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

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A guide to strengthening your organization’s ability to get ahead in the fast-paced regulatory environment. Gain confidence, increase preparedness and approach worry-free engagement. …

A guide to strengthening your organization’s ability to get ahead in the fast-paced regulatory environment. Gain confidence, increase preparedness and approach worry-free engagement.

Published in: Economy & Finance, Business
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  • 1. ©2014 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. Regulatory roadmap — putting you in the driver’s seat Tony Hadley Experian David Proctor Experian #vision2014 Robert Stone Experian
  • 2. 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
  • 3. 3©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Our panelists Robert Stone Managing Consultant Director Experian David Proctor VP Product Management Experian
  • 4. 4©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Regulatory priorities in the credit ecosystem Data accuracy Dispute resolution Data furnisher responsibilities Consumer education and empowerment
  • 5. 5©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.  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?
  • 6. 6©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.  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
  • 7. 7©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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 SmithOffice of Equal Opportunity Employment Stacey Bach
  • 8. 8©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Priorities of the Consumer Financial Protection Bureau Data integrity Consumer education Ability to pay Debt collections
  • 9. 9©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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 DataProcessed Data Data Disputes Metrics, Analysis, Benchmarking and Trending
  • 10. 10©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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
  • 11. 11©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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
  • 12. 12©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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
  • 13. 13©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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
  • 14. 14©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Priorities of prudential regulators Model governance Capital adequacy Attribute governance
  • 15. 15©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.  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
  • 16. 16©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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
  • 17. 17©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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
  • 18. 18©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 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
  • 19. 19©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Hear the latest from Vision 2014 in the Daily Roundup: www.experian.com/vision/blog @ExperianVision | #vision2014 Follow us on Twitter For additional information, please contact: Tony.Hadley@experian.com David.Proctor@experian.com Robert.Stone@experian.com
  • 20. 20©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Visit the Experian Expert Bar to learn more about the topics and products covered in this presentation.

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