What Everybody Knows About You: Banks

This article is part of a continuing series about data collection today. Following the information gluttony of retailers in the previous article, financial institutions seem quite restrained. None of the resources I found suggested that they had any interest in your personality or aesthetic preferences.

On the other hand, what the banks collect—detailed financial information along with sensitive data—can be very damaging to you in case of a breach; potentially involving “names, addresses, phone numbers, Social Security numbers, Taxpayer Identification Numbers, financial account information without security or access codes, and dates of birth.” But in general, this article describes only the intended uses of data, not the risk of security attacks that add a whole extra dimension of potential abuse.

Equifax reports contain demonstrably reasonable information such as whether you’ve had a bankruptcy and whether a debt has been turned over to a collection agency. Bank of America declares that they’re interested in questions of immediate importance, such as business sales.

Sections 2.2.1 and 3.1.2 of a document from the Consumer Financial Protect Bureau describe the information in a credit report, with such mundane information as mortgage and employment status.

Typical information that financial institutions use to evaluate your credit worthiness includes:

• Employment information
• Mortgage information
• Debt collections, late payments, civil suits, tax liens, bankrupcies
• Number and types of credit accounts, how much credit you have, and how long your have had the account
• Who asked for the data
• Other people on your account

The industry knows that incorrect information creeps into these reports. One researcher said that “19.2 percent of the credit reports examined by consumers were set aside as containing one or more pieces of header or tradeline data that a consumer believed could be inaccurate.”

Certainly, there are many sources of bias in the data used to evaluate credit worthiness. These biases stem from the denial of access that many people face to mortgages, employment, and other key resources. For instance, the subprime loan crisis of 2007 in the United States affected Black and Latine borrowers much more than Whites because of segregation, a result of earlier redlining, lack of wealth, and other discrimination. But the use of data itself by banks seems to be carefully controlled and limited.

The next article in the series discusses data collection and privacy intrusions by an institution that might surprise you.

<< Read the previous part of this series