The US Congress has recently called for a hearing with the nation’s major credit reporting agencies as lawmakers attempt to pass legislation to overhaul the industry.
Top executives from Equifax, Experian, and TransUnion — the three major credit reporting bureaus — faced intense scrutiny from the House Financial Services Committee, who seemed eager to push for changes in the credit sector after a massive data breach in Equifax in 2017.
Committee Chair Maxine Waters, a Democrat, also called the hearing to discuss proposed bills aiming to amend the existing credit reporting system.
Ranking member Rep. Patrick McHenry said that the credit reporting system needs significant repair even as the scoring system provides Americans with a foundation allowing millions to access credit with speed and efficiency.
Democrats emphasized that part of the problem is credit reporting bureaus considers consumers not as customers but as goods.
For Rep. Waters, this commodification of consumers including their personal data is the main reason the reporting system of the US consumer credit is broken.
In the past, both Reps. Waters and McHenry have proposed bills to improve the credit bureaus. But this time Waters said she would introduce legislation to protect American consumers further and strengthen the entire system.
On the part of the credit reporting agencies, they told the lawmakers they were doing their best to address concerns of consumers and beef up their cybersecurity to protect consumers against future breaches.
Both Experian and FICO are working on products, called Experian Boost and UltraFICO, targeted to roll out this year that will include additional information in consumers’ credit report, such as phone number and utility payment history.
Earlier, Francis Creighton, Consumer Data Industry Association president and CEO expressed his concern in an interview that the proposed legislation will allow consumers to strike out items in the report that are negatively impacting them.