New Credit Reporting Bill Passed by House, Seeks to Make Credit Reporting More Consumer-Friendly

Yesterday, the U.S. House of Representatives passed H.R.5332, Protecting Your Credit Score Act of 2019, which seeks to help consumers gain easier access to their credit information as well as establish new oversights over credit reporting agencies. The bill, introduced by Rep. Josh Gottheimer (D-NJ-5), would amend the Fair Credit Reporting Act and require the Consumer Financial Protection Bureau (CFPB) to take certain steps in regards to credit reporting agencies.

The summary of the bill provides that it would: 

• Allow consumers to receive their credit score when they request a free annual credit report.
• Direct credit reporting agnecies to create a central online portal where consumers can dispute errors, place or lift security freezes, and access free credit reports and credit scores. 
• Require the CFPB to establish a public registry of credit reporting agencies.
• Require credit reporting agencies to provide available information to consumers about the purpose behind a credit report pull.
• Grant the CFPB statutory authority to supervise credit reporting agencies, establish a credt reporting ombudsman within the CFPB, and establish data security requirements for credit reporting agencies.
• Require the Government Accountability Office to conduct a report on the feasibility of credit reporting agencies replacing Social Security numbers with another type of federal identification.
• Allow courts to award injuctive relief so that they can compel credit reporting agencies to comply with credit report protections.

The bill is now off to the Senate. 

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insideARM Perspective

It's interesting that we now have a piece of legislation that seeks to establish a registry of credit reporting agencies, as a similar avenue might also be a helpful avenue for debt collection agencies and firms.

In debt collection, one concern that pops up is how to handle fraudsters and scammers, who harm both consumers and legitimate debt collectors that try to be in compliance with laws and regulations. Unforutnately, the scorpion dance of authenticating a consumer on a phone call—which is required by laws and regulations governing prohibitions of third-party disclosure—makes it difficult for consumers to distinguish between legitimate debt collectors and fraudsters. 

A CFPB registry of legitimate debt collectors could solve this problem. Consumers who are uncertain if the company on the phone is a legitimate collector can quickly check the registry to see if the agency is listed for their peace of mind.

This idea has been floating around for a while, and now is as good a time as any to revisit it.