A new bill—H.R. 5332, introduced by Rep. Josh Gottheimer (D-N.J.)—could make credit reports less predictive and useful while weakening the credit underwriting process and increasing costs for borrowers, the American Bankers Association said in a letter to House Financial Services Committee leaders. While well-intentioned, the association said, the bill would promote the elimination of negative but accurate credit information, and could lead to abuses by credit repair organizations and bad actors seeking to defraud lenders.
“We believe that H.R. 5332 will enhance the ability of these individuals to flood consumer reporting agencies and furnishers of information with false claims of inaccuracies that must be resolved in a timely fashion or deleted,” ABA said, adding that the Fair Credit Reporting Act already provides consumers strong dispute rights to challenge information in their credit reports. “The resulting degradation in the reports will reduce the ability of lenders to evaluate an applicant’s creditworthiness and ability repay, which in turn will increase what consumers pay for credit and make it harder for many consumers, especially the underserved, to get credit.”