One could be forgiven for tuning out the daily news coming out of Washington, DC, but there is substantive policy work currently happening in the consumer reporting ecosystem. The Fair Credit Reporting Act (FCRA) is facing the biggest set of reforms since the Fair and Accurate Credit Transactions (FACT) Act passed in 2003. As the voice of the consumer reporting industry for over 100 years, the Consumer Data Industry Association (CDIA) has a unique, comprehensive understanding of the wide-ranging impact these proposals can have on critical industry sectors of our national economy and on consumers.
The FCRA is the most pro-consumer data and privacy law in the country. It regulates the collection and use of data, giving consumers control over how their data are used and transparency into what data are collected. The House of Representatives is considering a reform bill to extensively amend the FCRA, including:
- adding multiple new requirements to the FCRA dispute process;
- giving credit repair companies new tools to challenge information on credit reports;
- banning the use of credit reports in private employment decisions;
- shortening the obsolescence period of information on reports from seven years to four; and
- reducing the amount of time bankruptcies can stay on a record from 10 years to seven.
Congress is also looking at proposals to either prohibit the furnishing of negative data of furloughed workers, or prohibit the reporting of negative data of workers impacted by a federal government shutdown. The Senate meanwhile has asked industry to answer a series of questions on data privacy, protection and collection.
New legislation would build on a productive decade of action to improve consumer protections in the consumer reporting system. The Consumer Financial Protection Bureau (CFPB) now oversees all participants in the consumer reporting system, including the data security practices at nationwide CRAs. Also, new rules have improved accuracy and the dispute process has become much more consumer friendly. Consumers today have more control over their credit file than ever before.
The CDIA supports the responsible use of consumer data to help consumers achieve their financial goals, and to help businesses, governments and volunteer organizations avoid fraud and manage risk. Banks and other data furnishers accurately provide information to CRAs, that compile the information and make it available for other banks and other users of data to make smart decisions. This process ensures fair and safe transactions for consumers, facilitates competition, and expands consumers’ access to financial and other products suited to their unique needs.
As stated in our response letter to the Senate Committee, we believe “[T]oday’s consumer reporting system is structured well to serve the entire ecosystem, especially consumers.” Consumers benefit from this system through pricing that is suited to their particular needs, and the economy benefits because lenders and others can depend on reliable information to decide whether and how to make a loan. The CDIA will continue working to maintain the benefits of the consumer reporting system in Washington and across the country.