The CFPB has issued an outline of proposals for a rulemaking under the Fair Credit Reporting Act (FCRA) regarding data brokers, credit reporting disputes, and medical debt on credit reports. In general, we support the CFPB’s proposals.
- The CFPB’s proposals will protect consumers from the significant harms of data broker practices, such as selling sensitive financial information to target harmful offers of high-cost credit or credit repair to distressed borrowers. We support the CFPB’s proposal to cover a data broker’s sale of certain types of consumer data (e.g., data typically used for credit and employment eligibility determinations) under the FCRA, regardless of the purpose for which the data was actually used or collected.
- We support the CFPB’s proposal to codify its interpretation that the FCRA does not distinguish between legal and factual disputes, and does not exempt CRAs or furnishers from reasonably investigating so-called legal disputes. To address system issues, we recommend that the CFPB clarify that injunctive relief is available under the FCRA and establish an Office of Ombudsperson for consumer reporting issues.
- We strongly support a ban on the inclusion of medical debt items in credit reports. Medical debts can significantly lower a consumer’s credit score and harm their ability to qualify for affordable credit, jobs, or rental housing. The voluntary reforms by the nationwide CRAs were positive, i.e., waiting one year before reporting a medical debt and removing medical debts that are paid or under $500. However, consumers with unpaid medical debts over $500 still bear the burden of negative credit reporting.
- The CFPB should ensure that any ban on medical debt reporting includes prohibiting the reporting of public records information regarding medical debt, e.g., judgments for medical bills that appear on specialty consumer reports used for credit purposes, such as LexisNexis RiskView. A ban should also include negative information regarding medical credit cards and medical debts charged to general purpose credit cards