House lawmakers held a hearing on the credit reporting system on Tuesday, where one expert pointed out ways that the industry has failed to put consumers first.

Syed Ejaz, a financial policy analyst for Consumer Reports, said during testimony before lawmakers on the U.S. House Committee on Financial Services that the current credit reporting system does not work for U.S. consumers and can limit their financial opportunities.

"Consumers need a credit reporting system that works for them - one where their reports are accessible and accurate and errors are easy to correct," Ejaz said.

Ejaz noted that complaints to the Consumer Financial Protection Bureau regarding credit reporting errors have doubled since 2019 and are among the most frequently cited concerns.

The Federal Financial Institutions Examination Council (FFIEC) today issued a new booklet in the FFIEC Information Technology Examination Handbook series, titled “Architecture, Infrastructure, and Operations.”

The booklet provides expanded guidance to help financial institution examiners assess the risk profile and adequacy of an entity’s information technology architecture, infrastructure, and operations.

The new booklet replaces the “Operations” booklet issued in July 2004 and it provides examiners with fundamental examination expectations regarding architecture and infrastructure planning, governance and risk management, and operations of regulated entities. The booklet discusses the interconnectedness among an entity’s assets, processes, and third-party service providers along with the principles, processes, potential threats, and examination procedures to help examiners assess whether a financial entity’s management adequately addresses risks and complies with applicable laws and regulations.

Some states are clamping down on the payday lending industry, described by critics as a predatory practice that preys on the poor. But it appears unlikely that anything will change this year in Rhode Island -- one of just two New England states that allow payday lenders to charge the equivalent of triple-digit interest on loans.

During a recent event at Tolman High School in Pawtucket, educators and Democratic politicians celebrated a new law requiring Rhode Island students to get education in financial literacy.

Rhode Island General Treasurer Seth Magaziner said the research is clear -- students become more fiscally savvy adults when they learn the basics of finance.

“When students have access to education on how to budget, how to save, how to invest, on average, those kids go on to have higher credit scores, lower debt, lower likelihood of ever taking out a payday loan. and all kinds of other better financial outcomes,” he said. “So this works.”

Whether you're applying for a new credit card, a personal loan, or a mortgage, your credit score is apt to play a large role in whether you get approved or not.

If your credit score is great, you're likely to not only get a chance to borrow money when you want to, but do so at affordable rates. On the other hand, with a poor credit score, you may be denied a loan or get stuck with a higher interest rate on it.

But what if your credit score is neither good nor bad, but rather, nonexistent? Such is the case for an estimated 53 million people who are "credit invisible" -- meaning, they don't have enough of a credit history to have a score attached to their names.

Often, having no credit score is just as bad as having poor credit, or, in some cases, even worse. Banks, credit card companies, and other lending institutions often deny credit to borrowers with no credit score whatsoever. But now, some banks are stepping up to try and prevent that scenario.

Varo, Square and others seek clarity from the bureau on disparate impact, while lawmakers debate putting the agency in charge of credit reporting.

The intersection of the Consumer Financial Protection Bureau (CFPB) and the concept of disparate impact in lending came to the fore twice Tuesday.

Six fintechs — PayPal, Square, Varo, Affirm, LendingClub and Oportun — asked the bureau in a letter Tuesday to give more guidance on how it will apply the theory of disparate impact when artificial intelligence (AI), machine learning (ML) and alternative credit data are used to make lending decisions.  

Under disparate impact, a policy can be illegal if it has a discriminatory effect on a protected class but may not be if the intent behind a business serves a "substantial, legitimate, nondiscriminatory interest."

Examiners found violations in areas including consumer reporting accuracy, redlining, foreclosure, and Public Service Loan Forgiveness

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today issued a report highlighting legal violations identified by the Bureau’s examinations in 2020. The report also highlights prior CFPB supervisory findings that led to public enforcement actions in 2020 resulting in more than $124 million in consumer remediation and civil money penalties.

“Today’s release of Supervisory Highlights reinforces the importance of the Bureau’s supervisory work, including during the COVID-19 pandemic, to find and correct systemic problems that hurt consumers,” said CFPB Acting Director Dave Uejio. “The actions we took in 2020 mitigated some of that harm, but consumers are still struggling, and we will stay vigilant.”

Walmart and the fintech Green Dot said Thursday the retailer's MoneyCard is now offered as a demand deposit account, according to a press release. Users can manage their finances digitally or at Walmart's 4,500 locations or more than 90,000 Green Dot retail distribution locations nationwide. 

Consumers who convert their Walmart MoneyCard to a demand deposit account can access perks such as overdraft protection and no monthly fee for a qualifying direct deposit of $500. Walmart MoneyCard users can access a digital banking platform that is "similar to a traditional banking account," the retailer said. 

Walmart is offering a $20 bonus to customers who activate a Walmart MoneyCard bought online or in-store and deposit $500 or more by Aug. 15, the retailer said.

Examiners found violations in areas including consumer reporting accuracy, redlining, foreclosure, and Public Service Loan Forgiveness

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today issued a report highlighting legal violations identified by the Bureau’s examinations in 2020. The report also highlights prior CFPB supervisory findings that led to public enforcement actions in 2020 resulting in more than $124 million in consumer remediation and civil money penalties.

“Today’s release of Supervisory Highlights reinforces the importance of the Bureau’s supervisory work, including during the COVID-19 pandemic, to find and correct systemic problems that hurt consumers,” said CFPB Acting Director Dave Uejio. “The actions we took in 2020 mitigated some of that harm, but consumers are still struggling, and we will stay vigilant.”