The Senate Banking Committee yesterday held a hearing on the Fair Credit Reporting Act, inviting testimony from the Bureau of Consumer Financial Protection as well as the Federal Trade Commission.
The members of the committee, both Democrats and Republicans, shared their concerns over the FCRA and a “broken” credit reporting system highlighted by a lack of consumer control over the information managed by credit bureaus and an inability to appropriately penalize credit bureaus when a mistake is made.
“The credit reporting system is backwards” Sen. Sherrod Brown [D-Ohio], the ranking member of the committee said during the hearing. “Like so much of our economy, it works for big corporations, but doesn’t work for regular Americans.
“The Fair Credit Reporting Act is almost 50 years old. The amount and type of information being collected today would have been unthinkable when it was created. It’s time for a serious overhaul that puts Americans in control of their own data.”
One of the areas discussed during the hearing was how medical debts can impact an individual’s credit score, which might be unfair because consumers rarely have a choice when it comes to dealing with matters of their health, as opposed to say making a decision to take out a credit card or by a new car. Sen. Brown suggested keeping medical debts off an individual’s credit report until a more affordable healthcare option is made available to Americans.
For the most part, the two witnesses — Peggy Twohig, the assistant director of the Bureau of Consumer Financial Protection’s division of supervision, enforcement and fair lending, and Maneesha Mithal, the associate director of the Federal Trade Commission’s bureau of consumer protection division of privacy and identity protection — expressed their agency’s willingness to work with Congress on finding better solutions.
Sen. Robert Menendez [D-N.J.], appeared to strike a chord when he began his five minutes of question time by asking both Mithal and Twohig for the last four digits of their Social Security numbers. After both declined to provide them, Sen. Menendez pointed out that the credit bureaus can sell the personal information of consumers without needing their consent, such as what both witnesses just declined to do.
Sen. John Kennedy [R-La.] called on the credit bureaus to use technology to help improve the system, especially as it pertains to how consumers report errors on their credit reports. “We should be smart enough to come up with technology to fix the broken system,” he said, according to a published report.