Stop Unfairly Cutting Consumers From Credit Options

Target: Dave Reijo, Acting Director of the Consumer Financial Protection Bureau

Goal: Encourage alternative to credit scores that punish millions of American consumers.

Consumers must increasingly rely on borrowing and loan financing to make big purchases. Unfortunately, many Americans are hindered because their fortunes often rest on the credit score: a restrictive measurement tool that often does not paint a full picture of a person’s reliability on payments. A new provision proposed by the Biden administration could increase opportunity for the millions with less-than-favorable credit scores.

President Biden unveiled an executive order tackling a host of economic issues. Of interest to borrowers is an alternative to the system of credit reporting and scoring central to most current lending practices. This option would allow consumers to download data from their banks and keep it with them at all times. The data could then be shown to potential lenders as a barometer of a person’s ability to pay back credit.

The cash flows and spending patterns revealed by this data could give lenders a much clearer insight into a person’s financial responsibility. For consumers, this option is beneficial because they have a greater scope for demonstrating their credit or loan-worthiness. Often-omitted payments from credit scores such as insurance, rent, and utilities do appear on bank statements and do demonstrate a responsible payer.

Sign the petition below to urge the Consumer Financial Protection Bureau to fully adopt and promote this needed change in America’s lending system.

PETITION LETTER:

Dear Mr. Reijo,

Traditional credit scoring leaves behind a significant percentage of the American population. Weak or non-existent credit scores do not mean a consumer is incapable of paying on time and responsibly. A variety of outside factors can influence these scores, and their role as an arbiter for lending should be long-past.

Different and alternative criteria could open up a whole new world of possibilities for American consumers currently shut out of large parts of the market. The bureau’s own research reveals that just over half of adults in the entire country have prime credit scores. Of the remaining Americans, over on-fifth have bad credit or no credit. The proposal in the recent Biden executive order relating to lending would broaden the horizons of borrowers by enabling them to show a larger and perhaps more accurate picture of their financial capability via banking information.

Please implement this policy as soon as possible and encourage wide-scale adoption by lenders. Give more American consumers a fair shot.

Sincerely,

[Your Name Here]

Photo Credit: Andrea Piacquadio


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