WASHINGTON—Credit scoring models can be improved, while the SARs threshold needs to be raised, NAFCU told two congressional committees ahead of hearings this week.
Ahead of the Senate Banking Committee’s hearing on oversight of the credit reporting agencies, the trade association wrote a letter offering support for the use of alternative models that it argues “more accurately capture creditworthy borrowers.”
“NAFCU believes that improvements can be made to the current credit scoring system that allow credit unions to better serve their members without creating onerous new burdens,” wrote Vice President of Legislative Affairs Brad Thaler.
Thaler shared credit unions’ support of a fair and accurate credit reporting system, but warned against efforts that call for blanket suppression of negative credit information.
Security Standard Needed
In addition, Thaler highlighted the need for a national data security standard for entities that collect and store consumers’ personal and financial information, especially those entities that are not already subject to the same stringent requirements as depository institutions.
Thaler also stressed the need for depository institutions to be made aware of data breaches at credit bureaus as soon as possible so that the institution can proactively monitor any affected accounts.
SARs Threshold Needs to Increase
Separately, the reporting threshold of suspicious activity reports (SARs) should be raised, NAFCU told the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions ahead of its hearing on oversight of the Financial Crimes Enforcement Network (FinCEN).
In the letter, Thaler offered support for raising the reporting threshold of suspicious activity reports (SARs) and currency transaction reports (CTRs) to $30,000 to modernize outdated regulations and relieve some of credit unions’ compliance burdens.
In addition, Thaler shared NAFCU’s concerns about FinCEN’s beneficial ownership reporting form, which, as proposed, would allow reporting companies to answer “unknown” on several questions for core information.