Soon after news emerged that the Consumer Financial Protection Bureau (CFPB) would be pulling back its investigation into Equifax Inc. and the data breach that led to the personal data of 143 million Americans being exposed, Equifax announced a new initiative it says aims to promote competition in the U.K. small business (SMB) lending market.
A press release issued Monday (Feb. 5) said Equifax is rolling out a solution for lenders to assess small business credit health. Equifax cited the U.K. government’s Commercial Credit Data Sharing (CCDS) initiative, which includes the creation of a credit reference agency to promote the sharing of credit data across lenders and to broaden the availability of financing for small businesses.
Equifax’s new tool allows lenders to keep track of the financial status of small businesses that have received a loan and alerts them to possible issues regarding missed payments.
“We’re excited to be supporting this government scheme to boost lending in the SME sector, essential to the health of the U.K. economy,” said Equifax Head of Commercial Nic Beishon in a statement. “CCDS is a game changer for many businesses who have the financial ability to repay a loan but who are currently either denied it or left in limbo when a lack of information leaves banks unable to make a timely decision. The new data overcomes this issue by providing an in-depth view of a business’ financial activity than has ever been accessible before.”
Beishon pointed to PSD2 and Open Banking regulations that, along with CCDS, create “the foundation to restructure the SME lending market and help the sector grow.”
“We will be using the data in a variety of ways to create new products for the market, helping lenders better evaluate loan applications,” the executive continued. “Whether a business needs finance to expand, invest in new technology or open a new office, they will now be able to get faster decisions to help make their plans a reality.”
Equifax’s decision to expand use of its small business data for lenders follows reports that the company could see a pulled-back investigation by the U.S.’ CFPB after Mick Mulvaney, the organization’s interim director, reportedly shelved plans for tests into how Equifax secures data following the high-profile breach. Unnamed sources told Reuters that Mulvaney has not ordered subpoenas or sought testimony from Equifax executives.