5 ms·
Twenty or so years ago Experian and FairIsaac were paid by USAID to help build credit bureau infrastructure in Kazakhstan. USAID also paid their legal departme
by Aspos 2y ago
Twenty or so years ago Experian and FairIsaac were paid by USAID to help build credit bureau infrastructure in Kazakhstan.
USAID also paid their legal departments to help draft a law which would govern the whole process.
And guess what, in the result we got much fairer, more efficient, far more future-proof infra than the US has today.
Gov licenses credit bureaus and runs its own one.
Banks must report to all licensed bureaus and may choose which bureau to pull reports from. This means a report from any bureau is as good as from any other one.
Having a gov player in the market effectively creates a price ceiling, so a private bureau has to sell data for less than the government-run bureau.
Private bureau has to keep innovating to justify its existence and thus keep creating new products which predict creditworthiness better and better.
Credit report includes all the raw information, so banks are free to compute their own score and are not bound to anything stupidly archaic and awkward such as US FICO score, don't need to rely on any external score at all.
It is the XXI century, computing a credit decision out of a few hundred datapoints takes milliseconds, costs nothing.
So gov-run bureau sees a fraction of a % of the load yet effectively moderates the whole market.
The largest private bureau is owned by banks (like VISA used to be) and thus is working in the best interests of the banks.
Many (if not all) problems we see in the US financial sector are the result of regulatory and legislative negligence. Just some lazy folks trying to run things the way there were in the 80es.
- Workaccount2 2y agoI think the idea is in good spirit, but it's important to be aware that gov backed services often run at a loss indefinitely. It's impossible to compete with a business that doesn't need to make money to exist. So you end up with just the government service.
- CoolGuySteve 2y agoYeah that's why the only and best way to send packages here is the USPS.
- Aspos 2y agoI see why you have this assumption, yet we have 20+ years of data proving that a private bureau can actually compete, flourish and innovate while serving majority of the reports while gov-run bureau ensures that prices stay manageable.
- Zeetah 2y agoIn many areas, the notion of government services operating at a loss doesn't make sense - police, fire department, armed forces, libraries, parks, etc.
- Workaccount2 2y agoNone of those are links in a chain of private markets. They are their own government monopoly markets. If the government is going to become the defacto credit rating agency, they might as well be the defacto lender. Obviously loan rejections and low scores will be unpopular and an easy lever to push on for more votes, so just ditch the credit ratings all together and have a government lender that lends taxpayer money for all loans at a flat-rate. Which basically has happened already - student loans - and we all know what a rosey picture that is.
- mint2 2y agoThat is incorrect, those are not government monopolies, those spaces have private options. FedEx, DHL, UPS and government USPS Parks - there’s a ton of types with equivalent public and private versions Police - private security Firefighters - there are private fire fighters who protect houses threatened by wildfire - they just don’t need to respond when it comes to responding to stuff like traffic accidents and health incidents Etc etc
- Workaccount2 2y agoI mean, you can edge case away any argument. My neighbor uses solar and batteries so I guess the power company isn't a monopoly?
- mint2 2y agoThat’s not comparable, that analogy is like saying I have a backyard so there’s no government monopoly on parks. It’s not like saying there’s a private tennis club and public tennis courts, or whatever other typical park amenities. That flawed analogy is like saying I have a baton so police aren’t a monopoly on protection, when my analogy actually was private security companies.
- vundercind 2y agoA lot of things in the US would change for the better if we installed a new government for ourselves using the techniques we have when we assist or replace foreign governments. There’s a ton of stuff we have and do, including some fundamental stuff (our system of voting, for one) that’s known to be really bad compared to the “state of the art”. But, in part because of some of those bad elements, we only ever get to apply better solutions for others, never ourselves.
- supertrope 2y ago>replace foreign government Like a CIA sponsored military coup? Or aerial bombing?
- BizarroLand 2y agoFrom what I gather in the Federalist Society Papers, the original intent was that we would reinvent our country every 25 years or so, draft a new constitution and incorporate all of the changes that we needed to continue to function with the precept of being a great society, "Of the people, by the people, for the people". However, requiring 100% of states to affirm the new constitution was difficult enough in 1776 when there were only 13 states and they all had a common enemy to band together against. Doing that now would probably be impossible or require antilogic so extreme no human could read it without their ears bleeding from the brain hemorrhage.
- dragonwriter 2y ago> From what I gather in the Federalist Society Papers, the original intent was that we would reinvent our country every 25 years or so I think you are confusing in name the Federalist Papers with the modern and, except in attempt to steal glory, unrelated Federalist Society, and confusing in substance the Federalist Papers with a letter written by Thomas Jefferson to John Adams in which he expressed the conclusion that all laws (incl. Cobstitutions) must, based on then-current actuarial data, sunset in approximately that timeframe to avoid the living being ruled over by the dead.