Waters Holds Credit Bureaus Accountable

As Prepared for Delivery

Today, this Committee convenes for a hearing on repairing the nation’s broken credit reporting system and holding the major consumer credit bureaus accountable.

In October of 2017, Committee Democrats convened a minority day hearing on ensuring the integrity of our country’s consumer reporting system and safeguarding consumer data. As Ranking Member of the Committee, I invited the Chief Executive Officers of Equifax, Experian, and TransUnion to that hearing. All three declined to appear and testify.

So this hearing, with testimony with the CEOs from the major credit bureaus, is long overdue.

In 2017, Equifax experienced a data breach that exposed the sensitive personally identifiable data of approximately 148 million individuals – around half of all Americans. In 2015, Experian discovered a breach that affected 15 million consumers who applied for T-Mobile service. In 2013, all three major consumer credit bureaus, including Transunion, identified unauthorized access to sensitive data that they held relating to high profile individuals. Consumers did not choose to entrust these companies with their personal information, and they do not have the option today of choosing a different company to maintain their consumer credit data records or having their information deleted from the major credit bureaus’ databases, even following these egregious breaches.

To make matters worse, all three of the major consumer credit reporting bureaus have used this breach of consumer data and consumer trust to sell products they are marketing as identity theft protection. It certainly appears they are capitalizing on consumers’ fear and desperation, despite the fact that there are many free tools that consumers can use to protect their credit.

These data breaches are deeply troubling because credit bureaus collect reams of information on millions of Americans. The more information they collect, the more people are at risk when that information is not properly protected. Even worse than credit bureaus’ vacuuming up of consumer data is the lack of control that consumers have over this data. If a consumer is dissatisfied with one credit bureau, they can’t take their business to a competitor. To credit reporting bureaus, consumers aren’t consumers. They are commodities. This commodification of consumers and their personal data is the core reason why our nation’s consumer credit reporting system is broken.

In this broken system, credit reports are routinely filled with errors that are difficult for consumers to correct. Negative information stays on for periods much longer than its predictive value. Medical debt continues to harm the credit standings of otherwise creditworthy consumers. These problems are pervasive in the credit reporting system.

They directly impact how much we pay for a car loan, whether or not we can get a mortgage, and, in some cases, whether or not we can get a job.

America’s consumers deserve better than this.

That is why for several Congresses, I have put forth my bill, the Comprehensive Consumer Credit Reporting Reform Act. My bill is intended to repair the existing system, by shifting the burden of removing mistakes from credit reports onto the credit bureaus and furnishers, and away from consumers, placing limits on credit checks for employment purposes, reducing the time period that negative items stay on credit reports, among other reforms. Today we will also discuss legislation to protect innocent consumers affected by a Federal government shutdown from having their credit damaged.

While these are all critical reforms to the existing system, I believe that we need to ask whether the system is so beyond repair that we need to completely rebuild the entire consumer credit reporting sector to truly put consumers first.

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