tv Credit Bureau CE Os Testify on Credit Record Legislation Part 1 CSPAN March 1, 2019 8:50pm-12:17am EST
watch our live coverage of the 11th annual tucson festival of books on booktv, on c-span2. >> this weekend, on c-span, president trump will speak at the annual conservative political, a conference, live saturday morning, at 11:30:00 a.m. eastern. then at 8:00. vermont senator bernie sanders, formally announcing his candidacy for president in brooklyn, new york, and live sunday morning athlete 9:45 even, new jersey senator and presidential candidate, cory booker, will speak in selma, alabama, on the anniversary of the clash between civil rights demonstrators and police in 1965. known as bloody sunday. watch on c-span, c-span.org or listen to the free c-span radio app. >> now the ceo odd three credit recording bureaus testify on
proposed bills that would change federal revelations for the agencies and consumers. the house financial services commit year hearing is three hours and 25 minutes. >> the committee will come to order. >> without ox the chair is authorized to declare recess of the committee at any time. this hearing is entitle 'owho is keeping score: holding credit bureaus accountable and repairing a broken system. and i now recognize myself for four minutes to give an opening statement. today this committee convened for a hearing on repairing the nation's broken credit reporting
system and holding the major consumer credit bury rows accountable. in october of 2017, committee --s convened a minority day hearing on ensuring the integrity of our countries consumer reporting system and safeguarding consumer data. as ranking morph the committee i invited chief executive officer officers he can would fast,er andon and transunion to hearing awesome three declined to appear and testify. i must sayre that since that time -- i must share since that time i've met with at least two of the chief executive officers. so this hearing without testimony with the crowes from the major credit bureau using long overdue inch to 17, equifax experienced a data breach that exposed the sensitive personal identifiable data of approximately 148 million
individuals around half of all americans. in 2015,er ex-peeron discovereda breech that affected 15 million consumer who applied for t-mobile service. in 2013, all three major consumer credit bureaus, including transunion, identified unauthorized access to sensitive data that they held relating to high profile individuals, consumers did not choose to entrust these companies with their personal information. and they do not have the option today of choosing a different company to maintain their consumer credit records or having their information deleted from the major credit bureau's databases, even following these egregious breeches to make matter worse, all three of the major consumer credit reporting bureaus have used this breach of
consumer data and consumer trust to sell products they're marketing as identity theft protection. it certainly appears they're capitalizing on consumer's fear and desperation despite the fact they are -- there are many free tools that consumers can use to protect their credit. these data breaches are deeply troubling because credit bureaus correct reames of information on millions of americans. the more information they collect, the more people are at risk. when that information is not properly protected. even worse, than credit bureaus vacuuming up of consumer data is a lack of control that consumers have over the data. the consumers dissatisfied with one credit bureau, they can't take their business to a competitor. the credit reporting bureaus, consumers aren't consumers.
they're commodities. this commodification of consumers and their personal data is a core reason why our nation's consumer credit reporting system is broken. in this broken system, credit reports are routinely filed with aread that are difficult for consumerrer to creque, negative information stays on for period longer that inpredictive value. medical debt continues to harm the credit standings of otherwise credit worthy consumers. these problems are pervasive in the credit reporting system. they directly impact how much we pay for our car loan, whether or not we can get a mortgage, and in some cases, whether or not we can get a job. america's consumers deserve better than this. that is why for several congresses i have put forth my bill, the comprehensive consumer
red recording actinism bill is intended to repair the existing statement by shifting the burden of removing the mistakes from credit reports on to credit bureaus and away from consumers, placing limbs on credit checks for employment purposes, reduce thing time period that negative items can stay on credit reports, among other reformes. today, we will also discuss legislation to protect innocent consumers affected by federal government shutdown from having their credit damaged. while these are all critical reforms to the existing system, i believe that we need to ask whether the system is so beyond repair that we need to completely rebuild the entire consumer credit reporting sector to truly put consumers fir. with that, the chair now recognizes the ranking member of the committee, the gentleman from north carolina,
mr. mchenry for five minutes for an opening statement. >> i want to thank the chairwoman for yielding and i want to thank you for holding this hearing. i do agree with you, chairwoman waters, this hearing is a long time in coming, and is necessary. the system is broken. while the credit scoring system provides us with a foundation that allows mentales of mentales 0 access credit quickly and efficiently the credit reporting system is in need of major repair. the fair credit reporting act, the principal statute governing the industry, and i would dare say creating an enhancing the stand offering the three before us today, was written for another time. a preinternet era. there is no better example than the -- created than the three
sitting before us today. our credit reporting system show be well-served by increased competition. it should allow for innovation that mirrors the changes in the financial services space generally, and society more dramatically. the dispute resolution process should be more consumer friendly, more user-friendly, a clear regulatory regime should be instituted. the chairwoman and i have drafted legislation over the years to modernize and create be better process for consumers. while our approaches may by very different, we both know that we need to find a way that works better for the people we represent. part of our focus should be to understand what happens to the massive amount of data that flow into credit bureaus. the reality today is that if you have a credit file, your
information is probably on the dark web. that is a result of equifax data breach which put two out of every five americans most sensitive personally identifiable information at risk. moreover for me, the breach demonstrated the the come my send si and technological inadequacies of a corporation that in okay cases knows more about the people -- knows more about people generally than it does about themselves. that's unfortunate. so, it's incumbent upon each of to us understand where the data goes, how it's used, and how it's protected, and how we can more efficiently determine itself accuracy. ...
is still predictive of a consumer's ability to repay loans. i think that's an important discussion for this hearing. one of the best ways to help people rise above the poverty line is to allow them to build more thorough financial records. that means expanding the information that's collected, that consumers can build so that they can be deemed credit worthy. the bottom line is that we must do more in striving for innovation in a more consumer-facing process. i think that means more competition. i think that means not simply nationalizing these three before us, or creating a government burrow to do it. but having greater competition,
forcing industry to compete for consumers while consumers participation and -- opportunities to enhance their bottom line over the long-term. i hope today's conversation is a productive one. i think -- i thank both panels, both that are here and those in the audience waiting for the second panel, i look for their testimony, for their time on this important matter. chairwoman waters, i hope we can work together to build and enhance what a much needed statute in need of reform. >> ms. waters: the subcommittee recognizes mr. meeks for one minute. >> mr. meeks: with my one minute i will be very brief, framing what i see as the fundamental
issues we should consider today and going forward. first, consumer reporting agencies behave like de facto utilities, but are not subject to oversight or regulations comparable to that or utilities. cra captured data on two-thirds of the american population, and nearly every house hold it is nearly impossible to circumvent them, and the industry is concentrated in just three companies. second consumers are the data, the source of conflicts but not the clients. the entire industry is built on capturing, analyzing, quantifying and trading consumer's personal information but consumers don't even own their own data and have limited access to it. and third, era's and um perfect information impact the working poor by depriving them access to credit and hurting their ability to get a job or be approved for rent or getting an apartment.
>> ms. waters: today we have two panels, mr. mark begor, ceo of equifax, mr. craig boundy of experian north america. mr. begor was named chief executive officer in 2018 of equifax. mr. begor served as managing director in the industrial and business services group at wereberg a private equity firm based in new york city. prior to that mr. begor spent 35 years at general electric. mr. peck joined transunion in december 2012 as president and ceo, prior to transunion mr. peck was the -- a fts100
company where he served as ceo of the lexus nexus risk solutions business from 2004 to 2012. mr. boundy is ceo of experian north america, he joined experian in november 2011, as manager and director of experian uk and heroine. prior to joining experian mr. boundy was ceo of a uk-based management and information technology consultant firm, so without objection your written statements will be made part of the record. each of you will have five minutes to summarize your testimony. when you have one minute remaining, a yellow light will appear, at that time, i would ask you to wrap up your testimony so we can be respectful of both the winses and the committee members time. mr. begor you are now recognized for five minutes to present your
oral testimony. >> mr. begor: chairwoman waters, and members of the committee, thank you for the opportunity to be here today. i'm mark begor, chief financial officer of equifax since last april. let me begin by expressing my personal regret for the disruption that our 2017 cyberattack caused on millions of americans. i am here today because we recognize there are things we can do better. credit-reporting agencies like equifax are trusted to protect personal data we hold to help consumers access credit and help financial institutions make risk decisions. by having their credit data at equifax consumers have access to more affordable credit through loans regulated by federal and state laws. last year in the u.s., equifax delivered $2.3 billion consumer credit files to credit lenders,
and with this hearing today, with the help of lenders, nearly a million transactions, mortgages, credit cards, apartment rentals and auto loans will be completed. as you well know, consumers are at the core of what we do. and equifax is taking significant steps to become a more consumer-focused credit burrow. since the 2017 cybersecurity incident, equifax is invested more than $80 million to assist impacted consumers. when we announced the incident in accept 2017 we offered an identity-theft and credit monitoring free for all americans regardless of whether they were impacted by the cyber incident. last november, when the service was coming to an end, equifax decided voluntarily to extend that protection for another year. going forward, we are investing over $50 million to make it easier for consumers to interact
with us, both in our internet and call centers. we are simplifying our online dispute process, and improving our phone systems, and reducing the time to answer phones. we want to make sure that we are consumer-friendly burrow at every step of the way. credit bureaus, data furnishers and consumers all share an interest in maintaining accurate credit data. the current regulatory framework requires credit reporting agencies to promptly investigate any dispute or inaccuracy, and expect lenders provide credit agencies with accurate information. let me be clear. a single error on a consumer's credit report is one error too many. i understand how frustrating it can be for consumer to feel helpless. when dealing with a credit bureau like equifax. when i hear stories about
consumers who have difficulties dealing with us it strengthens my resolve to push equifax further to improve our consumer support. i'd like to conclude by reinforcing our focus around data security. we are committed to building a culture with in equifax where security is part of our dna. i've made it a personal commitment that we will be an industry-leader around data security. we've added experienced senior leaders and board members to enhance our security and technology skillsets and in 2018 we added nearly a thousand incremental it and security professionals to our team. i also want to -- you to know we're putting our money where our mouth is. we are increasing our technology in security budgets by 50%, totaling $1.25 billion, between 2018, and 2020. we recognize that being part of
an industry leader, is actively sharing our security learnings and best practices. last year we established a number of meaningful partnerships that will raise the bar for the entire security community, by leveraging our joint learnings, we look forward to collaboration for security and beyond. to close y like to thank chairwoman waters for holding the meeting, equifax is committed to consumers helping them to manage their lives in a secure way. we are using unprecedented resources in technology, security, and people, as well as making it easier for consumers to manage their credit reports are equifax. thank you for the opportunity to testify.
>> ms. waters: you are now recognized mr. peck. >> mr. peck: thank you for the opportunity to appear before you today. my name is jim peck, and since 2012 i have been fortunate to be the president and ceo of transunion. transunion is a global company headquartered in chicago with nearly 4,000 employees in the united states. and over 7,000 worldwide. consistent with our mission we seek to help people through the power of information. we strive to ensure fairness for consumers in the marketplace, and help our businesses identify underserved markets and mitigate business risks. our work helps ensure the economy is built on a solid credit foundation. i believe in transunion's mission and will continue to be proud of the progress the company has made under my leadership after i retire from my position on may 8. the many people at transunion have improved innovative new products to
advance consumer access to free credit information and education, and substantially enhance the company's cybersecurity program. we appreciate the committee's foresight in asking how we can make the credit system even better. we particularly appreciate the chairwoman's leadership on these issues. the credit bureaus and all entities have a responsibility to make sure all information is accurate. we match these to 230 million americans. while we achieve accuracy in almost every instance, given the extraordinary volume of the information we receive, it is inevitable that sometimes errors occur. we recognize no statistic of error can be understood.
we address the issues, and we learn from our mistakes and hold ourselves accountable. we try to improve every day. we know that inaccuracies in credit files are almost often a result of legitimate disagreements between consumers and lenders, that's why we continue to invest to simplify the process for consumers to resolve disagreements with their lenders. i would also like to share some suggested improvements that would transunion would believe further reduce inaccuracies, and consumer disputes and increase financial inclusion. first, more timely reporting of key credit events like loan pay off, could enhance credit report accuracy, and resolve issues before consumers need to dispute them. second, the process for reporting of student loan information should be enhanced to provide better support for our nation's student borrowers. third, stakeholders should expand the use of alternative
data such as positive cell phone data and utility payment data as this has the potential to substantially increase the credit eligibility population. through innovative solutions and incorporating trending data, transunion has helped over 60 million credit invisible, or credit disadvantaged people in greater access to credit. many significantly better terms and some for the very first time. transunion also believes that individuals should have access to their credit information and should be empowered to lock or freeze their credit wherever, and whenever they choose. we are proud of the fact that each year over 160 million americans have taken advantage either directly or through a partners of free access to their transunion credit information. critically i wanted to finish my remarks today by discussing what we at transunion consider an absolute imperative. the need to keep consumers data safe.
i can confirm that transunion has not had a material event that has resulted in the loss of consumer credit information. virtually every industry in government is under perpetual attack through ever evolving and cyber criminals and faces new vulnerabilities that need to be addressed. ours is no different. transunion follows the guidelines, and we have ramped up resources and capabilities over the last six years, and are consistently upgrading systems to keep pace. we would support and participate in a task force of government and private industry to work collaboratively against cybercrime. in closing i am proud of the innovations transunion continues to bring in the mandatorier marketplace to expand created credit to millions of hard-working people, thank you for the opportunity to testify here today and i look forward to your questions. >> ms. waters: thank you mr. peck, mr. boundy you are recognized for five minutes to
present your testimony. >> mr. boundy: members of the committee, i am craig boundy, ceo of experian north america, and i thank you for inviting me here today. i appreciate the opportunity to discuss important work our efforts to make consumers a central focus of our business and how we're investing to improve the credit reporting system. let me begin why credit bureaus exists, and how consumers benefit. credit bureaus accurately compile individual's payment histories from creditors so that lenders can use the data to make better lending risk decisions. good lending decisions for credit cards, autos and mortgages mean fewer defaults. fewer defaults mean lower cost for consumers, and greater eligibility. they help stabilize the soundness of the consumer's lending sector. what we hear most often from consumers, from and regulators, and everyone wants us to focus
on clear objects. ensure the information is secure, make credit reports accurate, and manage a data dispute system that is easy for consumers to use. experian has heard and responded to this call, and shifted its focus to the consumer. the number one priority of experian is keeping consumer information safe, and secure. we began increasing our investments in data security well before the equifax breach and we continue to do so. experian is committed to achieving the highest possible levels of data security and integrity and will continue to work on our own initiative, and with our regulators to find opportunities for improvement. we support enactment from a federal standard, and have supported such since 2005. experian also supports the meet committee's goal of underserved consumers. they may not have credit card, but they make rent, and utility payments. experian announced an
opportunity for consumers to include certain information from a bank account on to credit report. this free program, called experian boost allows consumers to opt in sharing utility and telephone payment information directly to their credit files, improving their credit score. they can contribute information from the bank accounts including the length of time accounts have been open, and frequency of activity. this is particularly helpful to consumers who are new to credit, or have had financial challenges. we want to work with the committee to find more ways to expand financial inclusion. experian also supports the meet's goal of enhancing the accuracy of credit reports. we believe the best way to achieve and maintain improvements on behalf of consumers is through a robust, and continuously supervised examination program administered by the consumer protection burrow. this program should continue to
focus on ongoing improvements by both credit bureaus and lenders as well as other entities to furnish information to credit bureaus or use information from credit bureaus. we are equally focused on data accuracy. our goal is to reach as close to 100% accuracy as is possible. we have invested heavyally to move closer to achieving that goal. our data quality team of more than 100 people manage a rigorous process of vetting data from lenders. we apply more than 400 data checks on each record submitted by a lend, and summarize a report back to the lender each month. if data provided to us by a lender does not melt our standards we reject it. an important component of accuracy is to make credit reports accessible for consumers to review and easily dispute data. in march of last year experian announced a online dispute portal, including an optimized
version to make it easier for consumers to submit disputes, and receive the results of the disputes. i'd like to close saying experian is proud of the improvements we've made. our employees come every day to want to help, and we are committed to the continuous improvement of our business for the benefits of consumers, lenders, and the economy. thank you for inviting me to testify. i look forward to answering your questions. >> ms. waters: i now recognize myself for five minutes with questions. mr. begor i understand you were not at equifax when the massive data breach happened in 2017, but you run the company now so i have a few questions for you. equifax initially offered one year free co2 monitoring for those affected by the data breach. the company then offered a second year of free credit monitoring. but instead of providing this
service itself you sent these customers to experian for their services. consumers had to sign up by january 31st, 2019. and if they didn't i understand the initial credit lock they had on their data expired. so how many consumers signed up for the second year of service and can a consumer watching this hearing who may have been affected by your company's data breach still sign up for the free credit monitoring? >> mr. begor: we offered the free credit monitoring after the data security breach to all americans, not just those impacted by the data security breach. and 4 million americans took advantage of that free credit monitoring service. as you pointed out we extended the credit monitoring service in november 2018 for another year, and we decided to use experian versus equifax, and i don't have the exact amount of how many are using that service but i'll get
back to the chairwoman with that data. we are not offering any credit monitoring for our consumers, but they can freeze their credit using senate 2155 pus in place last september, and we offer a free lock and alert product, a equifax product. >> ms. waters: i want to understand why you referred them to experian. >> mr. begor: we moved it over to experian because we believed it was a more appropriate way for the service to be provided in some of the regulators we were working with and the discussions we had with this. >> ms. waters: despite the fact equifax is a burrow providing these services you're saying that in the case of the breach, you didn't have the expertise, the ability to handle your own consumers? >> mr. begor: chairwoman waters it wasn't the expertise, we
moved quickly to offer the service right after the data security breach. >> ms. waters: then why did you refer them to experian. >> mr. begor: as i mentioned earlier in my comments in discussions with the regulators, the discussion was they thought it was more appropriate for a third party to provide the services than equifax. >> ms. waters: how many consumers signed up for the second year of service. >> mr. begor: as i mentioned a minute ago i don't have that at my finger tips, i believe its in the neighborhood of 2 million that moved over to the experian service. >> ms. waters: can they still sign up for the free credit monitoring service? >> mr. begor: they cannot. >> ms. waters: why not. >> mr. begor: the consumers that decided to take advantage of it we think we took care of them in the fourth quarter of 2017, the 4 million that did sign up, and i started to say we offer a free lock and alert product where they can lock their credit file for free using a mobile application, and that's available to all americans at no
cost. >> ms. waters: so what you're basically saying is you took care of all harmed consumers, and you don't need to expand it or do more. >> mr. begor: i didn't say that chairwoman waters, i did say we took advantage of all americans that wanted to take care of it whether they were impacted or not in the fourth quarter of 2017 so we opened it up to every american available and as you know there are other services available that want to lock their credit file through each of the three bureaus, and with equifax our online and mobile application. >> ms. waters: i only have a few seconds left and i want to know, your company sales equifax complete premier, which your website described is and i quote "our most comprehensive credit monitoring and identity theft protection product" but why should consumers pay $19.95 a month when a lot of being
offered can be done for free. >> mr. begor: i'm not sure i understand the question. consumers have a choice whether they want to take advantage of the product, it's also available from equifax, and other credit burrows, multiple sources of credit protection for consumers that want to avail themselves of it. >> ms. waters: i don't think that's a sufficient answer to that question, but my time is up, and i'm going to give me ranking member an opportunity to have his five minutes of questions, thank you. >> thank you chairwoman waters i'd like to thank you for being here today. i've read your testimony, we've reviewed it, one thing is clear to me. not one of you discussed in your testimony increased competition in the industry. you don't even reference competition with one another.
in fact, mr. begor, you stated millions of americans have benefited from the efficient structure of tekra -- yet what i see here is a olgoneally, we have a -- the three of you not really competing and the consumers are the one's that are losing out. i think that's a problem. that state of limited competition has real ramifications. so, how does an oligolopy protect consumers? okay, i'll take that as an answer. so -- each of you referencing your testimony that you have efficient way, quick simple way to lock your credit. if somebody's concerned about for whatever reason their credit
file being stolen or accessed by other folks. , is that correct? you all have a very quick easy process online for that? >> that's correct, yes. >> yes. >> yes. >> mr. mchenry: and you also have referenced all of you have referenced the changes in senate bill 2155, some of you referenced the fact that we talk about synthetic identity fraud. for kids, right? and you all enable parents to lock kids credit scores. their children's credit, right? >> that's correct. >> >> correct. yes. >> mr. mchenry: and you encourage parents to do that if they have concerns. >> correct. >> correct. >> yes. >> mr. mchenry: so let's compare the two processes. you have this innovative process which you talk about which americans can freeze or lock
their credit with a simple click, and anyone listening can go on the three websites, and they advertise this. i'm a parent of two children, one is four, she hasn't told me she has a credit card yet. the 13-month old i am concerned. [laughter] but i looked at your process to freeze my child's credit. while i can very easily and efficiently click through a process and do it online to lock my credit, for my child, i'm required to get a copy of my social security card, my driver's license, and their birth certificate, a copy of both of my children's social security cards -- my birth certificate, not just my child's my birth certificate as well. a copy of my child's birth certificate as well as their social security cards,
documentation, either through a birth certificate court order law executed power of attorney or foster care attorney that my wife and i are their parents. in your efficient process, every single one of you,ish the three of you have a process by which we use the united states postal service to mail photo copies to you. of this sensitive information. so, why is it that when it's protecting my data, it's an efficient process, and why is it such an inefficient process using a ant acquainted analogue paper system to protect kids? why isn't it as simple as a click? and how do i know that those documents are secure? when i mail it to you. you also reference the fact those documents will not be returned to us -- to the sender.
so with a nearly a million kids exposed to synthetic identity fraud each year, you've made this process needlessly slow, because you don't think it in your corporate interest to make the process more efficient. nor is there competition for you to add in some better way for parents to do this. so, how do i know that your system takes these paper copies and ensures they're delivered to the appropriate department, the information on these pes of paper is protected through secure chain of custody, and the paper copies and information are being destroyed at the end of the process. this is an enormous amount of trust there. so -- the frustration i have here is that i don't see that vibrant competition which is needed for this industry to actually help consumers in the
way that the law should instruct. that's why we need to update the law, and need more competition, and simply taking you three down to one, and putting you in government is not the solution either. so we need to make sure there's competition so that consumers actually can win, and parents can have a more efficient way to protect their kids. i yield back. >> ms. waters: thank you very much. we'll move on to the next member. the gentlewoman from new york is recognized for five minutes. >> ms. velazquez: thank you chairwoman. and let me start by thanking you for holding this important hearing. the first question i would like to address it to the entire panel. concerns about credit reporting errors. credit, stolen credit information and identity-theft
have cost consumers to purchase additional credit, monitoring services. on all the products from all three of your companies. for example, experience credit works premium program allows consumers to check their credit reports every day, from all three of your companies and charges consumers $4.99 for the first month, and then $24.99 for each additional month. do you think developing products like this help to help consumers guard against your own negligence and then turning around and selling them back to the consumer at an extraordinary-up allows you to profit in part from your own deficient practices?
mr. begor. >> mr. begor: yes, congresswoman, we offer a product similar to that but as the congresswoman knows there are many avenues consumers can use to protect their data. one is the "free freeze" that's available through senate 2155, and equifax's case many americans have taken advantage of that, and as i mentioned in my testimony, we offered out a free for life product separate from the "free freeze" that's is phone-enabled tool that a consumer can lock their credit file and open it up at their discretion. so get full control over their credit file. >> ms. velazquez: thank you. mr. peck. >> mr. peck: we've created a business model that over 160 million americans a year are getting free credit monitoring, and in addition to that they're getting credit education. >> ms. velazquez: mr. boundy. thank you. >> mr. boundy: with experian you can come online and get access
to credit monitoring for free, and i think this is a important step as well as being able to freeze your credit. >> ms. velazquez: mr. boundy, queue and to me what makes your product so much better that requires you to charge $25 compared to the $5 in the first month? >> mr. boundy: there are costs involved in providing the product. >> ms. velazquez: but what is extraordinary about your product the second month, compared to the first month? why do you go from $5 to $25? to fix deficiencies that you created in the first place, that could cost me, my ability to access credit? >> mr. boundy: our products are used by many people in the u.s. and they enjoy the product we provide that helps them. >> ms. velazquez: can you answer to me why such a big difference
from 5-$25, do you understand what it means for low-income families, consumers, what does it represent $25 a month? >> mr. boundy: i do, and we offer a free product that consumers can take advantage of as well. >> ms. velazquez: again, this question is for all three of you. in march 2017, the cfpb bruised a supervisory report which found cra lacked quality control policied and procedures to test reports for accuracy, had inconsistent practices for vetting furnishers, and have insufficient monitoring and oversight of the furnishers once they were approved to provide data. so my question is, how do each of you ensure the accuracy of the report you are producing, and test the voracity of information furnishers are
providing to you? yes sir? >> as i mentioned in my testimony we believe one error is one error too many. we've got an extensive team of data quality people that are auditing furnishers inputs, and as i mentioned in my testimony we're investing heavily in our dispute process to make it easier for consumers to help them get a dispute fixes. >> ms. velazquez: and what are the oversight procedures you have in place. >> we have an extensive data quality team,. >> ms. velazquez: what are your procedures for taking action against any furnisher that's failed to comply with your established requirements. >> we will stop taking their data, congresswoman. >> ms. velazquez: so what is the maximum number of times a furnisher's data can be rejected before you stop accepting information from them. >> i don't have the number at my
fingertips. >> ms. waters: we must movie to the gentleman from florida, mr. posy, recognize for five minutes. >> mr. posey: thank you for appears here today. i have a two-part question for each of you. we can go left to right. your testimony touches on synthetic identity fraud. and so my questions are, what steps can we take to curb this type of fraud, and what role do social security numbers play in synthetic identity fraud? and obviously is there a more technologically advanced approach that we could or should be taking? >> thank you congressman, that has been a growing problem and has been for a long time. not only for credit bureaus, but for financial institutions at
lodger. we're attacked daily by posers, from people trying to access the personal information we've had. we've invested in multi-factor identification to make sure you are you and when your trying to access your data, but even with that we have a small number of fraudsters that are successful and accessing our data. awards to your question about the social security numbers, we're a member along with i believe the other credit bureaus with a better identity coalition that was formed i believe a year ago, looking at alternatives to the social security number, but to me the real approach is just having more rigor around identification of the individual when they're trying to access sensitive information. >> mr. posey: thank you. mr. peck? >> mr. peck: thank you congressman. so the problem of synthetic identification, isn't just a credit industry problem, it's a problem through the united states and the world. i think we need to do multi-factor authentication, and i think we need to think about a
government task force that includes our industries, but other technological industries and comes up with new ways of -- to check for identities and i think we have to acknowledge that the social security number while it is a fine identifier is not something that can be used by itself. as an identity check. so we need to augment that and admit that it's served its purpose, and now use new technology -- maybe biometrics, to come up with -- more and even better authendication. >> mr. boundy: i think it's an important question something we're all concerned about, and i think we'd be happy to work with the committee and suggest ideas to further improve the way we address the threat of synthetic
identity fraud. >> mr. posey: what would happen to the availability and cost of credit if we eliminated entire categories of debted from credit scores? >> i think that's an excellent question congressman, we're big believers mostly to financial institutions that are making the financial decisions that more data and accurate data results in the best consumer decision. in eliminating types of data from consumers, our view and i think the financial institution's view could raise the borrowing costs for all consumers which is why we believe accurate and complete information is most important. >> mr. posey: mr. peck? >> mr. peck: congressman, i agree, more and different kinds of data we've suggested. so utility data, cable bill data, cell phone data, these are the kinds of data that can quickly get someone who may have stumbled to prove they're back on the right track and are good borrowers, so i would consider
that first. awards to taking off data, i think that something that the industry should study, and understand the implications. once they understand it, we can make an informed decision of whether we should do that or not. >> mr. posey: thank you. mr. boundy? >> mr. boundy: i think it's important we're able to have the correct and accurate information on a credit report that allows as many people to gain access to credit. that's why we've launched experian boost product, which allows them to submit information on to their credit file for free. >> mr. posey: i yield back. >> ms. waters: now the gentleman from new york is recognized for five minutes. mr. meeks. >> mr. meeks: let me ask you all four this question first. would you agree with the statement that although consumers may be the clients of your data, they are not your primary clients but the source
of your data -- of data? >> thank you congressman, as i said in my oral at home that's not how we view it. that's now how i view it since i joined equifax last april. we have been clear internally and externally that we are consumer-friendly credit bureau, and we are investing heavily in the consumer, $50 million in technology to make it easier for consumers to access their credit file and process disputes they may have on their file. >> mr. meeks: so then who owns the data? do you own the data? or do the consumers own the data, who owns the data? >> there's no question congressman, it's the consumer's data. >> mr. meeks: so if it's the consumer's data then where and how does the consumer control that data? for example, if a consumer decides that he wants -- he or
she wants to opt out, entirely from having their information tracked by your companies, if they do what is your estimate about such a person's ability to access credit or quickly comply with a background check? >> i think the congressman knows the credit bureau system we have in the united states is the envy to many countries around the world. consumers have the ability to freeze their file and gives them the control to decide if they want to lock their file from access by any financial institution, and then they can unlock it at their discretion, and as i mentioned equifax rollout a mobile application called lock and alert that gives them even more control to lock and unlock it when they're out getting a new car. >> mr. meeks: would the consumer pay for that? >> they do not, it's free for life, and offered for free. >> mr. meeks: and the question is then -- would the consumer because i go to mr. peck. in this question, mr. peck, when
your agencies, you control oftentimes, particularly for poor people, the determination of whether or not they can get a job. sometimes because they look at their credit rating to make the determination whether they can get a job or not. and my concern then is for that poor person, that is trying to get a job and they're declined, them having access and being able to go and through and look through their own data in a timely form so they can get the job, what does your company do to make their that happens so that's not a an additional expense to the person who is already struggling. >> mr. peck: if the credit report is the reason a consumer doesn't get a job. the employer is required to tell them what information in the credit report caused them to not get the job. and then there is the avenue of free access to your credit report through one of many
avenues today to look at that report. >> mr. meeks: so because -- what i'm trying to drive at when a dispute arises, who other than the consumer is tasked with advocating on the consumer's interest and position, is there anybody? >> mr. peck: when a consumer has a dispute, they submit it to -- if it were transunion, they would submit it to transunion. one of many avenues. we have an obligation within five days acknowledge that, and get that to the lender who is -- or whoever is causing the issue, and then we have an obligation to get back with them within i think it's 30 days. it ends up our statistics show we get back with them within five days, 25% of the time. >> mr. meeks: but there's no other advocate because what happens oftentimes especially with someone who is poor and they're trying to make their life better, there's a statement, i don't know whether
any any of you have been poor before, but there's a statement that james baldwin made, that anyone -- >> and then they have to end up paying for not having an -- then they suffer. and the time out of this poverty that -- to get out of. and maybe because of the lack of competition -- and the member and the chair we're talking about, that they have no place else to go. and it seems as though the three of you basically can control that and that person, a lot of time, and that person, therefore is out of a job and cannot find their way out of poverty, i yield back.
>> ms. waters: the gentleman from missouri, mr. luke meyer is recognize for five minutes. >> mr. luetkemeyer: madam chair, i think the lady of missouri is up next. she has an emergency she needs to attend to, so i'll reserve my time for later if you allow her to take her five minutes now. >> ms. waters: the time is granted to ms. wagner. >> mrs. wagner: i thank you for your courtesy, and my colleague from missouri for his kindness also. i thank the chairwoman for hosting the hearing today. to examine the current state of america's credit reporting system. consumer protection and monitoring the accuracy of credit scores is an issue that is critically important to my constituents, and certainly to everyone across the country. mr. begor. we know that one of the best things that cybersecurity professionals can do is to band together.
sharing advice and expertise about what works and what doesn't. how does equifax been helping the broader -- i'll call it chief information security officer community? >> thank you as i mentioned in my oral testimony this morningist one we've taken on quite strongly since the data security breach in 2017. not only with our competitors, we're sharing with what we've learned and our industry and financial partners and others that have been impacted. we have forms that we've set up in communities and technology teams are sharing quite openly what we be learned of what happened at equifax, and how we're investing the $1.25 billion of incremental investment we're making between 2018-2020, really sharing that with others quite only, because we believe this is a war that won't end. not only the credit bureau, financial institution, company in united states, and government agency is attacked daily by fraudsters and nation states
that are trying to attack our data and security. >> mrs. wagner: and building on that, i'm grateful for your leadership, you've been a breath of fresh air at equifax, and if you could tell me a little bit about how your workforce has changed since the 2017 cybersecurity incident. i understand that you have a larger security team, but tell me more about what you've done to ensure you've hired employees with the right expertise, and how you've drawn in new talent. >> mr. begor: yes, as you well know we've added resources in st. louis and atlanta, which are two principal centers in the united states. we've added 1,000 incremental people in the united states which is about a 20% increase in our u.s. workforce. and that's part of the $1.25 billion incremental spend we're going to do around technology, and we've attracted the best. we believe people are going to differentiate how we operate in
security and technology and that's why we've had a high priority in bringing in new and strong talent. >> mrs. wagner: how would eliminating, inaccurate information -- >> if we eliminated accurate incorrect information. if we eliminated the wrong information -- i think as we look at the properties of burrows around the world who have attempted this the cost of lenged has increased substantially to the consumer. because they have no way of differentiating between the different. >> mrs. wagner: ultimately the consumer is going to pay. >> that's what we've seen, that's why we strongly suggest we look at ways to bring in more information, especially things like cell phone payment data, other utility type data that we all deal with, and there is a
cfpb study that shows in people in rural and highly urban areas are more positively effect by drinking the data in because it brings them back into the good standing or back into the credit community, much more quickly than relying on the traditional forms of credit reporting. >> mrs. wagner: mr. peck, briefly in what way does a consumer have control over their data as transunion. >> mr. peck: at transunion we believe that we are the stewards of the data. the consumer can lock and unlock, freeze or unfreeze their data. they can opt out of the data when it's used for firm offers of credit which is a form of marketing so they have complete control of when it is used. >> mrs. wagner: thank you mr. peck. mr. boundy, how does it help people from addresser communities thrive in your
corporate environment. >> mr. boundy: as an employer deinvestment inclusion is a important part of how we run our organization. i'm proud of and our employees are proud of whether it's from looking teams to form individual clubs and create communities, or employee resource groups that allow them to represent the community or how we recruit our staff. it's a very important part of how we run our company. >> mrs. wagner: i thank you everyone for their courtesy and i yield back. >> ms. waters: the gentleman from missouri, mr. clay is recognize for five minutes. >> mr. clay: thank you so much madam chair, there are quite a few missourians on this panel. but let me ask the three of you, and i'm -- i want to read a quote for a recent story. and this is from francis creighton, president and ceo of consumer data industries
association. -- in the report they're talking about the legislation that are negatively impacting them and we think that's really problematic. so my question to the three of you is that problematic for consumers to be able to challenge something on their report, have it removed or at least bring it to your attention, and does it indicate that the industry may need a shift in culture? because you are putting up quite a bit of resistance to changing the culture that you now operate under. as far as credit reporting burrows. and these and understand -- the question is about the impediments and barriers that you put in front of people who are trying to close the family wealth gap, or trying to close the gap in home ownership.
that's the impact that your scores have on families. so let me start with you mr. begor. does the industry need a shift in culture? >> mr. begor: congressman as i mentioned in my oral testimony this morning. our culture is shifting, we've always been strongly focused on the consumer, it's a priority for me to support consumers, and as you talk about errors on credit files we're really enhancing the processes and the focus around helping a consumer because there's a lot of anxious. if they're trying to get a mortgage or school loan or auto loan, and there's an error on their credit file we are obligated to help them fix that. if the error is an error get it fixed so they can improve their score or standing. >> mr. clay: so how says is that for a customer to come to your company and say hey, that's a mistake, and how long does it take to get corrected or taken off the report. >> mr. begor: as i mentioned in my oral testimony we're
investing $50 million in the coming months to enhance our capabilities to have mobile online access as a ranking member talked about having to send documents through the mail, send them through the web to us in a secure way, and there's regulations on how quill we have to respond, we respond i think it's 25% within the first 7 days resolve that dispute over 50% in the first 14. and we're obligated to complete that process within 30 days. >> mr. clay: okay, mr. peck s there a resistance to a cultural shift in your industry. >> mr. posey: i think our culture is very much shifted towards the consumer. no one wins when there's an inaccurate report. especially the consumer. so we've tried especially over the last four or five years to put in processes in place that are easy for the consumer to do. so for example, write on their credit report we have a button
where they can say if you're disputing this, press the button what are you disputing. not only our own service but services like credit karma, and we believe that has driven unthe amount of disputes that we've had or people just asking questions about their credit to improve it. i would suggest if it was my testimony that especially in the area of student loans, the reporting process is very confusing. i think it's known that it's confusing and it does not help the first time -- these are people paying back their loans for the first time. and we would love to work with this committee on doing something about that. we also think all data is not alike. so if someone is paying off their loan and they know they have a morn coming so maybe they want to pay off their auto loan, having the record show much more quickly it's paid, would reduce disputes but also make the person's life easier. so we would strongly --
>> mr. clay: before my time runs out mr. boundy, has your company made a difference in the number of disputes have they gone down? or is the culture the same? >> mr. boundy: congressman i think our company has made a significant shift on concentrating on the consumer. whether that's making it easier for consumers to dispute, our online dispute portal does that. or more importantly looking consumers to contribute information to improve their credit score. >> ms. waters: now the gentleman from missouri. is recognized for five minutes. >> mr. luetkemeyer: thank you for being here today. it's important for a lender to be able to understand the risk their about to take. lenders want to lend money. they don't make money unless they lend it. in order to make a accuratestition on whether to do it they have to analyze the risk
their taking when they lend that money. so for your business to be a part of their lenged decision is important and to have accurate information is important. i know that there's been discussions today about some of the things you've done or how you've improved your process and data, but i'd like to ask you a couple of questions and go down the line. can you give me an example of an individual that you helped as a result of some of the new programs that you've instituted. in our communities where we have large employment centers like atlanta and st. louis we are involved with local charities that are doing credit coaching and one experience has been brought to my attention of a woman who was unbank said. she was receiving our paychecks via a debit card, there's fees
associated with that and through our coaching in partnership with the agency we were able to help her open a checking account, and she then graduated into getting a credit card and it's though elements of trying to help that we're really quite supportive of. >> mr. luetkemeyer: mr. peck? >> mr. peck: i'll talk about something in the broad sense and maybe specificalliy. so we introduced a product that included trended data. so we, over a 30-month period you could see not only what a person's account was but how they're paying it, and that ended up having a -- a large impact on helping people who were maybe starting from a bad spot in their credit to more quickly prove that they were acting financially responsible. the same effect happens with alternative data and i keep quoting the study that just came out that has a higher impact on rural areas, and highly urban
areas. and our studies show 60 million people have gone from credit invisible, to visible, or they've improved their credit score. a specific thing that just happened, and someone copied me on a note they had sent through the dispute process, and she was asking us, can you help me get my auto loan paid off. it's been paid off, but it hasn't been reported yet. and i'm applying for a mortgage. so what we're suggesting is there are transactions aren't the same if we can work together to help the furnishers understand that perhaps those types of transactions make them happen more quickly you can help consumers in a tangible way. >> mr. luetkemeyer: thank you mr. boundy. >> mr. begor: i thought the useful to tell you about jeanine. she's a married working mothered from ohio, we helped her at
experian to get a fresh start with her credit life. she got into trouble with credit in college, and began to associate her debt with anxiety. she needed to talking to someone about her personal situation. we partnered and referred her into our creditor educator program. she was able to improve her credit score by 150 points, it allowed her to take out an auto loan, and a mortgage. in her own words she said "i did not think i had any leverage but this program gave me confidence to apply what i knew and push forward to settling into a better life with better credit." >> mr. luetkemeyer: thank you, and one of the things mr. peck you made the point here a minute ago with the awards to -- people's circumstances change their ability to pay also so maybe change jobs. .
. . . >> accuracy is the most important thing that we do and what we really do is check for accuracy as it comes in. we spent a tremendous amount of dollars in time on the matching algorithms. we think we have some of the best in the business. we also spent a tremendous amount of energy and time working with the furniture's to make sure that they are good, submitting data in the right format and not sending anonymous data, so if the data looks funny or wrong we get back with them. >> my time inspired a you back.
>> thank you very much. gentlemen from georgia. >> thank you very much cheerleading. let me ask you this going back for a minute with equity facts in the breach. you are a georgia company and i love georgia. >> you to congressman. >> and we want to make sure that the record is clear in terms of how we have moved to correct the breach situation. i think it's a point to let the committee know that you are not the ceo, they are relatively new at equifax. that you assume this position about ten months is that correct? >> it is congressman. >> so it's like we have a new sheriff in town.
and i want to commend you for the leadership that you provided in cleaning up the mess. you have invested one point to billion dollars in getting new technology to measure the breach never happens again. you've hired over a thousand tech -- highly qualified tech professionals to make sure of. you've provided retribution and retention for all of those customers -- the 248 million who need the help and retribution to make sure that they are cleared. so i want to tell you double done but, we got a bigger issue here. according to the cfpb's report, of all the complaints that have been registered by consumers,
they have not been breached, they had been on an accurate reporting. so i want you to comment on that because you have an issue there. i want to know -- and i think the committee wants to know, what are the steps you're taking to address this issue of inaccuracy as archer lady pointed out in her opening statement, it is devastating to folks that are trying to get jobs conne, student loans. >> thank you congressman. as i mentioned in my testimony this morning. it's an important issue and i was very clear that one credit report error is one too many. and we are really doubling down on her focus on the consumer we are investing heavily in our consumer interfaces so we can improve the ease for consumers to process dispute. as you pointed out, when a
consumer has an issue with your credit file, it's been talked about this morning, we have a lot of sympathy to have better trained call center representatives, better technology, to help them. they're trying to complete a new financial transaction whether the car loan or mortgage. >> here is why i am having difficulty, this process is what you refer to as the dispute resolution process. it goes on and it goes on. sometimes these consumers have to go to court. who is going to pay for that? when it's been the credit agencies will merging files, mistaking information, and in order to get that cleared they have to go to court. which means they have to get a lawyer, they have to pay all these costs, what are we doing on that point?
>> thank you, congressman. it's very rare that a consumer would have to go that far as to go to court. and they do you're correct. and we don't want any consumers to have to get on the avenue. we wanted solve it quickly and that's her focus. in the other thing we want to do when we are not able to solve in the few instances where they do go to court, we want to learn from that and fix our process -- >> do you not think it might be worthwhile to find a way to be helpful ? for the cost if they have to go to court. you say it's very few, fair is fair they didn't make the mistake. the credit agency, equifax, or any of the others, made the mistake. wouldn't that be something that would be worthy of consideration, that if the have to go to court let's find a way
to help the consumer out. he dirty suffering from the mistake that you in the credit agencies make. >> our focus is to resolve the consumers quickly so the consumer can complete the transaction. my goal is to be a consumer friendly credit bureau. >> your time is expired. it's recognized for five minutes. >> thank you madam chair. looking at the history of why this industry came into existence was to ease availability for credit, right. for a broader scale. the products that have been put forward have significantly help more credit available for millions of consumers. i know having a small family
business background, my grandfather started in construction in the 1930s. i run the family sand and gravel operation and i know over the decades credit has been a significant issue. what i am concerned about is the ranking member had a talk about, is where are we in the industry since victor hasn't been touched since the 1970s. i am wanting to know what has been done to modernize and adopt the new technologies and specifically i want to go quickly on this, the national institute of standards and technology updated cyber framework last bring in the safeguard rules of firms for majors. so we go quickly down the like, do you comply the framework in the sacred rules?
>> yes. >> yes. >> yes we do. >> have you conducted an independent audit of the cybersecurity platform questioning. >> we are constantly reviewing in turn loyally and externally expectations to make sure that it's up to standard. >> so not an independent at this point? >> external audits carry out those. >> yes we do external audits. >> following the cyber incidents in 2017 there been multiple external reviews of cybersecurity protections both by yourselves and government agency. >> should congress pursue legislation and consumer notification standards questioning.
>> i think it would be something that we would support and be a national standard of notification. >> yes i agree that they should. >> we also support that equinox. >> i do believe that we need some up dates and some significant -- i am concerned that the reforms that the chair has put forward may go a little far field on that and specifically the drafts suggest eliminating territories from debt from credit scores. i'm curious, knowing that the history of how this evolved and how the industry evolves, what would be the impact of this and what would happen to the availability of cost of credit to consumers? >> i think we would -- is
something we need to study more in detail. but a principal probably too, could negatively impact lender's ability to assess risk, second has the risk and the cost of consumers access to credit. >> in my view we should study it and make sure it statistically sound and know what our conclusions are if we take certain things and reduce them from seven -4 years. at the same time i think we should take more effort to see more information will help improve the score is. i think that would help modernize the system as you discussed. >> congressman just to reinforce, we believe more data in accurate complete data is an interest of all americans in credit. >> you talked about this in your opening statement, that experience offers the opportunity to add information and often by consumers is that correct?
>> we launched a product called experian boost into booster score. >> sometimes maybe more information that is put in by a consumer might help the questioning. >> what this does is let us -- offers a consumer ability to add information that would currently don't have that will positively impact their score. >> my time is expired i appreciate the opportunity. >> thank you and the gentleman from texas. >> the command chair. thank you witnesses for appearing. and i appreciate what they have said in reference to their efforts to atone. i do have some questions that relate to other things that oak occurred. is it true that eck will fax
sold 1.8 million in company stock before the breach was announced? >> i don't have the exact number but there was a number of executives -- >> time is of the essence. was it at or near, or around or approximately a million .8. >> i don't have the number at my fingertips but i'd have to come back to my office to that. it seems to me that you've been naughty. is it true that at or around the same day the breach was announced there was an attempt to limit damages by way of a
congressional hearing? i'm talking about the 148 million consumers who had their precious information breached. is it true there was a congressional hearing to limit the damages questioning. >> i am not familiar that congressman. >> i am. have you opposed capping damages such that your liability would be limited to some number, perhaps $500,000 questioning. >> not since i'd been a part of equifax. i am not. >> are you aware that there were efforts to limit damages questioning. >> i was not aware congressman. >> is it true that the credit bureaus are now liable for the information you purvey? >> is not directed at me?
>> i am not sure how to define the term liability. >> may help you, if you have information that is inaccurate, is it true that you would say to the public that the person who gave us the information is the person who bears the responsibility for the liability questioning. >> i mentioned earlier, if our view at echo facts that we have a central role when there is inaccurate information to auditing -- >> do you agree that the liability for litigation is something that you would contend belongs to the person they give you the information, furnish information questioning. >> i am not aware so i cannot give a perspective on the liability. i can tell you that we have an obligation and it simple to how i'm lit running the company. -- >> let me ask you this, do you
give notice to the users of information that there may be as many as 20% that is inaccurate questioning. >> we don't give notice, it's on the cfpb website of what the disputes are in the process -- >> do you as a purveyor of information, do you notice indicating that our business model is flawed? we use inaccurate information. do you let consumers know that you have a flawed business model? >> congressman as i mentioned in my testimony earlier, our focus is on accurate data and i said also -- >> also on inaccurate data. that's my job. i take my job seriously and i'm
sure you take your seriously. >> yes, i do. >> in accurate information hurts i've dealt with constituents who have not been able to get a mortgage because of inaccurate information. why would i assume given that you've been naughty, you haven't been nice, why would i assume that you are now going to repent that you have seen the error of your ways and that she want to atone and self regulate? i see no reason to do it. i support the legislation that the chairwoman has presented. it is time for change. i yield back the bones of my time. >> the gentleman from colorado. mr. tipton is recognized for five minutes. >> thank you chairwoman. i appreciate you taking the time to be here today.
you note in your testimony that placing emphasis on accuracy in credit reporting benefits to consumers and financial institutions leading ultimately to better consumer protection than outcomes. in your testimony you suggest that the credit bureaus help stabilize the safety of the nation's consumer lending practices. can you make a statement regards to statutory change the speed proposed by the chairwoman customer what kind of customer information is reported in being required in the statements to be able to stay on the consumer credit report? is that going to be able to distort financial formation or would it enhance the questioni questioning. >> i think to answer your question, the overall goals continuously improve accurate credit reports. but the information that is holding the current reports allows us to be part to make
sure that consumer lending is appropriate in the united states. >> would you recommend caution with putting in statutory requirements in terms of some of the information would inhibit some of the ideas that you're putting forward in the often program for the utility bills, the payments that you are making on real estate and other was coming in. >> thank you, what's important to understand about the program is it's a consumer often program. any consumer can take part in if they want to. but our industry does rely on contribution of information on which anything can impact the accuracy of the information that we hold. >> i noted that you wanted to chime in with what mr. downey was talking about on the experience boost program and the opsin's. >> i did.
i came out with trended data global for the other two. and we came out with certain alternative data well before the other two, experience has come out with another product and we want to match and build and it's a competition in this industry where we are pushing each other to come up with really interesting technology solutions to help the consumer. that is the point is going to make. >> i appreciate that. i represent a lot of rural colorado. small communities, ensuring businesses, and the ability to use other methods to qualify that you have an ability to repay is something and father both. our people taking advantage of it? >> yes they are indeed.
we launched it recently and there's a large number of consumers opting in because they see the benefits. >> we don't have that product in place at this time but we are working on it. we've gone about it with trend data that's been in the market for a while. in our alternative data products have increased the number current of credit scores and credit disadvantage of 60 million people. >> you talk to quite a bit about your company's desire to be able to get some of the dispute resolutions accelerated, you cited a number of dollars to be put in. would you expand a little bit on what those dollars were actually translating into in terms of making that dispute resolution real reality for consumers christmas. >> thank you, congressman.
a couple comments this morning, we believe our central goal is to support the consumer. this is a consumer data that we protect and when there is one dispute, is one dispute too many. the $2 million over the coming months is going to enhance the technology between us and the consumer to make it easier for them to file a dispute and easier for them to dispute and process. when do we have it, when to go back to the furniture financial institution, what's resolution, and we view ourselves as an advocate for the consumer. >> thank you. i will yield back madam chair. >> thank you. the gentleman from missouri. he is organized for feminist. >> thank you, madam chair. thank you for being here. did you bring any of your stuff with you? did any of you bring your stuff? >> i can hear the question
christmas. >> did any of you bring any staff with you? >> yes. >> are they in here questioning. >> yes. >> yes yes some are right behind us. >> raise your hands please. thank you. the high level of diversity mentioned earlier. i don't want to suggest that it's easy to do what you are doing when you have ultimately 200 million adults that you handle with the credit files and
10,000 furniture's of the people who provide information. but on having some difficulty with, the fact that i am not sure that there is an urgency to clean up the whole system as it should be. that leaves me to it another thing, that is connected with that, the only difference between the three of you, the three credit bureaus, the process -- the difference in
which the way you process information. is that the only difference? >> congressman, if you'd like i'd start. there's a lot of differences between the three credit bureaus. as you pointed out central to our business is managing the 250 million americans credit files that we have responsibility for. but there's various differences that you heard this morning, some of the technology that we have, and the tools we are using with consumers which makes my view very competitive industry. we are investing to provide more tools for consumers and for our customers with the financial institutions in order to be an integral part of the u.s. economy. >> i'm glad you said that. why do we need all three? can somebody tell me in a short period of time when we need all three questioning. >> okay good, that's what i thought. >> we were deciding who to answer. >> no you answered it, what you said earlier is one answer. but can the other two
questioning. >> there are actually hundreds of cra's and specialty cra's a deal with different data that we don't deal with, we have to be the three national series were evolved over time. i think having more than one creates substantial competition between us. >> with the competition? >> we are competing for the ability to provide the best information on a consumer as possible both to the consumer and to the businesses that are trying to lend to the consumer. >> when you say competitors, having somebody has a choice? >> -- >> they do have a choice. the lenders have a choice in the consumers have a choice. if they want to use her particular services. >> with the exclusion of others questioning. >> to use our services for certain things with the exclusion of others.
>> what information would you have for credit that the other two and a half? >> we have access to certain utility information that others might not have because of the relationships we have formed. certain access to rental information that others might not have because of the relationships we informed. we have access to trended data because we've been saving it over 30 months. that the others may not have. those are examples of the kind of data -- >> the three of your competitors customer. >> congressman, i have a lot of employees that are great to come to work in the consumers that come to work and that's what we concentrate. >> nobody answer my question. i just need you to point out why we need three agencies. you say your competitors and
nothing to prevent your creditors. >> mr. williams from texas he recognized for five minutes. >> thank you, madam chair. thank you all for being here. as a small business owner, and i'm a capitalist i might add, the first and of value and complete and accurate credit report to make a business decision. i am a car dealer. i have been a car dealer for 50 years and my family for 79 years. we work with lenders to see what terms they can offer prospective buyers to her clients. essential to any business that lending financing. can you elaborate on what equifax has done to the accuracy of credit reports since the cfpb began supervising the company. >> we have a large number of
employees that concentrate on the producing accuracy of dates in applying rigorous checks. if the people providing the information don't meet standards we terminate them. we have terminated over a hundred of the last three years. we are moving to make sure the consumers can add information onto their own credit file and walk away with the car straightaway. >> as a small business owner capitalist, i'm going to get as many people into new cars as possible as long as the lender is willing to give out loans. and whether a person is buying a car, a private jet or even a cow, the lender needs to be paid back in order to offer lines of credit to other people in the community. a deal is a deal in america. and people need to pay their debts. i am worried about this committee that they will go down a path where lenders are
receiving credit reports that have been scrubbed of all the negative credit information. mr. peck, can you go into some detail quickly about the potential risk of removing damaging information from a person's credit questioning. >> if we would blindly. [inaudible] there could be unintended consequences. so when you're going to do something like that, even when you add information you need to prove that is statistically and empirically will do the job it's intended to do. the danger is, if you remove something without thinking through implications you could increase the cost of credit to everybody because ultimately when people don't pay back the loan the cost of credit goes on. >> i agree. >> you mentioned that equifax has been investing into technology and security. can you elaborate on these investments how they are making consumer data much more secure so we do not have a repeat of the data breach questioning.
>> as i mentioned in my testimony this morning, it's our goal to be an industry leader in data security and a one point to 5 billion clear investing in 2018, 2019, and 200020 is also bringing the very best technology into echo facts that is available anywhere in the industry. whether it's presuming or in bringing systems into the new forms of technology. in that same focus we are trusted with protecting the data we take it very seriously. >> that's just a statement i have. number four, before my time ends, i want to ask each of you with a yes or no simple question. do you think that the government established a credit report agency that is better than each of your representative companies questioning. >> no.
>> no. >> no. >> it would cut out competition is what it would do. finally, are you capitalist or socialist questioning. >> i'm a capitalist of the software. >> i would lean towards being a capitalist. >> i am proud to run a business in the united states and does a good job. >> i want to thank all of you for what you do and being a person in the lending business that you report to it is importantly to the sellers in the consumers. thank you for that. >> i yield my time back. >> the gentleman from colorado. >> gentlemen thank you for testimony. just a couple questions, mr. cleaver was saying why should there only be one of you? my question is why is there more of you, let's talk about the secret sauce and credit scores
as somebody came up with an algorithm and you guys modified these algorithms, i don't understand him, why are there more? why is there only three of you, that is the problem that i see. that's where you're getting extra scrutiny. why are there more than three of you? >> we have tried to pate and some of her comments that there is intense between the three of us, the 1.5 investments that we are making is a sizable amount. there is more than the three of us. there are hundreds of furniture's and credit agencies that are in the industry. >> today there's just three of you, whenever we talk it is always trans union, echo facts and equifax. i'm an experienced customer, one of the three areas that sells data to the masses and then they
sell back to me so that i can see what my credit score is but why are there only three of you customer. >> is a good question congressman, over time the three have emerged and it was largely a geographic thing. if you look at the industry overall there are literally hundreds of cra's that are looking at different ways to collect different types of information that are regulated by the of cra, there also many analytic firms, you mention pico, virtually every lender has their own scores as well. so there is intense competition which is been fueled by syntax, who had access to all this information that the big thin bs hold the majority of the data,
if they weren't sharing that information into a credit bureau system like this, community banks, small other banks, they would not be able to compete. they would not get the information. and i think over the last three or four years that has driven a substantial increase in the amount of newer and better products that have gotten the hands of all different kinds. >> let me stop you. there are only three major consumer banks. there may be minors but when i think of credit bureaus you are the three that i think of and i think everybody up here, democrats and republicans, you are it. when there is a breach it is big. i said this to mr. boundy who is is, i screwed up on something, i
paid the wrong amount, chase cassis a check but then unbeknownst to me it was a short check. and that i had paid enough. and my wife comes in and says my credit score just dropped like iraq. and i think everything's fine. and you start calling and talk to the credit bureau and they send you to the bank, and you get the low person on the total pool, i guess the thing that really gets all of us is even if you have good credit, you script once and it seems to have a really tough effect on your credit which could hurt you for a long time to come. i am a little bit happy to hear about this of the product that you have. if i gave you my utility bill how is that going to help me? >> thank you for the question. the way the equifax boost product works, you can go online
for free and take information from your bank accounts and put it directly onto your file. i understand where the chairwoman is going to want to look into the situation, we only have three and smaller varieties out there. but the fact is that you have a tenant information on all of us. when something goes awry, even if it's because of what i did, it was my mistake, but something small that i fixed right away i have not been able to repair in two years, i hear about it for my wife on a regular basis because she had impeccable credit until i screwed up. the facts that you guys have is long-lasting, and across the board and there is real desire on our part to make sure that
there is communication between you and the banks and all of us to help us to do a better job and without you back. >> thank you. the gentleman from georgia. he is recognized for five minutes. >> thank you, madam chair and thank you all for being here. as being a former business owner, mistakes and errors happen. none of us are perfect. we don't live in a perfect world. but the mistakes that happen in your business to have a profound affect because it affects the livelihood of individuals. when there is an error on a credit report, that is information that is provided to you from a creditor of some type right?
>> most often a creditor. >> when somebody dashed a consumer notices something through credit karma or something like that, do you have any way of assisting dashed to attempt to assist the consumer in cleaning it up and how to clean it up christian work. >> yes, if they dial into us we answer the call and 30 seconds, if they dispute online which is becoming more the prevalent we taken their data, and they have an automatic way to upload the documentation that supports her dispute, we get in contact with the furniture or the lender and we try to help them to resolve the dispute. >> so if the lender, do they have a timeframe that they are supposed to respond. >> is 28 days then we close the dispute. in the favor of the consumer.
>> does equifax to the same ? >> we do. we are investing more dollars to make it easier to process that dispute and quicker call time. it's an anxious time when they see in an error on the report. is it immediate or 0 time after the 28 days or whatever course work. do you have a timeframe as well >> it happens almost automatically. in an overnight fashion when the dispute is repaired, it will update their credit scores and go all through the system. >> yes, it's a very similar practices from equifax. >> how long is this been in place? the process of consumer disputes has been in place since the legislation came out. in my view over the last five years, seven years the dispute
process has been improved substantially because of the use of online tools, i think the credit bureaus frankly have gotten much more focused on doing a better job at it. >> think i appreciate that. i did a little research on complaints, experian had about 90 5,000 complaints since 2012 does that sound about right question work. >> i don't know the exact number but i think that sounds right. >> we ran the numbers that's about five tenths of 1% of your customers. which sounds pretty good when you talk to customer satisfaction. do you guys track customer
satisfaction ratings question right. >> we do, we do call recordings to coach our call center associates and how to be strong in customer service and we are focused on improving the service. >> okay. i don't envy the position you're in, i think as my colleague said, it's important to help keep our interest rates down but it is a frustrating process when you do has something wrong. my grave concern about where were going with all this, the government getting more in gauge because quite frankly, the agency that has the lowest customer satisfaction rating in the entire united states of america is the united states government. by far. at the bottom is the veterans administration and treasury. if they would adopt the same procedures that you have for resolving disputes, i think that would go up because we regularly deal with constituents who with the va have data that is wrong
about a veteran that we have sent the right data, we have some that are now on their 13th year trying to correct that information. i have constituents who are on the fifth and six year trying to correct data with the irs and the department of treasury. we have the same thing with the housing agency with hud. those are the three of the lowest of the lowest. my concern as congress goes forward, while there are issues with these agencies that need to be corrected, are we just going to make them worse by getting the government involved with that. madam chair yelled back. >> the gentleman is reckless for five minutes. >> thank you very much and welcome to the committee. the question that i have in the population does not have access to credit it means that they do not have a credit score, as all
of you know, no credit scores just as bad as low credit score. how can we utilize an alternative proofs with someone's ability to pay a payment including utility bills, cell phone bills and maybe even cable bills that -- to determine what kind of credit score. all of you can respond to that. in this type of society, people will do anything sometime to pay the utility bill, cable bill and so forth but they still might have a really bad credit score. how do you handle the situation coursework. >> i will start, we believe that one of the roles that we play is helping the disadvantaged american who doesn't have access to the traditional credit file,
there is 19 million that have a thin file which mean they are in the credit bureau but have no trade lanes. meaning they don't have any financial records. like our competitors we are constantly looking for alternative data like cell phone, utility, rental payments that we can bring into our financial partners and help the credit decisioning for the consumer that is not in the traditional financial system. >> my answer would be very similar. we are trying to find information or payment data of things that people are using in the regular a goo everyday life, wireless phones, rental, cable, issues of sustainability to discipline themselves to pay for those things. its way into the t score and increases their access to credit. >> congressman thank you for the question. if you want to do that experian,
you can do that today. you can go to experian.com and select to boost your score and you can add the information and it will reflect an increase as a result of that if it's appropriate. i've heard of one consumer increasing his score by 70 points. >> thank you very much. by the question, when i was coming out of college is very popular my senior year, everybody one to give me credit card. as a result of getting on the credit cards, two or three years later winners trying to get a home it was a situation where they said i missed a couple payments. i was causing problems. i have probably over hundred thousand students in they have a lot of things going on in terms of using credit cards to make payments. you all take that into consideration when two or three years later when they're out of school and trying to apply for
other things in the credits start to reflect from those options that they made. anyone can respond. >> i will start. as you may know, credit scoring systems that we use in the financial institutions use, really predict the nature of a missed payment that is two years ago, three years ago, four years ago, five years ago is rest relevant and part of that credit decision. something that is missed last week or last month is more wade into the credit decision. >> real quick, all the hurricanes that we have had, hurricane michael in florida, and a lot of things happen and will still happen with people's credit and so forth. heidi went on on that #.
>> as you may know, in a situation about a hurricane we will work with the financial institutions to make sure that they understand the impact that consumers or another natural disaster. we are doing the same thing with furlough government workers with the government shutdown and we also offered free credit reports to the furlough government workers so they could understand where they may have missed a payment and help them communicate that to financial institutions. >> anyone else? >> i was more or less going to answer the same way. the example with the recent government shutdown, as advertising that there is help available, we have professional counselors counseling the people who might've been affected and how to talk to their finishers or the lenders. we talked to the lenders and said that here's what you can do that indicates this person wasn't really late on a payment. >> yield back. >> the gentleman from ohio,
mr. davidson. he is reckless for five minutes. >> thank you manager woman. and thinking for the work that you do to make sure consumers have access to credit. would you agree that it's accurate to the purpose of credit agencies is to help those to accurately assess risk of default or timely repayment questioning. >> yes i would, i would also say it is to help consumers have an independent view of who they are without raised religion, gender. >> a topic that is near and dear to me, into millions of americans in a big part of why you all three here today are here, data privacy. the general data protection regulation, or gdpr for sure, are you familiar with that? >> i am familiar with in principle. >> in response, your uk branch said preparing for gdpr has had
a significant impact on uk organizations in terms of cost and effort. do you still agree with that statement christmas. >> i agree with the statement that we made. >> clearly is a dynamic change to privacy laws for europe and i'm curious how the gp ours regime can only occur if the data subject gives informed in unambiguous, a cleared affirmative act with a specific informed in unambiguous indication of the data subjects agreeing to the processing of personal data related to him or her such as by written statement including electronic means or oral statement. to me that's illegally confusing and i'm sure caused a lot of changes for your company as a house for many others.
but it's very different from the opt-out regime. how do credit reporting agencies lawfully process personal data under gdpr and should that be a model for the united states legislation? >> it's a complex topic but there are great similarities between the gdpr legislation is applied to the credit bureaus in the financial systems, for example in the united kingdom and as well as united states. >> at the end of the day it's on consequential then if we go with the gdpr for the u.s.? >> i am not sure that i would agree with that. there are a lot of protections in place today, the senate bill 2155 that was passed last september allows the consumer to freezer file for free.
-- >> it is very different legal framework for the u.s. and i'm sure that all of you are aware that the u.s. is contemplating future privacy legislation and i'm very passionate that we get it right. i am just curious how it would impact. i trust that it would impact you. i don't think it's accurate to downplay the size shifts the gdpr had a privacy framework. by saying it's what we have in america, it's not. the underlying premise is really different. i think the other big thing is who would ultimately at each organization, is responsible for security,. >> it would really be myself. the two security officer reports to me and report to the board. we have a technology committee in the individual has to dual report. >> it would be me. >> it would be me. >> i'm encouraged to say that.
it's nice to hear that the bus stops here. then that everything happens or fails to happen comes up to the chief executive. it's been incredibly valuable and prominent role in the church organizations, could you highlight how your organization has changed the role and responsibility for your system? >> the data security breach works for general counsel and always change right after the data security breach and i continued with the practices. [inaudible] >> any big changes for your organizations? >> the highly technical job. there is no reporting at the legal department. it's also a culture and you need this person to have direct access to your audit into your chairman of the board. >> thank you. >> no major changes other than
it's an incredible job. >> thank you my time is expired. i yield. >> the woman from virginia is recognized for five minutes. >> thank you, madam chair and thinking for the witnesses joining us. i represent virginia's tenth district. it has a very high concentration of federal employees and contractors who was negatively impacted by the shutdown. the shutdown is over, most of my constituents are back to work but the challenges still remain. potential financial, we recently conducted a survey to federal employees to see how they were affected financially by the shutdown, survey found that more than a quarter of them missed a mortgage or rent payment because of the shutdown.
13% mr. student loan payment and nearly half fell behind on their bills in general. did you observe any increase or spike another negative credit reporting among folks who have identified as federal employees or contractors or that you know that are in the region where there are lot of such employees christmas. >> in my testimony with great sensitivity to any american impacted by any issue whether it's a hurricane, wildfire or in this case the government shutdown. we announced that february 1 we are offering free credit reports for impacted government workers, we also increase the staffing in our call centers to make sure that they were ready and available to take the inbound calls to help coach the impacted
workers. and you probably know, there's an ability to put a note on your credit file to highlight that you are impacted in that way. and that goes to the financial institutions as part of the underwriting process for new loan, auto loan or credit card. >> as far as -- following up, as a part of the process if they did for example pay mortgage payment late, or mr. rent payment, that is something that would show up as an adverse event in their credit score? >> that is correct. >> but they would have an option to test explanatory statement but it would ultimately help the score the ticket? >> that is correct. and they have the opportunity to talk to the financial institution to make sure that they understand why they used to and go to the avenue. >> i think we know why they missed it. they were getting paid. you testified earlier in your
prepared remarks that you set the data provided by the furnisher's? >> yes that is correct. is that data process involve the consumers themselves questioni questioning. >> my testimony involves our employees and quality team for about 400 checks of accuracy. but every consumer is able to access the report for free and check our information as well. >> but before that date is entered into the system, is there any bedding that involves the consumer? or does it just involve the furnisher's and double checking the social security number, date of birth -- >> the information in my testimony, is reviewed by our own staff for its accuracy and put her range of roles and checks to make sure it's as accurate as possible. >> does that involve the consumer itself? >> at the point now. >> as far as consumer inquiries
to a person's credit report, whether it be by furnisher or creditor, or the consumer itself, does the number of inquiries, is an increased number of inquiries cause a decrease in the overall credit worthiness score? >> there are hard inquiries and soft inquiries, when the consumer themselves make an inquiry to take out credit, and they make a repeated series and many all at once, that can decrease the score when it's a soft inquiries. meaning they have checked their own credit score, meaning they have been part of a predetermined offer of credit. that is a soft inquiry, that would not count against, it shows up in the credit report but does not count against the credit score. >> for example, the status of
the gentleman from colorado, she apparently likes to go on the credit reporting bureaus and checker score with regularity. is that an adverse event that would impact -- >> that would be a soft inquiry and the reason we keep track is because the federal leg relations as we have to belittle her every time including herself somebody checked her score. it's called soft inquiry. >> think very much. the dispute process, those arrived when a consumer is denied credit is that correct? >> would you say that's an accurate time. >> your time has expired. >> thank you. >> gentleman from tennessee, recognized for five minutes. >> thank you, madam chairwoman. and i want to think of the witnesses for being here for this important hearing.
if i came to you, in your statement, you talk about trans union ultimate data. helping 60 million in some od odd -- disadvantage customers getting access to credit by supplementing traditional credit with new insights that reflect payment behaviors. my question, have you seen any type of negative impact from doing this or these new insights? >> our studies have shown that these impacts are very positive. i would have to go back to look at the report to see if there is any kind of negative impact. but that's something that we would be willing to share. >> you see any potential risks
questioning. >> i think the risk would be that the pernicious are doing on a voluntary basis. if there is a negative impact than this would have to be able to respond to us. i think that is part of the conversation that this committee needs to have. we look for more and more sources of alternative data. we have to encourage the suppliers of this a trinity of data that they will have to supply with fca. >> when you talk about encouraging the suppliers, are you saying a reluctance, or how would you characterize a christmas. >> it's a good question. i would characterize it as we relate the received word negative data on these types of things than positive data. in the positive data makes a difference to people. of course negative data makes a negative difference to people.
so to really get a full profile of the modern american who has a cell phone, pain cable bill, making rent payments, because they can't afford a home right now, we want all that positive data to be part of a credit report. >> thank you mr. pack. there's a difference of opinion of how we approach credit reporting modernization. the legislation approach reform, by make it easier for consumers to address the issues with credit scores by creating processes to mistakes and remove adverse findings. question mr. boundy to you, give any concern that whether this might raise cost and what it protect consumers seeking credit? >> think for the question.
i agree with the committee to improve people's access to credit and accuracy and credit report. one of the reasons that i've talked about, with defined ways to access different information to allow them to increase their credit score. i'm concerned with anything that could come impact the consumer's ability to access credit in the financial institution can provide the credit. >> do you think it could adversely affect the cost of the consumer or the cost to the consumer questioning. >> i think removing some information if it's proving information it could impact the cost. >> give any idea of the extent it could affect to the cost questioning. >> i don't have any idea but i'd be happy to work with the committee and come up with more details on that. >> if you could look and analyze what do you think the cost would be to the consumer and get back to me i'd appreciate it.
if i could use the same question in the same premise. give an opinion from your standpoint whether that would affect cost ultimately to consumer. >> similar to his testimony, we believe that more data is going to be more valuable for all americans including alternative data is important. but first and foremost, having accurate data is quite critical and that's a focus that we have on the internal process and making it easier for consumers to process disputes and i think the congressman knows in the last five plus years the cfpb has been very active with us and furnisher's around the accuracy of data. >> with that affect the cost of the consumer? >> it could, it could impact the cost to all consumers if the wrong data was removed from the data file. >> thank you very much. i yield back the balance of my time.
>> the woman from michigan is broken is for five minutes. >> thank you, madam chairwoman. i don't know if it's because i knew but i always feel like it's been so long in the monotone is the same. i know the chairwoman wouldn't like me to it ask us all to stand up and stretch. i do appreciate this and it's a really critical issue in my district. i represent detroit in the wing counties. we have the largest car insurance rates in the nation. one of my zip codes is an average of over 5,000 dollars. to u.s. agencies, and i'm pretty sure so yes, to transmit credit scores to cart industries. >> yes we do. >> yes. >> yes. >> what does a credit score say about the person's driving history or potential for accidents?
>> anybody. >> i can't respond to how an insurance company uses the data. maybe one of the other ceos could. >> i can't respond either. other than that it's one of many, many factors that go into the siding of how much the cost of insurance is for an individual. >> i don't have a different answer. >> one of the things that i talked to the chairwoman of on some of my colleagues is i have a resident who worked at the hospital in michigan for over 25 years. steady income, credit score, and as soon as she retired it is impacted her credit score. she had no idea until she got her increase in her insurance rate. it went up over 400 or $500. it's still going up almost every single year. she called them and she asked
what was the problem, what was the issue i haven't gotten a car accident and 55 years, not one ticket. she went to work and came back and she just goes grocery shopping or sees her family. she is an incredibly responsible driver. in their answer was her credit score drop. and she said i don't understand how that impacts my driving record. and i asked all of you, i want to introduce a bill that basically says you can't provide credit scoring -- credit score to the auto insurance industry because there is no connection with some of these driving record in the credit score. i would like to hear from you all, would you support something like that? >> i really can't give an opinion on that because they don't know enough about how the insurance industry uses data.
and i'm sure it's one of multiple data sources they use including the driving record of the individual. but i'm not skilled enough to part of biden answer. >> i would encourage you to dig into it. and ask. >> i intend to. >> i imagine you do. and ask how are you calculating the different scores that would impact drivers rating which drives their insurance rate. >> is a complex issue and worth the study. >> so i read somewhere in that some of the car and insurance industries feel that if the credit score is lower the likelihood of them committing a crime is higher, a crime or fraud. if you read and dig deep, many experts said you're punishing somebody for being low income. most people's credit scores not because they haven't paid a bill, at some because they don't have access to credit. in some of the services, so for my folks it's not because
somebody forgot to pay a bill, or my colleagues paid a little bit less and you supposed to, it's because they have no access to really bring in a credit score for any equity. it's something that's very disturbing because in michigan, there's no transit system. the only way to get around into a job, 70% of folks work outside of the city of detroit. so they have to drive. and more and more of our residents are driving without car insurance because of this issue on credit score. so i want to bring that to your attention and i hope that you all will work with me and my colleagues and will be in full support of saying that we have to restrict the use of credit scoring for auto insurance companies as the driving record standard. thank you so much for your time. thank you, chairwoman. i yield my time. >> thank you very much. the gentleman from tennessee, mr. rose is recognized for five minutes. >> thank you, chairwoman.
in thank you to the three witnesses on the panel today. the comprehensive consumer format, i assume all three of you are familiar with the terms of that proposal legislation? >> yes. >> as i understand credit bureaus, the three organizations that you represent have pushed for alternative credit information from community such as telecommunications and utility companies yet many of those companies as i understand are reluctant to provide consumer payment data because they might subject them to the fair credit report reporting act. is that a similar concern you have? >> i would say generally in discussions that would be true. >> the legislation institutes new requirements on furnisher's including the establishment of a new regime for investigations upon request by consumers. in an appeals process following
such investigations. i am not convinced that these changes will incentivize more companies to furnish data to credit bureaus, does this have the potential, this is is a question for all three of you, does this have the potential to undermine admission of growing the number of qualified borrowers in the united states? >> i think the furnisher system in the united states is a voluntary system in its one where financial institution makes a decision to contribute the data to the three credit bureaus. our view is that there is a rigorous process today to manage the disputes. you heard my testimony, we want to take that to another level and improve the customer focus that we have in supporting consumers would have an error or dispute on a file. >> i really can't add much more to that view. it's the same view. >> i be concerned with anything
if we didn't have an accurate representation of the consumer. and help them get access to credit. >> with lowering the amount of time the adverse credit information stays on the report tend to result in a higher cost to consumers to borrowers? >> thank you for the question. i will reiterate my view. when we start talking about taking things on and off credit reports, we should actually do the statistical analysis because we can as an industry. to determine what would happen and that would include the lenders and if it were to result more dprk cost will be the consumers through higher interest rates. >> is it safe to say that financial institutions by credit reports in order to accurately price the credit risk of an individual?
>> that is correct congressman. >> so surely there is room for debate on specifics of how to deal with disputed information on the credit report. but it seems clear that mispricing credit risk is the root cause of many default, would you agree? >> i would. that is what financial institutions are charged to do, as when they're granting a mortgage loan or any other financial transaction. >> my experian personally is that government is rarely good at doing anything. my general approach to whether government should be telling us how to evaluate credit risk or whether the private market should be helping us figure out how to evaluate credit risk is one of placement that on the private market. i commend your companies for the service that you do to the
american public by helping our financial institutions adequately assess the risk of we as consumers and we come forward and i hope that this body does not get carried away with trying to substitute whatever it be. might be pursuing to make sure that you are able to adequately access the information and provided to your consumers that would allow them to fairly and accurately price credit so all of us in turn can continue to work in a credit industry and an existing one which is the envy of the world in terms of properly assessing risk. thank you for being here. i yield back the ball to my ti time. >> the gentleman from california, mr. sherman is recognized for five minutes. >> we have an amazing consumer
credit system in this country. it would've been unheard of a hundred or 200 years ago. ordinary working people borrowing hundreds of thousands of dollars when they buy a home, tens of thousands when they buy a car, borrowing from people that they have never met. that can happen because you do your job. we want to make the credit reporting system better but we should respect that having a credit reporting system is what allows people to get loans and why we will curse a situation where we are denied alone unfairly with inaccuracy, it is amazing to have a system where ordinary people can get loans from folks that they have not met. i want to focus to the gentleman with equifax. good hundred 40 million records
stolen. as far as i know we still don't know who hacked the system or what they used the information for. they obviously put tremendous effort into hacking you, and then they don't seem to have used it unless the perhaps a national or foreign spy agency that was only interested in the records of a few dozen or hundreds of american intel personnel looking for the one who is in desperate need of cash. do you have any insight at all as to why somebody would spend such tremendous effort and when the whole effort of team individuals to hack you and then not the proceeds that they got? >> thank you for the question, you are correct and our forensic
experts watched the dark web closely since the incident and we have seen no instances as you pointed out where the data has been used in any fashion. typically when it stolen it will be used in stol sold on the darb for identity purposes but we haven't seen any instances of that. -- >> is there hundred and 45 million americans whose data was stolen roughly smaller number of who wasn't stolen, or the people whose identity was stolen from you subject of identity theft from the people who work? >> we haven't seen any instances of increased identity theft related to her data. we are able to watch that on the dark web and we haven't seen that. >> for a while you are providing free credit monitoring, you've stopped? >> that is not correct. we offer free credit monitoring right after the data breach for
every american regardless of their impacted or not. in november of 2018 when the one year was up we voluntarily extended it for another year. >> for only the people who signed up? or what about people who didn't sign up yet. >> just for those who signed up. >> so only 2 million out of a hundred and 45 million signed up, what about the other 141 million? >> there were actually 4 million who signed up after the data breach. >> so as to leave the 139 million. >> correctly of other services like the free freeze for consumer can freeze the credit bureau. >> i might want to freeze because my data was stolen from your network but i would want to freeze with you and your two colleagues up there, directed pay money to them to get them freeze. >> you do not.
2155 is passed last september it's free freeze for all americans in a fax also has a free for life product that we rolled out after the data security breach that the mobile application to lock and unlock your credit file. a number of us including the chairwoman have legislation to focus on those employees of the federal government and contractors who weren't getting paid during the shutdown or god forbid the neck shutdown. it is my understanding that some of you are footnoting this disclosure and saying hey this person didn't pay their electric bill, but by the way their federal employee and the federal government was obtained them. but a footnote isn't as good at nose disclosure at all. it's my understanding that you would need legislation to simply make it like it never ever happened. do you support legislation that would instruct the credit rating agencies to expunge from the record the nonpayment of bills by federal employees who weren't
being paid during the period of time that they were being paid in a month or two after. which of you support? >> i will start. we don't stage the legislation is necessary because his other tools in place to help those employees. >> the gentleman's time has expired. >> we would support the legislation. >> we don't think it's necessary we have a virtual. >> we all want to ensure that consumers have access to credit. transparency and accuracy of those reports is critical. so where there is heirs you are called upon to make those corrections. all three of your companies operate around the globe is that correct? >> yes. >> yes. >> yes correct. >> in each of the situations there are different role on what
records are accessible and available. and have a significant impact on borrowers ability to access credit correct? >> correct. >> yes. >> the systems are obviously different across the globe. i'd love to tap into your experian and see a number of those countries have experimented recently on how the credit reporting are available. can you comment on what has been done on the foreign markets that have harmed and we've seen globally. >> without seeing what country, there have been some that have over several periods, that have forgiven any record of the debt on anyone's credit report and i won't say chaos ensued, but it was very hard to determine who
to lend to and the cost of debt went up substantially. those areas in other countries that they try to replicate a lot of the regulation that this body has passed, they were building a middle-class and is probably one of the most satisfying things about my job and trans union is watching groups of people whether it's micro lending or otherwise be able to get access to loans to quote their children, to send their kids to school, and it's built on the fact that were able to report information when consumers take out the loan to get them to opt in to the system just like that of cra. >> the example where the common with the law the city will wipe out historical records -- when you socialize and remove that, you are damaging good credit history. >> it did damage the economy for
some period of time. >> have you seen other examples of countries that were put in place laws that were socializing the credit risk ? >> i think he outlined it well. the same thing that we seen in countries -- from my perspective the credit bureau system is and be of the world. the way that we operate in the depths of the data and the furnisher's and how it's used is really the envy of every country that i've seen with. >> i don't have any other good examples. >> i think the walkway is that the more records that are accurate, the more reliable data that we have, the better that we are to better properly assess risk and give people opportunities to obtain loans to go about their life. >> i about my time. >> the gentleman from illinois, mr. garcia is recognized for five minutes. >> thank you, madam chair and
thank you all for your testimony. my question is for mr. becker distress for federal employees and contractors and their families during the shutdown. and you mentioned that your firm has announced a free credit report service for those affected by the shutdown. one week before this free credit report service was announced a coalition of consumer and civil rights groups wrote to you and two other ceos to urge that credit bureaus institute a special program of credit repo report. employees of federal contractors and employees of small businesses affected by the shutdown. i would like to ask that that letter be entered into the
record madam chair. measures that the consumer groups recommended but beyond a free credit score however, included the opportunity to have negative information removed from the credit report if consumers could prove that they had lost income do to the shutdown. question, mr. begor, did echo effects take the recommendation of these consumers and civil rights advocates into consideration when implemented is free credit report service? if so, why haven't the full recommendation been followed? >> they cover the question. we did receive inquiries as well as a letter from chairman chairwoman waters. we responded quickly and through the credit report. we offer more than the free credit report, we trained our call centers associates to be ready for the inbound calls and
from the impacted consumers. i highlight that this is one instance where we are trying to get the right human turn efforts when there is a hurricane. or while filed the impacts of consumers to pay. with regards to taking data off of the current file, we don't have the ability to do that. that is done by the furnisher or the financial institution. the only data in they are the ones who are responsible for. as mentioned earlier, we really work with the consumer, the individual that is impacted and give them the coaching to talk to their financial institution about what was impacting as well as if they would like, to put a note on the current file about the situation which will be shared with the financial institution for future transactions. >> thank you. mr. boundy and mr. pack why haven't your firms offered any measures to those affected by
the shutdown or am i missing something? >> i think we did offer the similar relief as we offered to the regular employees. specific to taking negative information of the credit report we discussed with the finishers in the affected parties that there could be something called a forbearance code put on the credit report and that is only avenue that we have to educate and to do something about that. >> we do and have been offering a free credit report and free credit monitoring for anybody impacted and also worked with the lenders to provide forbearance codes and education on our website and help you figure that as well. >> thank you. i think the fact that none of your firms voluntarily implemented the credit relief measures for those affected by
the shutdown beyond a free credit report offered by a fax underscores the need to do more. that is why i am proud to be cosponsoring with chairwoman waters the bill creating a mechanism to identify those adversely affected by shutdowns and to restrict credit rating agencies from including an adverse credit profile with the duration of the shutdown plus 90 days. i yield the rest of my time. >> thank you, the gentleman from texas. recognized for five minutes. >> thank you, madam chair. and think you gentlemen for being here. i know you're busy and we appreciate your time. the office of personnel management as you may or may not know, was responsible for a data breach in which 21.5 is the number give or take identities
were stolen which leads me to it question if the u.s. government can't protect classified employees data then how can the private ministry do a better job especially if we create a single entity that is collecting all this credit data. i'll ask you mr. bigger what'll have you learned from the data breach that you've recovered from a fax and can you guarantee this will happen again. >> you raise an excellent question. i share my testimony earlier this morning from our perspective, every company, all three, every financial institution, every government agency basis, we are attacked. i get alerts as part of her new security protocol. every time someone tries to penetrate our perimeter. this is a war that will not in.
what we have learned from it is that we have to continue investing. we are putting record amounts inter technology and security. 50% increase in our spend. it's an area that we have to be diligent on. another important point that i look at from the perspective, we don't have any trade secrets around security. we want to share everything that we are learning with our competitors, but with government agencies, we meet in washington, with our customers and we think sharing is quite important. can i guarantee it will never happen again. i don't think anyone can guarantee that. but i can guarantee we are taking every step possible to make sure it doesn't happen again. .. ..
because of the talent we are believers that looks like the community we work in and the customers we represent. >> i appreciate your testimony i also apologize for my comments on - - my staff comment earlier. >> just have everyone remember everyone is here they have a right to their opinions and they have a right to use their time as they see fit. in the future direct your comments to the members so they can respond to you.
>> i have not recognized you for any time now the gentleman from california is recognized for five minutes. >> i would like to start with a question if you would be willing to share today your social security number your birthday and address at this public hearing i would be uncomfortable doing that congresswoman but if you so oblige me i prefer not to. >> can i ask why? bracket is sensitive information that i would like to protect and consumer should protect there's. >> if that sensitive information were provided at this public hearing what are you concerned could happen quick. >> like every person i would be worried about identity theft i am a victim of identity theft it has happened to me twice once of my tax
returns and one with a consumer opening fraudulent credit cards in my name so we are concerned about that. >> so my question is, if you agree that exposing this information creates more then why are your lawyers arguing in federal court that there is no injury or no harm created by your data breach quick. >> it is hard for me to comment. >> but you do employ those lawyers. they do operate at your direction and counsel and they are making arguments in court arguing on the record i have the pleadings here from the
court case they are arguing on the record that there was one - - this case should be dismissed no injury and no harm created from the personal credit information. 's i would ask you to please look carefully at what your lawyers are doing because it is very inconsistent with that helpful testimony you have provided today. >> my second question is september 2013 is it correct that analysis rated your likelihood at 50 percent with
the likelihood or breaches you were aware at 50 percent quick. >> i am not. >> do you know, your current bread breach risk reading quick. >> can you find someone to follow up with that quick. >> i would be happy to. >> you have spent considerable resources improving cybersecurity in dollar incense your investment or percentage of your revenue but about cybersecurity. >> half a billion dollars per year. >> just $1 billion per year on information security.
>> i am out of time. >> he recognized for five minutes thank you for being here today. some of my questions might be different i have a little more background based on the fact that my 26 years of service as a ceo to protect data. and in 2017 from the largest cyberattack in history and then ultimately responsible you and equifax will continue working to ensure damages mitigated to the fullest extent. >> we are doing that as we speak. there has been some questions i found interesting and then
these questions will have a point and a reason. and then to equifax and experian. and that biggest concern for the organization what is the answer quick. >> cyberbreach. it really is. that was our biggest issue based on technologies. with that type of information we are definitely on an agreement that. i believe they should work through to address in any
political infrastructure i don't know the definition but edible reporting in industries are based on the data that you hold. . >> what could be more of a comprehensive reform to the system. then that weaponize eating data and somebody talking about social security numbers the chair was talking about that and credit scores as a result and i just have this to
say. mind was check in the background check so the more data that you have protects those in the military to ensure those are the people that scare me. so on that note i would love to talk to you about those databases. that is why we need you to protect this data it is everybody's personal information that i can attack at will. that all the stuff here is technical. i nerd out on this so i apologize but richard cordray former cfp director and then
with those credit risks to be more constrained. that i will say for me looking at this right now we have the most robust system. and actually asked the committee why do we have the actual data providers quick. >> questions i want to ask is it encrypted in rest or transit? and to protect that with those identified breaches get some of these questions to say that they were sharing and then off the shelf software.
>> as you might imagine it is a combination of the cutting-edge technology and augmenting ourselves and we are sharing everything we are doing with customers and competitors and government agencies. . >> i would love to talk with your providers. >> the gentleman from new jersey's. >> thank you for all coming today we appreciate the steps you have all taken to those data breaches consumer reporting agencies as we talk about today it must be enhanced oversight with cybersecurity beyond cybersecurity i have heard from my constituents dealing
with website could be clunky or confusing somebody mentioned today creating three separate accounts for three separate websites to freeze their credit is slow and cumbersome that there is not a faster streamlined process that they could give them power to freeze their credit if they find suspicious activity to give consumers more control of their information and increase cyber's of security at the credit reporting agencies. and the manner that equifax disclose the breach there are some fixes that need to take place is not a democrat or republican issuance those from new jersey to south carolina or southern california were affected the amount of time that passed between the discovery of the breach and the public finding out is
disgraceful to many of us. i would like to hear from each of you but can you explain why the internal guidelines you have put in place to promptly notify consumers that this happened again and how long will it take next time to notify those consumers and what do we do about this quick. >> thank you congressman it is an excellent question and our goal at the time and i can talk about going forward is to notify consumers and regulatory agencies when there is an event as quickly and as completely as we can. as you know, the situation of what happened met equifax 2017 was incredibly complex it took time to see who was impacted and data was accessed so we
can have the proper notification going forward it is to go as quickly and completely as we can. >> do you feel you didn't want to immediately notify because you were concerned when show that notification occur how do you make that decision quick. >> it is situational but what we want to do is notify those consumers so they know if they were a victim of a breach it does take time to work through forensics what happened but the goal is to notify as quickly as possible first and foremost,. >> thank you for the question. in the equifax breach happened we found out when everyone else found out. our goal is to get with the
right government entity as quickly as possible we have had conversations that we can relate to you later over what is going on and you must not know because you haven't told us and we said of course, not because they could help with understanding with what might've happened. our role to notify consumers as soon as possible to have the same issues how to notify them so it is as soon as possible. >> we notify as soon as possibl possible. >> and that question is as a consumer you should know right away because every day that goes by is possibly a breach of somebody misusing their
credit for nefarious purposes. that is the challenge and what do we do about it quick. >> i think that is absolutely right they should be notified as soon as it is practical and possible. >> i yield. thank you. >> i recognize the gentleman from ohio. >> thank you chairman. i appreciate everybody being here today. i don't envy the situation that unfolded at equifax. it was terrible for the american people to have that level of a breach but obviously the credit reporting agencies are critically important to society we talk a lot about income inequality what we don't talk enough about his wealth and equality and the effects were not having any access to credit on the individual's ability to build wealth for their
families. i want to go through a quick line of questioning so to summarize testimony today the argument i hear a lot of what seems like an old golf play there are more than three of us and we do compete aggressively is that a fair characterization quick. >> more than fair. >> yes. >> yes. >> in the last fiscal yea year, could you each say how much revenue as a company the last fiscal year quick. >> us revenue was two two.$3 billion. >> globalist two.3 billion i could get back to you with a
combination of businesses in the us. >> hours was about 4 billion. >> so there are more than three of us are there any other domestic competitors that compete anywhere near that scale from a revenue standpoint? or 50 percent or even half as close quick. >> congressman i would say there are people in the information business that approach i know pico has a large business. >> so basically i will check that as an oligopoly by most
definitions and that we do compete aggressively but in your testimony you said that you were funneling customers to experience and as a result of that breach is that roughly what you were saying quick. >> and don't recall using the term funneling but the first year we provided a credit monitoring service for free to all americans including those that were impacted at the end of that year we voluntarily extended for one year and had experian to provide the second year. >> see your competitor provided the service quick. >> at our expense. >> i come from a variety of backgrounds and professional football is one of them i know about competition i would suggest that is not competition not in the way we'd typically describe it. so to me it is fairly obvious
what this industry needs is a lot of reform and reform that would inspire more real competition not where you scratch each others back to extend credit to more people. so back to what i originally talked about wealth inequality and the ability to extend credit to different communities come in your written testimony you talk about machine learning technology using to extend credit, can you talk about the success of that program how you see machine learning playing into the idea to extend credit to more people quick. >> we are the big believers into things. more data is good for every american. point number one and technology use to access that
data to create algorithms will be better for the financial services industry we have a patent on that earlier this year and it is one that allows the company to use that to go through those databases in order to make decisions to extend credit to more people. >> i yield back. >> the gentleman from minnesota is recognized. >> thank you madam chair and our witnesses talk about commitments to be more consumer friendly so to that end time to download apps i look for equifax and experience app came up first i downloaded it it was very
easy. i must commend you i could find my credit score open accounts and closed but then i found you have at least one payment with a derogatory indicator i cannot find out what that was so upon notification you have something on your credit score how does a consumer like me actually identify what that is what is the easiest and most expedient way i am not on the detail. >> there is a lot of information but when you see a red arrow there is nowhere
else to go. >> normally then we look at the individual report and then you can see the negative impacts. >> so the actual paper report but not the app. >> i can double check that. >> how does one identify specifics quick. >> so the application is a credit view of suggestions on what you could do differently to change your credit score. >> is there a cost associated quick. >> go to credit karma it is free many banks offer that for free. >> but your product quick. >> i don't believe it is a true identity product. >> so a third party identifies what that arrow is as you
probably know consumers in the process of applying for a financial transaction if they are denied credit they will get a credit report for free that is generally when they engage with us when something on their credit report impacts their credit score than they will call us at the call center or if there is a process they think has that dispute either online or through the call centers and generally that is how we consumer will engage with us with an error on the credit report. >> so going back, i see my read in arrow indicates something is there so i just can't look at what that red arrow is? you understand what i'm trying to get to i hear from
constituents what troubles them they cannot identify why and in my estimation neither organization makes that terribly easy is there a better way to do so quick. >> i would have to look into it more detail but what you're saying is correct. >> if the answer is you have to purchase the information that troubles me and consumers i yield the rest of my time. >> the gentleman from wisconsin is recognized for five minutes. >> welcome. good afternoon do the three of you all know each other from before today's hearing? have you met before quick. >> by phone. >> this is the first time.
mister bundy and i have met face-to-face. >> it is wonderful we can lock our credit but it would even better service if you could collaborate just to give us one app to lock all three talk about that amongst yourselves that would i know you have the technology in friendships i would love it if you can work on that. will you work on that quick. >> yes. so let's talk about the lawsuit. you are being sued because of the breach quick. >> that's correct. >> is it fair to say that to your knowledge when you have not seen any of this
information that was breached being used against american citizens quick. >> all of our forensic analysis shows no evidence of that. >> so no american has been damaged from the breach correct quick. >> is that a question quick. >> no doubt there is a concern. >> but no one has had their identities stolen. >> not that we can identify. >> so the allegations but there hasn't been damaged as of yet with a class-action lawsuit where the lawyers will take 35 or 40 percent of the cut but nobody has been damaged i want to make that point to that is a fair argument to make if there was damage but at this point there has been.
we live in a nation state quick. >> we don't know the criminal or the nationstate that did the attack. we don't know. >> i don't have an opinion we are working closely with the authorities that started right after we know they are working hard to figure out the criminal. >> there are several reports that it was china you probably don't want to comment on that but again, it reiterates the point that china has not been an ally and we don't know how they will use this information on us. you provided free credit monitoring quick. >> not only to those impacted but all americans mimic the whole country. you are required to provide one year. >> each law varies by state.
>> 2155 i don't believe 2155 was it allows consumers to do the free freeze with no charge. >> i will note most of my friends across the aisle were against that. so the three of you collect data and try to provide useful information to individual companies to extend credit to americans and you have the best and most accurate data possible? is that fair trying to screw the american people? hey trying to put bad information site credit
reports of people cannot get credit quick. >> no. of course, not. >> are you trying to use the data to make poor people poor and keep them from getting home homes? or the best data the best credit decisions can be made by customers quick. >> correct. >> if you don't have good data than frankly you're not very good companies you could lose clients or revenue. >> if somebody gives you bad data you are just the collector wouldn't it be better if a bank gave you bad information you are just the aggregator. is that fair to say we also have obligations to audit the data that comes in to make sure it is accurate to provide consumers access to errors
they have identified. >> the gentleman is recognized for five minutes. >> thank you for being here today i appreciate your time to discuss this issue. earlier today you said no security breach has happened within your organization because you are consistently updating your system but yet just this past november in hong kong you were forced by the hong kong banking authority to suspend online services over a personal data security flaw identified after a local newspaper easily accessed information from the city's leader in finance minister you said you haven't had a breach so how can you say this wasn't a security breach quick. >> thank you for the question.
in our view it is an attempt of fraud with the credentials of the three people were stolen and they could access the system getting the data only for them. the choice to shut down the system was ours because we were going to upgrade the authentication. >> i appreciate that. >> if i am listening correctly they could access the data not just the leader and finance minister but others as well quick. >> know. >> but the reporter got the data. >> he stole that after many repeated attempts with the individual data of just one person each. >> you would not consider that a security breach or to access information about an individual's personal information you don't consider that a security breach quick.
>> not a material security breach. >> i would consider that a security breach as an owner of a digital design firm so why weren't you using two factor authentication quick. >> we could not that in but we are doing and now. >> i'm glad to see you are doing that but as someone who uses two factor authentication just to run for office and we could implement that very readily i would assume with the size of your organization and the security would be up today to make sure those things happen but i appreciate you try to move forward but i would absolutely consider you have a security breach and were not well prepared. so my question is do you think it is realistic there will not be in the future data breakage? i know you are investing
heavily you say you have not had material damages and it sounds like you are making some investments like your boost program. what do you think will happen in the future? will there be more data security breaches quick. >> as i testified a couple times this morning, it is a war every company faces whether your credit bureau or financial institution there are criminals and nationstates that attack us and i get alerts virtually multiple times per week about the perimeter being attacked. we believe we have to continue to invest in this technology to protect ourselves and second the sharing of the ideas of how to protect yourself is important i came
to the company that there is no trade secrets over data security we share with our customers and competitors. >> could we look forward to more security breaches quick. >> asked the question earlier could i guarantee but the answer is of course, not. >> we can expect there will be an attack on all of our systems. >> congresswoman there are constant attacks and all of the systems. >> so with cybersecurity and attacks, what percentage of your revenue or profitability are you putting into cybersecurity to protect the systems? . >> as we discussed before putting $500 million into the overall it system. >> what percent of your operating expense? profitability quick. >> roughly 30 percent not
30, 20 some percent of revenue. >> what percent of profitability quick. >> $297 million of profit. >> the gentleman from kentucky. >> thank you for your testimony we will start with mister bundy working our way down so describe a world that credit reporting agencies do not exist. >> i think i could describe it is difficult for consumers to access. >> thank you congressman the biggest banks would obtain all the information on consumers
and market to them exclusively with those competitive products. >> what could you say what it would mean for the consumer quick. >> that's a great question we play a critical role in as i travel the world the credit reporting system and infrastructure around the world it would increase cost for everyone. >> i appreciate the answer because obviously this industry has a vital role providing the infrastructure that is the predicate for affordable and accessible financing to consumers throughout this economy having said that we have identified issues and problems i appreciate those measures you are taking to correct some of
those issues. so following up with the line of questioning regarding to credit data as a solution. wide are those impediments to always take into account cell phone bills rental payments what are those existing impediments to inhibit you from expanding on your programs to take alternative data on a voluntary basis making that as a standard part of the assessment because the more data the better in terms of accuracy. anyone can answer that question. >> with the boost program we can work with consumers to allow them to put that directly onto their file to
see that immediate benefit. >> but that is voluntary. >> that's right the impediment to get that completeness over the large number of consumers. >> why wouldn't your firms do that as a matter of course, to obtain that information more frequently? . >> we are constantly working to make sure consumers have the best access but it is voluntary for organizations to provide that information. >> i agree that our focus we continue to look for more data sources because that would help more consumers particularly those less advantaged. >> especially with unforeseen medical bills that is not predictive of future credit
worthiness has your industry taken a look at that in terms of catastrophic health care situation that results in nonpayment that punishes a credit history but that normally wouldn't be a solid indicator of future credit worthiness as the industry taken a look at that issue? . >> that is a good question but one of the previous agreements we made is to take off credit that is the payments on medical or if the insurance company was supposed to pay for and hadn't it doesn't go on the credit report we would be willing to look into other avenues to reduce the negative information. >> final question, in the
world of modern technology it's our understanding the credit bureaus only recognize five basic dispute types can you verify this? would it be better if the industry with more particularity could categorize disputes with greater detail or more than just five categories? anyone quick. >> i would have to look i'm not sure the right answer on that. >> your time is expired. >> the committee will stand in recess for ten minutes to at the request of the witnesses the committee will stand in recess for ten minutes to at the request of the witnesses. [inaudible conversations]