Risk & Compliance

House Committee Probes Credit Reporting Agencies

The committee held a hearing amid proposed legislation that would overhaul the industry.
Lauren MuskettFebruary 27, 2019
House Committee Probes Credit Reporting Agencies

The House Financial Services Committee pressed the country’s major credit reporting agencies about their business practices, amid calls for legislation to reform the industry.

“Our nation’s consumer credit reporting system is broken,” Representative Maxine Waters, chairwoman of the House Financial Services Committee, said. “I’m troubled to the point where I do think that we need to start thinking about how we reimagine it and rebuild it from the ground … We will be introducing legislation.”

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Executives from Equifax, Experian, and TransUnion went before the committee to give testimony.

In a prepared statement, Equifax CEO Mark Begor said, “Consumers trust and expect that their credit reports contain the most accurate and complete data possible, and lenders rely on that information to help millions of consumers obtain the right loans at the right time.”

Representative Patrick McHenry of North Carolina, the top Republican on the committee, said the industry needed to be overhauled and more competition was needed.

“What I see here is an oligopoly,” McHenry said. “I don’t see that vibrant competition which is needed for these agencies to actually help consumers.”

Maxine Waters has floated a draft bill that would change the agencies’ business practices by limiting the scope of their reports, reducing the time that adverse information would remain on the records of consumers to make it easier for consumers to challenge errors on the reports.

The Credit Union National Association (CUNA), an industry trade group, responded in a letter to Waters and McHenry that it supported the intent of the Fair Credit Reporting Act.

“Over the last few years, many credit card issuers, financial institutions — including credit unions — and other companies have begun to voluntarily offer consumers free access to their credit score, providing consumers with an important tool to help manage their finances,” the group said.

“CUNA supports robust financial education and other voluntary initiatives by companies and financial institutions to increase consumers’ financial literacy.”