Bullied by President Obama's new consumer watchdog, the Big Three consumer credit bureaus have curved credit scores for deadbeats. The capitulation is a bad omen for the economy.
The credit-scoring system underpins our economy. If lenders and insurers can't rely on it, they can't make sound judgments about the risks involved in millions of transactions each day.
Yet the system is being socialized thanks to a campaign by the administration to falsely smear it as inaccurate and biased against minorities.
The campaign began in 2011 when the Consumer Financial Protection Bureau investigated scoring models used by the consumer credit-reporting agencies. They include the VantageScore owned by the three biggest credit bureaus — Experian, Equifax and TransUnion — which provide scores and reports to underwriters.
Then last summer, the administration fed a front-page story to the Washington Post lamenting how "credit scores of black Americans have been systematically damaged" by subprime foreclosures, "haunting their financial futures." A week later, CFPB announced in Detroit that it would start policing Experian, Equifax and TransUnion.
(H/T Lord Humungus)