WASHINGTON, D.C.—The U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance will hold a hearing on Tuesday, May 7, 2013 at 2:30 p.m. titled "Credit Reports: What Accuracy and Errors Mean for Consumers."
Please note the hearing will be webcast live via the Senate Commerce Committee website. Refresh the Commerce Committee homepage 10 minutes prior to the scheduled start time to automatically begin streaming the webcast.
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Senator John D. (Jay) Rockefeller IVChairmanU.S. Senate Committee on Commerce, Science, and Transportation
Prepared Opening Statement – Senator John D. (Jay) Rockefeller IV, Chairman
“Credit Reports: What Accuracy and Errors Mean for Consumers”
Tuesday, May 7, 2013 2:30 p.m.
The credit reporting system plays a crucial role for Americans. Credit reports are the foundation for some of the most important decisions that consumers face. Businesses use credit reports to decide whether consumers can get a car loan or a mortgage for their house, or even a credit card. These reports decide how much consumers will have to pay for that credit. Credit reports are used to determine whether a consumer can rent an apartment, or even get a job. Because credit reports have such influence on all aspects of consumers’ lives, they must be accurate. And, if they do contain errors, people must be able to correct those mistakes.
The Fair Credit Reporting Act (FCRA) was enacted and amended to do just that. The law requires the credit bureaus to take steps to ensure that the information they collect and sell is accurate. Moreover, when the information is not correct, the FCRA also gives consumers the ability to challenge those errors, and requires the companies to investigate and make corrections when warranted.
But recently, I have heard news that is troubling, to say the least. In February, the Federal Trade Commission (FTC) released a study of the three major credit bureaus – Equifax, Experian, and TransUnion – that found five percent of consumers had material errors on at least one of their credit reports that could lead them to paying more for loans. Also in February, 60 Minutes aired a news story that described both significant levels of inaccurate information on credit reports, as well as a difficult if not impossible dispute system for consumers to correct those errors. These findings raise concerns about both the accuracy of information contained in credit reports, as well as the dispute system in place for consumers to correct inaccurate information.
The credit bureaus have a legal obligation to take all reasonable steps to maximize the possible accuracy of credit reports, and when they do contain errors, provide consumers with the means to fix them. I expect this industry to do everything it can to ensure that the system works for the ones that it impacts the most – everyday Americans. If today’s hearing uncovers problems with the credit reporting industry, I urge these companies to tackle those problems with a sense of urgency.
I want to thank Senator McCaskill for holding this hearing to explore the prevalence of errors on consumers’ credit reports, the impact of those errors, and the challenges consumers face in disputing and correcting those errors. I would also like to encourage the FTC, as well as the Consumer Financial Protection Bureau (CFPB), to continue their long-standing efforts to protect consumers and ensure that companies are complying with the law.
Senator Claire McCaskillChairwomanU.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance
Witness Panel 1
Ms. Maneesha MithalAssociate Director for the Division of Privacy and Identity ProtectionFederal Trade Commission
Mr. Corey StoneAssistant Director, Deposits, Cash, Collections, and Reporting MarketsConsumer Financial Protection Bureau
Witness Panel 2
Mr. Stuart PrattPresident and CEOConsumer Data Industry Association
Mr. Ira RheingoldExecutive DirectorNational Association of Consumer Advocates
Ms. Judy Thomas
Dr. J. Howard Beales IIIProfessor, Department of Strategic Management and Public PolicyGeorge Washington University School of Business