Senators urge CFPB to correct credit reporting system

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Written by Thomas Ahearn, editor-in-chief of the ESR News blog

On November 10, 2021, US Senators Brian Schatz (D-HI), Sherrod Brown (D-OH), Ron Wyden (D-OR), Elizabeth Warren (D-MA), Jack Reed (D-RI), Chris Van Hollen (D-MD) and Ben Ray Luján (D-NM) sent a letter urging the Consumer Financial Protection Bureau (CFPB) to take concrete steps to reform the credit reporting industry.

Specifically, the senators urged CFPB director Rohit Chopra to use the CFPB’s supervisory, rule-making and enforcement authority on the largest consumer information agencies (CRAs) to l nationwide to improve the accuracy of credit reports, streamline the dispute resolution process, and hold CRAs accountable for errors.

“Even a low error rate means that tens of millions of people can be denied employment or housing without their being responsible. As a result of simple mistakes, consumers can pay more for credit or be denied loans altogether; they could face obstacles in applying for a job, getting a mortgage or renting an apartment, ”the senators wrote in their letter.

The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the CFPB oversight, rule-making and enforcement powers over the nation’s largest credit rating agencies that represent the vast majority of the credit reporting market. As a result, the senators called on the CFPB to introduce accountability into the credit reporting system.

“Specifically, we ask you to assess persistent errors in credit reports and how credit rating agencies consistently fail to resolve these errors, particularly by not devoting sufficient staff and resources to resolution. litigation – a loophole that the CFPB could use its supervisory authority to remedy, ”the senators wrote in their letter.

“CRAs engage in worrying practices that contribute to inaccuracies, including using partial social security numbers to match data,” but senators “were encouraged by the recent CFPB advisory opinion that the practice of matching consumer records only through name matching is illegal, ”they wrote.

“Any further action taken by the CFPB could, with appropriate privacy and security measures, also require credit rating agencies nationwide to match the nine digits of a consumer’s social security number. We also ask you to consider requiring national rating agencies to carry out periodic verifications of the accuracy of the information provided, ”they wrote.

A 2012 Federal Trade Commission (FTC) study found that one in five consumers had an error on their credit reports and five percent had errors that were economically damaging. A 2015 follow-up study by the FTC found that nearly 70% of affected consumers surveyed three years earlier continued to dispute information.

Employment Screening Resources® (ESR) – one of the world’s leading providers of background checks ranked # 1 background check firm by HRO Today in 2020 – provides employers with credit reports for employment purposes that comply with federal laws, state and local. To learn more about ESR, please visit www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind. All information on this website is for educational purposes only.

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