House Committee Should Reject Bill That Would Restrict Consumer Remedies for Credit Reporting Abuses

Release Date: 
September 6, 2017
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Public Interest Orgs Urge House Committee to Reject Bill That Would Restrict Consumers’ Legal Remedies for Credit Reporting Abuses

The U.S House Financial Services Committee, Subcommittee on Financial Institutions and Consumer Credit will hold a hearing tomorrow morning to consider H.R. 2359 and five other financial services-related bills.  

WASHINGTON, D.C. – The National Association of Consumer Advocates and 35 national, state, and local public interest organizations representing millions of consumers today sent a letter to the U.S. House of Representatives Financial Services Committee urging members to oppose H.R. 2359, a bill titled the “FCRA Liability Harmonization Act,” which would reduce remedies in lawsuits for consumers who are victims of credit reporting abuses.

“The bill would allow bad actors in the credit reporting industry to wrongfully label consumers as deadbeats, terrorists, and criminals without fear of meaningful consequences. It also would have a deleterious effect on the marketplace due to the spread of defective data and information on millions of consumers and workers that almost inevitably would result,” the groups’ letter said.

Specifically, the bill would amend the Fair Credit Reporting Act to eliminate punitive damages awards for individuals and impose a one-size-fits-all cap on damages in class actions to $500,000 for groups of consumers who seek remedies against the same wrongdoer. The bill would undermine accountability for credit bureaus and background check companies.

 “H.R. 2359 would restrict Americans’ access to justice without sound justification,” the groups’ letter said. “An arbitrary cap on statutory damages in class actions would deter and practically block the most effective method for harmed consumers to stop systemic willful violations of the FCRA. And without class actions, it is not economically feasible in many cases for consumers to pursue claims on their own.”

Industry supporters of weakening consumers’ remedies in legal actions against credit reporting abuses argue that violations of the FCRA are mere “technical violations.” However as the groups explain, the federal law requires the violations to be willful in order for consumers to receive statutory and punitive remedies:

“The bill’s provisions would restrict damages where harmed consumers already have met the burden of proving that the perpetrator understood the law and violated it anyway. And notably, the three credit reporting agencies consistently are among the top most complained-about companies, with the vast majority of complaints involving incorrect information on consumers’ credit reports.”

Further, the legislation disregards the real and consequential harm to consumers. The groups submitted recent case summaries demonstrating the systemic conduct of bad actors in the industry, and the injuries to consumers, including the loss of job and housing opportunities, and access to credit.

The groups urged the Committee to reject the bill.