On February 16, the CFPB published a Request for Information seeking information about the “use or potential use” of “alternative data” and/or modeling techniques that might help increase access to credit for consumers who otherwise lack sufficient credit history. As explained by the Bureau in a press release, and as previously covered by InfoBytes, millions of Americans have insufficient credit history to produce a credit score. Accordingly, the Bureau is seeking public feedback on the benefits and risks of utilizing alternative sources of information–such as bills for mobile phones and rent payments–that may be used to make lending decisions involving consumers whose lack of credit history might otherwise exclude them from lending opportunities.
In prepared remarks delivered at a field hearing on alternative data, CFPB Director Richard Cordray noted, among other things, that
Equal access to credit means even more if overall access to credit is expanded and not constrained by lingering uncertainty about how regulators intend to apply fair lending laws. So we have crafted this Request for Information to help us better understand whether and how such uncertainty may be hindering credit access for disadvantaged populations. We also want to learn more about how the Consumer Bureau might reduce that uncertainty while holding fast to the anti-discrimination principles that are the cornerstones of federal law.