Sec. 501. Consumer Bureau study and report to Congress on the impact of non-traditional data
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The Bureau of Consumer Financial Protection shall carry out a study to assess the impact (including the availability and affordability of credit and other noncredit decisions, the potential positive and negative impacts on consumer credit scores, and any unintended consequences) of using traditional modeling techniques or alternative modeling techniques to analyze non-traditional data from a consumer report and of including non-traditional data on consumer reports on the following:
Consumers with no or minimal traditional credit history. Traditionally underserved communities and populations. Consumers residing in rural areas. Consumers residing in urban areas. Racial and ethnic minorities and women. Consumers across various income strata, particularly consumers earning less than 120 percent of the area median income (as defined by the Secretary of Housing and Urban Development). Immigrants, refugees, and non-permanent residents. Minority financial institutions (as defined under section 308(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ( 12 U.S.C. 1463 note)) and community financial institutions.
Consumers residing in federally assisted housing, including consumers receiving Federal rental subsidies. In assessing impacts under subsection (a), the Bureau of Consumer Financial Protection shall also consider impacts on— the privacy, security, and confidentiality of the financial, medical, and personally identifiable information of consumers; the control of consumers over how such information may or will be used or considered; the understanding of consumers of how such information may be used or considered and the ease with which a consumer may decide to restrict or prohibit such use or consideration of such information; potential discriminatory effects; and disparate outcomes the use or consideration of such information may cause.
In assessing impacts under subsection (a), the Bureau of Consumer Financial Protection shall also consider recent Government studies on alternative data, including— the report of the Bureau of Consumer Financial Protection titled CFPB Data Point: Becoming Credit Visible (published June 2017); and the report of the Comptroller General of the United States titled Financial Technology: Agencies Should Provide Clarification on Lenders’ Use of Alternative Data (published December 2018).
Not later than 1 year after the date of the enactment of this Act, the Bureau of Consumer Financial Protection shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing all findings and determinations, including any recommendations for any legislative or regulatory changes, made in carrying out the study required under subsection (a). In this section: The term alternative modeling techniques means statistical and mathematical techniques that are not traditional modeling techniques, including decision trees, random forests, artificial neutral networks, nearest neighbor, genetic programming, and boosting algorithms.
The term consumer report has the meaning given such term in section 603 of the Fair Credit Reporting Act ( 15 U.S.C. 1681a ). The term non-traditional data means data related to telecommunications, utility payments, rent payments, remittances, wire transfers, data not otherwise regularly included in consumer reports issued by consumer reporting agencies described under section 603(p), and such other items as the Bureau of Consumer Financial Protection deems appropriate. The term traditional modeling techniques means statistical and mathematical techniques (including models, algorithms, linear and logistic regression methods, and their outputs) that are traditionally used in automated underwriting processes.
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Sec. 501
Consumer Bureau study and report to Congress on the impact of non-traditional data
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