WASHINGTON (Aug. 15, 2007) – The National Association of Mutual Insurance Companies (NAMIC) pointed to a new government report showing a direct correlation between credit scoring and risk. A study released by the Federal Reserve Board comes on the heels of a report by the Federal Trade Commission that also said credit scoring is not unfairly discriminatory.
“Once again, the federal government has undertaken an exhaustive study of credit scoring and whether it unfairly discriminates against certain population groups for higher rates on insurance and other financial products,” said Carl Parks, NAMIC’s senior vice president for government affairs. “Once again, the government found that credit scoring is not a proxy for race or ethnicity.”
Parks pointed out that the latest report on credit scoring used different data from that in the FTC’s report. “Despite using a different data set, the conclusions reached by the Federal Reserve were the same as the FTC’s,” Parks said. “This should put to rest, once and for all, the notion that credit scoring is anything less than a valuable tool for predicting risk that helps lower rates of financial products – including insurance – for the majority of Americans.”
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Posted: Wednesday, August 15, 2007 12:00:00 AM. Modified: Friday, August 17, 2007 11:15:18 AM.
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