This article really inflamed me this week. It’s about the gathering of data from every source known to man and collating this data to detect patterns and trends for who knows what end purpose!
Why is any consumer’s data allowed to be merged and morphed into multiple data sets for purposes beyond the original intent? When I give anyone my information it is for their use, to accomplish what I am seeking from them. That’s it!
Yet the implied consent that if a consumer gives data to financial providers, it can used for other purposes, is getting creepier by the day and has certainly gotten out of control. It seems like this all started with the credit bureaus selling “leads” based on data field criteria and it has bloomed from there. And now, the Government has jumped on the “Big Data” bandwagon (although they were probably already on it) and plan to use the information provided by the financial providers, to detect patterns and practices about financial providers. Hmmm.
Let’s start with the obvious, which any Economics 101 class will teach you; data can be spun to look anyway that you want it to.
So if that is the case, then the only purpose that I see in methods like this is to spin guilt to lenders who may not be guilty of anything. After all, HMDA data certainly makes every lender look guilty whether they are or not, so more data will do a better job at that? Regulators are already “estimating the probability” of race or ethnicity or sex based on names, geographic location and other metrics and this “guesstimating” will continue.
Consumer advocates, Universities and Regulators say this information is needed to keep up with lenders and their practices. Anyone that knows me, knows that I support being true, honest and just to consumers. I realize that not all lenders feel this way, which is why we now have this intense regulation. We have to weed out the bad and bad practices. I just do not believe that large databases of information will serve consumers directly, or the purposes outlined in the article. Instead it will serve the pockets of those who can spin it in a way to profit from it.
Seeing this after the news of the Disparate Impact ruling leaves me even more concerned for lenders who are trying to do the right thing. There will always be bad eggs in our industry no matter what the regulation; and I do support controls in our industry. Yet let’s focus on controls that allow a lender to flourish when they demonstrate good controls over consumer protection and fair lending. That should be our goal, not fairy tales based on volumes of data that were supposed to be private to begin with.
I would be very interested in your thoughts on this subject!
To Read The Article, CLICK HERE!