Maintain Uniform Credit Reporting Standards
David Moskowitz is general counsel for Wells Fargo Home Mortgage. This viewpoint is an excerpt from his recent congressional testimony regarding the Fair Credit Reporting Act.
Marketplace experience shows that consumers expect the financial services companies they do business with to know about their accounts, to respond quickly to their questions and to advise them about products and services that will help them reach their financial goals. The service consumers expect requires that Wells Fargo have integrated information to give customers what they want - when, where and how they want it. Subject to the Fair Credit Reporting Act, Wells Fargo shares customer information internally to meet these goals.
Providing a new mortgage, refinancing an existing mortgage, meeting our contractual servicing requirements for investors and our customers requires information about their financial affairs. Applying inappropriate restrictions on transfers of information among our affiliates would impede customer service.
The 1996 amendments to the Fair Credit Reporting Act recognize the value to customers of the ability to transfer information among affiliates. This ability is wholly consistent with consumer expectations that their questions will be answered and their needs will be met with a single call or a single e-mail message, whether their financial products are provided by a single company or several companies in the same affiliated group. To put it another way, customers do not care whether for technical, regulatory or management reasons Wells Fargo chooses to organize itself into a particular series of affiliates of a holding company or subsidiaries of one bank. What customers do care about is the seamless delivery of the products Wells Fargo offers regardless of how we choose to distribute them.
To use customer information to provide the same level of service that could be provided by a single entity with the same information about the same customer, a holding company like Wells Fargo that provides services through multiple bank and non- bank charters would have to consolidate its operations into as few charters as legally possible.
Because of the uncertainties of the outcome of the FCRA debate, institutions like Wells Fargo will likely change their corporate structures to reduce the number of separate entities rather than risk restrictions on information sharing among affiliates. It is our view the corporate structure should not be a factor in setting public policy regarding information use. The touchstone, instead, should be consumer expectation.
This is especially critical to our mortgage business. Since passage of the 1996 amendments to the Fair Credit Reporting Act, mortgage servicing has become more efficient. Wells Fargo customers have more channels through which they can apply for a mortgage and get assistance or conduct transactions related to a mortgage, as well as the complete array of financial products offered by Wells Fargo. With affiliate transfers and use of customer information, mortgage customers can make a mortgage payment at their local bank branch, obtain balances, get consolidated statements and get the support of 24-hour call centers that serve an entire affiliated enterprise.
Wells Fargo can offer a variety of mortgage services and products, such as:
* Quick turnaround on refinancings.
* Discount on closing costs for signing up with Wells Fargo product line.
* Referrals lead to new homeowners. In California, 40% to 50% of Wells Fargo's mortgages originated this year are the result of referrals from Wells Fargo Banks to Wells Fargo Home Mortgage.
Actions by multiple states to enact their own state versions of the Fair Credit Reporting Act will frustrate customers that do routine transactions across state lines. Wells Fargo provides services to thousands of customers that may have accounts "domiciled" in one state, yet reside or do business with a Wells Fargo bank in another state. Nearly half a million Wells Fargo customers have made teller or ATM transactions out of state within the past five months.
Finally, Wells Fargo believes the current uniform national standard for information use, as provided by the 1996 amendments to the FCRA is vital and asks that this Congress provide clarity and stability by removing the sunset provisions that affect affiliate sharing and other segments of credit granting. Congress should also address identity theft and should grant authority to bank regulators to set new national standards for notices about information use to customers.
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