ATR Opposes H.R. 5332, The Protecting Your Credit Score Act

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Posted by James Setterlund on Tuesday, June 30th, 2020, 4:26 PM PERMALINK

Americans for Tax Reform President Grover Norquist on Monday sent a letter to House Speaker Nancy Pelosi (D-Calif.) and Minority Leader Kevin McCarthy (R-Calif.) expressing opposition to Rep. Josh Gottheimer’s (D-N.J.) H.R. 5332, the Protecting Your Credit Score Act of 2019. Despite attempts to frame the bill as a set of protections for consumers, its core provisions would actually work against the interests of borrowers if enacted. Essentially, it would expand the power of the Consumer Financial Protection Bureau while benefitting trial attorneys and creating opportunities for cyber theft of consumer information by providing complete Social Security numbers.

H.R. 5332 gives the CFPB the power to direct the credit reporting agencies when to audit consumer reports and oversee the creation and maintenance of a designated website consumers can use to view available credit information all in one place. Additionally, the bill creates a new office under the establishment of an ombudsman within the CFPB to oversee all consumer complaints against credit reporting agencies. This person would have outsized enforcement power to oversee the credit reporting industry, including regulatory and disciplinary autonomy, with little accountability.

The Act opens the door for expanded litigation and encourages superfluous legal challenges through its injunctive relief provision. Businesses could expect to see an influx of challenges to credit report information stemming as the designated website would erase negative but accurate information on a borrower’s credit history from being included in credit reports. The abuse of the tool will open the door to a surge of lawsuits to correct the record that will be far more lucrative to attorneys than helpful in protecting consumers and businesses. The cost of litigation resulting from H.R. 5332 would result in increased costs to produce credit reports that will be paid by consumers.  

Additionally, the bill requires credit reporting agencies to use consumers’ full Social Security numbers in reports against the current practice of only using the last four numbers. By itself this would expose consumers and companies to increased risk of cyber theft, but the problem is intensified with H.R. 5332. The designated website would be built by credit reporting agencies but owned and overseen by neither the agencies nor the CFPB. The website will contain the information of every consumer and serve as a prime target for bad actors seeking to access Social Security numbers in which additional financial products can be created using customers names but without their knowledge.

Though Gottheimer and others sought to protect consumers’ credit scores by increasing transparency in credit reporting, the consequence of their proposals will inevitably lead to the opposite. H.R. 5332 passed out of the House Financial Services Committee on a partisan vote of 31-24 with all Committee Democrats supporting the bill. It passed the House with a vote of 234-179 but faces opposition in the Senate.

Read the full letter here.

Photo Credit: New Jersey National Guard

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