Consumer groups push for bill to reform credit reporting / Public Information Service


Consumer groups are pushing for legislation to reform how credit reporting agencies handle errors on credit reports.

The calls to change the Fair Credit Reporting Act follow an admission by Equifax last month that a coding glitch caused major changes in the credit scores of about 300,000 people. U.S. Rep. Al Lawson, D-California, is seeking bipartisan cosponsors for a bill requiring credit reporting agencies to respond to inquiries from third-party credit repair companies or nonprofit consumer groups.

“Every day,” he said, “banks, employees and government entities rely on credit reports to make critical decisions about an American’s viability in home and auto loans, employment and even government benefits, which are so critical today”.

Equifax issued a statement in August saying it had corrected the coding error but did not immediately respond to a request for comment on the bill. Currently, a loophole allows agencies to disregard correspondence on credit disputes if it does not come directly from the consumer.

“If agencies don’t even have to touch the mail, that leaves community members who are really trying to change the game for their lives – and their children – growing up in very violent neighborhoods,” said Reverend Andre Chapple. , executive director of the African American Empowerment Coalition in Los Angeles, a nonprofit organization that educates people about credit issues that can prevent them from renting an apartment, buying a car or finding a job. “And they want to move, but they can’t, because their credit score suffers from a bunch of inaccurate things there. It’s really unfair.”

Michael Claunch, senior counsel for the American Association of Consumer Credit Professionals, said consumers deserve access to expert help to repair their credit.

“Because the process of improving your credit is confusing, difficult and time-consuming,” he said, “so third parties – such as credit repair organizations, as well as nonprofit community organizations lucrative – are necessary”.

According to the Consumer Financial Protection Bureau, 98% of the time the big three credit reporting agencies fail to provide relief to people who complain about errors in their credit reports.

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