New year brings new regulatory acceptance and educational initiatives

New year brings new regulatory acceptance and educational initiatives

Date: June 24, 2020

Dear Colleague,

Welcome to a New Year — one VantageScore Solutions has already started off at an exciting pace. We are kicking the year off in typical fashion: knocking down yet another barrier to adoption related to regulatory acceptance and adding new educational resources for lenders and consumers.

Beginning January 1, credit scores produced by the VantageScore model are accepted in data fields for the Federal Reserve’s Capital Assessments and Stress Testing Report (FR Y-14M report). Until this year, FICO had been the only scoring-model brand the Fed accepted. The report is required by law under both Dodd-Frank and the Bank Holding Company Act for all bank holding companies that are deemed to be SIFI banks (Systemically Important Financial Institutions). This includes both domestic institutions and the domestic subsidiaries of foreign institutions.

The revised FR Y-14M report is included in the set of instructions given to the SIFI institutions. Notably, the report describes a score generated by the VantageScore model as “an industry standard credit score.”

The FR Y-14M report is an element of the Federal Reserve Board of Governors’ Comprehensive Capital Analysis and Review (CCAR) program. The aim of the program, according to the Fed, is “to ensure that institutions have robust, forward-looking capital planning processes that account for their unique risks and sufficient capital to continue operations throughout times of economic and financial stress.”

More information about regulator recognition of the VantageScore model is available on our website.

As for new educational resources, this month we announced two new initiatives that are helpful for consumers.

  • Quizzle.com, a website dedicated to helping consumers manage personal credit, announced that it is providing VantageScore 3.0 credit scores to users of its free service. In addition, Quizzle is giving users score-explanation information from ReasonCode.org, the VantageScore educational website dedicated to clarifying credit score disclosure notices, and helping consumers use them to improve their scores.

  • Speaking of ReasonCode.org, we’ve also enhanced that website in some innovative ways. For starters, we’ve translated the website’s content into Spanish. We also rebuilt the site’s search mechanism so that consumers can enter codes in either English or Spanish to get more detailed explanations and score-improvement tips. Now, whether a consumer receives a score disclosure notice in English or Spanish, he or she will not be left wondering what the reason codes mean, or how to use them to help improve his or her credit scores.

These two resources nicely sum up what we truly believe here at VantageScore Solutions: that greater knowledge of credit scoring can be a win-win for lenders and consumers. In fact, we know from our research that better understanding of credit scoring among consumers correlates to higher credit scores.

Articles covering these new resources in greater detail are included in this month’s newsletter.

This month’s “Did You Know” article covers why and how lenders pull credit scores, and to kick off 2014’s “Five Questions With” column, we are delighted to be joined by Gary Korotzer, executive vice president & head of marketing, Wells Fargo Consumer Credit Solutions.

Warmest regards and all the best in 2014,

Barrett Burns