The House on Wednesday passed legislation to review consumer credit reports and provide additional protections and opportunities to rebuild credit.
The measure, which consisted of a package of six bills, was passed along party lines. It includes language calling on the Consumer Financial Protection Bureau (CFPB) to establish a credit rehabilitation process, prohibiting rating agencies from including past due or defaulting student loans on credit reports after the borrower has made nine monthly payments on time and forcing private lenders to offer repayment. plans for those facing economic hardship and looking to rehabilitate their credit ratings.
The legislation also includes provisions that would tighten restrictions on credit checks for employment decisions, except as necessary for positions requiring background checks “by federal, state, or local law, or for a credential. national security ”and reduce the retention period of negative credit information. a four-year report and make changes to the credit report dispute process.
Supporters of the bill argued that it was a necessary step to tackle abusive or predatory practices and provide borrowers with options to gain financial stability.
“This bill, this set of bills is based on reforms that the members of the Financial Services Commission have developed for several congresses. Mr. President, credit reports are unlike any other business, ”President of House Financial Services Maxine WatersMaxine Moore Waters Progressives should know that a financial transactions tax would hurt average Americans Photos of the Week: Therapy Dog, Surfside Memorial and Chinese Dancers. Pressley, Tlaib and Waters call for extended protection for residents of social housing PLUS (D-Calif.) Said on the floor before the vote.
“Consumers are not customers of credit bureaus, they are the product. Credit bureaus aggregate consumer data for sale to lenders, employers, and other businesses. Unfortunately, our consumer credit reporting system is seriously flawed and consumers have little recourse. It is common for credit reports to be filled with unacceptable errors that are difficult for consumers to correct. “
But critics of the legislation allege the bill would make dramatic changes that could negatively impact consumers, with leading Republicans arguing they should work to find a bipartisan solution to the Fair Credit Reporting Act reforms. .
“This is a Democratic bill under the guise of consumer protection that will destroy the accuracy and completeness of consumer credit records. This will lead to a weaker financial system, compromising much of the security and strength that we have accumulated over decades, ”the representative said. Patrick mchenryPatrick Timothy McHenryBiden officials scramble to avoid August wave of deportation (RN.C.), the top Republican on the House financial services committee, said during the floor debate.
“This will essentially socialize the credit rating and therefore the credit allocation. And, listen, this is an election year. I see it. And I see that not only in the rhetoric here in the House but in the legislation before us today. This bill will weaken underwriting standards. This will make credit a riskier business, impacting both the cost and affordability of credit for all Americans.
The legislation faces an uphill battle in the Republican-controlled upper house.