Your consumer credit information and rights are protected by the Consumer Credit Protection Act (CCPA), which became active in 1968. The CCPA is Federal legislation that helped create disclosure requirements that have to be followed by consumer lenders like the credit card companies and auto-lending firms. Contrary to the stand-alone interest rates, the Act requires consumer lenders to inform consumers about the annual percentage rates, special or previously hidden terms and the total potential costs to the borrower.
The CCPA law is a cardinal law in that it has made the terms of the loans more transparent to the borrowers who may not be technical about finance issues. It has also formed the basis for a variety of consumer protection laws that have been enacted since 1968. Some notable laws include the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity, the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act and now Protecting Your Credit Score Act of 2019.
There are three major companies responsible for your credit card information and reporting; Equifax, Experian, and TransUnion. They are for-profit companies and will calculate your credit scores based on personal finance and payment history. The credit score has a major effect on your ability to do major financial transactions, for instance, rent a house, buy a car, purchase insurance, or even take out a credit card. But what formulas apply when it comes to credit score processing? Is it the same for all the three companies? Bottom line is, the formulas are different for each company, and they charge differently to find out what your score is.
Creation of a centralized information pool
The Fair Credit Reporting Act (FCRA) is an Act that was passed in 1970 and regulates the collection of credit information and the access of the credit reports. The act ensures fairness, accuracy, and privacy of the personal information, something which hasn’t yet materialized. FCRA primarily focuses on the governance of all activities pertaining to the reporting of credit information for the consumers.
Owing to this fact, the Protecting Your Credit Score Act would direct the three companies to create a centralized online website, which would give access to a person to check their credit scores for free at any time. According to H.R 5332, Protecting Your Credit Score Act of 2019 Section 2, it states that “each consumer reporting agency shall jointly develop an online consumer portal landing page that gives each consumer unlimited free access to the consumer report of the consumer, information on who has accessed the consumer report of the consumer over the last 24 months, and, as available, for what permissible purpose the consumer report was furnished.”
Supporters of the legislation say that the bill helps consumers to better understand the processes leading up to the credit score determination. Congressman Gottheimer continues to say “[The bill] sets up a one-stop-shop, an online portal to check your credit report, for free, at any time,” Rep. Gottheimer explained. “It allows victims to shut off the ability of credit hucksters from using your information to apply for credit under your name.”
Nonetheless, the bill faces criticism with the opponents saying that the legislation could open the door for lawsuits that result in the potential removal of damaging but vital financial information.
“We are concerned about the increasing abuse of these protective provisions to remove accurate but negative information,” the American Banking Association’s James C. Ballentine wrote to Congress,
The bill passed in the House Financial Services with a vote of 31 to 24. It now advances to the full house where it awaits a potential vote. Even though it has attracted one Republican cosponsor, Rep Tom Reed, its passage is low in the republican controlled senate
I support the bill. H.R. 5332 is a good bill that will bring transparency to how credit information and reporting is done in this country. A while back, I did a blog showing how wide the credit system has been compromised. Remember, these three companies do not care about anything as long as they are making profits. How is it then that these companies can be allowed to have so much control over our access to credit. Of importance to note also is that the playing field for credit access is not anywhere near to objective. What we need are more reforms to address the cultural biases and cultural values about the use of debt, the payment of debt and the unfair treatment of borrowers due to credit reporting.
Knowing the ins and the outs of credit reports is a big step in ensuring you secure your path to financial freedom and wealth creation. Over the years, I have been training people on the ways and means to secure a financially stable future. If you want to find out how you can improve your credit score and take advantage of the opportunities ahead, contact me at Eric.frazier@thepowerisnow.com. Also, we are partnered with great agents across the country and with First Bank to provide the products and programs that First Time Homebuyers need to buy a home or income property now because tomorrow it will be even more difficult. Go to www.applytobuynow.com and get started today. The Power to buy is now!
Eric Lawrence Frazier MBA
Vice President and Mortgage Advisor of First Bank
NMLS 461807
President and CEO of The Power Is Now Media Inc.
CalDRE 01143484
www.thepowerisnow.com
Sources & Works Cited
https://www.thepowerisnow.com/the-united-states-credit-system-is-broken/
https://www.congress.gov/bill/116th-congress/house-bill/5332/text
https://www.debt.org/credit/your-consumer-rights/the-consumer-protection-act/
https://www.investopedia.com/terms/c/consumer-credit-protection-act-of-1968.asp
