Our research suggests that the market for consumer credit has matured in interesting and important ways, largely to the benefit of consumers. However, the principal aim of our research is to examine whether or not a loss of the existing framework of preemption would threaten the benefits currently enjoyed by consumers. We also consider the impact on consumers of possible modifications made at the federal level to that framework, where these modifications are consistent with the state legislative proposals examined in this report.
Our quantitative analysis considers the following areas of inquiry:
(1) Has automated underwriting contributed to the availability of home mortgage loans and increased homeownership? If so, who has been affected, and how? How would changes to the framework of preemptions enacted in 1996 affect automated underwriting practices?
(2) Has the ability to prescreen made consumer credit markets more competitive? If so, how would restrictions on this method of customer acquisition affect the cost and availability of consumer credit? Do prescreened credit card offers contribute to identity theft? If prescreening is not essential to risk-based pricing or credit decision-making, are there other benefits that justify its preempted status?
(3) Have uniform national standards for credit reporting contributed to the ability of credit grantors to model risk? If so, would certain types of federal or state legislative activity in areas currently preempted by the FCRA diminish the quality and quantity of data available in credit reports?