During the marathon of hearings on the Equifax data breach this fall, many members of Congress expressed dismay about the lack of control consumers have when it comes to the credit bureaus.
The concerns were bipartisan: Congresswoman Jan Shakowsky (D-IL) noted that “Consumers don't have a choice over what information Equifax, or …, TransUnion or Experian, have collected, stored, and sold,” while Senator John Kennedy (R-LA) lamented that “It just seems incongruent to me that you have my information. You don't pay me for it. You don't have my permission.”
Despite all the angst our members of Congress conveyed at the Equifax Congressional hearings, the U.S. House Financial Services Committee passed a bill today, Wednesday, December 13, that will reduce consumers’ control over data collected by the credit bureaus. H.R. 435, the “Credit Access and Inclusion Act,” strips some of the few privacy rights that consumers do have in deciding whether their information is sent to credit bureaus like Equifax.
The bill is touted as a way to help consumers with little or no credit history, which is a well-intentioned goal. But there is a massive problem – H.R. 435 tries to achieve this goal by nullifying state and federal privacy protections when it comes to reporting payment information about rental housing or utilities. The bill overrides state and federal laws that protect consumers, such as by requiring consent, when public housing authorities, private landlords, electric or gas companies, and other utilities want to send information to credit bureaus. Rental and utility payment information can already be reported, but in some states and circumstances (such as government-subsidized housing), it is the family’s choice.
Another problem is that reporting by gas and electric companies in particular may result in negative marks for millions of families – disproportionately families of color – who struggle with huge winter heating or summer cooling bills, but catch up in subsequent months. Those negative marks will result in lower credit scores, making it more expensive for them to get access to loans.
Who benefits from this bill? Equifax, Experian, and TransUnion. The “Big Three” credit bureaus would be happy to vacuum up more data without the bothersome annoyance of federal privacy provisions or state laws in California, New Jersey, and Wisconsin that prohibit certain utility companies from sharing customer data without the customer’s permission. The bill also prevents states from regulating landlords when they report payment information to credit bureaus or tenant screening agencies. So landlords are free to put renters on a tenant screening blacklist if the renter legally withholds a payment due to poor sanitary conditions – and there’s nothing state law can do about it.
Consumers will be looking over their shoulders for the rest of their lives after the horrifying Equifax data breach. So why did the House Financial Services Committee reward credit bureaus by making it even easier to collect and sell our personal information without our permission? Where will your representative stand on this important data privacy issue? Now’s the time to call and find out.