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House Financial Services Committee to Consider Bills Amending Credit Reporting System's picture
Commentary by Steven Lofchie

House Financial Services Committee Chair Maxine Waters (D-CA) will convene a full Committee markup of bills that would "make critical reforms to the broken credit reporting system."

The bills include:

  • H.R. 3614, the Restricting Use of Credit Checks for Employment Decisions Act;

  • H.R. 3618, the Free Credit Scores for Consumers Act of 2019;

  • H.R. 3621, the Student Borrower Credit Improvement Act;

  • H.R. 3622, the Restoring Unfairly Impaired Credit and Protecting Consumers Act;

  • H.R. 3629, the Clarity in Credit Score Formation Act of 2019; and

  • H.R. 3642, the Improving Credit Reporting for All Consumers Act.


The purposes of the bills fall into two broad categories: (i) to enable consumers to view and correct potentially inaccurate information; and (ii) to limit the consumer credit information that is available to users. For example, under one bill, negative credit information would only be accessible for four years. Under another bill, employers would generally be prevented from using credit information in employment decisions.

The first purpose is reasonably easy to justify. The second is more difficult. Why is it that negative credit information should be accessible for four years: why not three years or five years or forever or never? Similarly, why is it that employers should not consider credit information, particularly if lenders are entitled to do so? The decision to employ a person requires judgments about that job applicant. On what basis does, or should, Congress decide that the information is irrelevant? Interestingly, that bill provides an exemption for "national security," which would seem to imply that information as to credit history is in fact relevant, at least for some purposes.

Perhaps it is the case that individuals have a moral claim that certain negative information about them be forgotten or ignored. But if there is such a claim, neither its basis nor its scope are self-evident. Conversely, perhaps the government has decided that the information is inherently misleading. But it is not obvious on what basis the government would make that decision, as opposed to lenders or employers making the decision individually.

None of the above is meant to reject any possible outcome, but only to express a desire for an explanation, a rationale, ideally one that might be tested.

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