Tlaib Introduces Bill to Reduce Debt History for Millions of Americans

Reduces the Length of Time from Seven to Four Years

DETROIT – Today, Congresswoman Rashida Tlaib (MI-12) re-introduced the Restoring Unfairly Impaired Credit & Protecting Consumers Act to provide credit restoration for victims of predatory lending, fraud, and other financial abuse, prohibit the reporting of medical debt, and reduce the length of time that adverse information appears on credit reports from seven to four years.

Credit and consumer-related fraud, deception, and exploitation are widespread. For-profit schools target low-income students using inflated job placement rates, leading to crushing student debt. Domestic abuse survivors face fraudulent charges from abusers. Millions of Americans are the victims of identity theft each year, particularly our seniors. Medical debt collections listed on credit reports—often for necessary and life-saving procedures—impact millions of Americans. Additionally, roughly twenty percent of people have an error on one of their credit reports. These factors can impact whether a person is able to pay their bills, access basic necessities, get a student loan, secure a mortgage, or obtain a credit card.

To help address these issues, the Restoring Unfairly Impaired Credit & Protecting Consumers Act would:

  • Reduce the duration that adverse information stays on a credit report from seven to four years;
  • Prohibit medical debt from being included on credit reports or consumer reports;
  • Require credit reporting agencies to remove negative information resulting from predatory loans and fraudulent activity;
  • Give survivors of domestic and other financial abuse a pathway to get negative information resulting from abuse removed from their credit reports; and
  • Establish the right to free credit monitoring and identity theft protection services for certain consumers, including victims of fraud, and those 65 and older.

“The use of credit reports—which frequently contain errors—is now more than ever a huge barrier to a thriving life for many of our residents. Americans should not be denied access to basic needs that improve their quality of life, like employment, housing, or transportation because of medical debt. Our neighbors should not have to go without necessities because they fell victim to fraudulent activity or predatory lenders. Survivors of domestic and financial abuse do not deserve to have debt resulting from that abuse on their credit report. This bill is about fairness, opportunity, and justice, and I urge my colleagues in Congress to finally get this bill signed into law,” said Congresswoman Rashida Tlaib.

This legislation is endorsed by the Consumer Federation of America, Detroit Action, the Detroit Justice Center, the National Consumer Law Center, Public Citizen, the Sugar Law Center for Economic and Social Justice, We The People of Detroit, and We The People Michigan.

“We thank Congresswoman Tlaib for her leadership in protecting the credit records of consumers unfairly tarnished by predatory mortgages, harmful private student loans, and debt resulting from domestic abuse,” said Chi Chi Wu, Senior Attorney at the National Consumer Law Center. “Most importantly, this bill flat out bans the reporting of medical debt and reduces the harm of negative credit reporting generally by giving consumers a fresh start more quickly.”

“CFA strongly supports Congresswoman Tlaib’s efforts to protect consumers from predatory and fraudulent practices that have had a detrimental impact on consumer credit reports for far too long,” said Dylan Bruce, Financial Services Counsel at the Consumer Federation of America. “Of particular concern is the burden of medical debt, which plagues our credit reporting system and disproportionately affects the most vulnerable consumers, and we firmly stand behind this legislation which aims to prohibit its inclusion on credit reports.”

“Public Citizen welcomes Rep. Tlaib’s needed bill that will help improve the credit ratings of those abused by financial scammers or beset with crushing medical debt and ideally restore their ability to access services impacted by credit and obtain affordable personal loans,” said Candace Milner, Racial Equity Policy Associate for Public Citizen’s Congress Watch division. “The current credit reporting system creates unnecessary economic barriers that hinder millions of Americans from accessing basic needs. Rep. Tlaib’s bill addresses the failure of credit agencies to ensure accuracy in their credit reporting while also providing tools for victims of predatory lending and financial abuse to repair their credit. If passed, this bill will prevent millions of Americans from experiencing economic ruin because of destructive credit reporting.” 

“The Restoring Impaired Credit and Protecting Consumers Act will have a strong positive impact on low-income Black Detroiters, said Linda Campbell, Director of Detroit People’s Platform. “Bad credit scores play a large role in keeping Black Detroiters from fully participating in the city’s supposed comeback. For example, the Detroit Future City, in March 2022 report, found that credit history was the single largest reason why mortgages were denied to Black borrowers. From opportunities for higher paying jobs to mortgage lending for quality housing, unfairly incurred poor credit is 21st century redlining that keeps Black and brown people from resources. This bill is necessary to empower Black Detroiters to participate fully in their own communities and achieve economic security for their families.”

The full text of the bill is available here.

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