WASHINGTON – During the House Financial Services Committee markup on Tuesday, members are expected to vote on at least four pieces of legislation that would harm families living paycheck to paycheck and struggling with affordability and access to credit. If enacted, these bills would expand payday loans aimed at low wage workers and make it harder for people to fix harmful errors on their credit reports, no matter how devastating the error.
The so-called Earned Wage Access Consumer Protection Act (H.R. 9330) does not protect consumers. Instead, it fuels the affordability crisis by protecting payday loan apps that take hundreds of dollars a year from low-wage workers and by exempting these high-cost loans from federal and state protections. More than 200 labor, consumer, and civil rights organizations issued a stark warning to Congress: H.R. 9330 would exempt payday loan apps from fair lending laws and open the door for apps to take even more from the already overstretched paychecks of military servicemembers and other workers.
“With groceries, rent, and other necessities costing more than ever, Congress must not allow predatory lenders to disguise loans with sky-high interest rates as purportedly harmless ‘earned wage access’ products,” said Lauren Saunders, senior attorney at the National Consumer Law Center. “Numerous courts have uniformly rejected the charade that these loans are not loans, and Congress should too.”
Another harmful bill, the FCRA Liability Harmonization Act (H.R. 5775), would dramatically reduce accountability for credit bureaus and other companies, including when they wrongfully label people as bad credit risks or with a criminal history. The bill eliminates punitive damages under the Fair Credit Reporting Act (FCRA), no matter how egregious the violation.
The Credit Access and Inclusion Act (H.R. 5402) is touted as helping consumers build credit by including rent and utility payment history, but in reality it overrides state and other federal laws that give people control over their personal information and harms people struggling to afford high utility bills or obtain affordable rental housing.
The Fair Credit Reporting Reseller Accuracy Act (H.R. 8141) claims to impose new accuracy standards on resellers, companies that assemble and merge information from other consumer reporting companies, but instead gives these companies a free pass from liability. Resellers would be off the hook for errors if they conveyed information unaltered from another company, even if the inaccuracy was obvious.
“Incorrect information on a credit report, whether caused by errors or identity theft, can be devastating. They can shut people out of jobs, housing or insurance. Inaccuracies compound the affordability crisis by costing families thousands of dollars in higher interest rates or denying access to loans altogether,” said Chi Chi Wu, director of consumer reporting and data advocacy and acting co-director of federal advocacy. “Congress should be helping to address credit reporting problems, not caving to the industry’s wish list to shield them from liability.”
Advocates urge the members of the House Financial Services Committee to reject these harmful measures. “These bills would enrich fintechs and billionaires at the expense of people and families struggling in an ever-escalating affordability crisis,” Saunders said.
Related Resources
Support NCLC
Please support NCLC's work to advance consumer rights and economic justice with a tax-deductible contribution today!
Donate