After the deadly riot at the United States Capitol on January 6, dozens of companies suspended donations to the 147 Republicans who tried to overturn the presidential election. Many others paused all their political giving. Experian, one of the three major credit agencies, took a different approach.
On January 27, about three weeks after the riot, the National Republican Senatorial Committee (NRSC) reported that it received a $15,000 check from Experian. The NRSC, which works to elect Republicans to the Senate, is chaired by Senator Rick Scott (R-FL), one of eight Republican Senators who attempted to reverse the results of the 2020 election by objecting to the Electoral College. The money can also be used to support the reelection of the seven other Republican objectors in the Senate. It was Experian's only donation in January.
Beginning in November, Scott amplified Trump's lies about voter fraud. On November 25, for example, Scott claimed that the November election has "shown we need major reforms" to "protect against fraud."
Scott's vote to decertify Pennsylvania's electors on January 6 helped set the stage for the violent attack on the Capitol. "I’ve heard from constituents across Florida and across the country and I’ve listened to their concerns about the way this election was carried out. I share many of their concerns," Scott wrote in a statement before the vote. "We simply cannot tolerate partisan political attempts to change the rules and tip the scales in our elections."
After the mob incited by Trump resulted in five deaths and 140 injuries at the Capitol, Scott called Trump's impeachment and Senate trial a "waste of everyone’s time." Scott claimed that Trump, who called on his supporters to march on the Capitol and "fight like hell," should not be held responsible because Trump "never said when somebody should break in."
Experian's own FEC filing suggests it cut the check to the NRSC on January 1, 2021, weeks after Scott began pushing claims of voter fraud. And since the NRSC did not post the contribution until January 27, Experian had plenty of time to rescind it after the January 6 riot.
Why did Experian back Scott and the NRSC when so many other corporations are on the sidelines? The company did not respond to a request for comment. But Experian appears concerned about a Biden administration proposal to protect consumers that could undermine its business model.
Biden's threat to Experian's business
Experian is one of three major credit agencies that has a massive impact on the economic lives of Americans. Experian, Transunion, and Equifax "collect lending and payment data on 220 million Americans without consumers’ permission or approval." This data is then fed into a secret algorithm that establishes a credit "score" for each American. The score can impact your ability to rent an apartment, qualify for a credit card, obtain a loan, or get a job. Errors in the reports are very common and difficult to fix.
There is also evidence that the scores replicate and perpetuate historical discrimination. Blacks and Latinos have been historically shut out of loans or offered loans at exploitative rates. That means that today, Blacks and Latinos are likely to have lower credit scores because they either were unable to establish credit or had a harder time staying current because of high-interest rates. These lower scores now make it more difficult to obtain favorable credit moving forward — or improve their scores.
As a candidate, Biden proposed "the creation of a public credit reporting agency" under the auspices of the Consumer Financial Protection Bureau (CFPB) to compete with Experian and the other credit bureaus. The new public credit reporting agency would develop "new transparent algorithms for predicting creditworthiness with a goal of minimizing disparate racial impact." That may mean excluding "certain adverse credit data from credit reports and scores, for example, medical debt or payment delinquencies on predatory credit products, which are disproportionately targeted at Black and brown communities." It would also provide "clear explanations of what consumers can do to improve their credit." The scores "will be free to consumers at any time." (Experian and other private companies only provide one free credit report per year.)
The Biden campaign proposal is based on a plan published in 2019 by Demos, a public policy think tank.
The Biden proposal is an existential threat to private credit bureaus. It would create a free and more equitable alternative to their products. If the public credit score proved to be a more accurate predictor of future creditworthiness, it's easy to see how it could impact companies like Experian.
In September, the Consumer Data Industry Association — which represents Experian, Equifax, and TransUnion — issued a press release calling Biden's proposal "a dangerous idea" that "injects politics into the credit market."
Experian's progressive image
On its Twitter feed and elsewhere, Experian has carefully crafted a progressive public image. Experian, for example, publicizes its commitment to celebrating "black lives."
But the effort to overturn the election and install Trump for a second term involved discarding millions of ballots cast by Black voters in cities like Philadelphia, Atlanta, and Detroit. Trump and his allies had no evidence to support their claims but frequently cited cities with large Black populations as the epicenter of "fraud."
Experian is now financially supporting Scott and other Republican Senators that backed this effort.
A limited window
Right now, the public has a very limited window into political giving by corporate PACs in 2021. There were 147 members of Congress that objected to the certification of the Electoral College vote. But, since it's not an election year, members of Congress report their donors quarterly. Their first disclosure is not due until April 15. In 2021, federal PACs can opt to disclose their contributions only twice a year. For PACs that opt to file with the FEC on that schedule, their first filing will not be July 31, 2021.
But national party committees like the NRSC are required to report their donors monthly, even in non-election years. The NRSC filed their first report on Saturday night, which revealed the donation from Experian. It was one of the few donations the committee received from a major corporate PAC. Other corporate PAC donors in 2021 included HollyFrontier (15K), the National Cotton Council (15K), and the Associated Builders and Contractors (15K).
Corporate PACs can also elect to report monthly in non-election years. Experian made the decision to report monthly so we also know its donation to the NRSC was the only political contribution the group made in January 2021. TransUnion and Equifax operate PACs but will not report their activity until July.