Rep. Alexandria Ocasio-Cortez took Equifax to task over the weekend, suggesting she’ll soon open a House investigation into its scoring methodology and security practices.
Recently-elected Rep. Alexandria Ocasio-Cortez (D-NY) blasted credit reporting agencies over the weekend, taking aim at Equifax and its counterparts.
According to the Washington Post, the freshman legislator is accusing the credit reporting industry of running a “broken” system. Using what Ocasio-Cortez regards as flawed methodology, companies like Equifax have had an adverse impact on people’s ability to find jobs and safe housing.
“Also a good moment to note that in the wake of the Equifax scandal, privatized credit scoring is a dice game & the credit score system is very broken too,” Ocasio-Cortez tweeted on Saturday.
“If only someone could do a Financial Services hearing about that.”
Ocasio-Cortez, who’s drawn conservative flak since winning a long-shot election in her native New York, joined the Financial Services Committee at the beginning of 2019.
The Bronx representative was responding to another Twitter user who claimed it took decades to repair his credit. And while Ocasio-Cortez’s comments are in line with her image as a young progressive, they’re surprisingly not far off from Wall Street observations, either.
Chairwoman @RepMaxineWaters has scheduled a Financial Services (@FSCDems) hearing on Credit Bureau Accountability for Feb. 26th.https://t.co/F8hadvCYUO https://t.co/IyDBltDR60
— Alexandria Ocasio-Cortez (@AOC) February 12, 2019
As Business Insider notes, short-sellers have begun piling their bets against Equifax. They may be motivated, at least in part, by a wave of class-action lawsuits filed in the wake of the company’s 2017 data breach. A culmination of security failures, the hack-attack compromised the personal data of some 147 million Americans. Stolen information included names, dates of birth and Social Security numbers.
Piled onto litigation are numerous inquiries from members of Congress, like Ocasio-Cortez; several have called for an overhaul of the way in which credit bureaus ‘process consumer data and assess their creditworthiness.’
And the Post points out that last month, a federal judge in Atlanta authorized two class actions seeking compensation for losses incurred as a consequence of the data breach.
If that’s not bad news for the nation’s largest credit reporting company, even Wall Street’s anticipating further damage.
Hedge funds have stacked Equifax at $600 million short. That amount, says the Post, matches record highs set after the company first disclosed the breach.
Short-sellers, explains the Washington Post, ‘borrow shares in a company and then sell them with the hope of later buying the same number of shares at a lower price. If the stock price falls, they profit by pocketing the difference.’
Securities finance analyst Sam Pierson told the paper that lawsuits may explain the gamble. However, Pierson says that “short positioning” began as early as October.
But Ocasio-Cortez’s tweets didn’t stop and end with Equifax. She also criticized lenders who prey on the impoverished and desperate.
“One of the biggest ways predatory financial actors get away w/it all is manufactured shame around personal finance,” she tweeted. “When working people aren’t paid a living wage, they become easy prey.”
Sources
Rep. Alexandria Ocasio-Cortez takes aim at Equifax and credit scoring
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