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Financial Outsourcing Solutions


FOS Blog

12 Jul

The Call for Databases

The Call for Databases

Already we check the OFAC database, which includes other watchlists.  We check the Department of Defense MLA database for persons opening new accounts and the SCRA database to assure a person is on active duty status.  Some institutions also use ancillary identify verification databases to confirm CIP information.  There are several more movements underfoot to create “databases.” 

Section 202 of EGRRCPA calls for the creation of database by the Department of Veterans Affairs to allow consumer reporting agencies to verify veteran’s medical debts.  Currently, credit bureaus “hide” this debt for 6 months but that is being changed to 1 year due to the slow billing and collections process of the VA.

Section 215 of EGRRCPA calls for the Social Security Administration to create a new database containing people’s names, dates of birth, and social security numbers to be used in preventing “synthetic identity theft.”  This occurs when someone combines real (stolen) information and fake information to create a new identity.  This information then is used to open fraudulent accounts and steal money.

In Congressional testimony on May 21, OCC Senior Deputy Controller Grovetta Gardineer called on the Committee on Banking, Housing, and Urban Affairs to implement a centralized “beneficial ownership” database. This would create a central location for financial institutions and law enforcement to verify identifying information of beneficial owners.

Now, we all know how efficient the government is about developing and maintaining databases.  And given suspected Russian and Chinese cybersecurity hacking, we question government security over our personal information.  Wouldn’t it be more advisable to use a private vendor with sound information security controls to build a centralized database for all this information? Data from these various sources could then be fed into one location (much like those identify verification databases that use OFAC, social security, driver’s license, post office, and phone directory source information).  One could then search and specify the type of information needed.  It could work much like the NMLS database that is used for Mortage Loan Originator (MLO) and also for Money Service Business (MSB) registrations, which serves different audiences.  In this fintech age, there’s got to be a better way to manage all this information than having to make multiple inquiries to different sources.

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