Consumer Benefits from Open Public Records

Open access to public records serves many valuable purposes in our democracy and provides many public benefits, ranging from preventing and detecting crime to locating missing children. (These public benefits are outlined in greater detail in the Coalition for Sensible Public Records Access paper, Public Benefits From Open Public Records.)

The value of accessible public records, however, extends far beyond these democratic and social benefits. The benefits of open public records are so numerous and diverse that they impact virtually every facet of American’s lives as consumers. In fact, public records have come to constitute part of the critical infrastructure of our information economy. As privacy consultant Robert Gellman, former chief counsel to the House Government Operations Subcommittee on Information, Justice, Transportation and Agriculture, has written: “Many government agencies exist principally to create, collect, or provide information to assist in the conduct of business, legal, or personal affairs. Government information is a valuable resource and commodity that can be used in many different ways to further economic growth.”1

These uses of public records in the market are so common, and their value so great, that we frequently take them for granted. Consider just a few of the essential consumer benefits that open public records provide:

Information for Financial Decisionmaking

Public records provide key information about consumers’ financial fitness. Information from bankruptcy courts for example, not only facilitates the recovery of debts by creditors, but also provides valuable notice to future creditors. Public record information is also used to verify loan application information, determine property ownership and value, and identify outstanding liens. That information helps increase the accuracy of future credit decisions, increases the availability of credit, and decreases the cost of credit to the public.

Accessible public information also has increased the number of Americans who now qualify for credit and other services, and increased the confidence of service providers in meeting the needs of this previously underserved population. In 1956, about 24 percent of U.S. households (13 million) had mortgage loans. By 1998 over 43 percent of households (44 million) had home mortgage loans, and the percent of the U.S. population owning their own homes were at an all-time high-thanks to reliable, accessible information drawn largely from public records.

This country’s open public record system significantly reduces the cost of credit by facilitating accurate decisionmaking, reducing fraud and other losses, improving efficiency and confidence. As a result, American consumers save billions of dollars every year. In fact, economist Walter Kitchenman has calculated that just one of these features of our open information economy?the extent to which reliable, centralized, and standardized consumer credit information makes it possible to pool consumer loans and then sell them to investors?saves American consumers at least $80 billion a year.2

Accessible public records facilitate rapid financial decisionmaking. Even major financial decisions are often made in a matter of minutes or hours, instead of weeks or months, as is the case in most other countries. In 1997, 82 percent of automobile loan applicants received a decision within an hour; 48 percent of applicants received a decision within 30 minutes. Many retailers open new charge accounts for customers at the point of sale in less than two minutes.

This is unheard of outside of the United States in countries that do not share our commitment to open public records. (And this fact has not gone unnoticed, to judge from recent European reports arguing for more open public records so that Europeans can one day enjoy the same benefits that Americans have come to take for granted.)

Information to Verify and Facilitate Property Ownership

Our entire system of real property ownership and nearly all real estate transactions have long depended on public records. These records are used to confirm that the property exists, its location, and its defined boundaries. Buyers, lenders, title insurers, and others use these records to verify the title owner. Mortgages, many legal judgments, and other claims against real property cannot be collected without reference to public records. And, as we have already seen, accessible public information makes financing the purchase of a home easier, cheaper, and faster than could otherwise be the case.

Information to Prevent and Detect Fraud

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