Our Response to the OCC's Senate Testimony on Regulatory Priorities

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The Acting Comptroller of the Currency is responsible for addressing matters facing the OCC and the American federal banking system. This article makes reference to his testimony on August 3, 2021 to the Senate Committee on Banking, Housing and Urban Affairs, which can be read in full here: Written Testimony of Michael J. Hsu, Acting Comptroller of the Currency

Summary of the Acting Comptroller's Testimony

The Acting Comptroller of Currency identifies four key regulatory priorities "requiring the agency's [the OCC's] immediate attention" (pg. 1), in line with the OCC's mission involving fairness and inclusion in banking:

  1. Guarding Against Complacency by Banks;

  2. Reducing Inequality in Banking;

  3. Adapting to Digitalization; and,

  4. Acting on the Risks that Climate Change Presents to the Financial System.

The events of the past two years have been cause for reflection on fairness throughout society, including in banking. The OCC remains committed to "ensur[ing] that the banking system works for everybody, especially those who are vulnerable, underserved, and unbanked."

Trust Science's Response

As an alternative consumer reporting agency focused on improving financial inclusivity in credit scoring through the use of cutting-edge AI FinTech solutions in a legally compliant way, Trust Science applauds the OCC's stance, especially as it relates to inequality and digitalization. Trust Science looks forward to supporting the OCC and looks forward to an improved regulatory environment that supports increased accessibility and inclusion in banking, in line with our mission to help deserving people get the loans they deserve.

Reducing Inequality in Banking

As stated by the Acting Comptroller, "reducing inequality in banking must be a national priority. The events of the last two years have brought our history of financial inequality into sharp relief" (pg. 4). 

With forty-five million Americans (disproportionately poor and minority) lacking a credit score and thus being unable to obtain key credit products such as a mortgage, the problem of credit invisibles has become paramount and a matter of urgent concern. Given that the traditional credit system presents a catch-22 that requires credit history to develop credit, it is not surprising that many Americans are left on the sidelines of the modern economy. However, as the Acting Comptroller identifies, "many people in this segment demonstrate financial responsibility through payment of rent, utilities, and other recurring financial obligations" (pg. 8). 

While Project REACh is evaluating credit scoring models based on alternative data sources that include these key pieces of financial data, Credit Bureau +™ by Trust Science delivers the power of these alternative data sources to lending leaders in a market-validated manner, today. As a result, lending leaders are able to get accurate, powerful, and predictive credit scores on millions more Americans in a fully compliant, fair, and ethical manner. For lenders, this means the ability to reduce risks, increase originations, and see substantial ROI of up to 200X. Just as importantly, for underserved, financially-stressed, or underbanked applicants, this means the ability to get their creditworthiness fairly assessed on metrics that are relevant to their finances, allowing more people to demonstrate financial responsibility in different ways and getting more people access to the credit products that are fundamental to joining the modern economy. 

Adapting to Digitalization

The Acting Comptroller identifies three related trends that are collectively driving the digitalization of banking (pg. 11):

  1. The mass adoption of digital technology;

  2. The rise of new payments capabilities; and,

  3. Technological innovations outside of the banking system.

As a leader in technological innovations outside of the banking system, including the development of digital asset and digital identity technology used in credit underwriting, Trust Science is fully prepared for -- and powering -- these trends to take hold of the financial system and looks forward to supporting the creation of a strong and fair regulatory environment surrounding these trends.

With the mass adoption of digital technology, and with over 85% of Americans owning a smartphone, the smartphone is a relatively new consumer vector for access to the key pieces of information involved in traditional and alternative credit reporting. Trust Science has developed Smart Consent™, a direct-to-consumer mobile application that enables users to easily provide informed consent to the use of their data and digitally accesses consented data into its scoring system. For lenders, this fully compliant technology provides a more complete picture of applicants for fairer and more accurate loan assessment.