Bills
| 3.23.22

Should Credit Reporting Bureaus Create a Single Online Portal for Consumers to Access Their Credit Reports & Scores? (H.R. 5332)

Do you support or oppose this bill?

What is H.R. 5332?

(Updated July 30, 2020)

This bill — the Protecting Your Credit Score Act of 2019 — would direct the three major credit reporting bureaus to work together to create a single online portal for consumers to access their credit reports and scores.

The portal would be required to:

  • Provide free and unlimited access to a customer’s credit reports and scores;
  • Allow customers to initiate and resolve disputes with credit bureaus; and
  • Give customers access to see to whom credit bureaus have sold their data in the past two years.

Additionally, this bill would direct the Government Accountability Office (GAO) to examine the most secure and accurate marker to track a consumer’s credit, whether with a Social Security Number or another federal identifier.

Argument in favor

Given credit reports’ importance in many aspects of consumers’ financial lives, it’s essential that they reflect accurate information and be easy to access. Requiring the three major credit reporting bureaus to work together to create a single online portal for consumers to access and correct errors in their credit reports and scores would give consumers more visibility in, and control over, their credit scores.

Argument opposed

In eliminating negative, but useful, information on credit score reports, this legislation would make such scores less useful to financial institutions and others that seek to use consumers’ credit scores to evaluate their creditworthiness and suitability as renters or borrowers. Additionally, this legislation gives the already too powerful Consumer Financial Protection Bureau’s (CFPB) even more authority.

Impact

Consumers; credit reporting bureaus; consumer management of their credit reports and scores; and the Government Accountability Office (GAO).

Cost of H.R. 5332

The CBO estimates that this bill would cost $15 million over the 2020-2025 period and $25 million over the 2020-2030 period.

Additional Info

In-Depth: Sponsoring Rep. Josh Gottheimer (D-NJ) introduced this legislation to direct the three credit reporting bureaus to work together to create a single online portal providing free, unlimited access to credit reports and scores as well as the ability to easily initiate and resolve disputes with credit bureaus. In remarks at this bill’s House FInancial Services Committee markup, Rep. Gottheimer said:

“There are three companies in the United States that literally hold the keys to deciding Americans’ credit fates, on whether you should get access to credit -- what you pay for a car, whether you can get a mortgage for a house, the rates on a credit card, and how much you can receive for a small business loan. Each of these credit bureaus come up with their own magic number: your credit score. They have their own secret formula, and it’s up to you to track it, beg them to fix inaccuracies when they arise, and deal with data breaches when they occur, far too often. My bipartisan legislation asks the private sector — not the government — to help fix this, because, as you all know, I believe that the private sector is the best solver of problems like these. My bipartisan bill sets up a one-stop shop, online portal to check your credit report, for free, at any time. It allows victims to shut off the ability of credit hucksters from using your information to apply for credit under your name… By creating this one-stop portal, all three credit bureaus will now have to work together, to help protect you and make your lives easier, not the other way around. My bipartisan legislation will help fix this, and help Americans protect what they have spent a lifetime building — their credit.”

New Jersey Citizen Action supports this legislation. Its Executive Director, Phyllis Salowe-Kaye, says:

“Credit reports and scores play a critical role in the life of any consumer. But under-regulated Consumer Reporting Agencies too often report inaccurate credit scores that can cost anyone thousands of dollars in higher-priced credit, or result in the denial of a job, insurance coverage or an apartment rental. The Accurate Access to Credit Information Act will bring badly needed transparency and accountability to the credit industry.”

House Financial Services Committee Republicans opposed this legislation in committee. In their minority views, they express the belief that this bill is “overly prescriptive,” with “the potential to jeopardize a consumer’s personal information” due to its reliance on Social Security numbers (SSNs) and lack of strong cybersecurity protections. Additionally, House Financial Services Committee Republicans expressed concerns over this bill’s expansion of the Consumer Financial Protection Bureau’s (CFPB) “unchecked power.” Ultimately, Financial Services Committee Republicans concluded:

“H.R. 5332 is another attempt by Committee Democrats to expand the power of an unaccountable unconstitutional agency. Moreover, the bill jeopardizes consumers’ personal information by expanding reliance on SSNs. Finally, the bill does nothing to address the long- standing cybersecurity concerns with credit reporting.”

The American Bankers Association (ABA) opposes this legislation. In a June 23, 2020 letter, the ABA argued that this legislation would “make credit reports less predictive and useful by promoting the elimination of negative but accurate information that will weaken the underwriting process and thus increase borrowers’ costs and reduce people’s ability to get loans.” Noting that the Fair Credit Reporting Act already gives consumers strong dispute rights and a framework for promptly resolving credit reporting disputes, the ABA further argued:

“H.R. 5332 will make it even easier than it is today for individuals to flood consumer reporting agencies and furnishers of information with false claims of inaccuracies that must be resolved in a timely fashion or deleted. The resulting degradation of the reports will reduce the ability of lenders to evaluate an applicant’s creditworthiness and ability to repay, which in turn will increase what consumers pay for credit and make it harder for many consumers, especially the underserved, to get credit.”

This legislation passed the House Financial Services Committee by a 31-24 vote and has the support of one cosponsor, Rep. Tom Reed (R-NY) (who did not sign House Financial Services Committee Republicans’ minority views in this bill’s committee report).

A range of customer advocacy and financial services reform organizations support this legislation. They include the National Association of Realtors, Americans for Financial Reform, National Consumer Law Center (on behalf of its low-income clients), Consumer Action, Consumer Federation of America, Consumer Reports, National Association of Consumer Advocates, and U.S. Public Interest Research Groups (USPIRG).


Of Note: The Federal Trade Commission (FTC) has previously found that one in five consumers has verified errors in their credit reports. Additionally, one in 20 customers has serious enough errors in their reports to cause them to be denied credit or need to pay more to access credit. This tallies up to 42 million Americans with errors in their credit reports and 10 million Americans with credit report errors that can have life-altering consequences.

When customers find errors in their credit reports, it can take an average of three to six months to resolve credit report errors. Additionally, credit reporting agencies have been criticized for performing lackluster investigations in these cases and providing little additional documentation to parties seeking a consumer’s credit score.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / alexsl)