A recent Congressional hearing sought more accountability for the credit reporting industry, and a legislative proposal is also seeking more consumer rights relating to their credit scores.
The new Democrat-controlled Congress is clamping down on the credit reporting industry, with a renewed push to expand rights for affected consumers.
Reform to the credit reporting system is gaining some traction, with a House Financial Services Committee hearing on February 26 about holding the major credit reporting bureaus – Equifax, Experian and TransUnion – accountable. Financial Services Committee Chairwoman Maxine Waters is also pursuing legislation for credit reporting industry reform.
A bill Waters has introduced seeks to amend the Fair Credit Reporting Act so that consumers are treated more fairly in the credit reporting process. The proposed legislation would give more rights in disputing reports from consumer reporting agencies and their sources.
For instance, it would enable consumers to appeal disputes that consumer reporting agencies have completed, and makes consumers more aware of their rights in challenging any errors. The legislation also aims to limit the use of credit checks for employment decisions, and be more lenient in reporting some lapses by private student loan borrowers who have been paying their loans.
See related: Main lesson after Equifax breach: Protect yourself
Bill seeks to strenghten oversight of credit reporting industry
Other goals include:
- Making it easier for consumers impacted by predatory lending and unfair reporting to regain their credit standing.
- Seeking more federal oversight of the input that credit reporting agencies use, providing consumers more access to and better understanding of their credit scores.
- Doing away with misleading and unfair credit reporting practices.
- Providing consumers more protection against identity theft and other fraud.
According to the National Consumer Law Center, a consumer advocacy group, the credit reporting system continues to mistreat consumers, even decades after the adoption of the Fair Credit Reporting Act.
Chi Chi Wu, a National Consumer Law Center attorney, said in a statement, “A key reason is the structure of the system is that consumers are the commodity, not the customer of the credit bureaus. When Equifax, TransUnion or Experian fails to respond to consumers’ problems, we can’t vote with our feet to leave.”