Friday, June 03, 2005

Should the Assembly discuss debt relief?

The need to alleviate the dire levels of poverty which persist throughout many parts of the third world, especially Africa, is something agreed upon by all political parties.

However I cannot support the call by one AM for the Welsh Assembly to debate the matter. Standards of living in the third world could be raised to some extent by western governments adopting different policies on debt relief and free trade. Britain’s contribution towards this is something that will have to be debated and agreed upon at national government level – ie in Parliament.

The Welsh Assembly meets for 7 hours a week. If an hour or more is set aside for discussing a matter over which it has absolutely no control, but on which all it’s members are in full agreement, then up to 20 AMs will all get up and make essentially the same speech, describing the situation in identical terms, and calling on the government to do more. A resolution will then be unanimously passed.

AMs may feel strongly about poverty. They forget that everyone else does. If the Assembly is going to pass resolutions on international affairs perhaps every local council should also do likewise. Why stop there? The board of every health authority could just as logically suspend discussions on waiting lists and MRSA to debate debt relief, – over which they have as much influence as the Welsh Assembly.

If the Assembly must pass a resolution - then it should simply be tabled and passed without debate. Whatever influence they feel a resolution will have on the government can be allowed to take effect without the need for a long debate which will allow the Assembly to avoid discussing matters for which it does have responsibility.


Blogger David said...

This comment has been removed by a blog administrator.

3:00 AM  
Blogger David said...

Reminds me of the local councils in the 80s who declared themselves nuclear-free zones. Apparently well-intentioned, in reality posturing for internal consumption - like the loyalty oath campaign in Catch-22.

If the Assembly wanted to do something about poverty perhaps they could take control over their own costs - new Assembly building estimated costs up from £10m to nearly £70m - and donate the money saved to a relief programme. That would be practical and helpful.

3:02 AM  
Blogger Taffia Don said...

it really gets my goat how people are criticising the cost of the assembly building, im not a big fan of labour, but at least welsh labout had the forsight to put a cap on the expenditure for the new assembly. we can see how the skyrocketing of costs for hollyrood (pardon my spelling) has turned a fiercyly independant country against devoultion because of its missmanagement.

8:50 AM  
Blogger Taffia Don said...

right lets post what i originally intended to now. debating what the assembly hasn't got powers over. sounds like a staple of the assembly - wasn't it two years ago that it decided to ban smoking in all public spaces? i seems to me that debating something that the assembly hasnt got powers on is the only way it has advanced its remit and is every likely to. after all the new legislation that looks like coming into force is one of the assembly asking for powers and it being fast tracked through westminster. so im sure we will se an increase in debates on areas over which the assembly have no power.

8:54 AM  
Blogger David Davies AM said...

the Assembly only capped the costs of the building after it had run around £40million over budget.

On the main issue smoking in public places was something which the Assembly was calling for powers to decide. Nobody is pretending that the Assembly are about to get the power to sort out debt relief.

11:24 AM  
Blogger Grangetown Labour said...

The Assembly has no serious power on the I/D cards issue either (a non devolved issue prominently featured in Labour's manifesto in last month's GE), yet it is being debated in the Assembly on Tuesday.

Will you be there David? And are you for or against I/D cards?

4:26 PM  
Blogger Anthropax said...

What about flood defences? Why doesn't Monmouth get any money from the honey pot? I presume you were there weren't you?

1:29 AM  
Blogger David said...

Taffia Don - I don't get your point. I'm criticising the project management that allows a building's costs to escalate like that. It's unpleasant news for everyone who is obliged to pay for it and presumably it's not great news for whoever's 'managing' it. So we shouldn't mention it because burying bad news is better for Wales, is it?

3:41 PM  
Blogger Taffia Don said...

no i just simply want to point out that labour have strived to control the costs of the assembly building unlike scottish labour that has presided over a huge percentage increase in the cost of the building, the welsh government had the forsight to controll the costs. now the management of the project is compleatly different from the point i was making the early dispute with the arcitect about the design of the building (cant remember if that went to court) and set back subsequently has been less than textbook management of a project. of course the public have a right to know the public finances im just trying to get a balanced picture, you trying to paint this as a calamity is trumped up, when compared with other governmental buildings - including the cost for the palace of westminster, and hollyrood, the recognition that costs must be prevented from spiraling out of control and the very little that it has increased shows that it is has been successful and cost effective - assuming that the conservatives dont close the assembly.

- right its now 1:30 am, i'll be back later to see if that still make sense to me.

5:21 PM  
Blogger David Taylor said...

I agree with what you say about the Assembly only meeting for seven hours a week, so time set aside for debates need to be considered carefully.

Why then, did you support the debate on top-up fees two days before the publication of the Rees report, and waste Assembly time.

8:15 AM  
Blogger ddisanazi said...

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2:10 PM  
Blogger ddisanazi said...

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2:11 PM  
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6:14 AM  
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FICO is an acronym for Fair Isaac Corporation (traded publicly under the symbol FIC) and refers to the best-known credit score model in the United States, which is calculated using mathematical formulae developed by this company. The FICO score is primarily used in the consumer banking and credit industry. Banks and other institutions that use scores as a factor in their lending decisions may deny credit, charge higher interest rates or require more extensive income and asset verification if the applicants credit score is low.

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The three major credit reporting agencies (also often, but inaccurately referred to as credit bureaus) in the United States, Equifax, Experianand TransUnion calculate their own credit scores, which go by different trademark names as well as many different versions of the score (often differing because of what they are meant to predict and when they were written): Beacon, Beacon 96, and Pinnacle are all available only from Equifax; Empirica, Empirica Auto 95, Precision Score, and Precision 03 at TransUnion; and Fair Isaac Risk Score at Experian. These versions, while all developed for the agencies by Fair Isaac, differ and are periodically updated to reflect current consumer repayment behavior. The NextGen Scores are the most recent scores, but creditors vary in which version they prefer to use.

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Nearly all large banks also build and use their own proprietary statistical models for credit scoring purposes, often in conjunction with the FICO score or other outside scores.

The statistical models that generate credit scores are subject to federal regulations. The Federal Reserve Board's Regulation B, which implements the Equal Credit Opportunity Act, expressly prohibits a credit scoring model from considering any prohibited basis such as race, color, religion, national origin, sex, or marital status. Regulation B also stipulates that credit scoring models must be empirically derived and statistically sound. Furthermore, if an adverse action is taken as a result of the credit score ( e.g. an individual's application for credit is denied) then specific reasons for the denial must be provided to the individual. A statement that the individual "failed to score high enough" is insufficient; the reasons must be specific.

There exist several generally accepted algorithms for extracting the primary contributing factors to a low credit score. One or more of these algorithms is typically used to supply a list of reasons when a loan applicant has been denied credit, in order to satisfy the Regulation B requirement that specific reasons are disclosed. Some consumers feel these adverse action reasons are somewhat disingenuous, as the only determining factor for credit denials is a numeric score — the "reasons" are summed up only for the consumer.

Each of the credit reporting agencies has developed its own version of the credit score intended to compete with Fair Isaac's score. Although not as widely used, these scores (for example Trans Union's "TransRisk" score or Experian's "ScoreX" and "PLUS" scores) are less expensive than the FICO score. These scores are often derisively referred to by consumers and lenders as "FAKO" scores, for they do not use official Fair Isaac methodologies. The cost savings of a non-FICO score are tempting to some banks and credit card companies, who need an accurate risk assessment on millions of accounts every year. For ease of use, these scores tend to be mathematically scaled so that they fall in the same general range as the FICO score. Fair Isaac offers scoring models for the U.S ., Canada, and South Africa. It also offers a "Global FICO" for many other countries.

Credit scores are designed to measure the risk of default by taking into account various factors in a person's financial history. Although the exact formulae for calculating credit scores are closely guarded secrets, Fair Isaac has disclosed the following components and the approximate weighted contribution of each:

35% punctuality of payment in the past (only includes payments later than 30 days past due)
30% capacity used: the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
15% length of credit history
10% types of credit used (installment revolving consumer finance
10% recent search for credit and/or amount of credit obtained recently
The above percentages provide very limited guidance in understanding a credit score. For example, the 10% of the score allocated to "types of credit used" is undefined, leaving consumers unaware what type of credit mix to pursue. "Length of credit history" is also a murky concept; it consists of multiple factors - two being the oldest account open and the average length of time an account has been open. Although only 35% is attributed to punctuality, if a consumer is substantially late on numerous accounts, his score will fall far more than 35%. Bankruptcies, foreclosures, and judgments affect scores substantially, but are not included in the simplistic pie chart provided by Fair Isaac.

Further, Fair Isaac does not use the same "scorecard" for everyone. The scorecards are segmented so that there are over 100 different actual scoring models that are applied to different individuals based on different ranges of input values (some scorecard segmentations include: age, depth of credit history, etc.) The implications of this segmentation are that while the approximate weighted contribution above may be an average across all scorecards, individuals will receive different scores or weightings based on the scorecard segmentation that they fall into. Some consumers have noticed their scores decreasing by small amounts for no apparent reason.

Current income and employment history do not influence the FICO score, but they are weighed when applying for credit. For instance, an unemployed individual with no other sources of income will not usually be approved for a home mortgage, regardless of his or her FICO score.

There are other special factors which can weigh on the FICO score.

Any monies owed because of a court judgment, tax lien, or similar carry an additional negative penalty, especially when recent.
Having above a certain number of consumer finance company credit accounts also carries a negative weight (critics say that this causes a vicious cycle, locking people into continuing to use consumer finance companies).
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A FICO score generally ranges from 300 to 850. It exhibits a left-skewed distribution with a US median around 725. 660 is generally regarded as potentially subprime and represents an important break point for credit worthiness. The performance of the scores is monitored and the scores are periodically aligned so that a credit grantor normally does not need to be concerned about which score card was employed.

Each individual actually has three credit scores for any given scoring model because the three credit agencies hold their own, independent databases. These databases are independent of each other and may contain entirely different data. Many lenders will check an applicant's score from each bureau and use the median score to determine the applicant's credit worthiness.

A new Vantage score has been offered by all three credit bureaus to creditors since spring 2006. It will soon be available to debtors. Its range is from 501 to 990. It is graded A (901-990), B (801-900), C (701-800), D (601-700), and F (501-600). It remains to be seen whether the Vantage Score will replace the FICO score or even be accepted by many creditors.

4:46 PM  
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