Rep. Maxine Waters (D-Calif.), has introduced the “Comprehensive Consumer Credit Reporting Reform Act of 2016” (H.R. 5282), which will build on a draft proposal Waters released in 2014. Credit reporting has been a particular area of interest from the Consumer Financial Protection Bureau (CFPB) because of the inability of consumers to determine who furnishes information to creditors.
According to Waters’ draft proposal, the Fair Credit Reporting Act (FRCA) would be amended to include provisions that would:
- Provide relief to borrowers who were victimized by predatory mortgage lenders and servicers by removing adverse information about these residential loans that are found to be unfair, deceptive, abusive, fraudulent or illegal;
- End the unreasonably long time periods that most adverse information remains on a person’s credit report by shortening such periods by three years;
- Give consumers tools to truly verify the accuracy and completeness of their credit reports by mandating that furnishers retain all records for as long as adverse information about these accounts remains on a person’s credit report;
- Eliminate punitive credit scoring practices by removing fully paid or settled debt from credit reports, including medical debt; and
- Give distressed private education loan borrowers the same chance to repair their credit as federal student loan borrowers by removing adverse information when delinquent private education loan borrowers make consecutive on-time monthly payments for a certain period of time on their loans.
“American consumers are increasingly reliant on credit information that is used to determine their ability to buy a house, open a checking account, or even get a job,” said Waters, who is also the ranking member for the House Financial Services Committee. “We’ve all heard the horror stories about the serious problems with credit reporting practices that unjustly restrict so many people’s economic opportunities.
“But I believe it is also time to shine light into the mysterious ‘black boxes’ that generate credit scores and give victims, who are saddled with poor credit because of predatory and unfair practices, the chance for a fresh start,” Waters added. “This bill will bring much-needed accountability to the credit reporting industry, which will enhance consumer and creditor confidence in the integrity of information on reports and restore fairness in the system.”
The legislation contains nine Titles:
- Title I: Fixing the dispute process
- Title II: Restricting the use of credit checks for employment decisions
- Title III: Rehabilitating the credit standing of struggling private education loan borrowers
- Title IV: Restoring the impaired credit of victims of predatory activities and unfair consumer reporting practices
- Title V: Monitoring the development and use of credit scores
- Title VI: Providing greater consumer access to and understanding of consumer reports and credit scores
- Title VII: Banning misleading and unfair consumer reporting practices
- Title VIII: Expanding access to tools to protect vulnerable consumers from identity theft, fraud or a related crime, and protect victims from further harm
- Title IX: Miscellaneous.