Banking Committee Chairman Mike Crapo, R-Idaho, added a provision to the bill for the FHFA to review credit scoring alternatives; the FHFA currently uses FICO’s classic scoring model for loan applicants; the provision adds a new piece to the ongoing argument occurring between FICO and VantageScore; FICO and some lawmakers say the FHFA is already going through a review process for credit scores; the FHFA did ask for input on new scoring models in December and is working through the comment process. Source.
Sawa Credit is creating a community debt servicing technology platform to help the underserved stay in their homes.
China has been looking to create a credit scoring system seen in many developed economies like the U.S. and the U.K.; initially asking 8 top companies to be involved, though they found it hard to form as companies were unwilling to share proprietary data with competitors; the PBoC is now tasked with having a industry wide system that does not favor giants like Alibaba and Tencent. Source.
While Alibaba’s Sesame Credit has increased access to loans in China the government recently told them to stop a national rollout of the program; John Gapper from the FT writes that there are three main issues behind social credit scores in China; technology companies have a more liberal attitude than banks when it comes to data; social credit scores seem to promote spending and more credit where as a traditional FICO score rewards a user for self control; the scores are proprietary to the companies who created them like Alibaba did with Sesame Credit. Source.