Press Releases

Yesterday, the House Financial Services Subcommittee on Financial Institutions, led by Chairman Andy Barr (KY-06), examined the consumer credit reporting market and the importance of accurate credit reports for risk management and access to credit.

On Promoting Economic Opportunity:

Subcommittee Chairman Barr said, "Access to credit is fundamental to economic mobility. It is the foundation that provides families the opportunity to buy homes. It gives Main Street small businesses leverage to grow. And it provides individuals the flexibility to manage through both opportunity and hardship. At the center of that system is the Fair Credit Reporting Act—a law that, for decades, has aimed to balance two core objectives: consumer protection and enabling the responsible flow of reliable information that lenders rely on to provide credit."

Rep. William Timmons (SC-04) said, “The consumer credit reporting system plays a foundational role in our economy, influencing how Americans access credit, secure housing, and even obtain employment. At its core, this system depends on the accurate and consistent flow of information between data furnishers, consumer reporting agencies, and the institutions that rely on these reports to make decisions. When it functions properly, it supports both sound risk management and broader access to credit.”

On the Removal of Certain Categories of Debt from a Consumer’s Credit Report:

Committee Vice-Chairman Bill Huizenga (MI-04) questioned witnesses on the impact of certain debts being removed from credit reports, to which Mrs. Veneshia Ferdinand, Director of Compliance Policy, Simmons Bank, on behalf of the American Bankers Association, responded, “Let me start with this. If valid information is suppressed from a consumer’s credit report, that will ultimately impact the credit underwriting standards for any bank. It would be a systemic change in the market. Banks would have to lower their standards, increase prices, or tighten credit and that would directly impact consumers in the local economy and the broader spectrum. We never want to see a customer have a loan they can’t afford. We have to and we are obligated by the Truth in Lending Act to verify the ability to repay and if that consumer cannot repay or we don’t know if they can repay that loan, that’s not good for the consumer and that’s not good for economy as well. 

On Expanding Credit Through Alternative Data:

Committee on Small Business Chairman Roger Williams (TX-25) said, “For a long time, access to credit has depended on a family or a fairly narrow picture of a person's financial history. In recent years, we've seen rapid changes in how alternate data, especially with the growth of alternative data like rent, utility, and cash flow information, can now give lenders a more complete view of a potential borrower's risk. When done right, that kind of data can expand access to credit while preserving safety and soundness across the financial system.”

On the Fair Credit Reporting Act's (FCRA) Liability Framework:

Rep. Barry Loudermilk (GA-11) said, “We've seen growing concerns that the current FCRA liability framework, particularly around statutory and punitive damages, in class actions can create incentives for litigation that may not always correspond to actual consumer harm…That’s why I've introduced H.R. 5775, the FCRA Liability Harmonization Act, to bring FCRA liability in line with that of other consumer protection statutes. This would reduce costs and promote further competition in the consumer reporting system, while ensuring consumers still have robust protections to ensure the reports are accurate.”

Witnesses Echoed the Work of the Committee:

Mr. Dan Smith, President and Chief Executive Officer, Consumer Data Industry Association said, “One of the most promising developments in consumer reporting is the growing use of alternative data, including rental payment history, utility payments, and other transactional data, to build a more complete picture of a consumer's financial behavior. Millions of Americans who have thin credit files or no credit history at all, but who pay their rent and utilities on time every month, should get credit for their responsible financial behavior. Incorporating that data into credit decisions can open the door to credit access for consumers who have historically been left out of the mainstream financial system.”

Ms. Rebecca Kuehn, Partner, Hudson and Cook said, “The FCRA Liability Harmonization Act, H.R. 5775, would align the FCRA with every other major consumer financial protection law by: Capping statutory damages in class actions; Eliminating punitive damages in class actions; Preserving actual damages and individual causes of action; and maintaining reasonable attorney’s fee provisions. This is not a rollback of consumer protection. It is a recalibration that preserves meaningful remedies for harmed consumers while discouraging litigation that benefits lawyers but destabilizes a critical economic infrastructure.”

Mrs. Celia Winslow, President and Chief Executive Officer, American Financial Services Association said, “When creditors can accurately assess a borrower’s creditworthiness, they can price loans accordingly: lower rates for lower risk and access to credit for those who might not qualify elsewhere. This is how a first-time borrower with a thin file gets a loan and how a consumer rebuilding after a setback gets a second chance, rather than a rejection. Accurate credit reporting is what makes that possible. It is not a bureaucratic exercise; it is the mechanism by which more people get credit at better terms. When report data is corrupted, through fraud, false disputes, or artificially inflated scores, creditors cannot distinguish real risk from manufactured creditworthiness. The response is predictable and inevitable: tighter standards, higher rates, and fewer approvals. The victims are not the fraudsters. They are the honest borrowers who played by the rules.”

Mrs. Ferdinand said, “Banks occupy a vital role in the credit reporting ecosystem as both users and furnishers of consumer information. The FCRA provides a comprehensive framework that, when effectively implemented, protects consumers, promotes accurate credit reporting, and supports a functioning credit market. Continued attention to clarity, consistency, and practical implementation will help ensure that regulatory policy achieves its intended objectives for all participants in the system.”

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