1. What is a Credit Bureau? A cooperative repository of information
Gathers and stores consumer credit payment history from lenders about how individual consumers pay their bills, i.e., credit obligations
Provides consumer credit payment history to lenders
Assures the privacy and limited use of consumer data

2. Organizing a Credit Bureau
U.S. system is private consumer reporting system
Contributes to safety and soundness of banking system
Central bank (U.S. Federal Reserve) and other regulatory agencies encourage participation through audit and examination process
Fairness to consumer, full file reporting of positive and negative data
Any credit reporting agency in an emerging market is better than no organization

3. Establishing a Credit Bureau… in proper sequence
Create and agree on an organizational structure
Equal commitment and interest of users and furnishers
Confirm and assure that legal structure of state permits development of credit reporting agency
Create a communications plan to assure positive cultural acceptance through education and public relations
Market commitment to furnish and use data to major banks

4. Establishing a Credit Bureau… in proper sequence
Select a Director or CEO who will manage Credit Reporting Agency
Determine adequate site for technological infrastructure (computer hardware, software, communications)
Decide if international partner is desired
If international partner is desired, send RFP to all candidates

5. What is the Value of Credit Bureaus to the Lender?
Control Risk
Lower bad debt loss
Risk-based pricing
Increase Revenue/Profits
Grow the business and increase sales
Have more money to lend
Administrative Savings
Single source of information
Standardized decision format
Improves Customer Loyalty
Speed of approvals
Greater number of approvals

6. What is a Credit Report?
Factual and objective history of how consumers pay their debts
Credit report contains four sections
Identifying information
Credit payment history
Public record/collection activity
Inquiries

7. Operational Issues of a Credit Bureau
Contracts
Users
Permissible purposes
Access code
Consumer disclosure
Security in-house
Penalties for noncompliance
Furnishers
Frequency of reporting
Timeliness of reverification
Notification of erroneous data
Notification of change in reporting format

8. Operational Issues of a Credit Bureau
Consumer Relations
Procedures and staff to handle
Inquiries/denials
Reinvestigations
Complaint resolution
Hardware/Software Issues
Security
Backup systems
System capacity and efficiency
Ease of upgrading
Communication flexibility

9. Basics of a Fair Credit Reporting Act
Defines set of permissible purposes for use of data (privacy)
For Credit
For Insurance
For Employment
For Tenant Screening
For Governmental license or benefit
For Collection Purpose
By Court Order
By Written instructions of the consumer
What is Not Permissible
Government curiosity
Citizen curiosity
Legal procedures (Divorce, Jury Duty, etc.)

10. Basics of a Fair Credit Reporting Act
Consumer access and consumer rights
Right to know contents (disclosure)
Right to dispute contents
Free copy or reasonable fee
Demand corrections and reinvestigations
Personal statement or explanation
Right to sue – civil action for violation
Defines obligations of data furnishers
Timely and accurate data
Reinvestigate disputed data
Correct erroneous data

11. Basics of a Fair Credit Reporting Act
Provides for regulation, interpretation and penalties for violation
Government agency enforces
Government agency interprets
Monetary fine and/or jail for violation

12. Basics of a Fair Credit Reporting Act
What a FCRA should NOT do
Does not require consumer’s written permission to create or access a file
Does not require creditors to furnish data
Does not permit consumers to “opt-out” of the system
Does not regulate commercial data or information about business credit
Is not a substitute for property title verifications
Is not a “blacklist” but rather contains positive and negative data
Does not allow subjective, hearsay or personal opinion information in the credit report