Experian offers Income Insight W2SM for assessing individual income, addressing recent Federal Reserve Board amendment
New model is latest addition to Experian’s suite of products that enables lenders to assess an individual’s income and comply with updated lending requirements
Costa Mesa, Calif., March 22, 2011 — Experian® , the leading global information services company, today announced Income Insight W2SM, a new income model that estimates an individual’s wages, helping lenders comply with the recent Federal Reserve Board’s amendment to Regulation Z (Truth in Lending) with respect to the implementation of portions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act).
This updated regulation will require credit card issuers to assess borrowers’ “ability to pay” on an individual basis, rather than relying on household income. Amended on March 18, the update from the Federal Reserve Board confirms earlier portions of the Final Rule which explicitly allowed for the use of “empirically derived, demonstrably and statistically sound models that reasonably estimate a consumer’s income or assets.”
Given the new direction outlined in the latest rules, Experian is now offering clients two products to support regulatory obligations and enhance the underwriting and risk assessment process.
“Both of our models estimate an individual’s income based on an individual’s credit report,” said Brannan Johnston, vice president of income and assets for Experian. “Income Insight W2 estimates wages, while Income Insight estimates total income, including wages, investments, rentals and other income. We are thrilled to offer this additional flexibility to the hundreds of clients currently utilizing our “ability of pay” suite of products.”
Income Insight and Income Insight W2 were uniquely developed from a deep database of verified income and built on proprietary credit attributes. The performance statistics and model development process of both models demonstrate that they are empirically derived and statistically sound and are consistent with the new regulations.
“Experian remains committed to providing our clients with products and services that not only help them to comply with federal regulations, but also to evaluate the creditworthiness of their borrowers more effectively,” added Johnston.
Key benefits of Income Insight W2SM include:
• Support of lenders’ compliance with recent legislation cost-effectively and efficiently
• Assistance to lenders with responsible provision of credit through considering borrowers’ “ability to pay”
• Compliance with the Fair Credit Reporting Act and the Equal Credit Opportunity Act
• Validation of wages efficiently in real time
• Accurate segmentation of defaulted borrowers to maximize collection processes
Experian Public Relations
1 714 830 5192
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2010, was $3.9 billion.
Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.
For more information, visit www.experianplc.com.
Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners.