ISAACSON, Thomas M. et al.

Patent Trials and Appeals Board

Aug 15, 2019

14046444 - (D) (P.T.A.B. Aug. 15, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
14/046,444 10/04/2013 Thomas M. ISAACSON 088-0104 3383
40271 7590 08/15/2019
Polsinelli PC
2810 Laurian Lane, Suite 300
Dunkirk, MD 20754
EXAMINER
TROTTER, SCOTT S
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
08/15/2019 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
athumann@polsinelli.com
patentdocketing@polsinelli.com
qle@polsinelli.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte THOMAS M. ISAACSON and CARY P. JENKINS
____________________

Appeal 2018-007650
Application 14/046,4441
Technology Center 3600
____________________

Before JAMES W. DEJMEK, SCOTT B. HOWARD, and
STEPHEN E. BELISLE, Administrative Patent Judges.

DEJMEK, Administrative Patent Judge.

DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from a Final Rejection of
claims 1–15 and 17–20. Appellants have canceled claim 16. App. Br. 19.
We have jurisdiction over the remaining pending claims under 35 U.S.C.
§ 6(b).
We affirm.

1 Appellants identify Thomas M. Isaacson as the real party in interest. App.
Br. 3.
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STATEMENT OF THE CASE
Introduction
Appellants’ disclosed and claimed invention generally relates to
receiving an indication of the initiation of a purchasing transaction and
performing an analysis of the financial condition of a user prior to the
completion of the purchasing transaction. Spec. ¶¶ 2, 7–8. A user’s
financial condition “may be their probability of default on one of their loans
. . . or may relate to their retirement plans . . . or some other aspect of their
financial condition.” Spec. ¶ 7. According to the Specification, by
providing the results of the analysis of the user’s financial condition prior to
the completion of the purchasing transaction, the user may be alerted to a
potentially risky transaction. Spec. ¶¶ 8–11.
Claim 1 is representative of the subject matter on appeal and is
reproduced below:
1. A method comprising:
receiving, via the Internet, an electronic indication of an
initiation of a purchasing transaction for a product or a service
by a user via a purchasing system;
prior to completion of the purchasing transaction,
performing, in real time, an analysis via a processor, assuming
the completion of a purchase, of an effect of the purchase on a
financial condition of the user, wherein the analysis of the
financial condition of the user assuming the completion of the
purchase is based on two or more of: an income of the user,
mortgage information for the user received over the Internet from
a mortgage company, student loan information for the user
received over the Internet from a student loan company, credit
card information for the user received over the Internet from a
credit card company, bank information for the user received over
the Internet from a bank, car loan information for the user
received over the Internet from a car loan manager, investment
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information for the user received over the Internet from an
investment manager, and retirement account information for the
user received over the Internet from a retirement account
manager;
when the analysis yields a result which is above a
threshold:
presenting, via the Internet, an interactive notice to
the user indicating that a change in the financial condition
of the user would occur if the purchasing transaction
where to be completed;
receiving from the user via the interactive notice an
indication identifying that the user desires to either
complete the purchasing transaction or to discontinue the
purchasing transaction; and
providing an instruction to continue with the
purchasing transaction when the indication is to complete
the purchasing transaction; and
when the analysis yields that the result is at or below the
threshold, not presenting the interactive notice to the user.

The Examiner’s Rejection
Claims 1–15 and 17–20 stand rejected under 35 U.S.C. § 101 as being
directed to patent-ineligible subject matter. Final Act. 3–7.

ANALYSIS2
Appellants dispute the Examiner’s conclusion that the pending claims
are directed to patent-ineligible subject matter. App. Br. 5–13; Reply Br. 3–

2 Throughout this Decision, we have considered the Appeal Brief, filed
August 14, 2017 (“App. Br.”); the Supplemental Appeal Brief, filed
September 25, 2017 (“Supp. App. Br.”); the Reply Brief, filed July 17, 2018
(“Reply Br.”); the Examiner’s Answer, mailed May 17, 2018 (“Ans.”); and
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9. In particular, Appellants argue the Examiner mischaracterizes and
oversimplifies the claims as being directed to “monitoring a user’s
purchasing transactions and conducting a real-time analysis of the user’s
financial condition based on the effects of those purchases before they are
completed and if the effect exceeds a threshold, notifying the user of the
change in the user’s financial condition th[e]n either completing or
discontinuing the purchase based on the user’s actions.” App. Br. 5–7;
Reply Br. 3–5. Appellants assert the claims do not “monitor” a user’s
purchasing transactions and that the Examiner has not shown the claims are
directed to a concept “long prevalent in our system of commerce.” App.
Br. 5, 8–9; Reply Br. 4–5. Additionally, Appellants assert the claims were
not properly analyzed under the Alice framework.3 App. Br. 8–9; Reply
Br. 3–5. Moreover, Appellants argue the claimed approach “improve[s]
computer related technology by allowing the computer . . . performance of a
function not previously performed by the computer.” App. Br. 11–13.
The Supreme Court’s two-step framework guides our analysis of
patent eligibility under 35 U.S.C. § 101. Alice, 573 U.S. at 217. In addition,
the Office recently published revised guidance for evaluating subject matter
eligibility under 35 U.S.C. § 101, specifically with respect to applying the
Alice framework. USPTO, 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Office Guidance”). If a claim
falls within one of the statutory categories of patent eligibility (i.e., a
process, machine, manufacture, or composition of matter) then the first

the Final Office Action, mailed February 10, 2017 (“Final Act.”), from
which this Appeal is taken.
3 Alice Pty. Ltd. Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014).
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inquiry is whether the claim is directed to one of the judicially recognized
exceptions (i.e., a law of nature, a natural phenomenon, or an abstract idea).
Alice, 573 U.S. at 217. As part of this inquiry, we must “look at the ‘focus
of the claimed advance over the prior art’ to determine if the claim’s
‘character as a whole’ is directed to excluded subject matter.” Affinity Labs
of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016). Per
Office Guidance, this first inquiry has two prongs of analysis: (i) does the
claim recite a judicial exception (e.g., an abstract idea), and (ii) if so, is the
judicial exception integrated into a practical application. See 84 Fed. Reg.
at 54. Under the Office Guidance, if the judicial exception is integrated into
a practical application, see infra, the claim is patent eligible under § 101.
See 84 Fed. Reg. at 54–55. If the claim is directed to a judicial exception
(i.e., recites a judicial exception and does not integrate the exception into a
practical application), the next step is to determine whether any element, or
combination of elements, amounts to significantly more than the judicial
exception. Alice, 573 U.S. at 217; 84 Fed. Reg. at 56.
Here, we conclude Appellants’ claims recite an abstract idea. More
specifically, Appellants’ claims are generally directed to analyzing the
impact of a pending purchase on the financial condition of a user (i.e., the
would-be purchaser). This is consistent with how Appellants describe the
claimed invention. See Spec. ¶¶ 2 (describing the disclosure relates to
providing a financial condition evaluation to a purchaser when making a
purchase), 10 (describing the disclosed system can perform an analysis of a
financial condition implication of the purchase); App. Br. 7 (describing the
claimed invention as receiving an indication of a purchasing transaction and
performing an analysis of the purchase to the financial condition of the user).
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Analyzing the impact of a pending purchase on the financial condition of a
user is a certain method of organizing human activity (e.g., a fundamental
economic practice or commercial interaction, such as sales activities)—i.e.,
an abstract idea. See 84 Fed. Reg. at 52; see also Alice, 573 U.S. at 219–20
(concluding that use of a third party to mediate settlement risk is a
“fundamental economic practice” and thus, an abstract idea); Bilski v.
Kappos, 561 U.S. 593, 611–12 (2010) (concluding hedging to be a
fundamental economic practice and, therefore, an abstract idea); Credit
Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1054 (Fed. Cir. 2017)
(holding that “processing an application for financing a purchase” falls
within certain methods of organizing human activities and is, therefore, an
abstract idea). Additionally, contrary to Appellants’ assertions, analyzing
the impact of a pending purchase on the financial condition of a user is long
prevalent in our system of commerce. See, e.g., Theresa Freas, Credit
through the Ages: Where it all Began, http://insight.equifax.com/the-history-
of-consumer-credit/ (last visited Aug. 1, 2019).
Further, if a claim, under its broadest reasonable interpretation, covers
performance in the mind but for the recitation of generic computer
components, then it is still in the mental processes category unless the claim
cannot practically be performed in the mind. See Intellectual Ventures I
LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016) (“[W]ith the
exception of generic computer-implemented steps, there is nothing in the
claims themselves that foreclose them from being performed by a human,
mentally or with pen and paper.”); see also CyberSource Corp. v. Retail
Decisions, Inc., 654 F.3d 1366, 1375, 1372 (Fed. Cir. 2011) (holding that the
incidental use of “computer” or “computer readable medium” does not make
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a claim otherwise directed to process that “can be performed in the human
mind, or by a human using a pen and paper” patent eligible); Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012)
(explaining mental processes are not patentable); and 84 Fed. Reg. at 52–53
nn.14–15.
In particular, analyzing the impact of a pending purchase on the
financial condition of a user can be performed by a human, mentally or with
pen and paper. Consistent with our Office Guidance and case law, we
conclude that analyzing the impact of a pending purchase on the financial
condition of a user is a mental process (i.e., an evaluation) and, thus, an
abstract idea. See 84 Fed. Reg. at 52; see also CyberSource, 654 F.3d at
1371–72 (concluding claims directed to “detecting credit card fraud based
on information relating to past transactions” can be performed in the human
mind and were drawn to a patent-ineligible mental process); FairWarning IP
LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed. Cir. 2016)
(concluding claims directed to “collecting and analyzing information to
detect misuse and notifying a user when misuse is detected” to be mental
processes within the abstract-idea category). Additionally, we note that
using a computer to perform tasks more quickly or efficiently does not
confer patent eligibility on an otherwise ineligible abstract idea. See, e.g.,
Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d
1266, 1278 (Fed. Cir. 2012), aff’g 771 F. Supp. 2d 1054, 1065 (E.D. Mo.
2011) (“[T]he fact that the required calculations could be performed more
efficiently via a computer does not materially alter the patent eligibility of
the claimed subject matter.”).
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Moreover, the United States Court of Appeals for the Federal Circuit
has noted that, in certain instances, there may be an overlap between an
abstract idea within the mathematical concepts category and an abstract idea
within the mental processes category. See Elec. Power Grp., LLC v. Alstom
S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (concluding that “analyzing
information by steps people go through in their minds, or by mathematical
algorithms, without more, as essentially mental processes within the
abstract-idea category”). Further, merely combining several abstract ideas
does not render the combination any less abstract. RecogniCorp, LLC v.
Nintendo Co., LTD., 855 F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one
abstract idea . . . to another abstract idea . . . does not render the claim non-
abstract.”); see also FairWarning, 839 F.3d at 1094 (determining the
pending claims were directed to a combination of abstract ideas).
Claim 1 is reproduced below and includes the following claim
limitations that recite analyzing the impact of a pending purchase on the
financial condition of a user, emphasized in italics:
1. A method comprising:
receiving, via the Internet, an electronic indication of an
initiation of a purchasing transaction for a product or a service
by a user via a purchasing system;
prior to completion of the purchasing transaction,
performing, in real time, an analysis via a processor, assuming
the completion of a purchase, of an effect of the purchase on a
financial condition of the user, wherein the analysis of the
financial condition of the user assuming the completion of the
purchase is based on two or more of: an income of the user,
mortgage information for the user received over the Internet from
a mortgage company, student loan information for the user
received over the Internet from a student loan company, credit
card information for the user received over the Internet from a
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credit card company, bank information for the user received over
the Internet from a bank, car loan information for the user
received over the Internet from a car loan manager, investment
information for the user received over the Internet from an
investment manager, and retirement account information for the
user received over the Internet from a retirement account
manager;
when the analysis yields a result which is above a
threshold:
presenting, via the Internet, an interactive notice to
the user indicating that a change in the financial condition
of the user would occur if the purchasing transaction
where to be completed;
receiving from the user via the interactive notice an
indication identifying that the user desires to either
complete the purchasing transaction or to discontinue the
purchasing transaction; and
providing an instruction to continue with the
purchasing transaction when the indication is to complete
the purchasing transaction; and
when the analysis yields that the result is at or below the
threshold, not presenting the interactive notice to the user.
More particularly, the concept of analyzing the impact of a pending
purchase on the financial condition of a user comprises (i) receiving an
indication that a purchasing transaction is pending (i.e., the claimed step of
receiving an electronic indication of an initiation of a purchasing transaction;
and (ii) performing an analysis of the effect of the pending purchase on the
financial condition of the purchaser based on relevant data (i.e., the claimed
step of performing an analysis of the financial condition of the user based on
received financially related data about the user).
Because the claim recites a judicial exception, we next determine
whether the claim integrates the judicial exception into a practical
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application. 84 Fed. Reg. at 54. To determine whether the judicial
exception is integrated into a practical application, we identify whether there
are “any additional elements recited in the claim beyond the judicial
exception(s)” and evaluate those elements to determine whether they
integrate the judicial exception into a recognized practical application. 84
Fed. Reg. at 54–55 (emphasis added); see also Manual of Patent Examining
Procedure (“MPEP”) § 2106.05(a)–(c), (e)–(h) (9th ed. Rev. 08.2017,
Jan. 2018).
Here, we find the additional limitation(s) do not integrate the judicial
exception into a practical application. In particular, the claims do not recite
(i) an improvement to the functionality of a computer or other technology or
technical field (see MPEP § 2106.05(a)); (ii) use a “particular machine” to
apply or use the judicial exception (see MPEP § 2106.05(b)); (iii) a
particular transformation of an article to a different thing or state (see MPEP
§ 2106.05(c)); or (iv) any other meaningful limitation (see MPEP
§ 2106.05(e)). See 84 Fed. Reg. at 55; see also Final Act. 6–7. Rather, the
additional elements recite, inter alia, that the abstract idea is performed by
sending and receiving data over the Internet. Additionally, the claimed steps
of presenting the results of the analysis (if a threshold has been exceeded)
and receiving a user response to complete or discontinue the purchase, or not
presenting the results to the user of the results of the analysis are below a
threshold are the types of extra-solution activities (i.e., in addition to the
judicial exception) the courts have determined insufficient to transform
judicially excepted subject matter into a patent-eligible application. See
MPEP § 2106.05(g); see also Parker v. Flook, 437 U.S. 584, 590 (1978)
(explaining “[t]he notion that post-solution activity, no matter how
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conventional or obvious in itself, can transform an unpatentable principle
into a patentable process exalts form over substance”); Elec. Power Grp.,
LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (recognizing “that
merely presenting the results of abstract processes of collecting and
analyzing information, without more (such as identifying a particular tool for
presentation), is abstract as an ancillary part of such collection and
analysis”); Bancorp Servs., 771 F. Supp. 2d at 1065 (explaining that
“storing, retrieving, and providing data . . . are inconsequential data
gathering and insignificant post solution activity”).
Additionally, we disagree with Appellants (see App. Br. 11–12) that
the claims recite an advancement over conventional computer technology.
Notably, Appellants assert the pending claims set forth a set of rules that
improve computer related technology “by allowing the computer . . .
performance of a function not previously performed by the computer.” App.
Br. 12. “[T]he fact that the required calculations could be performed more
efficiently via a computer does not materially alter the patent eligibility of
the claimed subject matter.” Bancorp, 687 F.3d at 1278; see also OIP
Techs., Inc. v. Amazon.com, Inc., 788 F. 3d 1359, 1363 (Fed. Cir. 2015)
(explaining that “relying on a computer to perform routine tasks more
quickly or more accurately is insufficient to render a claim patent eligible”)
(citing Alice, 573 U.S. at 224 (“use of a computer to create electronic
records, track multiple transactions, and issue simultaneous instructions” is
not an inventive concept)); see also Enfish, LLC v. Microsoft Corp., 822
F.3d 1327, 1335–36 (Fed. Cir. 2016) (distinguishing between claims
wherein the focus of the claims is on an improvement in computer
capabilities and those that invoke a computer as a tool).
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For at least the foregoing reasons, the claims do not integrate the
judicial exception into a practical application.
Because we determine the claims are directed to an abstract idea or
combination of abstract ideas, we analyze the claims under step two of Alice
to determine if there are additional limitations that individually, or as an
ordered combination, ensure the claims amount to “significantly more” than
the abstract idea. Alice, 573 U.S. at 217–18 (citing Mayo, 566 U.S. at 77–
79). As stated in the Office Guidance, many of the considerations to
determine whether the claims amount to “significantly more” under step two
of the Alice framework are already considered as part of determining
whether the judicial exception has been integrated into a practical
application. See 84 Fed. Reg. at 56. Thus, at this point of our analysis, we
determine if the claims add a specific limitation, or combination of
limitations, that is not well-understood, routine, conventional activity in the
field, or simply appends well-understood, routine, conventional activities at
a high level of generality. See 84 Fed. Reg. at 56.
Here, Appellants’ claims do not recite specific limitations (or a
combination of limitations) that are not well-understood, routine, and
conventional. The claims (see, e.g., independent claims 1, 12, and 17)
merely recite generic computer components (e.g., a computing device, a
processor, and memory) performing generic computing functions
(e.g., receiving and transmitting data, processing data, and displaying the
results of the data processing). See Mortgage Grader, Inc. v. First Choice
Loan Servs. Inc., 811 F.3d 1314, 1324–25 (Fed. Cir. 2016) (generic
computer components, such as an “interface,” “network,” and “database,”
fail to satisfy the inventive concept requirement); see also Alice, 573 U.S. at
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226 at 2360 (“Nearly every computer will include a ‘communications
controller’ and a ‘data storage unit’ capable of performing the basic
calculation, storage, and transmission functions required by the method
claims.”); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir.
2014) (“That a computer receives and sends the information over a
network—with no further specification—is not even arguably inventive.”);
and Ans. 8–9. Moreover, we note Appellants describe the various
components at a generic, high level. See Spec. ¶¶ 24–27, Fig. 1.
Further, to the extent Appellants are asserting a lack of rejection under
Sections 102 and/or 103 suggests the instant claims do not recite well
understood, routine, or conventional activities or, otherwise, recite an
inventive concept (see, e.g., App. Br. 9–10), we are not persuaded. Subject-
matter eligibility under 35 U.S.C. § 101 is a requirement separate from other
patentability inquiries. See Mayo, 566 U.S. at 90 (recognizing that the § 101
inquiry and other patentability inquiries “might sometimes overlap,” but that
“shift[ing] the patent-eligibility inquiry entirely to these [other] sections
risks creating significantly greater legal uncertainty, while assuming that
those sections can do work that they are not equipped to do”); see also
Diehr, 450 U.S. at 188–89 (“[t]he ‘novelty’ of any element or steps in a
process, or even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101 categories of
possibly patentable subject matter”); Ass’n for Molecular Pathology v.
Myriad Genetics, Inc., 569 U.S. 576, 591 (2013) (“Groundbreaking,
innovative, or even brilliant discovery does not by itself satisfy the § 101
inquiry.”); Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, 874
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F.3d 1329, 1340 (Fed. Cir. 2017) (“[e]ligibility and novelty are separate
inquiries”).
Additionally, to the extent Appellants contend the claims do not seek
to tie-up (i.e., preempt) an abstract idea (see App. Br. 10–11; Reply Br. 8–9),
we are unpersuaded of Examiner error. “‘[W]hile preemption may signal
patent ineligible subject matter, the absence of complete preemption does
not demonstrate patent eligibility.’” FairWarning IP, 839 F.3d at 1098
(quoting Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379
(Fed. Cir. 2015)); see also OIP Techs., 788 F.3d at 1362–63 (“[T]hat the
claims do not preempt all price optimization or may be limited to price
optimization in the e-commerce setting do not make them any less
abstract.”). Further, “[w]here a patent’s claims are deemed only to disclose
patent ineligible subject matter under the Mayo framework, as they are in
this case, preemption concerns are fully addressed and made moot.” Ariosa,
788 F.3d at 1379.
For the reasons discussed supra, we are unpersuaded of Examiner
error. Accordingly, we sustain the Examiner’s rejection of claims 1–15 and
17–20 under 35 U.S.C. § 101. See 37 C.F.R. § 41.37(c)(1)(iv) (2016).

DECISION
We affirm the Examiner’s decision rejecting claims 1–15 and 17–20
under 35 U.S.C. § 101.
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No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 41.50(f).

AFFIRMED

Notice of References Cited
Application/Control No.

14/046,444

Applicant(s)/Patent Under Patent
Appeal No.
2018-007650
Examiner

Art Unit

3696

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Theresa Freas, Credit through the Ages: Where it all Began, http://insight.equifax.com/the-history-of-
consumer-credit/ (last visited Aug. 1, 2019)

V

W

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*A copy of this reference is not being furnished with this Office action. (See MPEP § 707.05(a).)
Dates in MM-YYYY format are publication dates. Classifications may be US or foreign.
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PTO-892 (Rev. 01-2001) Notice of References Cited Part of Paper No.
Generate Leads / Apr 27th, 2018
Credit through the Ages: Where it all Began
By Theresa Freas
Exploding volumes of data and staggering advances in analytics and technology provide financial institutions with limitless opportunities to
assess and predict consumer financial behavior. Financial institutions use this insight to inform credit decisioning, acquisition and account
management strategies. But where did it all begin? Just where did the concept of credit get its start?
Join Equifax and Visual Capitalist as we journey through time and explore the evolution of credit. In this three-part series, we’ll visit the
earliest days of consumer credit to better understand how the credit system has evolved over time. We’ll then explore the impact on
consumer credit of present-day analytic techniques and machine learning. And finally, we’ll journey into the future and share a sneak peek
into consumer credit decisioning, acquisition and account management strategies of tomorrow. Are you ready?
Part 1: The History of Consumer Credit
Today, financial institutions use credit reports to inform decisions about housing, employment, insurance and utilities deposits. Consumers
and businesses alike rely on forms of credit. They buy many big-ticket items (homes, autos, appliances, and vacations), as well as everyday
goods (groceries, clothing and medicine). But where did this system of credit all begin?
To understand our modern-day system of credit, we need to take a step back in time. Our journey starts over 5,000 years ago in Sumer
where it is thought that consumer loans make their first appearance for agricultural purposes[1]. Fast forward 1,700 years to Babylonian
SEARCH BLOGINSIGHTS BLOG TOPICS INDUSTRIES
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Page 1 of 4Credit through the Ages: Where it all Began - Equifax Insights Blog
8/1/2019https://insight.equifax.com/the-history-of-consumer-credit/
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times when The Code of Hammurabi is written, formalizing the first known laws around credit[2]. They establish maximum interest rates,
and now a public official must witness loans and record them as a contract to be legally valid.
Fast-forward a few thousand years more to 800 AD and the fall of the Western Roman Empire. Under Charlemagne’s rule (768-814 AD),
the Church bans usury for all laymen and economic activity grinds to a halt[3]. As we skip ahead a few more years to 1787, English
Philosopher Jeremy Bentham writes “A Defense of Usury,” a treatise arguing that restrictions on interest rates harm the ability to raise
capital for innovation[4].
Retail Credit Company is Born
As we head into the early 19th century, the roots of our modern day system of credit reporting take hold when a group of English tailors
come together to swap information about customers who fail to settle their debts[5]. Crossing the pond, the oldest of today’s three major
credit reporting agencies in the U.S. – the Retail Credit Company – is established in 1899, compiling an extensive list of creditworthy
customers[6]. Today, we know the company as Equifax.
In the 1950s-60s, credit records were maintained on index cards stored in filing cabinets[7]. In 1964, The U.S. Association of Credit Bureaus
studies the application of computer technologies in credit reporting. Around this same time, credit application forms become standardized[8].
In 1970, the Fair Credit Reporting Act is passed in the U.S., establishing a standard legal framework for credit reporting[9]. Finally, in 1989
credit bureaus introduce credit scoring, quickly becoming a standard system to measure credit in the U.S.[10]
This system of credit scoring remains largely unchanged. However, there are great advances in analytics and technology leading the way to
improved credit decisioning. In part two of our three-part series, we’ll discuss how those advances impact credit decisioning, acquisition and
account management.
To discuss the future of consumer credit with one of our experts, contact us now, or read more about alternative data, trended data and
neural networks at www.equifax.com/business/.
This is part one in a series of articles on the evolution of credit, based on a three-part infographics series with Visual Capitalist.
Sources: Visual Capitalist
[1] Quantum Future Group (http://cof.quantumfuturegroup.org/events/5461)
[2] Armstrong Economics (https://www.armstrongeconomics.com/research/a-brief-history-of-world-creditinterest-rates/3000-b-c-500-a-d-the-
ancient-economy/)
[3] The Guardian (https://www.theguardian.com/notesandqueries/query/0,5753,-1030,00.html)
[4] New World Encyclopedia (http://www.newworldencyclopedia.org/entry/Jeremy_Bentham)
[5] Denver Post (http://www.denverpost.com/2005/08/08/credit-gets-closer-look/)
[6] Time (http://time.com/3961676/history-credit-scores/)
[7] Philadelphia Fed (https://www.philadelphiafed.org/-/media/consumer-credit-andpayments/payment-cards-
center/publications/discussionpapers/2002/CreditReportingHistory_062002.pdf)
[8] New Research in Corporate Finance and Banking – Biaise, Bruno; Pagano, Marco (http://bit.ly/2xqx2zc)
[9] The Balance (https://www.thebalance.com/fair-credit-reporting-act-of-1970-1947567)
[10] MyFico (http://www.myfico.com/credit-education/credit-score-versions/)
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This is the third article in a 5-part series. We originally published this
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PhD, Senior Director at Moody’s Analytics An obscure […]
Page 3 of 4Credit through the Ages: Where it all Began - Equifax Insights Blog
8/1/2019https://insight.equifax.com/the-history-of-consumer-credit/
Theresa Freas
As Senior Director of Portfolio Marketing at Equifax, Theresa leads marketing strategy and
execution for the company’s financial services portfolio and enterprise capabilities. In this role, she is
responsible for developing and implementing integrated marketing campaigns, including thought
leadership, sales enablement and demand generation that support the portfolio. Theresa and her
team received a 2018 Killer Content Award for Measurable R[...]
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