On January 29, 2020, the House passed H.R. 3621, the Comprehensive Credit Reporting Enhancement, Disclosure, Innovation, and Transparency Act of 2020 (“Comprehensive CREDIT Act”). Sponsored by Rep. Ayanna Pressley (D-MA), it passed by a mostly party-line vote of 221-189, with all but two Democrats supporting it. The legislation is a package of several Democrat-sponsored bills that target consumer reporting and, if passed into law, would affect all aspects of the industry. For example, the Act includes provisions:
- Providing consumers a new right to appeal the results of initial reviews about the accuracy or completeness of disputed items on a report, and requiring consumer reporting agencies and furnishers to implement specific appeal processes;
- Requiring removal of adverse information related to “predatory” mortgage lending;
- Banning the use of credit scores for employment purposes (except where a consumer report is otherwise required as part of a Federal or state law or for national security clearance);
- Providing private student loan borrowers similar opportunities to improve their credit as those available to federal student loan borrowers;
- Shortening the time credit information can remain on a consumer report (from 10 years to 7 years for bankruptcies and from 7 years to 4 years for other adverse information);
- Banning or delaying the reporting of certain medical debts;
- Directing the Consumer Financial Protection Bureau to provide oversight and to set standards for validating the accuracy and predictive value of credit scoring models;
- Requiring a study on how the use of non-traditional data impacts the availability and affordability of credit for consumers with limited or no traditional credit histories; and
- Directing the nationwide consumer reporting agencies to provide consumers free copies of their credit scores when the consumers obtain their free annual consumer reports.
The House approved the Act over sharp criticism from organizations such as the U.S. Chamber of Commerce. It now awaits consideration by the Senate, which will likely ignore the legislation as long as Republicans remain in control. With the 2020 election looming, however, a change in the Presidency and control of the Senate could also mean passage of the Act or something similar to it—and, with it, significant changes for the consumer reporting industry. Furnishers and CRAs alike should consider this legislation a preview of what could occur if Democrats control the White House and both houses of Congress in November.