Deciding that amnesty from breaking immigration law and access to taxpayer-provided welfare and other public benefits was just not enough, President Obama is now turning the screws to the financial sector to grant credit to millions of illegal aliens.
As part of a recently released 37 page report by the Consumer Financial Protection Bureau on so-called “credit invisibles” the agency is demanding credit scores be generated using cell phone payment records, utility bills and “immigration remittances.”
It hopes that once they secure a FICO score, they can move a step closer to qualifying for mortgages, car loans and credit cards.
But analysts say most of these “unscorables” are not creditworthy, and according to preliminary estimates, their median credit score falls well below the subprime cutoff (535 vs. 620). Public records show many are subject to third-party debt collection and tax liens.
Lenders rely on the three-digit credit score as an indicator of how likely it is a borrower will repay a debt. Stale files or thin credit history does not allow FICO and other risk modelers to accurately predict future credit performance — that is, the likelihood, relative to other borrowers, that a consumer will become 90 or more days past due on a credit obligation in the following two years.
Using “alternative” inputs in the models, such as utility payments and remittances, could water down the models and make credit scores less reliable, leading banks to make even riskier lending decisions.
It was just a few years ago when so-called “subprime” mortgage lending caused a major financial panic leading to a severe recession. Now, President Obama wants to give subprime mortgages, loans and credit cards to millions more shaky credit risks. And giving credit to illegal aliens, who already have shown a blatant disregard for American law, seems to be a recipe for another major financial collapse.
