“As we begin to emerge from the coronavirus pandemic, it will be more important than ever for lenders to have a more comprehensive and inclusive picture of how Americans have been managing their financial health — even in extraordinary circumstances — beyond what’s seen in the traditional credit bureau file alone.”

America’s credit system is under serious pressure as it faces the most sudden and severe downturn since the Great Depression. Our CEO Melissa Koide and former President and CEO of FICO Larry Rosenberger released an op-ed titled “Data needs to be wider-sourced and more inclusive” discussing using more financial data for lending, enhancing public policy guidance, and financial exclusion and the COVID-19 effect.

“Even though credit scores play a key role in determining who gets a mortgage and at what terms, the current credit system disadvantages a disproportionate share of low-income consumers who don’t have enough information in their credit files.”

“It is clear just a few weeks into the Biden administration that fair lending and racial equity will return as a central focus of regulators under President Joe Biden.”

“A growing consensus that the CFPB should create regulations on ensuring consumers’ safe sharing of their bank data with finance apps, such as Venmo and Mint, isn’t making the agency’s job any easier.”

“For decades, numerous academics, consumer advocates, and legislators have pointed out the importance of consumer credit scores on individuals’ ability not only to obtain credit, but also on housing and loan affordability.”

“The New York fintech startup Harvest began offering a new credit score Thursday that uses artificial intelligence to take into account cash flow, spending habits and financial discipline alongside traditional scoring data to help lenders determine if a potential borrower is creditworthy.”

“How should financial regulators shape their response to the COVID-19 pandemic in overseeing microfinance institutions (MFIs)? What factors should they consider to help poor people and micro- and small enterprises survive the crisis?”

In many smaller American towns banks and credit unions are finding usual sources of loan demand dwindling — and that was before the COVID-19 recession. Community banking institutions may find trouble if they market their credit services further afield. The solution may be to dig deeper for loans in the communities they already know, marketing loans to be evaluated with new alternative data sources (like some fintechs do).

“New York, long the hub of the financial world and an early epicenter of the COVID-19 outbreak, is looking to innovative financial technologies as one source to help its pandemic-battered economy.”