It’s all about the data
September 29, 2010 | alternatives, federal legislation | Comments (0)The American Banker focuses on an interesting aspect of the BCFP:
The CFPB will have to acquire real-world data on a variety of financial products and their impact. Examining credit cards alone will need data elements ranging from credit card products, terms, fees, outstanding debt, average percentage of debt per household, demographics of households and so on. Mortgages will need similar information and include metrics on performance, payment schedules, delinquency rates and foreclosures.
Another large data segment comprises the list of “covered persons.” The Act broadly defines these entities as those who engage in “financial activities.” In practice, this means not just banks and mortgage companies, but also financial advisors, debt collection agencies, real estate appraisal services and so on. The bureau needs to manage master data elements, such as covered entities and products, to fully understand relationships, hierarchies and exposures. In addition, the research department in the CFPB could have potentially more wide-ranging data acquisition needs.
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