AFSA: Congress Should Address Causes, Not Symptoms in Credit Reporting Issues December 10, 2019 The American Financial Services Association today submitted a comment letter to the House Financial Services Committee regarding to H.R. 5332, the “Protecting Your Credit Score Act of 2019.” The letter expresses concerns with the bill, which is being marked up and voted on by the committee. The letter outlines the important symbiotic relationship between lending and credit reporting systems that benefits American consumers when it functions well. The letter focused on two areas: First, the bill addresses only the symptoms of disfunction in the credit reporting system, not the root causes. The volume of frivolous credit disputes has exploded in recent years, propelled by unscrupulous, for-profit “credit repair” organizations. Whereas lenders go to great lengths to work directly with consumers when issues arise and want to resolve issues and payment difficulties directly, so-called “credit repair” firms take advantage of vulnerable consumers. The bill attempts to address these concerns in the credit dispute process by creating additional supervision and enforcement. “We believe a better solution to these concerns would be if policymakers were tasked with investigating the source of disputes to stem the tide of those that are frivolous and repetitive in nature,” Ann Harter, Vice President, Congressional Affairs wrote in the letter. “This would allow lenders to focus on remedying those errors that are legitimate, resulting in more accurate reports for consumers.” Second, the legislation should discourage Congress from pushing for more litigation on credit reporting issues. The bill proposes expanding injunctive relief for credit reporting issues. The big winner of this expansion would be plaintiff attorneys who would snatch more fees from consumers’ pocket. “Rather, policymakers should be working with consumer reporting agencies and lenders to understand and fix the conditions that have led to a deluge of frivolous disputes to begin with,” Harter noted. AFSA is pleased to see Congress propose legislation to improve the credit reporting process, a crucial part of the American economy. However, until the issue of frivolous disputes is understood, adding additional burdens on lenders and consumer reporting agencies is counterproductive.