Trades Caution Senate on Credit Reporting
“As you consider potential financial provisions for the COVID-19 response legislation now under discussion, we ask that you refrain from adding new credit reporting provisions that may negatively affect consumers,” the American Financial Services Association and several other trade associations wrote to Senate Banking Committee leadership yesterday.
The CARES Act established requirements that protect consumers and preserve the benefits of accurate credit reporting. Reliable credit reporting serves consumers well, enabling lower-cost and more expansive access to credit. Certain pending legislative proposals that would prohibit the reporting of credit information during the COVID-19 crisis would result in the reporting of inaccurate information.
“Such a change would harm consumers – especially low and moderate-income consumers,” the associations noted, adding, “The removal of multiple records simultaneously could disrupt the ability to generate any report or scores at all, to the detriment of the consumer.” Insufficient payment information could result in lenders making unnecessarily conservative credit decisions, resulting in fewer loans, and reducing overall access to credit.
August 4th, 2020 by Dan Bucherer