Financial Services Republican Leader Examines Lack of Innovation, Competition in Credit Reporting System
McHenry: What I see here is an oligopoly, the three of you, not really competing, and the consumer is the one losing out.
Washington,
February 26, 2019 -
WASHINGTON – Today, CEO’s of the three major Credit Reporting Agencies, Equifax, TransUnion, and Experian North America, testified before the House Financial Services Committee at a hearing entitled: Who's Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System.
Republican Leader of the House Financial Services Committee, Patrick McHenry (NC-10), pressed the witnesses on their efforts to modernize the credit reporting system, which suffers from a lack of innovation and competition. Ultimately, this leads to complacency and technological inadequacies with catastrophic consequences, such as the 2017 Equifax breach that put two out of every five Americans’ personal information at risk.
Watch the Ranking Member’s opening statement here or by clicking on the image below.
In his questioning, Ranking Member McHenry highlighted that nowhere is this complacency and lack of technological innovation more evident than the burdensome credit freeze process for the most vulnerable population of Americans: our children.
Ranking Member McHenry: “You have this innovative process you talk about, which Americans can freeze or lock their credit with a single click… So I’m a parent of two children… I looked at your process to freeze my child’s credit and while I can very easily and efficiently click through a process to do it online to lock my credit, for my child’s I’m required to get a copy of my Social Security card, my driver’s license, their birth certificates, their Social Security cards… And your efficient process, every single one of you, 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, when it’s protecting my data, it’s an efficient process, and why is it such an inefficient process, using an antiquated analog paper system, to protect kids? … So with nearly a million kids exposed to synthetic identity fraud each year, you’ve made this process needlessly slow because you don’t think it’s 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 the frustration I have here is 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, that’s why we need more competition, and simply taking you three down to one and putting you in government is not the solution either.”
Watch Ranking Member McHenry’s questioning of Mark Begor, CEO of Equifax; James Peck, President and CEO of TransUnion; and Craig Boundy, CEO of Experian North America here or by clicking on the image below.
