Protecting Your Credit Score Act of 2019
Floor Speech
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. Madam Speaker, I thank the chairwoman for allowing me to speak today on behalf of my bipartisan legislation, H.R. 5332, the Protecting Your Credit Score Act of 2020.
Madam Speaker, since I took office, I have been committed to helping protect seniors and other vulnerable communities from fraud and to protect their financial well-being. Like many of my colleagues, constituents in my district are feeling the economic pain caused by the ongoing pandemic.
Just this week, in fact, a constituent of mine, Patricia from Wantage, New Jersey, reached out to me to ask: What can we do as policymakers to help protect people's credit during this crisis?
Madam Speaker, I am proud that we were able to provide Americans with debt and credit relief as part of the bipartisan CARES Act, protecting homeowners in forbearance and Federal student loan borrowers. We were able to continue to work to do so with the bipartisan HEROES Act, which has yet to become law. It is in the Senate now waiting action. And that act, including suspending negative credit reporting during the pandemic, giving Americans time to recover economically before there is a risk of being hit on their credit reports. It is also time that we look at the way hardworking Americans are able to track and ensure accuracy in their credit reports so that their scores are where they need to be as we progress into our economic recovery.
Madam Speaker, I really want to thank Chairwoman Waters for her impactful leadership and partnership on this bipartisan bill and her incredibly supportive and smart team. I also thank Ranking Member McHenry for spending so many months working with me in such a constructive and cooperative manner. My bill reflects a lot of his wise input. I, too, am sorry we weren't able to find ultimate common ground. I also want to thank my good friend and co-chair of the Problem Solvers Caucus, Tom Reed, for his work cosponsoring this important legislation.
Madam Speaker, after working on this bill for a year, I was proud when the bill was reported favorably out of the Committee on Financial Services on December 11, 2019.
I am also proud the House last night passed the landmark George Floyd Justice in Policing Act. We must continue to come together as a country to fight for racial justice on all fronts, and to combat inequalities that have plagued this Nation for too long, which includes the ability to access credit.
Credit affects all communities, impacting what Americans pay for a car, whether they can get a mortgage for a house, the rates on a credit card, and how much they can receive for a small business loan. The impact it has is especially strong on communities of color. And experts have testified to the Committee on Financial Services that the credit reporting system is biased, particularly against these communities.
Running this crucial part of our economy are three companies in the United States that literally hold the keys to the kingdom. It is an oligopoly. They decide Americans' credit fate and whether they should get access to credit, and it is all done in a closed-off system behind the drapes. And we don't know what goes on, how they develop those scores.
I am very glad the ranking member is interested in trying to get more competition into that process. And I am very eager--and I am sure the committee is, too--to work together on that front.
I am also glad that there are areas that he would like to go further on overall when it comes to access to credit. And I am also eager to sit down as well.
Madam Speaker, the bottom line is these three credit bureaus come up with their own magic number: Your credit score. Houdini, himself, could not figure out how these credit scores are calculated. They have their own secret formula. It impacts every aspect of your life, as I said, from your car loan to your mortgage, and it is up to you to track it and beg them to fix inaccuracies when they arise, which is far too often, and most often not your fault.
The best way to discover whether there are errors on your credit report is to check your three reports from these companies, and FCRA currently only gives consumers the right to view their report for free once every 12 months.
Otherwise, you have got to pay out of your own pocket and chase down these three credit bureaus--anywhere from $9.95 a report to $15.95 a report. Experts recommend that you check your report before applying for any new line of credit or making a large purchase or renting or buying a home because a mistake can easily seriously affect your credit. It could lead to more costs and things like rising interest rates that would affect your loans, and even worse, you may be ineligible to qualify for financing altogether.
The Federal Trade Commission has previously found that one in 5 consumers have verified errors in their reports, not of their own making. And one in 20 consumers have errors so serious that they would be denied credit or need to pay more for it. That adds up to 42 million Americans with errors in their credit and 10 million with errors that can be life-altering.
We also now live in a world where data breaches are a constant threat. Unfortunately, every year 15.4 million Americans are victims of credit card fraud--42,000 people every single day.
According to the Merchant Risk Council, 80 percent of all credit cards are compromised. And the Identity Theft Resources Center has reported that as of June 11, there have been 475 reported data breaches already this year, exposing more than 5 million records. And once you are a victim, almost immediately the criminals, they start in. They apply for new cards, for mortgages, for loans, for cars--anything else they can get their hands on, all under your name--affecting your credit score within these three credit bureaus. And it is vital that these fraudsters be caught immediately and not be allowed to cause further damage undetected between the one free annual report.
It has happened to my sister, to my constituents, to people I know. And I am sure everyone out there knows someone this has happened to. And when someone is the target of this fraud right now, it is up to the victim to fix these issues. They receive all of the burden of chasing after these three companies with their own systems and procedures and beg them for help. And that can take 3 to 6 months.
Madam Speaker, my bipartisan legislation with Congressman Tom Reed from New York asked the private sector, not the government, to help fix this. And this is a big distinction here that I want to point out to the ranking member, this is driven by the private sector, not the government, to fix this issue. My bipartisan bill sets up a one-stop shop online portal to check your credit report for free at any time. It allows victims to shut off the ability of credit crooks from using your information to apply for credit under your name.
The portal will also provide the ability to initiate and resolve disputes between you and the credit bureau, and you will be able to see who the bureaus have sold your data to in the prior 2 years. Because, yes, they take your data and they go make money on your information.
Madam Speaker, the bill strengthens cybersecurity safeguards of information held by consumer reporting agencies, to help prevent a repeat of the 2017 Equifax data breach. The bill also asks the GAO to examine the most secure and accurate marker to track your credit, whether it is your Social Security number or another Federal identifier. And this is very important.
I am glad the ranking member raised this issue, because I agree. We should find the best possible identifier that is most secure, and that is exactly what this study is all about because we need to make sure we keep your identity secure. By creating this one-stop portal, all three credit bureaus will now have to work together to help protect you and make your lives better, not the other way around.
And I understand the issue that is raised about the security and making sure that this is not handed off to someone. That is why, again, as I say, the private sector will develop these websites.
And to a point about this that was raised: If my friend is actually really concerned, and he thinks that these three bureaus don't have secure websites now, well then we better get them here immediately and find out why he is worried about that and if they actually should be more secure. Because what we are asking them to do is develop a website just like they have now, which I hope--and I will ask the companies again--I hope that they are doing everything possible to keep their own websites secure.
Madam Speaker, well, my own sister had her credit hacked last year. She told me she was lucky to get a day off from her job to figure all this out. She had to sit on the phone and chase everyone. But what if you don't have the ability to take a day off to sit on the phone with each credit company and chase down every single issue? Our bipartisan legislation will help fix this and help Americans protect what they spent a lifetime building, and that is their credit.
Madam Speaker, I am also proud, lastly, to have the support of several businesses and consumer groups. Vince Malta, the President of the National Association of Realtors, sent a letter to me this week on the bill, which states: ``Access to free credit scores, transparency in the reporting process and use of consumer credit information high standards for vetting credit information, and a reliable method for contesting and correcting inaccurate information are critical to a vibrant housing market and economy.''
Other supporting groups include the National Consumer Law Center, the Consumer Federation of America, Consumer Action, and World Privacy Forum.
Madam Speaker, while we did not earn the support of every group--and I recognize that--I am proud that even among those who disagree with us acknowledged the efforts that we took in order to work towards a bipartisan agreement. I will continue to work to make every effort to reach consensus, and I appreciate their acknowledgment of that effort.
Madam Speaker, finally, let me say that during an economic downturn and throughout the years we are going to spend recovering from it, Americans' financial security will and must be paramount.
We have already seen spikes in fraud throughout this pandemic, especially related to direct payments and different types of loans. And the chairwoman has worked overtime in all of our bills to make sure we do everything possible to protect Americans during this time. I am grateful for her leadership.
Madam Speaker, as we recover from this crisis, I want to make sure Americans can protect their credit and resolve disputes that may arise. As SEC Chairman Clayton testified just yesterday to the House Committee on Financial Services, for a consumer, the best thing you can do for yourself is understand your credit and get your credit under control.
We need a modernized system that empowers all consumers, especially those facing new challenges with this new pandemic, with transparency and the ability to correct errors to their credit reports, and to make sure everyone can have access to credit so that they can have a home, a car, and enjoy everything that everyone who works hard should have access to.
Madam Speaker, I urge my colleagues to support this commonsense bipartisan bill, which will help every American.
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. Madam Speaker, just one point I want to bring back up, if I may. I want to thank my friend for his comments, and I appreciate his work and our efforts together here.
The one point about the Social Security number that I want to raise is, the bill requires a study at the GAO to see what the best answer is, whether if that is a Federal identifier number or a Social Security number, whatever the best answer is.
I know we spent a lot of time talking about this. I, too, am very concerned with making sure that we have the best possible outcome to protect people and protect their information.
So if the GAO comes back and says that we need to develop a new Federal identifier so that we keep it separate from the Social Security number, then, to me, that would be the best outcome. That is exactly why the bill requires the GAO to study this.
Again, just one other point, if we are concerned about current security and cybersecurity.
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. I yield to the gentleman from North Carolina.
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. Reclaiming my time.
Yes, they also have a period of time to develop the site. It is not going to happen overall. In that period of time, we will get direction on what the best outcome is in terms of using a Federal identifier, and we will execute against that as we develop this site.
Back to the site. If the oligopoly of the three bureaus--if right now our concern is that their sites are not secure, then we better have them in immediately and have them take us through their sites again. Because if you are still concerned about this--
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. I yield to the gentleman from North Carolina.
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. Right, right. I remember that.
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. Reclaiming my time.
Just one question on that. Do you feel now that the three are still insecure? And are you concerned about them?
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. Reclaiming my time.
Does the gentleman agree that we should have them back in immediately, again, to talk to them and find out if they have made progress?
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. The whole point is that, because they are still insecure, we better let people actually have access to their data all the time. That is what this bill does, so they can find out, instead of having to pay 10 bucks or 15 bucks every time to see if these sites are secure. That is my concern.
I thank the gentleman. I think we are good.
BREAK IN TRANSCRIPT
Mr. GOTTHEIMER. Madam Speaker, I thank Mr. Riggleman for his points. He is a good friend, and I respect him deeply.
I disagree here, respectfully. The whole point of this is to protect consumers. Giving consumers more data to have access to about themselves and to understand their own credit scores and their own credit history and have more transparency into their own lives does not hurt them; it helps them.
That is exactly what we are doing today, so that if you are hacked, if you are one of the millions of Americans whose credit is stolen every single day and you are trying to put your credit life back together, not by your own making, because someone did it to you, and they are opening accounts and doing things to you, what this legislation will do is help you.
Instead of having to spend hours chasing down the three bureaus and hoping that they actually do what they say they are going to do and put your credit back together, so that when you want a house and a mortgage, or you want a car, and you want to do the things that you have worked very hard to build your credit for, someone else who stole your credit won't be able to undermine that. That is what this bill does.
One point, just to clarify this important point that the ranking member made. The bill does not mandate the collection of Social Security numbers. It simply requires that credit bureaus match the information they already have on file to ensure that Jane Doe in Illinois who defaults on her payments does not impair the credit of Jane Doe in Indiana.
One of the biggest reasons consumers have errors in their files is because of the mixed files when negative information is assigned to the wrong person.
It is, once again, another reason why we need a place for consumers to go to get free access to their reports, to file complaints immediately, to contest issues when they see them, and to make sure their credit isn't sold off to someone else right underneath them.
That is the point of this. And why we are having a GAO study is to make sure we find the best way, the most secure way, to do this going forward.
This legislation protects consumers; it protects Americans; and it doesn't look out for the oligopoly. We need more competition there. It looks out for the American consumer, and that is the point.
BREAK IN TRANSCRIPT
Source