House nears passage of bills to overhaul credit reporting

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WASHINGTON — The House on Tuesday moved one step closer to passing a comprehensive package of bills to reform the credit reporting system.

The legislation is spearheaded by House Financial Services Committee Chair Maxine Waters, D-Calif., as an effort by House Democrats to reduce consumer burdens and provide more opportunities for consumers to rehabilitate their credit.

House lawmakers approved the rules governing debate of the legislation, setting up a final vote on the bills potentially later this week.

The Comprehensive Consumer Credit Reporting Reform Act includes six bills that, taken together, would limit the time that negative credit information would stay on credit reports to four years, require the Consumer Financial Protection Bureau to issue rules to regulate credit scoring models, expand access to free credit reports and scores, and restrict the use of credit checks for job seekers.

The legislation would also reform the credit report dispute process to shift the burden from consumers to the credit bureaus and data furnishers, and would also prevent credit bureaus from including adverse information related to private student loans on a credit report after the borrower has made nine consecutive on-time payments.

The bills in the package were introduced by Reps. Rashida Tlaib; D-Mich., Alma Adams, D-N.C.; Joyce Beatty, D-Ohio; Al Lawson, D-Fla.; Stephen Lynch, D-Mass.; and Ayanna Pressley, D-Mass.

Yet the package has divided the House along party lines, casting doubt on its chances in the Senate.

Rep. Patrick McHenry, R-N.C., the ranking member of the committee, blasted the credit reporting bills at the House Financial Services Committee's markup of the bills in July, arguing that the committee had only held one hearing on the subject and it did not focus enough on proposals to reform the Fair Credit Reporting Act.

“There was just one discussion draft of a bill attached with a hearing notice, yet this draft was not discussed once during the hearing. Not once,” McHenry said in his opening statement at the markup. “Now, six months later, without further discussion, we’re considering these bills that would make significant changes to the Fair Credit Reporting Act.”

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Credit reporting FCRA Credit scores Financial inclusion Maxine Waters Patrick McHenry House Financial Services Committee CFPB
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