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House Financial Services Committee Holds Oversight Hearing of Credit Bureaus

Credit Bureaus

The House Financial Services Committee Full Committee held a hearing on February 26th entitled "Who's Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System”. The hearing hosted two panels comprised of consumer reporting agencies (CRA) CEOs and consumer advocacy groups. The focus of the discussion was two legislative discussion drafts, the Comprehensive Consumer Credit Reporting Reform Act of 2019 and the Protecting Innocent Consumers Affected by a Shutdown Act. Both bills propose to alter how CRAs use credit reporting data to provide additional protections to consumers and in the case of the second proposal, those furloughed during federal government shutdowns.

Of interest to the apartment housing industry, there was consensus during the hearing that there is a need to include “alternative” data to accurately gauge a person’s creditworthiness. This is a concept long-championed and promoted by NAA and NMHC, and a top legislative priority for the 116th Congress. The Experian CEO discussed a new program called “Experian Boost” which allows consumers who have been making utility and telecom bill payments on time the ability to factor those payments into their credit files and instantly improve their credit scores. Unfortunately, rental history is not yet factored in this program.

NAA and NMHC submitted a letter for the record to Committee leaders,  thanking them for holding the hearing and urging caution in one area:  shortening the time certain adverse actions in a credit history are available to those running credit checks, such as apartment housing providers.  Accessing the most complete picture of an applicant’s credit history is crucial to properly assessing risk and evaluating potential residents. Without such access, more blunt instruments like credit scores could become the default measurement tool. Members of the Committee have expressed similar concerns to ours in this regard. NAA and NMHC will continue to work with the Committee on this concern and to broaden credit scoring models to include rent payments.