A proposed bill to curb abuse of the Fair Credit Reporting Act by class action plaintiffs’ attorneys would establish reasonable limits on liability while preserving the protections granted to consumers, the American Bankers Association and 14 associations said this week in a joint letter to lawmakers.
The FCRA Liability Harmonization Act (H.R. 5775), introduced by Rep. Barry Loudermilk (R-Ga.), would synchronize the law with other financial consumer protection laws by capping statutory damages in class action lawsuits, eliminating punitive damages and limiting attorney’s fees. In their letter, the associations said the FCRA is out of alignment with other consumer financial protection statutes by allowing class action plaintiffs to pursue unlimited damages, including punitive damages.
“The risk of a multimillion-dollar plaintiff’s attorney fee award – on top of even a nominal judgment for the consumer – pressures businesses into settlements,” they said. “These settlements are often driven not by merit but by the desire to avoid costly litigation and uncertainty. In turn, this diverts resources away from job creation and innovation, ultimately driving up costs for consumers.”
