Democratic senators have asked the Consumer Financial Protection Bureau (CFPB) to take concrete steps to reform the credit reporting industry.
Specifically, the senators urged CFPB Director Rohit Chopra to use the CFPB’s existing supervisory, rulemaking, and enforcement authority over the largest nationwide consumer reporting agencies, in order to improve the accuracy of credit reports, streamline the dispute resolution process, and hold consumer reporting agencies accountable for addressing persistent errors.
“In an industry that affects all Americans so directly, even a small error rate means tens of millions of people can be denied jobs or housing through no fault of their own,” the senators wrote. “As a result of simple mistakes, consumers may pay more for credit or be denied loans altogether; they might face obstacles applying for a job, getting a mortgage, or renting an apartment. These impacts can persist for years, putting innocent people in positions that are nearly impossible to resolve. Furthermore, these errors can exacerbate the racial wealth gap: according to new research from your agency, consumers residing in majority Black neighborhoods are twice as likely to have disputes appear on their credit reports compared to consumers in white neighborhoods. This is a disparity the CFPB observed across every credit category, including auto loans, student loans, and credit cards.”
The senators added that consumers should not have to navigate lengthy, complicated processes to correct credit reporting errors, or to protect themselves against identity theft or fraud—a continuing risk for the hundreds of millions of Americans whose information has been compromised in corporate data breaches, such as the 2017 Equifax breach.
“It is no surprise that credit and consumer reporting complaints handily top the list of issues consumers report to the CFPB,” they wrote. “Americans have more complaints with the credit reporting industry than any other type of consumer financial product or service, and the CFPB is empowered to improve this broken system.”
The letter was signed by senators Brian Schatz (D-Hawaii), Senate Banking, Housing, and Urban Affairs Committee Chairman Sherrod Brown (D-Ohio), Ron Wyden (D-Ore.), Elizabeth Warren (D-Mass.), Jack Reed (D-R.I.), Chris Van Hollen (D-Md.) and Ben Ray Luján (D-N.M.).