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Democrats’ Credit Reporting Bill Will Only Hurt the Very Consumers We Are Trying to Help


Washington, January 29, 2020 -

Today, Republican Leader of the House Financial Services Committee Patrick McHenry (NC-10) delivered remarks on the House floor in opposition to Democrats’ partisan legislation, H.R. 3621, appropriately renamed by Republicans as the “Cutting Consumers’ Credit Act.” This bill will weaken underwriting standards making it more difficult and costly for Americans from all walks of life to access necessary credit. While Republicans have offered bipartisan solutions to reform the credit reporting industry, Committee Democrats chose to push through a partisan bill to socialize credit risk modeling, which stands no chance of being signed into law.



Watch Ranking Member McHenry’s remarks here or by clicking on the image above.

Read Ranking Member McHenry’s remarks as delivered:

“Mr. Speaker, I yield myself such time as I may consume; I rise in opposition to the bill before us.

“This is a Democrat bill under the guise of consumer protection that will destroy the accuracy and completeness of consumer credit files.

“This will lead to a weaker financial system, undermining a great deal of safety and soundness that we have built up over decades. This will, in essence, socialize credit scoring, and therefore credit allocation. And look, this is an election year, I see that.

“I see that not just in the rhetoric here in the House, but in the legislation that’s before us today.

“This bill will weaken underwriting standards. It will make extending credit a riskier and more expensive activity – ultimately impacting both the cost and accessibility of credit for all Americans.

“Let me be clear, for more than a year now I have made the same statement on the House floor when the House Financial Services Committee has a bill here on the floor: Committee Republicans stand ready to work with the Democrats on issues that are important to the American people. And this bill is a prime example of this.

“We support policies that create jobs, grow our economy, and make our nation more secure.

“Today is no different. Republicans want to work with Democrats to help all consumers, especially consumers who may be struggling to access the necessary credit to apply for a home loan or replace a broken washing machine. Perhaps even start a small business.

“We want to reach a bipartisan compromise to reform the Fair Credit Reporting Act or FCRA.

“We want to find a compromise that meaningfully helps consumers and at the same time stands a chance of being signed into law. This bill is not that.

“But I fear my colleagues have thrown out bipartisanship in favor of satisfying political allies in an election year.

“This bill socializes credit modeling – giving the CFPB, an unaccountable bureau within the government, the ability to develop, maintain, and regulate credit modeling and factors used in analysis.

“You’re going to have politicians making the decisions on how credit is scored. That’s a dangerous thing, and something in the United States that we should not stand for.

“This bill prevents employers from knowing the credit worthiness of employees. This creates a situation in which employees who are in significant debt could be targets of bribes or extortion, or perhaps take money that is owed to other people.

“This bill creates a boon for the trial lawyers—creating new reinvestigation and appeals processes to be exploited by the trial bar.

“This bill diminishes the value of a credit score as a determining factor in extending credit – I don’t think that’s a secondary effect, I think that is the primary goal of this bill – by removing past credit scores after two years from a report and prohibiting those scores within the two-year period from being used as a factor.

“This bill also arbitrarily changes the time period negative information such as a missed payment remain on a consumer’s credit report.

“This bill makes it more difficult for private lenders to compete in the student loan industry by allowing delinquent borrowers or a borrower who has defaulted on a loan to rehabilitate their credit outside of the contractual terms. 

“This bill imposes unfunded mandates on the private sector to a really unprecedented degree.

“These provisions make clear what Democrats want to accomplish in this bill—they want to socialize credit and the models underlying credit allocation. This bill takes credit reporting out of the hands of the private sector and gives it to the government.

“Let me be clear, I’m no fan of the large credit reporting agencies, also known as CRAs.

“In fact, during our one hearing on this topic last February, nearly a year ago at this point, I use the term loosely that we discussed this bill as it was just a discussion draft and much different than what we have before us, but in that hearing we didn’t discuss the implications of this bill or FCRA in that hearing, and I made it clear I share the Chairwoman’s concerns with the credit reporting agencies, their lack of competition, and their oligopoly.

“In fact, there were aspects of the original discussion draft of this bill – that’s not part of what we have today – that I thought had merit and should be explored in greater detail.

“For example, I have concerns that the CRAs’ operations are not as consumer friendly as they should be or could be. 

“Moreover, not once after that hearing did the Committee consult with additional subject matter experts on the inefficiencies, ineffectiveness, or improvements needed to the Fair Credit Reporting Act.

“Not once after that February hearing did we discuss how to make CRAs work better for the consumer.

“Not once did we have real bipartisan discussions about what we could achieve and get signed into law.

“This is something that both Republicans and Democrats actually agree on. The need to reform this process.

“I agree we should be disclosing public record data sources.

“I agree we should exclude paid, medically-necessary debt from consumer credit reports.

“I agree we should prohibit certain adverse information resulting from financial abuse or predatory lending from being included in consumer credit reports.

“In fact, the substitute amendment I filed with the Rules Committee, that was not made in order this day, includes the bipartisan reform I described and more.

“Committee Republicans support reforms such as prohibiting the use of social security numbers to verify consumers. Now this is a primary source and a primary ingredient in identity fraud, and we should take action there. And I think we can.

“Committee Republicans also support facilitating online credit freezes and the removal of credit files for minors and children.

“We also support studying the use of non-traditional data in credit scoring as well as codifying the Consumer Financial Protection Bureau or CFPB’s credit reporting registry. I think those are things that we can do.

“Bipartisanship was within our grasp. All my colleagues had to do is reach out and grab it.

“As I said, Republicans stand ready to work with Democrats to help consumers.

“But this bill is about socializing credit and credit allocation, and this bill is not the answer to the consumers’ challenge.

“In fact, the Democrats’ bill will only hurt the very consumers we are trying to help.

“I urge my colleagues to oppose this socialization of credit reporting and vote no on this bill.

“And Mr. Speaker, I reserve the balance of my time.”

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