The U.S. House Financial Services Subcommittee on Oversight and Investigations considered testimony from three nationwide consumer reporting agencies ("CRAs") on the accuracy of credit reports and scores, as well as the CRAs' compliance with the Fair Credit Reporting Act ("FCRA") and recent CARES Act amendments to the FCRA.
At the hearing:
- John Danaher, Executive Vice President, Consumer Interactive at TransUnion recommended that (i) Congress enact legislation to facilitate greater use of alternative data, particularly monthly rent payments, (ii) the FTC and CFPB increase oversight of the credit repair industry to improve the consumer dispute process, (iii) the CFPB reinstate the requirements that lenders be the initial recipients of disputes before the disputes are escalated, and that third-party complaint filers attest that they are not credit repair organizations, (iv) policymakers set reporting standards for student loans and (v) policymakers support the expansion of trended data, which can be used to create a model trajectory of a consumer's past and future scores.
- Beverly Anderson, President, Global Consumer Solutions, Equifax Inc. attributed the increase in complaints through the CFPB Consumer Complaint Database to, among other things, (i) new CARES Act-related obligations, (ii) the submission of disputes to the portal, instead of directly to a CRA or data furnisher, and (iii) the rise of credit repair organizations' submissions, which dispute "accurate but adverse information on consumers' credit reports."
- Sandy Anderson, Senior Vice President, Strategy and Operations, Experian Credit Services testified that the increase in submissions to the CFPB complaint portal is largely due to third-party credit repair organizations filing disputes on "accurate but negative information to try to game the system." On the issue of financial inclusion, Ms. Anderson highlighted her company's new "game-changing" product ("Experian Boost") that allows consumers to opt-in to report monthly payment information (e.g., for telephones and utilities) to their credit reports.
Primary Sources
- U.S. House Financial Services Committee Hearing: Consumer Credit Reporting - Assessing Accuracy and Compliance
- U.S. House Financial Services Committee Memorandum: Consumer Credit Reporting - Assessing Accuracy and Compliance
- Equifax Testimony, Beverly Anderson: Consumer Credit Reporting - Assessing Accuracy and Compliance
- Experian Testimony, Sandy Anderson: Consumer Credit Reporting - Assessing Accuracy and Compliance
- TransUnion Testimony, John Danaher: Consumer Credit Reporting - Assessing Accuracy and Compliance
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