House Committee Passes Package of Bills to Amend the FCRA
On July 11th and 16th, the House Financial Services Committee marked-up and passed a number of bills, including six measures to amend the Fair Credit Reporting Act (FCRA). The FCRA-related bills included several measures that would directly impact employment screening and, including the amount and types of information that consumer reporting agencies would be permitted to furnish for employment purposes. FCRA-related bills passed include:
- H.R. 3614, the Restricting Use of Credit Checks for Employment Decisions Act, a bill which would prohibit the use of information bearing on an individual’s credit worthiness, credit standing or credit capacity for most employment decisions, except when required by law or for a national security clearance. This could restrict access to credit reports as well as bankruptcy information and other information bearing on credit.
- H.R. 3622, the Restoring Unfairly Impaired Credit and Protecting Consumers Act, a bill that would shorten the time period in which adverse information would stay on a consumer report from seven years to four years in most cases. The bill would limit the reporting of criminal conviction information to seven years. It also would repeal the $75,000 salary exclusion so that the obsolescence rules would apply to all consumer reports furnished for employment purposes, regardless of an individual’s salary.
- H.R. 3642, the Improving Credit Reporting for All Consumers Act, a bill that would revise the process for consumers to resolve inaccuracies on their consumer reports, including by creating a new right to appeal decisions, and direct the Consumer Financial Protection Bureau (CFPB) to develop minimum standards. The bill also would change the standard for the content of consumer reports to require “reasonable procedures to ensure maximum possible accuracy and completeness.”
- H.R. 3618, the Free Credit Scores for Consumers Act of 2019, a bill that would require consumer reporting agencies to give consumers free copies of their credit scores that are used by creditors.
- H.R. 3629, the Clarity in Credit Score Formation Act of 2019, a bill that would direct the CFPB to establish standards for the development of credit scoring models.
- H.R. 3621, the Student Borrower Credit Improvement Act, a bill that would establish procedures for private student loan borrowers to remove adverse information for certain defaulted or delinquent loans from their consumer reports when they demonstrate a history of timely repayment.
The bills, many of which address issues that Chairwoman Maxine Waters (D-CA) addressed in her own comprehensive FCRA bill, were each passed by the Committee on straight party line votes, with all Committee Republicans that voted opposing the measures. It is not yet clear when the full House may vote on the bills, but it would not be surprising for the bills to pass the House. Given the party-line votes on these bills so far, their prospects in the Senate appear dim, at least in their current form. That said, the progress of the bills merit attention as they advance through the legislative process because, if enacted, they would result in significant changes to the consumer reporting system. H.R. 3614, H.R. 3622, and H.R. 3642, in particular, would have a significant impact on the employment screening process.