Daily Dash: US Consumer Watchdog Takes Action On Junk Data

October 21, 2022
The Consumer Financial Protection Bureau (CFPB) says companies need to do more to ensure false data isn’t in consumer credit reports, UK law firms lack scrutiny over money laundering and Malta begins to recover investment woes post-grey list.

CFPB Takes Action to Address Junk Data in Credit Reports

The US consumer watchdog has issued new guidance to consumer reporting companies about their obligation to screen for and eliminate obviously false “junk data” from consumers’ credit reports.

Companies now need to take steps to reliably detect and remove inconsistent or impossible information from consumers’ credit profiles, the Consumer Financial Protection Bureau (CFPB) has said. 

For example, many children in foster care have large amounts of information on their credit reports that is clearly junk data because as minors they are prohibited from entering into most contracts for credit.

“When a credit report accuses someone of defaulting on a loan before they were born, this is nonsensical, junk data that should have never shown up in the first place,” said CFPB Director Rohit Chopra. 

“Consumer reporting companies have a clear obligation to use better procedures to screen for and eliminate conflicting information, or information that cannot be true.”

UK Law Firms Evading Money Laundering Legal Consequences, Report Warns

Law firms in the UK face almost zero risk of criminal enforcement if they breach money laundering rules, and little prospect of meaningful fines, according to a report released by Spotlight on Corruption and Global Integrity.

The report shows that a fragmented set of nine different professional bodies responsible for self-policing the legal sector’s compliance with UK anti-money laundering (AML) rules are providing uneven and inadequate enforcement.

The report also shows that a government target to strengthen the consistency of supervision for the legal and accountancy sector by Spring 2021 has been substantially missed.

This is in spite of the fact that non-compliance with AML rules is still a significant issue for lawyers. For example, 60 percent of firms were visited by the UK’s Solicitors Regulation Authority (SRA) in 2020/21 for failing to fully comply with duties to have adequate AML controls in place.

Malta Rebounds, Indicates EY Report

Malta's attractiveness for business has bounced back following its grey list removal this year, but the country’s attractiveness score is still short of pre-2020 levels.

The EY Malta Attractiveness Index found that 58 percent of companies surveyed say Malta is currently attractive for business, which is an increase of 21 percentage points over last year's levels.

Malta was put on the grey list in 2021, becoming the first EU country to be added. However, it was able to turn things around relatively quickly, with the Mediterranean country being removed in summer this year.

US At Risk Of Getting ‘Left Behind’ On CBDC, Says Congressman

A US lawmaker has warned that the country is at risk of getting “left behind” in terms of payments innovation without a central bank digital currency (CBDC).

Speaking at an event on CoinDesk TV, Congressman Jim Himes (D-Conn.) said the US should continue to develop a CBDC so that it has the option to launch one in future.

“Why would you exit the game before you even know what the game is going to look like?” he said. “We could do the research. We could set up a pilot program for a CBDC.

“Why not build a CBDC platform upon which innovators could build payment systems, remittances [and] businesses. It could serve as the platform for private sector innovation.”

Currently, Himes said the US is “nowhere” in terms of CBDC development, and a “huge political decision” is needed to start the ball rolling.

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