WASHINGTON, D.C. –U.S. Sens. Sherrod Brown (D-OH) and Brian Schatz (D-HI) held a news conference call on Wednesday to unveil major legislation that would protect consumers from inaccurate credit reports and credit scores. The Senators’ legislation will be introduced as Consumers Union releases a new report describing credit report errors that affect 40 million Americans. Credit report errors can increase consumers’ costs, lower their credit scores, and cause other financial hardship.
“In today’s economy, it is critical that consumer’s have access to a safe and reliable way of checking their credit reports and scores,” Brown said. “This legislation ensures consumers have the resources they need to correct credit report errors that could potentially impact future employment opportunities, credit applications, and other transactions that require a good credit score. Consumers would also have access to a free annual credit score and report.”
“Errors in a credit report can make the difference between whether someone can live the American Dream and buy a home or even get a job,” Schatz said. “Whether you have good credit or not is determined by a dark ecosystem of companies that are not accountable to consumers. When the stakes are this high and your credit can affect whether you get a job or house, consumers deserve to be on a level playing field with banks. Our legislation will make credit reports more accurate, help people to correct any mistakes, give federal agencies more tools to enforce the law, and hold reporting agencies and data furnishers accountable for their mistakes.”
Brown and Schatz’s new legislation, the Stop Errors in Credit Use and Reporting (SECURE) Act, would make it easier for consumers to correct, dispute, and access their credit reports and builds on a proposal from Senator Bernie Sanders (I-VT) to provide consumers with free credit scores.
Specifically, the legislation would:
- Require the Consumer Financial Protection Bureau (CFPB) to develop procedures for credit reporting agencies to follow as a means to improve accuracy.
- Ensure that agencies send consumers’ disputes and supporting documents to the creditor when there is an error on a report, so that they can thoroughly review the consumer’s claim.
- Make it easier for consumers to spot errors in their credit reports by requiring that consumers receive a free copy of their credit report if anyone makes an unfavorable decision based on the report.
- Give consumers the ability to request a free credit score along with their annual free credit report to see what credit they might be eligible for.
- Give courts the ability to stop a credit reporting agency from reporting inaccurate information and provide the Federal Trade Commission with new authority to stop sloppy practices.
Joining Brown and Schatz was Pamela Banks, Senior Policy Counsel at Consumers Union. Banks outlined a new report released on Wednesday that calls on Congress to take swift action to ensure consumers are protected against abuses in the credit reporting industry. The report highlights the high rate of errors in the credit reporting system and the difficulty consumers have accessing a reliable credit score. It supports efforts included in the Act to offer free, verified credit scores to consumers on an annual basis.
“Free access to credit scores will help consumers know where they stand with lenders and others when it comes to their credit record,” Banks said. “Maintaining an accurate credit report is absolutely critical in today’s economy, but too often, reports contain errors, and those mistakes can mean higher interest rates on loans, pricier insurance premiums, and even missed job opportunities. This bill provides consumers with free access to reliable scores, and it provides a good framework for holding credit reporting agencies and creditors accountable for making sure credit reports are fair and accurate."
The SECURE Act is cosponsored by Senators Sanders, Elizabeth Warren (D-MA), and Richard Blumenthal (D-CT) and endorsed by the Consumers Union, the National Consumer Law Center (NCLC), the National Association of Consumer Advocates (NACA), Consumer Action, and U.S. PIRG.
Additional information on the SECURE ACT can be found below: