WASHINGTON–The House has passed the Comprehensive CREDIT (Credit Reporting Enhancement, Disclosure, Innovation and Transparency) Act of 2020, which aims to reform certain aspects of the credit bureaus.
Passage of the bill was praised by consumer groups.
“For too many years, indeed decades, the Big Three credit bureaus – Equifax, Experian and TransUnion - have used and abused consumers by profiting from our information while allowing errors to run rampant,” said Chi Chi Wu, an attorney with the Boston-based National Consumer Law Center. “The credit bureaus have frustrated consumers’ efforts to dispute those errors, and have carelessly exposed our sensitive data to thieves. Finally, the credit bureaus are being held accountable for the harm they inflict on millions of American consumers who have no choice but to have their information sold and mangled by these for-profit corporations.”
The Comprehensive CREDIT Act would amend the federal Fair Credit Report Act (FCRA) to make reforms to the credit reporting system. The NCLC pointed to the high error rates in credit reports and direct the Consumer Financial Protection Bureau (CFPB) to issue accuracy regulations. NCLC supported the bill on behalf of its low-income clients.
The bill would also address what the consumer group called “the Kafka-esqe system for credit reporting disputes” by giving consumers a new right to appeal. The bill reduces the punitive impact of negative information by reducing the time limit for information on credit reports to four from seven years (for bankruptcies).
Other Provisions
Other key provisions of the bill include:
* Restrictions on the use of credit reports by employers
* Strict limitations on the reporting of medical debt, delaying reporting for one year and prohibiting reporting for medically necessary procedures
* Giving struggling private student loan borrowers a second chance to rehabilitate impaired credit records
* Credit reporting relief for extended active duty uniformed consumers
* The right to a free annual credit score for consumers.
Companion legislation has not yet been introduced in the Senate.