Vision 2014: Regulatory Roadmap Putting You in the Drivers Seat

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Regulatory roadmap — putting you in the driver’s seat

Tony Hadley Experian

David Proctor Experian

#vision2014

Robert Stone Experian

2 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.

What’s driving the agenda in Washington?

Data integrity

Debt collections

Ability to pay

Consumer education

Attribute governance

Model governance

Capital adequacy

Discussion topics


Our panelists

Robert Stone

Managing Consultant Director

Experian

David Proctor

VP Product Management

Experian


Regulatory priorities in the credit ecosystem

Data

accuracy

Dispute

resolution

Data

furnisher

responsibilities

Consumer

education and

empowerment


2.2% of credit files contained a material error that would move a consumer to a different score band reflecting a higher risk

5.2% of consumers are affected by a material error, reflecting that consumers have three reports and not all reports may contain an error

21% of credit reports contained an error that did not materially affect their score

26% of credit reports were alleged to contain an inaccuracy

What’s driving CFPB’s focus on data accuracy?


Debt collection added in July

Credit reporting complaints:

► Incorrect information on a report (73%)

► Consumer reporting agency investigation (11%)

► Inability to obtain report and score (9%)

► Improper use of credit report (4%)

► Problems with credit monitoring or identity protection services (3%)

CFPB’s consumer complaint system

39%

16%

14%

13%

8%

7%

July 2011 – February 2014

Mortgages

Other

Credit

reporting

Bank

account

Debt

collectors

Credit

cards


Consumer education occupies a large swath of CFPB’s organizational structure

General Counsel Meredith Fuchs

FOIA, Privacy and Records

Claire Stapleton

External Affairs Zixta Martinez

Response Center Scott Pluta

Operations / Facilities Suzanne Tosini

Procurement David Gragan

CIO Ashwan Vasan

CFO Stephen Agostini

Human Capital Dennis Slagter

Inclusion Scott Ishimaru

Financial Education Camille Busette

Consumer Engagement

Peter Jackson

Older Americans Nora Dowd Eisenhower

Service Members Holly Patraeus

Students Rohit Chopra

Financial Empowerment

Clifford Rosenthal Collections, Deposit

and Credit Information Markets

Corey Stone

Installment and Liquidity Lending

Markets Rick Hackett

Mortgage and Home Equity Markets Peter Carroll

Card and Prepaid Markets

Will Wade-Gery

Regulations Kathleen (Kitty) Ryan

Research Christopher Carroll

Consumer Advisory Boards

Delicia Hand

Community Affairs Chris Vaeth

Inter-Governmental Affairs

Cheryl Parker Rose

Small Business Community Banks and

Credit Unions Vacant

Legislative Affairs Catherine Galicia

Media Relations Jen Howard

Chief Technology Officer David Forrest

Chief Operating Officer Sartaj Alag

Deputy GC To-Qyuen Truong

Deputy GC Richard Lepley

Research, Markets and Regulations

David Silberman

Consumer Education and Engagement Gail Hildebrand

Principal Deputy GC

Supervision & Enforcement

Steve Antonakes

Deputy GC Steve Van Meter

Large Bank Supervision

Paul Sanford

Enforcement Kent Markus

Non-Bank Supervision Peggy Twohig

Fair Lending Patrice Ficklin

Chief of Staff

Christopher D’Angelo

Senior Advisor

Len Kennedy

Director - Richard Cordray Office of the

Director Deputy Director – Steve Antonakes

Ombudsman Wendy Kamenshine

Office of Financial Institutions and

Business Liaison Daniel Smith Office of Equal

Opportunity Employment

Stacey Bach


Priorities of the Consumer Financial Protection Bureau

Data

integrity

Consumer

education

Ability

to pay

Debt

collections


Raising the bar on data integrity

Data

integrity

• New packaged services from Experian

• Actionable information and insight

• Data officers and custodians are empowered

• Dispute management

Raw Data On-file Data Processed

Data

Data

Disputes

Metrics, Analysis, Benchmarking and Trending


Empowering consumers and driving engagement

Consumer

education

Mandates for increased consumer transparency

and education

Going beyond a score

Live one-on-one credit report education

Customer

education

Customer

loyalty

Credit

building

Credit

events


Assessing ability to pay with modeled income

Ability

to pay

The role of modeled income

The impact of modeled income on credit line increase

Regulatory update

Best practice: underwrite first, then apply ATP check


Debt collections in the regulatory spotlight

Debt

collections

Drivers include federal law and regulator priority

You need superior data quality…

Filters…

Single search and streamlined solution

Scoring Skip

tracing FirstSweepSM


Priorities of the Consumer Financial Protection Bureau

Debt

collections

Drivers include federal law and regulator priority

You need superior data quality…

Filters…

Single search and streamlined solution

Ability

to pay

The role of modeled income

The impact of modeled income on credit line increase

Regulatory update

Consumer

education

Mandates for increased consumer transparency and education

Going beyond a score

Live one-on-one credit education

Data

integrity

New packaged services from Experian

Actionable information and insight

Data officers and custodians are empowered

Dispute management


Priorities of prudential regulators

Model

governance

Capital

adequacy

Attribute

governance


Monitors attributes for soundness over time

Tracks the impact of changes on existing attributes

Provides regulatory audit support

All of which includes:

► Framework for effective attribute development and use

► Documentation management for robust version tracking

Attribute governance

Attribute governance is necessary for compliance


OCC Bulletin 2000-16

2000

OCC Bulletin 2011-12

2011

.

The Supervisory Guidance on Model Risk Management OCC Bulletin 2011–12 extends the scope beyond model validation to policies, practices, standards for:

► Model development

► Model use and implementation

► Model governance and controls

All banks of all sizes are impacted

Model governance


Attribute and model governance

DISCOVERY

Risk exposures,

business activities and

complexity and use of

models

GAP ANALYSIS

Gap analysis of model

policies and procedures and

identify discrepancies to

meet effectiveness and/or

compliance

ACTION PLAN

With detailed

recommendations and

migration path with timing

for bridging the gaps

Business Review

CREATION

Definitions; logic

and code

accuracy; and

implementation

timelines are

reduced

MONITORING &

MAINTENANCE

Detects shifts for

potential impact

and facilitates

upgrades to newer

versions of

attributes

DOCUMENTATION

Ensures accurate

information in all

applications

Records general

conventions &

limitations

MODEL

VALIDATION

Validation,

Backtesting,

Benchmarking/

effective challenge,

Sensitivity Analysis

and Stress Testing

Attributes Models


Experian offers unparalleled experience

and strategic thinking to help you deliver on

stress scenario loss forecasting models to

ensure capital adequacy

Primary business requirements:

► CCAR/DFAST

► Basel

► ALLL

Areas of expertise / previous engagements:

► Analytics and modeling

► Strategic business consulting

► Staff augmentation

Capital adequacy


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Vision 2014: Regulatory Roadmap Putting You in the Drivers Seat

Economy & Finance

Transcript of Vision 2014: Regulatory Roadmap Putting You in the Drivers Seat