or early 00's, it would have been both parties with a
joint press conference. Now we have 24 hour news and don't need cooperation to
get press. At this point working with the other party is just not done. The
congressional leadership of both parties has set a course and its going to be
this way for a while. In some ways, its just a shift from incumbent protection
to trying to gain back seats. Equifax is pretty far down the list politically
anyway, so it probably didn't actually do any harm, but it certainly didn't do
any good either.

I find it amusing that the polling that has failed for multiple years is being
seen as valid this time around.

------
rectang
Was it inevitable that the Equifax situation became partisan?

I'm a market constructivist, and I'd prefer the simplest possible solution
which regulates Equifax and its immense externalities out of existence.

But isn't there also a libertarian case to be made that the credit authorities
are a cartel and should be deregulated out of existence? And if that's the
case, can't at least some of us find common ground?

~~~
sp332
No, the Equifax breach hurt tons of constituents on both sides of the aisle.
The parties had every reason to come together on this. Especially the
Republicans, because the lack of trust will be bad for business. But it seems
the ones elected at the moment are beholden to specific donors and not
accountable to the people they're supposed to represent.

I'm not clear on how deregulation would hurt Equifax and the other reporting
agencies? It seems that enforcing regulations would hurt them in this case.

~~~
mulmen
You seem to have conflated the concepts of representation and protection.

Congress represents constituents, it does not protect them. If constituents do
not demand action here congress will not pursue further action.

The CFPB is supposed to be protecting consumers, not congress.

~~~
sp332
That's a good point. But rectang was asking about protection becoming
partisan, which is playing out in the Senate.

------
tomohawk
Equifax is bad, but the CFPB is much worse. Its rules and actions are immune
to oversight by any other body, including Congress and the Judiciary. It draws
funding directly from the Federal Reserve instead of being funded by Congress.

[https://www.forbes.com/sites/norbertmichel/2017/01/24/the-
cf...](https://www.forbes.com/sites/norbertmichel/2017/01/24/the-cfpb-is-in-
the-crosshairs-exactly-where-it-belongs/#277dedfc1a4f)

