Around three minutes into the presentation, percentages (perhaps score values) are shown for CCs, mortgages and auto loans, and each of these has two categories prime and subprime. Didn't you see this? Am I the only who thinks somethings might change after watching this?
I'll have to watch it again. I saw the categories, but I think those are FIs scoring pools (Thin, New, Seasoned, et al.)
I look at the software industry and the ferocious firefights in court over who struck John, or Bill, or Steve, or Larry, etc. Their lawyers are fiercely protective of what's viewed as "theirs". I think the same sort of vigor would be exhibited by lenders.
FICO tallies up the risk factors, and delivers a score. That score is blind to race, creed, color, ethnicity, sex, age, salary, employment history, state you live in, neighborhood you live in, home you live in, car you drive, education level, height, weight, blood pressure, predisposition for cancer, political party affiliation, bumperstickers on your car, charitable giving, and a myriad of other things which do not determine your risk to pay or default on bills.
After FICO delivers the score, a CCC decides whether you get a CC and what the terms will be. Once you get the CC, terms of the CC may be negotiated over time. Requests for CLI and APR reduction. Lenders grant or don't grant based upon their criteria, and their criteria are very, very, very broad compared to what FICO considers. FICO looks at concrete things where there's a pattern and history of risk associated with the thing. For example, FICO does not look at salary, time in your job, do you rent or own, where do you bank, checking or savings or both, DTI, and a number of other things that lenders DO consider.
By assessing the CC or loan product itself, and assigning a risk to it, FICO would only further the divide between primes and subprimes. Prime CC holders FICO scores would bump up, and subprime CC holders would bump down. Congress is already looking at legal reform because of CC practices. If FICO did it, the legal reform would be all but assured and further reaching.
I stand by my prediction that if it ever happened, it would not stand up to the numerous legal challenges that would follow.