On July 11 the House Financial Services Committee passed U.S. Rep. Rashida Tlaib’s (D-13th District) bill that would provide relief for consumers struggling to recover from predatory loans or fraudulent activity.

The Restoring Unfairly Impaired Credit and Protecting Consumers Act (H.R. 3622) directs the credit reporting agencies to remove negative information from credit reports relating to loans that are unfair, deceptive, abusive, or otherwise illegal. It shortens the length of time that negative information remains on a credit report from seven years to four years, prohibits credit reporting agencies from including medical necessary procedures, and prohibits them from reporting other medical collections until 365 days after delinquency.

“Consumer credit can determine a person’s ability to own a home, is used to set auto insurance rates, and is even used to determine employment eligibility, so it is absolutely vital that we ensure consumers, especially residents in communities like the ones I represent who have historically had limited to no access to credit, are able to have as many tools as possible to secure it,” Tlaib said. “For too long, a sudden health crisis or emergency room visit has meant years of being denied housing, transportation, or other necessities because of a medical item on a credit report—this bill will change that.”

The bill also establishes the right for victims of financial abuse to have adverse information associated with an abuser’s fraudulent activity removed from their consumer reports and empowers victims of identity theft by removing the requirement to have a police report to exercise ID theft protections available under the Federal Credit Reporting Act.

“Consumers suffering from instances outside of their control should not be punished or excluded from future opportunities to build or rebuild credit. H.R. 3622 is a win for working families in my district and across the country because it will prevent that from happening through initiatives that provide the equity they’ve been denied,” Tlaib said.

The bill will now head to the House floor for the body’s full consideration.
 

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