Majority Statement

• Senator John D. (Jay) Rockefeller IV

  Chairman

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Majority Statement

  Senator John D. (Jay) Rockefeller IV

  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.

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• Senator Claire McCaskill

  Chairwoman

  U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance

Testimony

• Ms. Maneesha Mithal

  Associate Director for the Division of Privacy and Identity Protection

  Federal Trade Commission
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• Mr. Corey Stone

  Assistant Director, Deposits, Cash, Collections, and Reporting Markets

  Consumer Financial Protection Bureau
  Download Testimony (148.98 KB)

Witness Panel 2

• Mr. Stuart Pratt

  President and CEO

  Consumer Data Industry Association
  Download Testimony (129.28 KB)

• Mr. Ira Rheingold

  Executive Director

  National Association of Consumer Advocates
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• Ms. Judy Thomas
  Download Testimony (116.32 KB)

• Dr. J. Howard Beales III

  Professor, Department of Strategic Management and Public Policy

  George Washington University School of Business
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