Coming To Capitol Hill: Credit Reporting Agency Oversight And CFPB Reform Legislation

Senate and House committees will hold hearings this week, with one featuring testimony from leaders of the three national credit reporting agencies and the other focusing on reform measures for the Consumer Financial Protection Bureau.

It’s a busy week for accounts receivable management (ARM) industry issues on Capitol Hill.

First, the House Financial Services Committee will hold a markup on proposed reform measures for the Consumer Financial Protection Bureau on Wednesday, April 26, among other legislation.

The bills scheduled for markup were first reviewed in a March hearing before the House Financial Services Subcommittee on Financial Institutions and Monetary Policy to “examine the leadership structure, funding, budget, and operations of the [Consumer Financial Protection Bureau] and areas in which reforms are needed,” ACA International previously reported.

They have been combined into one proposal sponsored by U.S. Rep. Andy Barr, R-Ky.: “The CFPB Transparency and Accountability Reform Act.”

According to the hearing memo (PDF), Barr’s bill combines seven bills that would:

• Make the CFPB more transparent and accountable to Congress and the American people.
• Change the leadership structure of the bureau from a single director to a bipartisan, five-member commission.
• Bring the bureau under the regular appropriations process and create a dedicated Inspector General for the bureau to ensure transparency, accountability and to prevent waste, fraud and abuse.
• Create a new Office of Economic Analysis and require cost-benefit analysis for all guidance, orders, rules or regulations of the bureau.
• Require all proposed rules to consider the impact on small businesses.
• Provide awards to whistleblowers who report original information relating to a violation of consumer financial law resulting in certain monetary sanctions exceeding $1 million.

ACA previously submitted a letter (PDF) to the subcommittee in support of CFPB reform legislation discussed in March and is working on advocacy for Wednesday’s hearing, including an updated letter (PDF) to the House Financial Services Committee.

The hearing will be held at 10 a.m. EST and is available to watch online.

Credit Reporting Agency Oversight

The Senate Committee on Banking, Housing and Urban Affairs will conduct a hearing, “Oversight of the Credit Reporting Agencies,” with testimony from Mark Begor, CEO, Equifax Inc.; Chris Cartwright, president and CEO, TransUnion; and Brian Cassin, CEO, Experian, on Thursday, April 27.

This year, the credit reporting agencies (CRAs) are no longer including medical collection debt under at least $500 on credit reports. Effective July 1, 2022, the CRAs announced they will no longer include medical debt that was paid after it was sent to collections on consumer credit reports.

U.S. Sen. Sherrod Brown, D-Ohio, chair of the Senate Banking Committee, has addressed the CFPB’s role in credit reporting changes, saying at an April 2022 hearing focused on the bureau’s semiannual report to Congress, “After increasing scrutiny from the CFPB, last month the three credit reporting bureaus – Equifax, Experian, and TransUnion – all announced they would finally change how they report medical collection debt. These changes are expected to remove nearly 70% of medical debt in collections from credit reports. This is a positive first step that will make sure people with medical debt don’t see their credit ruined simply because they or a loved one got sick.”

ACA is also working on advocacy materials for this hearing, including a letter to the committee on medical debt credit reporting issues.

The hearing is at 10 a.m. EST and can be watched online.