This is the third and final post in an interview between Experian’s Tom Whitfield and Dr. Michael Turner, founder, president and CEO of the Policy and Economic Research Council (PERC)—a non-partisan, non-profit policy institute devoted to research, public education, and outreach on public and economic policy matters.
In this post
Dr. Turner discusses mandatory credit-information sharing for communications companies, and the value of engaging and educating state regulators.
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Does it make sense for the FTC to mandate carriers to report?
Credit information sharing in the United States is a voluntary system under the Fair Credit Reporting Act (FCRA). Mandating information sharing would break precedent with this successful, decades-old regime, and could result in less rather than more information being shared, as it shifts from being a business matter to a compliance issue.
Additionally, the voluntary nature of credit reporting allows data furnishers and credit bureaus to modify reporting in response to concerns. For example, in reaction to high utility bills as a result of severe weather, a utility provider may wish to report delinquencies only 60 days or more past due. Similarly, a credit bureau may not wish to load data it feels is of questionable quality. A voluntary system allows for these flexible modifications in reporting.
Further, under existing federal law, those media and communications firms that decide they want to fully report payment data to one or more national credit bureaus are free to do so.
In short, there is simply no need for the FTC to mandate that communications and media companies report payment data to credit bureaus, nor would there be any immediate benefit in so doing.
How much of the decision is based on the influence of the State PUC or other legislative groups?
Credit information sharing is federally regulated by the Fair Credit Reporting Act (FCRA). The FCRA preempts state regulators, and as such, a media or communications firm that wants to fully report may do so regardless of the preferences of the state PUC or PSC.
PERC realizes the importance of maintaining good relations with oversight agencies. We recommend that companies communicate the fact of fully reporting payment data to a PUC or PSC and engage in proactive outreach to educate state regulators on the value of credit reporting customer payment data.
There have been notable cases of success in this regard. Currently, just four states (CA, OH, NJ and TX) have partial prohibitions regarding the onward transfer of utility customer payment data to third parties, and none of these provisions envisioned credit reporting when drafted. Instead, most are add-ons to federal privacy legislation. Only one state (CA) has restrictions on the onward transfer of media and communications customer payment data, and again this has nothing to do with credit reporting.
Agree, disagree or comment
Whether you agree with Dr. Turner’s assertions or not, we’d love to hear from you. So please, take a moment to share your thoughts about full-file credit reporting in the communications industry.
Click here to learn more about current and pending legislation that impacts communications providers.