How Likely Is The New Congress To Tighten Credit Bureau Oversight?

After the 2017 Equifax data breach, which compromised the personal information of almost 150 million consumers, one might expect Congress to take significant action to prevent future breaches. To date, one would be wrong, but that may change with a Democratic House eager to address consumer protection issues.

The Consumer Financial Protection Bureau (CFPB) has authority to review credit reporting agencies (CRAs) like Equifax, including assessing their ability to handle data breaches. The Trump administration has shown little interest in regulating the credit reporting agencies.

Legislative efforts didn't fare any better. Shortly after the breach announcement, Rep. Maxine Waters (D-CA) introduced the Comprehensive Consumer Credit Reporting Reform Act (CCCRRA), which would have tightened requirements for maintaining and protecting consumer records. The CCCRA would also give consumers more methods of recourse for inaccurate or compromised information. The CCCRRA went nowhere at the time, but expect a similar proposal in 2019.

Congress did take one protective step for consumers by making credit freezes free as of September 2018. Steve Weisman, author of Identity Theft Alert and cybersecurity expert, points out why credit reporting agencies aren't pleased. "We're their product and they make their money by selling our data. If we're freezing our credit reports, that data is not being readily sold."

The CFPB and other state and federal agencies have made strides in overall data protection, but the credit reporting agencies represent a higher bar. Credit reporting agencies are more like the IRS in that your personal information is stored there as a requirement. Your consent or knowledge isn't an issue. Hackers find the credit reporting agencies a very tempting target because they're a rich source of records and financial history, easily converted into packages that can be sold down the illegal distribution chain.

A December 2018 report from the Democratic staffs of the House Oversight Committee and Science, Space, and Technology Committee outlines four proposed areas of increased oversight:

Re-establishing CFPB oversight authority with required reports
Requiring the credit reporting agencies to comply with federal government cybersecurity standards
Creating comprehensive laws covering breach notification requirements
Establishing civil penalty enforcement for violating personal information/data security requirements.

Democratic legislation will probably focus on those four areas, with the civil penalties as the most likely non-starter in a Republican Senate.

Realistically, Democrats don't have the power to enact much of their proposed legislation they'll mostly be holding serve to keep existing restrictions and oversight from being loosened or removed. However, there are logical areas of compromise (assuming anyone in government remembers what compromise looks like).

Expect those to be areas with the most positive public relations benefits for the least effect on creditors and reporting agencies. For example, Republicans passed credit-reporting protections for certain medical debts of military members. Similar medical-debt reporting protections could be applied to all Americans, military or otherwise, and receive bipartisan support. Greater access to free credit scores and even credit reports could also gain bipartisan traction.

Credit reporting changes are possible over the next two years, but barring another set of massive breaches, don't expect significant action before 2020 — and even then, action may not be in your favor.

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