On January 29, the U.S. House of Representatives passed the Comprehensive Credit Act (“the Act”). Packaging several Democrat-sponsored bills together, the Act garnered the support of all but two of the present House Democrats. If enacted into law, the Act would significantly change the information that credit reports can contain, expand the processes available to consumers to dispute their credit reports, and provide for increased government oversight of the credit reporting system. Specifically, the Act would do the following:
- Give the Consumer Financial Protection Bureau regulatory oversight of credit scoring models, including authority to review and prohibit new types of credit scoring models in certain circumstances;
- Establish a new process for consumers to appeal the results of credit dispute investigations with Consumer Reporting Agencies (“CRAs”);
- Reduce the overall time that certain types of adverse credit events remain on an individual’s credit report;
- Limit the use of student and medical debts on credit reports in some situations;
- Prohibit credit reports from containing information related to any mortgage loan that either resulted from, or is related to certain predatory lending activities;
- Prohibit in general the use of credit scores by employers for hiring decisions; and,
- Require nationwide CRAs to provide credit scores without cost to consumers when they receive their free annual credit reports.
Having failed to secure a single House Republican vote in favor of its passage, the Act is unlikely to pass in today’s Republican-led Senate. It nevertheless provides a glimpse into the changes that the credit industry may expect if Democrats gain control of the Presidency and both houses of Congress.
We will continue to monitor and report on any developments related to the Act or any others which would impact the credit reporting industry.