House Passes Credit Reporting Bill Unhelpful to Consumers January 30, 2020 The American Financial Services Association is disappointed that Members of the House last night (January 29) approved H.R. 3621, “The Comprehensive CREDIT Act”, which actually harms the very consumers Congress claims to be trying to help by further empowering unscrupulous credit-repair organizations and the plaintiffs’ bar. “This bill would encourage frivolous and irrelevant consumer complaints, hinder lenders’ ability to quickly resolve such claims, and steer consumers toward unscrupulous credit-repair organizations that charge consumers hundreds of dollars, often without a benefit to the consumer,” noted AFSA President and CEO Bill Himpler. Earlier this week, AFSA submitted a comment letter to Majority Leader Steny Hoyer (D-MD) and Minority Leader Kevin McCarthy (R-CA) expressing serious concerns about HR 3621, and highlighting four problematic changes for the consumer credit industry, consumers and credit reporting agencies (CRA). First, the bill would require CRAs and credit furnishers to ignore certain credit data. “Eliminating otherwise accurate credit information from consumer reports harms consumers by reducing the predictive accuracy of consumer reports and scores and generates creditor interest in other sources of information,” Ann Harter, AFSA Vice President of Congressional Affairs wrote in the letter. Second, the bill also requires the Consumer Financial Protection Bureau (CFPB) to periodically review credit-scoring models and to provide the authority to prohibit the use of some components. Not only is this an unsuitable burden for the Bureau, it is entirely beyond its mission. “Third, the number of credit disputes consumers submit directly to creditors and through CRAs is already overwhelming, and bills such as this add to the burden,” wrote Harter. Current law requires CRAs to review and respond to all consumer disputes, a crucial tool for consumers. However, “in recent years a cottage industry of credit repair organizations has emerged that charges consumers fees to file repetitive disputes,” Harter noted, adding that the bill also removes important provisions currently in law that allows furnishers to respond within five days that a dispute is repetitive or irrelevant. These types of disputes are also from the predatory credit “repair” organizations. A 2016 notice from the CFPB reported that more than half the complaints it received about credit repair involved alleged fraud or scams. Finally, the bill expands the availability of injunctive relief in connection with violations of the Fair Credit Reporting Act (FCRA). While consumers should be able to obtain relief for legitimate disputes, the bill as drafted, would do nothing more than enable the plaintiffs’ bar to line its pockets and serve no useful purpose to the consumer.