U.S. House Committee Hearing on CRA Accountability

[Anonymous]

[EDIT February 25th:  Equifax, TransUnion, and Experian CEO's will attend. They are on the witness list for the first panel.

Live view on YouTube here: https://www.youtube.com/watch?v=42HZMyJLkaw

Updated information on the full witness list and proposed legislation is here: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=402343

/EDIT]

Tuesday, February 26 at 10:00 AM – The full Committee will convene a hearing entitled, “Who’s Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System.”

Hearings and markups will take place in 2128 Rayburn House Office Building and will be broadcast live at

https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=402343

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What might make this hearing interesting is that the current Chairwoman of the committee introduced legislation 2 years ago (H.R. 3755) that had the following bullet points: ( https://financialservices.house.gov/uploadedfiles/cr-_one_pager.pdf )

• Shortens the amount of time negative information stays on a credit report: Reduces the punitive retention periods that most adverse credit information remains on reports to 4 years (7 years for bankruptcies)
• Transfers Burdens from Consumers to CRAs and Creditors: Gives consumers the right to appeal the results of initial disputes conducted by CRAs and furnishers. Mandates consumers are provided free copies of any documents relied on by CRAs or furnishers to determine the accuracy or completeness of disputed items.

[800FICOGoal]

I would like to see utilities(electric, water, gas, phone, internet,cable), employers, and apartment/property owners restricted to soft pulls only. A consumer's credit shouldn't be penalized just because they're looking for a place to live or a job. 

[pipeguy]

There have been some reforms to credit reporting and records, such as CRA's can no longer charge for freeze/unfreeze as of September 2018. As far as the mentioned legislation "COMPREHENSIVE CONSUMER CREDIT REPORTING REFORM ACT OF 2017" that bill is dead as of the end of the 115th Congress, although it can be reintroduced in the 116th (which started January 3, 2019). 

I would not give very much weight to "televised hearings" as they are usually just for messaging. Once a bill has been introduced IF a committee takes it up then they do what is known as a "mark-up" which is where the work and details are hammered out. Then "IF" the measure is voted favorably out of Committee, which is pretty much a given if the bill was introduced and sponsored by a member of the majority party, it still has to be brought to the floor for debate and that is up to the majority leader. Even if a bill is passed by the House, there typically is a companion bill in the Senate and the text has to match exactly (it's more complicated than just this) and either the House version or the Senate version has to be approved by the other chamber.

Credit Reporting Agencies are generally regulated - usually through a published rule - by the CFPB, not by legislation. Lending laws are generally set and managed by the States.  Keeping completely away from any political comment, and politics has a lot to do with these hearings and probably not in the way you think, I would not put very much hope in any real results coming from this "televised" hearing.  

[DaveInAZ]

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@800FICOGoal wrote:

I would like to see utilities(electric, water, gas, phone, internet,cable), employers, and apartment/property owners restricted to soft pulls only. A consumer's credit shouldn't be penalized just because they're looking for a place to live or a job. 

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For utilities there should be a separate service like Chex/EWS does for banking, utilities can report any problem accounts to that service that utilities can pull & see when getting new service. How much my mortgage and/or car loan is and alot of other info in my credit report none of their business. And yes, employment and rental checks should be a soft pull, you're not applying for credit.

[Anonymous]

An update from a Bankrate.com article yesterday: https://www.bankrate.com/personal-finance/credit/credit-bureaus-ocasio-cortez/

"Equifax CEO Mark Begor has accepted an invitation to appear before the House Financial Services Committee on Feb. 26, according to the credit rating agency."

[pipeguy]

What is interesting about credit scoring is IMO, if you have strong scores you like them because you get the best rates and access.

If you have low or marginal scores you don't like the "system" because you get turned down for new credit products or pay a higher rate for those credit products you get.  

Is this system "fair"?

That would depend on your point of view and experience, especially your score. We can all think of ways the system can/could be improved, but I personally don't think the federal government should determine how credit scoring is done and I'm not talking about nefarious practices such as red-lining. 

Talk to those that have built their credit up to 760+ then have it crash due to whatever factor (loss of job, illness/injury, divorce, overspending) and then taken 2-3-5 years to reestablish, rebuild and once again be in the 760+ category. Fair? yeah, it is, responsible credit management equals greater access, rates, and rewards.    

[Spotsy]

There are some aspects of the scoring system that are fair, but many others that are not.  The scoring system is largely based on a point in time snapshot and not necessarily a trending pattern.  

Inquires are one one area that needs review...consumer should not be penalized for searching for the best rates possible.  Either force lending agencies to use SP to offer credit terms that then convert to a HP if the terms are accepted.  

Having zero debt debt is worse then having some debt. A consumer should not be punished for paying off everything, especially if they have a good amount of past experience with different types of debt.

Lenders should not be able to see enough information to back track into determining rates and terms on existing obligations. This gives them an unfair advantage over the consumer that is seeking better terms without forcing the consumer to show their hand.

Consumers should be able to remove accounts that may have been opened, but unused or even activated if they did not accept the terms.  It should not drag down the AAoA.

Creditors should provide upfront, more requirements needed to obtain an approval rather then having a consumer app and hope. There is a legitimate cost to the consumer just for apping for a product. This cost is reflected in a consumers credit score and potential affect to other existing accounts.

Creditors should allow the consumer to remove a flawless account from a credit report if the creditor decides to take an AA for only perceived reasons, not actual derogatory event done by a consumer.  This will help with DTI and score impacts.

so many more things that need to be changed to help consumers.

[Anonymous]

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@pipeguy wrote:

That would depend on your point of view and experience, especially your score. We can all think of ways the system can/could be improved, but I personally don't think the federal government should determine how credit scoring is done and I'm not talking about nefarious practices such as red-lining. 

I'm really new to the credit world, but not new to fiscal responsibility as far as spending responsibly goes, and I can think of one thing that would help the most people: A federal education mandate of a half-semester of basic financial planning in the senior year of high school.

I haven't read nearly as many posts on these forums as you and I've certainly come across numerous posts where someone stated something like "I wish I had known about all this earlier."