Newsroom
NAFCU, trades flag credit repair scams for lawmakers
NAFCU and several other trade groups sent a letter to the House Financial Services Committee warning of “the increasing threat credit repair scams pose to consumers and the credit markets.” The groups asked lawmakers to modernize the Credit Repair Organizations Act to ensure effective consumer protections.
“Credit repair organizations [CROs] exploit the most vulnerable Americans and inundate creditors and credit bureaus with meritless and duplicative claims that information in a credit report is inaccurate,” the letter stated. “These activities jam the credit reporting system with illegitimate claims that divert resources from authentic consumer disputes and cost Americans exorbitant amounts of money for no actual value.”
The groups noted efforts by the Federal Trade Commission (FTC) and CFPB to address CROs’ unsafe activities. They also reiterated their support for a fair and accurate credit reporting system that fixes errors on consumers’ credit reports quickly.
To ensure a fair and accurate credit reporting system, NAFCU has supported reform efforts, including using alternative credit score models to ensure creditworthy borrowers – who have previously been marginalized for lack of traditional credit history and other issues – have access to affordable credit, but has cautioned against changes that could have unintended consequences and give CROs more leverage to negatively impact financial institutions and consumers.
Earlier this year, NAFCU filed an amicus brief related to Fair Credit Reporting Act (FCRA) requirements, arguing that the law requires furnishers and consumer reporting agencies to investigate factual inaccuracies, not legal disputes. The association has also called for holding credit reporting agencies accountable for data security requirements under the Gramm-Leach-Bliley Act (GLBA) and recommended they be subject to CFPB or FTC examination.