Yes, eliminate their role in credit reporting
The phrase “Abolish ___” has been a cornerstone of social and political movements for centuries, used to demand the total elimination of specific institutions rather than their reform. Of course, “Abolish Slavery” was the mic drop use, but that still resonated when I heard the slogan, “Abolish Apartheid” around 1986 when I was in law school. Since then, however, using the word “abolish” seems to have become an overused progressive response to anything disfavored. While today we have “Abolish ICE,” the dumbest use of the “Abolish ___” slogan by far was “Abolish The Police” in the wake of George Floyd’s killing. Anyway, I’m jumping on my own one-man trade association bandwagon to offer my own crusade to demand elimination, not reform, of the annointed role in credit reporting played nation’s credit bureaus (the “Bureaus”).
Criticizing the Bureaus
Criticism of the Bureaus is not a new thing.[1] When you have been granted special powers over American consumers by the government like the Bureaus have, however, you better be ready for a few slings and arrows at your business model, practices, and pricing.[2]
Typically, criticism of the Bureaus has come from consumer complaints.[3] In recent years, estimates[4] reflect that complaints about credit data and the credit reporting industry have represented approximately 80% of the complaints received by the CFPB, far exceeding second place debt collection (at just 7%) and mortgage related issues way behind in the low single digits. While consumer complaints against the Bureaus have been a constant,[5] the consumer lending industry that works alongside the Bureaus to enable access to consumer credit in the US has rarely been the source of complaints.
Zero sum battle lines drawn
Today, however, despite the real and politically charged, “affordability” issue for housing (including concerns about “junk fees”) the Bureaus’ inflation-outpacing price increases have become a lightning rod for the lending industries (particularly the mortgage industry) that pass through the Bureaus’ credit report and scoring fees to consumers. Of course, if you believe the Bureaus’ excuses for their cost increases, the cost to manage your credit data keeps increasing (e.g., credit scoring costs, data security obligations, accuracy, compliance, etc.)[6] . Whether due to greed, inflation, regulatory burdens, or other things, the gloves are off now in the debate over credit costs, and many industry leaders are calling for reforms. Rich Swerbinsky described a “LinkedIn battlefield” on these issues.
Specifically, I took note of some extremely pointed and unusually bellicose criticism leveled at the Bureaus by MBA President, Bob Broeksmit at a recent MBA conference. Among other charged remarks, Broeksmit said the Bureaus were “gaslighting” the mortgage industry on their reasons for raising prices to consumers. Meanwhile, one of the Bureaus, Experian, just bought a licensed mortgage shopping company to, in their words, “[play] a more direct role in the mortgage journey.” The war between the mortgage lenders and the credit reporting industry is on, and it is not just in words.
Calls for change, however, all seem to be zero-sum finger pointing instead of thinking outside the box for any fundamental reform to the system for credit access to improve consumer control and outcomes. Using single file or “tri-merge” credit reports as a way to reduce costs is really a distraction debate over the wrong thing.
DOGE the Bureaus?
Instead, I am reminded of something I read four years ago in the April 16, 2022, Chrisman Commentary. In that edition, Rob Chrisman reported (in the context of news about a CFPB enforcement action against TransUnion) that one anonymous “industry vet” had the following abolitionary comments about the Bureaus that resonated with me at the time,
Perhaps it is time to reconsider the whole purpose behind the credit bureaus. With blockchain technology, smart phones, and data interfaces among financial institutions, what is preventing control of personal credit data being in the hands of the consumer instead of these private companies? That is, do we even need to give private companies a license to hold consumer credit data and the right to charge to sell that data (or get hacked giving access to Russia, China, and the dark web)?
If the bureaus want to sell my data, they should have to pay me for it. A single government owned bureau that some politicians and consumer advocates are promoting would be an even worse idea. Meanwhile, until Congress can figure out how to do its job and legislate a credit system for the 21st Century, the CFPB’s aggressive enforcement is the next best alternative to get these companies to act like responsible utilities instead of abusive government-sanctioned monopolies.
Gosh that industry vet’s written voice sounds familiar, but where were his usual footnotes?[7] So, now, with cover from Broeksmit and the MBA and channeling the best sort of Elon Musk DOGE/limited government efficiency creativity,[8] I am going on the record with my criticism. Specifically, the Bureau model is (1) a government granted monopolistic boondoggle[9] over your personal credit data that (2) has outlived its usefulness which (3) can and should be replaced with something else controlled by consumers.[10]
Who controls your data?
Lenders and other folks getting paid back over time want to know how a borrower has paid their bills in the past to assess any future credit transaction. So, while most folks have no idea how it happens, every month their payment history with all sorts of lenders, vendors and creditors gets sent to one or more of the three Bureaus. The Bureaus then sell that payment history back to the consumer and to third parties.
This is all due to the 1970s era law, the Fair Credit Reporting Act (FCRA) which entrusted these companies to hold and distribute that data. If you were designing this system today, consumers would be outraged[11] at how lawmakers enabled 3 largely unregulated Bureaus to gather and hold our personal financial data and then force us to pay them to get that data back when we want or need more credit.[12]
Mandating landlines?
While it made sense with the technology available in 1970, today FCRA is like a law that mandates everyone use landlines (owned by AT&T) for their telephone calls regardless of cellular technology. As I noted four years ago, from a technological perspective with blockchain,[13] dual factor authorization, silicon chips, the internet and AI, we can seamlessly and safely view our credit data on our smartphones with direct access to our creditors’ account information. Similarly, we could make our credit information available to other creditors who can apply any credit scoring methodology of their choosing to assess our creditworthiness. I fail to see where enabling the Bureaus to gather, control, and distribute that data fits in that ecosystem today.
Data breach/identity theft risk
My ire against the bureaus was initially piqued by the 2017 Equifax data breach (perpetrated by Chinese hackers) which inspired me to ask: Why the heck do these Bureaus even have all this data in one place to begin with? It’s not like anyone asked me if it was ok for them to get my social security number and payment histories which at least one them then proceeded to negligently give to Chinese hackers (in return, most consumers who bothered to submit the paperwork got less than $15 in that settlement).
Yet, the mere existence of the Bureaus as repositories of the personal data of hundreds of millions of consumers makes them massive (and irresistible) gold mines for data thieves. Ironically, rather than protecting your personal data, the Bureaus essentially enable identity theft to occur.[14] And identity theft only fuels other revenue generators for the Bureaus; like the totally palliative credit monitoring we all seem to get every time someone has a data breach. Wouldn’t it be enormously safer from a hacking perspective (and less expensive for consumers) to have that data held just by (i) the consumers themselves on a personal device over which they have physical control, and (ii) the creditors with which the consumer has voluntarily agreed to work with?
The better model
Answering my last question in the affirmative, here’s the simplified model I envision for the future of credit reporting with the consumer in control: when I am interested in a loan or credit of any kind from a provider, (using strong dual factor authorization) I push a button on my financial management app that enables that particular creditor to electronically access my credit history from all of my existing creditors. Meanwhile, all creditors (whether I have or want an account with them) will have their own software or AI agent that (once I have authorized them) is able to instantly and electronically gather and assess (with a credit scoring model overlay) my credit history from my existing creditors. Simply put, there is no need for the Bureaus in my future model.[15]
Admittedly, my new credit data model will require a transitionary period and does not fit with the existing definitions and roles of FCRA. Still, perhaps in the name of affordability, Congress can do its job and fix that.[16] Meanwhile, I always welcome feedback, and on this idea in particular, I would like to hear why I might be substantively wrong.
[1] Broadly, over the past 30 years or so, the credit Bureaus (primarily Experian, Equifax and Transunion) have faced criticism for generally operating with opaque methods harming consumers’ access to credit, housing, and jobs. Specifically, the kinds of complaints leveled against the Bureaus include: inaccurate data, making disputes and corrections difficult, failing to protect consumer information (highlighted by the 2017 Equifax breach), use of “dark patterns” to confuse and mislead consumers, bias, and the lack of meaningful consumer control over how consumer data is collected and used.
[2] The “Great American Mortgage Company” (Fannie & Freddie) and downstream beneficiaries of the liquidity they provide ought to take note of that.
[3] Specifically, complaints about inaccurate or fraudulent tradelines, improper use of reports, and inadequate investigations.
[4] See e.g., https://www.consumerfinancemonitor.com/2024/04/05/cfpb-publishes-consumer-response-annual-report/
[5] Those CFPB complaint numbers may decline in the future due to recent prerequisites implemented by the CFPB to submit credit related complaints. I guess CFPB trusts the Bureaus to resolve consumer issues and gather and report that data themselves. But, if CFPB can do that for Bureau complaints, why not mortgage related complaints too (and all complaints)?
[6] If you believe Bob Broeksmit, who may have been channeling Elizabeth Warren, the Bureau’s prices are going up because they are greedy.
[7] Astute readers will also note that I did not put my own quote in quotation marks because, well, that would be weird, right?
[8] I was quite hopeful for DOGE initially, but it needed more than a chainsaw.
[9] I worry, however, that one man’s “government granted boondoggle” is another man’s “thing that I’m not just going to give away for nothing.” See also, my August 25, 2025 Musing Edition # 96 entitled Corruption and the Great American Mortgage Company.
[10] This is not unlike my rant against the Realtors’ stranglehold on property listings through their multiple listing service (MLS). Real estate agents can provide other services highly valuable to consumers to earn their keep other than an MLS. Likewise, the Bureaus can gather and collect data for other consumer related purposes (e.g., employment, income, assets, etc.) but they should have no government granted right to that information or the ability to sell it to third parties without consumer consent.
[11] Then again, consumers rarely get outraged about things they don’t understand, even when they are getting screwed.
[12] Amendments to FCRA have provided consumers with access to obtain their credit reports for review, but the Bureaus still require lenders to pass through credit report fees to loan applicants and still can sell your data to third parties (with some recent limitations thanks to the MBA’s efforts on trigger leads).
[13] In an otherwise dismissive post about blockchain in mortgage, Harry Gardner, Director of Digital Services at ICE Mortgage Technology had this to say about blockchain, “Blockchain has its place – especially where participants do not trust any single entity, or where thousands of micro-contracts form a better solution than a few old-fashioned agreements.” Blockchain sounds perfect for the Bureaus though!
[14] A data/identity thief with information from only one creditor is highly disadvantaged over one who knows all your accounts. Identity thieves need the ability to obtain your entire credit file to obtain credit in your name and the Bureaus can make all that information available without your knowledge or consent.
[15] Note that we would still have the same dispute resolution issues and questions about whether someone’s credit file is complete that we have today, but revisions to FCRA contemplating a Bureau-less environment might be able to improve those issues.
[16] Some Bureau lobbyists would no doubt become very rich in the process of trying to prevent FCRA amendments to facilitate the Bureaus’ demise, and one needs only look at the Jones Act or sugar subsidies to see how vested interests (and corruption) can trump even the most obvious policy wins.