US Senators Send Letter Urging CFPB to Fix Broken Credit Reporting System – Job Screening Resources

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Written by ESR news blog editor Thomas Ahearn

On November 10, 2021, U.S. 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) take concrete steps to reform the credit reporting industry.

Specifically, the senators urged CFPB Director Rohit Chopra to use the CFPB’s existing oversight, regulatory and enforcement authority over the largest national consumer reporting agencies (CRAs) 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 may be denied jobs or housing through no fault of their own. As a result of simple errors, consumers may pay more for credit or see themselves refuse loans outright; they might encounter 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 supervisory, regulatory and enforcement authority over the largest national credit rating agencies which represent the vast majority of the credit assessment market. Accordingly, the senators asked the CFPB to introduce accountability into the credit reporting system.

“Specifically, we ask you to assess persistent errors in credit reports and how rating agencies consistently fail to address these errors, in particular by not devoting enough staff and resources to dispute resolution – a shortcoming that the CFPB could use its oversight authority to remedy,” the senators wrote in their letter.

“CRAs engage in concerning practices that contribute to inaccuracies, including the use of partial Social Security numbers to match data,” but the senators “were encouraged by The recent advisory opinion of the CFPB claiming that the practice of matching consumer records solely by name matching is illegal,” they wrote.

“Any additional action taken by the CFPB could, with appropriate privacy and security measures, also require CRAs nationwide to match all nine digits of a consumer’s social security number. We also ask that you consider requiring CRAs nationwide to conduct periodic audits 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 in their credit report and five percent had economically harmful errors. A 2015 FTC Tracking Study found that nearly 70% of affected consumers surveyed three years earlier continued to dispute the information.

Employment Screening Resources® (ESR) – a leading global background check provider ranked number one background check company by HRO Today in 2020 – provides employers with credit reports for employment purposes in accordance 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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