[OpieCunningham]

“After the Equifax breach, everyone learned that until there are actual repercussions for cyber attacks (like fines and people going to jail for negligence), if you can weather the storm, over the course of a year or two, there is effectively zero impact to your bottom line.”

It’s even worse than just weathering a storm. Lax security has been incentivized. The Equifax CEO, Richard Smith, stepped down shortly after the public became aware of the breach, with a $90m severance package.

https://fortune.com/2017/09/26/equifax-ceo-richard-smith-net...

[TheOtherHobbes]

It's almost as if making shareholder returns and CEO pay the only indicator of company success creates terrible consequences.

[papito]

Juice the returns at all costs for a few quarters and then walk away with riches from total ruins, you say?

[tudorw]

This is the way.

[koheripbal]

Long term shareholder returns are directly correlated to the long term company success.

It's always such an odd criticism to think of "shareholder returns" as a pejorative.

[specialist]

TheOtherHobbes said "only", as in "to the exclusion of all other concerns". Where's the pejorative?

[seventytwo]

They key is long-term…

[andrepd]

Success for the company, at the expense of everything else (the environment, public health, individual privacy, etc).

[jart]

It's worse than PII leaks and CEOs stepping down. Lax security has become scary. The U.S. Nuclear Weapons Agency was breached shortly after SolarWinds. Let's also not forget about OPM.

[nvr219]

Except everyone forgot about OPM.

[pbak]

What is OPM ? Office of Personnel Management ?

[Frost1x]

Yes. In case you're asking what OPM is and not just the acronym intended, OPM is an agency that manages and maintains stewardship of a stupid amount of information about all employees that work for or closely with the federal government.

Background checks and investigations, healthcare related policy information, etc. e-QIP, managed by OPM specifically, collects a lot of highly sensitive information on federal employees working in the national security ecosystem was hit:

https://en.m.wikipedia.org/wiki/E-QIP#e-QIP_security_breach

[pbak]

Holy hell... no wonder they snuffed it out in the media.

I live in Eastern Europe. A local city with a population of 300-400k was hit with a near total ransomware attack. The hackers asked for 400 bitcoin.

The mayor answered to them on TV "You fools, we still do most things on paper here ! We'll just spend the week-end installing windows and word and F** Y* !!!"

I sometime find wisdom in the approach from olden times :-)

[djrogers]

> Holy hell... no wonder they snuffed it out in the media.

The OPM hack wasn’t ‘snuffed out’ by any means - it was fairly well covered for a cyber attack of it’s era. Perhaps it wasn’t covered much in your part of Eastern Europe, but it was definitely not covered up.

The fact that some people have forgotten about it is a completely different issue.

[miohtama]

They should also have the old wisdom of not connecting critical systems to Internet.

[specialist]

Stupid me never learned the trick of failing upwards.

[stainforth]

Isn't Equifax a government organization? How do they have severance packages?

[pjc50]

It's a para-state agency; while Americans don't have ID cards because they're afraid of surveillance, a private company having a complete database of everyone and veto power over mortgages is fine because it's a private company.

[disgruntledphd2]

There's three companies doing it, so they possess the holy blessings of the all-knowing market \s

[betterunix2]

The existence of credit scores has tangible benefits that we take for granted. Without such databases we would all pay much higher interest rates and many more people would be denied loans. Very wealthy people would have little trouble, but low- and middle-income people would find it far more difficult to buy a house or a car. The reason it is better to be run by a private company than the government is not that surveillance, but the near-certainty (at least after everything we saw happen over the past 5 years) that a government credit scores agency would be politicized. We would have the same problems we have with equifax, and a whole new set of problems as e.g. the political party that rewrote the tax code to punish people who voted against them tried to weaponize credit scores.

[pbak]

As seen from another capitalist country, namely Switzerland, I take the "higher interest" rates as a tired argumentative "canard". It's a false idea perpetrated by lobbyists.

We don't have such databases. The difference here is that the bank's mortgage divisions have much lower profits, because checking somebody out is actually done by humans. It costs the credit provider more. US style mortgage broker do not exist.

Low- and Middle- income people here do not have houses because of high real estate prices due to very restrictive zoning (the country is small), and on average much, much, much more expensive construction than in the US. Here people expect a fully concrete house, near-to-passive level insulation, with 30-40 years free of any big renovation.

In conclusion: we do without an Equifax just fine.

[betterunix2]

...so low- and middle-income people are not buying their own homes under that system, which is exactly what I said. What is the disagreement here?

You say that interest rates are not higher, but that is a meaningless statement if people do not generally buy their homes on credit. Low- and middle-income Americans typically buy a home using a mortgage, and credit scores are an important part of that system.

[pbak]

My opinion point is that maybe if the US tried to do old style approach to home ownership, old fashioned banking, it wouldn't need that many artifices like rating agencies. Why I think that:

Your position is that the lack of a well informed credit market would make interest rates high, precluding acquisition of houses, hence the need for rating agencies.

My position is that truthful, complete information is enough to keep rates low, a market for that information is not necessary for assets which are not liquid (houses, mortgages). Swiss mortgage rate oscillate between 1-1.5%, depending on your financials.

Absolutely everybody buys houses and buildings on credit in Switzerland, due to huge tax deductibles. Those who don't are a rounding error around 99.9%, mainly due to some rare people's estate planning triggers.

Selling cheaper houses and apartments at lower prices has been repeatedly in the last 20 years (as low as a third of the usual price range). They doesn't sell.

Swiss are conservative, they tend to like long term investments with low degradation risk, regardless of current market price levels. Hence high prices, because they want high, long lasting quality.

Again nothing to do with credit information markets.

[jkepler]

Yet another reason why I think Switzerland would be a great country to move to.

[pbak]

Yes and no.

It's not as good as it once was, and purchasing power is slowly but certainly going down. Everything is tightening up. Switzerland is extremely integrated into the western money circuits. If it goes to shit in the US, it'll follow suit at a much slower pace.

However, Eurasia is replete with countries which try to imitate Western European successes by applying the same receppies. If you can swing it, the purchasing power is 3-5 times larger on the same net income, and you don't have pesky invasions of your private sphere at each corner.

Also, as a Swiss, I can tell you that past the superficial welcome, we're a mountain people. We're really not as warm as others peoples. Over time, depending on your character, it may accrues and impact quality of life.

We are also very disciplined in a lot of aspects of life, even outside work. That is a problem for some over time.

But if your character fits, you'll have a blast.

[adolph]

The state has broad enough illegal/illegitimate and legal surveillance tools that a nationwide ID card is unnecessary.

[pepr]

Equifax is a private company.

[encryptluks2]

You'd think that one of the credit bureaus responsible for maintaining the most sensitive data, and making it difficult for people to get affordable housing would be a government institution, but nope.

[betterunix2]

Would you rather have a government agency assign credit scores? The abuses would be rampant. Right now there is one party openly pushing to restrict voting access to people who are likely to vote for the other party, and a few years ago that same party enacted a new tax code that almost surgically penalized the residents of states that supported the other party; do you really trust such politicians to set up a fair credit rating system? I can see the headlines already: "SCOTUS rules 6-3 in favor of GOP effort to depress credit scores in Democrat-leaning cities," or perhaps, "Northeast states fear wave of foreclosures following GOP overhaul of credit score bureau," or maybe, "Whistleblower: President pressured credit rating agency to attack CNN, NYT reporters."

Equifax and the other ratings agencies have plenty of problems, but none of those problems are solved by having the government run things and many new problems would be introduced.

[ClumsyPilot]

Then why is the SEC public, it could arbitrarily issue fines and fuck with the share price of any company that didnt donate to your party, maybe it should be private too?

[betterunix2]

Different role, different scope, different situation. The SEC has limited power to target individuals compared to a credit rating agency. It would be a scandal to politicize the SEC, but it would not be the sort of nightmare that a politicized credit rating agency could become.

It is also worth pointing out that both the credit ratings and audits of publicly traded corporations are conducted by private-sector companies, not government agencies. The SEC's primary role is to ensure that the rules are being followed, which is a straightforward law-enforcement/regulatory role that makes sense for a government agency.

[Frost1x]

>Would you rather have a government agency assign credit scores? The abuses would be rampant.

Do you think the abuses are any less rampant when power is privatized? The main problem that would be solved by a government institution is a pathway for transparency and citizen recourse against questionable practices. It's admittedly not a lot of transparency or accountability but it can be far more than currently exists.

People talk about government corruption and sure, there's lots of it, but there's just as much if not more private corruption hidden behind privacy protection veils. At the very least, there is some degree of transparency with the government and we can in theory hold them accountable with explicit rights granted to us (more-so than private institutions).

I cannot hold these private institutions that have gamed the system so far they're beyond my grasp accountable for their actions. Ill start a credit rating agency tomorrow and compete with Equifax, Transunion, and Experian so through market forces of competition I can fix these problems! Consumers and market forces will fix these problems! Yea, right, give me a break.

This whole government bad, private good, anti-communism/socialism/whatever argument has grown tiring because we're at a point now where you can chuck private institutions in the same gutter of corruption as different systems of government. We played that fiddle and gave private institutions the benefit and here we are, with rampant corruption in concentrated pockets of business as well, governing our daily lives with little oversight or means of recourse beyond avoiding the system or hoping some competitor can actually change things.

Privatization works well when you can actually hold institutions accountable, when there are competitors that actually compete and give consumers the option to vote with their wallets. When that doesn't exist, it's far worse than a US government agency managing it. It might be cheaper but there's probably a good undesirable reason it's cheaper than a public institution that isn't related to poor management and basic optimization practices to improve efficiency. Those efficiency gains probably exist because the institution is doing something it shouldn't be doing, focusing on profit margins over implications on the consumer.

[specialist]

Yes and: Since contractors aren't subject to FOIA, privatization is a time honored strategy to move activities off book.

[betterunix2]

Did I say anything about communism? No, that is what you brought up. I mentioned possible abuses that are specific to a government agency, abuses that are the result of politics.

There is no reason to think that a government agency would be any more transparent than Equifax et al. are right now. Consumers have the right to receive a free credit reporter from these companies, and the right to dispute information in that report (also free). Maybe there is a need to adjust the regulations in order to combat particular abuses or problems that are happening right now. That does bring up the question of what specific abuses you would like to see fixed -- you did not actually mention anything in particular that Equifax is doing or how a government agency would avoid such a problem.

The previous president spent 4 years trying to use government agencies to punish political opponents, and just before leaving office he filled those agencies with loyalists in an attempt to sabotage his successor, all without regard for the effect such actions might have on the public. Those are forms of abuse that is specific to government agencies and it would be a disaster if it happened at a credit rating agency. This is not an argument that the government is always worse than the private sector; it is an argument that when it comes to something like credit scores the government should not be in charge.

[psyc]

It is a publicly traded corporation.