House Financial Services Committee passes bills to reform credit reporting

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The House Financial Services Committee last week passed several bills that would make substantial reforms to credit bureaus, the credit reporting process and the Fair Credit Reporting Act.

The following bills were among those passed by the committee:

star3 The Restricting Use of Credit Checks for Employment Decisions Act, H.R. 3614, which would ban the use of credit information for most employment decisions, except when required by law or for a national security clearance;

star3 The Free Credit Scores for Consumers Act of 2019, H.R. 3618, which would require consumer reporting agencies to give consumers free copies of their credit scores that are used by creditors;

star3 The Restoring Unfairly Impaired Credit and Protecting Consumers Act, H.R. 3622, which would shorten the time period in which adverse information would stay on a consumer report from seven years to four years.; and

star3 The Improving Credit Reporting for All Consumers Act, H.R. 3642, which would create a new right to appeal credit reporting decisions, and direct the CFPB to develop minimum standards for the credit reporting agencies.

All the bills were introduced by Democratic members of the committee and passed along party lines.

“I have long said that our credit reporting system is deeply broken,” said Rep. Maxine Waters, R-Calif. and committee chairwoman. “Consumers make more complaints about the credit reporting process to the Consumer Financial Protection Bureau than any other issue. It is exceedingly common that credit reports are filled with errors, consumers are penalized on their credit reports when they are preyed upon with unfair and deceptive products, adverse information stays on credit reports for too long, and credit information is sometimes unfairly used to make hiring and employment decisions.”

Republicans on the committee blasted the legislation and argued the vote was rushed.

“This committee has held one hearing on the topic of credit reporting, and that was back in February,” said Rep. Patrick McHenry, R-N.C. and the committee’s ranking member. “And when I say ‘on the topic’ I say that in the loosest form possible… not necessarily on the contents of reforming the Fair Credit Reporting Act. However, there was just one discussion draft of a bill attached with a hearing notice, yet, this draft, was not discussed once during the hearing. Not once. Now, six months later, without further discussion, we’re considering these bills that would make significant changes to the Fair Credit Reporting Act.”

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