Credit Scoring and the Un-Scored: Alternative Data Reporting Sponsored by: Good afternoon. We are going to wait for another minute to get started, but thank you all for attending the webinar and for your interest on this important issue. Thank you for attending today’s webinar, “Credit Scoring and the Un-Scored, Alternative Data Reporting,” hosted by the Asset Coalition Toolkit for States, the Sargent Shriver Center on Poverty Law, CEDA of Cook County, and the Policy and Economic Research Council. My name is Susan Ritacca and I am a community investment associate at the Shriver Center. I will be moderating the webinar today along with Karen Harris, supervising attorney at the Shriver Center’s Community Investment Unit.

Housekeeping Technical difficulties? Contact Lissa Domoracki at 312-368-1154 or at lissadomoracki@povertylaw.org Submit questions during the presentations via the control panel First a few housekeeping matters. If at any point during the webinar you are having technical difficulties please call or email Lissa Domoracki at 312-368-1154 or lissadomoracki@povertylaw.org All attendees will be automatically muted, however attendees will be able to ask questions using the control panel. We will forward questions to the presenters as we receive them and the presenter may choose to answer questions during or at the close of their presentation. We would like this to be interactive, and all the presenters welcome your questions.

Polling Question #1: Describe your organization Throughout the webinar today we will be asking a series of polling questions which will help us understand who is participating in the webinar, your general interest in credit reporting, your initial perspective on alternative data’s impact on access to credit and credit scores, and if this webinar offered you new information on these issues. Our first question is for you to describe the organization you represent today. If your organization is not listed in the choices or you are participating in the webinar today but not representing another constituency, please select other. (After poll results come in) Ok we have the results and it looks like the majority of people today are representing: _________________

Asset Poverty Focus on total household wealth including real estate, savings accounts and retirement accounts Asset “poor” means that individuals do not have enough wealth to meet their needs for 3 months if no outside sources of income exist Before we launch into our panelist presentations, I’m going to provide a brief overview of the field of asset building, and how it relates to credit. Asset building aims for households to acquire the financial resources to get ahead in life, not just get by. Most people have heard of income poverty, which focuses on a household’s current income level. Asset poverty, on the other hand, focuses on a family’s total household wealth. A household is considered asset poor if it does not have enough income to meet its expenses for 3 months if all outside sources of income have disappeared. More than 1 out of every 5 US households and approximately 1 in 4 women headed households are asset poor. And asset inequality is even more pronounced by race. 37% of non-white households are asset poor in the US. Building towards asset ownership ensures that there are adequate financial reserves to weather a financial crisis, build economic stability, and shield a household from poverty.

Asset Poverty and Credit Credit is required to build assets including to purchase a home, secure a loan, finance a car You can’t build credit if you don’t have assets, and you can’t build assets if you don’t have credit Credit reporting is the fundamental way people build assets. Credit enables us to secure a loan for a home, school or small business, in addition to accessing funds and capital. Without a credit score, consumers are relegated to finding other means of building assets. Historically this has been through borrowing money from family friends or other businesses, being forced to pay higher down-payments or deposits to establish accounts, or paying high interest rates to secure loans from unregulated loan companies. In order to allievate asset poverty, more opportunities for low income families to build credit are needed. This means that both access to credit and mechanisms to improve scores are necessary.

Asset Poverty and Credit Fact: Somewhere between 50 and 70 million people have No credit score A thin file score When discussing credit and asset building, it’s important to note that between 50 and 70 million people nationwide have either no credit score at all, or a thin credit file. A thin credit file means that an individual’s credit score is based on only two or three pieces of information such as a credit card or loan.

Polling Question # 2: Do you believe the current credit reporting system is a transparent, fair and accurate way for consumers to build credit? Polling question # 3: Do you think most people understand what is currently being reported? We would like to know now what you think about the current credit reporting system: Do you believe the current credit reporting system is transparent, fair and accurate way for consumers to build credit? __________ of you think that it is transparent, fair and adequate __________ of you disagree with this __________ of you are unsure Do you think most people understand what is currently being reported? _________ believe that most people understand _________ believe that only a small portion of people understand _________ believe that most people do not understand _________ unsure Given that the majority of people do not believe the current system is efficient and accurate or is understood by most people, the next question becomes what do we do about this situation?

Poll Question #4: Will alternative data reporting increase or decrease low income families’ access to the mainstream credit industry? Poll question #5: Assuming that it increases access, how will such reporting affect low income families’ credit scores? We’d like to determine a baseline of attendees’ perspectives based on what you currently know about alternative data. Today’s focus is on access to credit. When we talk about access, we are talking about two issues. First, whether or not people have access to the mainstream credit industry. Second, assuming that they do, can they access or obtain credit to purchase assets. In other words, do you believe including alternative credit data in credit reports will help low income families get access to the mainstream credit industry? Based on the results: ___________ believe that alternative data reporting will increase access to the mainstream credit industry ____________ believe that it will decrease access to the mainstream credit industry ____________ are unsure Assuming alternative credit reporting will increase access to the mainstream credit industry, will such reporting increase, decrease or leave unchanged low income families’ credit scores? _____________ increase _____________ decrease _____________ same _____________ unsure

What this Webinar will Cover The Type of Data that is Currently Reported Discuss Alternative Data Reporting Impact of Such Reporting Consumer Service Providers’ and Reporting Agencies’ Perspectives Legislative Initiatives These issues are the basis of today’s discussion. These questions will be addressed by our panelists and at the end of the webinar we will ask your opinion again about the impact of alternative data in credit reporting.

Panelists Michael Turner, President, Policy and Economic Research Council (PERC) John Howat, Senior Policy Analyst, National Consumer Law Center (NCLC) Jennifer Smith, Director, Home Energy Assistance Programs, CEDA of Cook County Terry Clemans, Executive Director, National Credit Reporting Association (NCRA) Carol Wayman, Federal Policy Director, CFED And with that, let me introduce you to our panelists today Dr. Michael Turner is the President and Senior Scholar of the Policy and Economic Research Council John Howat is the Senior Policy Analyst at the National Consumer Law Center Jennifer Smith is the Director for Home Energy Assistance Programs at CEDA of cook county Terry Clemans is the Executive Director of the National Credit Reporting Association And Carol Wayman is the Federal Policy Director of the Corporation for Enterprise Development (CFED).

Panelist 1: Michael Turner, President, Policy and Economic Research Council Our first presenter today will be Michael Turner from PERC…

Panelist 2: John Howat, Senior Policy Analyst, National Consumer Law Center Thank you, Michael. We will now introduce John Howat from NCLC….

Panelist 3: Jennifer Smith, Director, Home Energy Assistance Programs, CEDA of Cook County Thank you John. Next will be Jennifer Smith from CEDA of Cook County….

Panelist 4: Terry Clemans, Executive Director, National Credit Reporting Association Thank you Jennifer. Our next presenter is Terry Clemans from the National Credit Reporting Association

Panelist 5: Carol Wayman, Federal Policy Director, CFED Thank you very much, Terry. Next we will present Carol Wayman from CFED.

Q and A Thank you very much, Carol. Now we are going to open the discussion up for question and answer, and I’m going to turn it over to Karen Harris.

Polling Question #6: Do you believe including alternative data will increase or decrease low income families’ access to the mainstream credit industry? Polling Question #7: Assuming that it increases access, will such reporting increase, decrease or leave unchanged low income families’ credit scores? Finally today we want to ask you again to answer the following questions: Do you believe including alternative credit data in credit reports will help low income families get access to the mainstream credit industry? Based on the results: ___________ believe that alternative data reporting will increase access to credit ____________ believe that it will decrease access to credit ____________ are unsure AND Assuming alternative credit reporting will increase access, will such reporting increase, decrease or leave unchanged low income families’ credit scores? _____________ increase _____________ decrease _____________ same _____________ unsure Thank you for your answers. [SEE HOW THINGS HAVE GONE BEFORE ASKING THIS QUESTION: Throughout this discussion ________ have changed your opinion and ________ have remained the same]

Thank You Visit our resource page for additional materials and copies of today’s presentations, an audio recording of today’s webinar and transcript Complete the survey and subscribe to ACTS for future events and information For questions or comments concerning this webinar contact Susan Ritacca at SusanRitacca@povertylaw.org We would like to thank our panelists, Michael, John, Jennifer, Terry and Carol for your professionalism and expertise. We know that this subject can be complicated and we appreciate you sharing your research and concerns about the current reporting system. Ultimately, our collective goal is to increase low income families’ ability to access and obtain credit so that they can overcome asset poverty. Please visit our resource page for additional materials and copies of today’s presentations. There will also be an audio recording of the webinar and transcript. We would also appreciate if you completed the survey at the close of the webinar, and for more information about asset building and future events, please feel free to subscribe to ACTS at www.assettoolkitforstates.org And with that we will conclude our webinar.