Equifax Could Ironically Gain From Senate Bill Meant to Punish
(Bloomberg) -- Equifax Inc. has been a pariah in Washington ever since it disclosed a massive hack last year that put millions of consumers at risk of having their identities stolen.
But in an ironic twist, lawmakers could end up helping the embattled company at the same time they move to punish it.
Included in last-minute changes to the U.S. Senate’s sweeping rewrite of financial rules is a provision that might make it easier for Equifax and rivals to compete in the business of providing credit scores for borrowers trying to get home loans.
Senate Banking Committee Chairman Mike Crapo offered an amendment to his own bill late Wednesday that would direct mortgage-finance giants Fannie Mae and Freddie Mac to use credit assessments offered by multiple companies, instead of exclusively relying on FICO scores provided by Fair Isaac Corp.
It turns out that the main rival to Fair Isaac is VantageScore Solutions LLC. And who owns VantageScore? Equifax and its credit reporting competitors, TransUnion and Experian Plc.
But the whole thing could be a wash for Equifax. The legislation sponsored by Crapo, an Idaho Republican, also requires Equifax and other credit reporting companies to provide free credit monitoring to some consumers -- mainly military service members -- after a cyberbreach. The companies make millions of dollars in revenue charging for such services.
Crapo’s bill has support from at least a dozen Democrats, and is expected to clear the Senate in the coming days.
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