House members band together to package a bill that empowers consumers with better credit reporting protections
House members passed, H.R. 3621, the Comprehensive CREDIT Act of 2020, a bill that addresses the concerns in credit rating and credit reporting. Introduced by Rep. Ayanna Pressley (D-MA) and co-sponsored by Rep. Alexandria Ocasio-Cortez (D-NY), the legislation regulates how credit reporting agencies assess and detail your credit history and activity. It also assists Americans in handling the country’s growing crippling debt, especially from student loans and medical bills.
“In this country, credit reports our reputation . . but our credit reporting system is fundamentally flawed, rife with inequities and disparities that stifle the upward mobility of millions of hard-working Americans,” said Rep. Pressley on the House floor.
In the bill, the Comprehensive CREDIT Act of 2020 controls how credit information is shared and what type of information is disclosed by credit reporting agencies. It will also establish a credit rehabilitation program for students who took out private loans, and in some cases, remove derogatory marks on credit scores.
Packaged with several other bills from House members representing states dealing with gross wealth inequities and low-wealth communities, key measures included in the Comprehensive CREDIT Act come from H.R. 3622, the Restoring Unfairly Impaired Credit and Protecting Consumers Act, a bill sponsored by Rep. Rashida Tlaib (D-MI), which reduces how long adverse credit information stays on consumer reports from 7 years to 4 years; and takes off any predatory lenders reports. It also does not report debt for medically-necessary procedures and for other medical debt, delays reporting by one year.
Rep. Ayanna Pressley (D-MA) and Rep. Rashida Tlaib (D-MI)
As well, part of H.R 3621 is Rep. Alma Adams’ (D-NC) sponsored bill, H.R. 3642, the Improving Credit Reporting for All Consumers Act, which creates an easier process to dispute derogatory marks. Another part of the bill, from Rep. Al Lawson’s (D-FL) H.R. 3614, the Restricting Use of Credit Checks for Employment Decisions Act, makes it unlawful for credit to be used in hiring, unless it is required to conduct a background check by Federal, state or local law or for a national security clearance.
Additionally in the bundled legislation, the H.R. 3618, the Free Credit Scores for Consumers Act sponsored by Rep. Joyce Beatty (D-OH) requires credit reporting agencies to give free copies of credit scores to consumers so that they can see how creditors use their data to make credit decisions.
Lastly, the package includes H.R. 3629, the Clarity in Credit Score Formation Act sponsored by Rep. Stephen Lynch (D-MA), institutes a set of standards that provide oversight and clear guidelines on how scores are determined and reported. Also, it pushes for studies that determine alternative ways in credit rating that take into account consumers with little or no credit history.
Elated about the House’s passage of the bill, Rep. Pressley added in a release, “When credit reports determine where you can live, work and how much you will have to pay for everything from a car to a college degree, consumers deserve a system that ensures equity, transparency and accountability. American families are finding themselves trapped in cycles of debt, simply for trying to afford basic needs like healthcare and education. The Comprehensive CREDIT Act will greatly improve a fundamentally flawed credit reporting system, providing much needed relief for families across the country.”
If made into law, the Comprehensive CREDIT Act directly deals with tackling the rapidly increasing wealth gap. In 2019, the Federal Reserve released its data on financial accounts. According to their findings, since 1989, the top 1 percent of the world has captured $21 trillion in wealth, while the bottom 50 percent lost $900 billion. The numbers show that the bottom half of the world is in debt and has negative wealth.
Now the Comprehensive Credit Act goes to the Senate for voting.
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