Patrick McHenry

Mr. McHENRY

Mr. McHENRY. Mr. Chair, may I inquire how much time is remaining on both sides.

Mr. McHENRY. Mr. Chair, I am prepared to close, and I reserve the balance of my time.

Mr. McHENRY. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I submit for the Record page 114 of the bill, and I would highlight these sections, line 4, ``Maintenance of Credit Scores.'' ``Subsection A: In General. All consumer credit reporting agencies shall maintain the consumer's file credit scores relating to the consumer for a period of 2 years from the date on which such information is generated. ``Subsection B: Disclosure Only to Consumers. A past credit score maintained in a consumer's file pursuant to subparagraph A may only be provided to the consumer to which the credit score relates and may not be included in a consumer report or used as a factor in generating a credit score or educational credit score. ``Subsection C: Removal of the Past Credit Scores. A past credit score maintained in a consumer's file pursuant to subparagraph A shall be removed from the consumer's file after the end of the 2-year period described under subparagraph A.'' This is the section of the bill that says that your consumer credit report can only be 2 years old--your score. Now, the data can be longer, but your score can only use 2 years of past data. That is deeply problematic because, as we know, these things are more long-run occurrences. Creditworthiness doesn't happen overnight, nor do somebody's riskier habits happen overnight. So for a 2-year period, we have not seen any testimony why 2 years is sufficient. The current industry standard is much longer than that, but each different user of this credit information can determine for themselves what that appropriate time is, and that is not mandated by current law. So I find this troublesome, and problematic, and riskier than what we currently have in the law; and that is one of the components of this bill that I oppose. There are numerous other examples, but I know we will have more debate and I will be able to bring up those exact details as those on the other side tout the so-called benefits. Mr. Chairman, I reserve the balance of my time.

Mr. McHENRY. And finally, I include in the Record Statement of Administration Policy that says that the President would veto this bill. Statement of Administration Policy H.R. 3621--Comprehensive CREDIT Act of 2020--Rep. Pressley, D-MA, and Rep. Ocasio-Cortez, D-NY The Administration opposes passage of H.R. 3621, the Comprehensive CREDIT Act of 2020. The Administration supports measures to increase access to affordable consumer credit, but H.R. 3621 would do the opposite by reducing the efficiency of consumer lending markets and raising the cost of consumer credit. H.R. 3621 would preclude credit reporting agencies from incorporating a range of relevant data into consumer reports, which would reduce their predictive value and raise borrowing costs for responsible borrowers. This legislation would also prevent the Federal Government from reporting information regarding debts arising out of criminal monetary penalties. Additionally, H.R. 3621 would empower the Bureau of Consumer Financial Protection to control the development of credit-scoring models, which would hinder market competition that drives innovation and improves modeling. Finally, this legislation would interfere with the ability of employers, including executive branch agencies, to make reasonable background investigation determinations with respect to candidates for sensitive positions. If H.R. 3621 were presented to the President, his senior advisors would recommend that he veto it.

Mr. McHENRY. Mr. Chair, I thank my colleague from South Carolina, the second newest member of the Financial Services Committee, for offering this good, thoughtful amendment. This amendment will give us a better picture of the consent orders that impact credit reporting agencies, including the CFPB's consent orders related to marketing and sale of services. This is a good amendment in what is otherwise a bad bill. Often in legislating, we try to make bad bills less bad or not-so- good bills good, but I am grateful that Mr. Timmons offered this amendment and grateful for his participation representing upstate South Carolina and being a sound policymaker. Mr. Chair, I ask my colleagues to support the amendment.

Mr. McHENRY. Mr. Chairman, reclaiming my time, on that subject matter, it is the period of time between the arrest and the court date is my concern.

Mr. McHENRY. Yes.

Mr. McHENRY. Mr. Chairman, I would say I think the gentleman from California (Mr. Takano) has offered a thoughtful amendment. We don't want any unjust actions taken against somebody because they are accused of something at one period of time or made a mistake and the courts found that that was not, in fact, something illegal. So I think he has the right intent. I think the gentleman's inclination is right. I would be happy to work with him on a standalone measure to achieve something similar, but I appreciate that. Mr. Chairman, I reserve the balance of my time.

Mr. McHENRY. Mr. Chair, I claim the time in opposition. I am opposed to the amendment.

Mr. McHENRY. Mr. Chair, I claim the time in opposition to the amendment, even though I am not opposed to it.

Mr. McHENRY. Mr. Chairman, again, I still have concerns, but in the interest of due process, the direction of this amendment I think is a thoughtful one, and the gentleman's explanation is a strong explanation of his amendment. I would say in language such as no conviction, perhaps acquittal may be some better form of this, but this is something I am happy to work on if this ever gets to a conference committee, which I don't believe the bill will. But I am happy to engage with my colleague from California on the contents of this, and, as a separate measure, potentially, to work with him on that. Mr. Chairman, I yield back the balance of my time.

Mr. McHENRY. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I rise in opposition to the bill before us. This is a Democrat bill under the guise of consumer protection that will destroy the accuracy and completeness of consumer credit files. This will lead to a weaker financial system, undermining a great deal of safety and soundness that we have built up over decades. This will, in essence, socialize credit scoring and, therefore, credit allocation. Mr. Chairman, this is an election year. I see that, and I see that not just in the rhetoric here in the House but in the legislation that is before us today. This bill will weaken underwriting standards. It will make extending credit a riskier and more expensive activity, ultimately impacting both the cost and accessibility of credit for all Americans. Let me be clear. For more than 1 year now, I have made the same statement on the House floor when the House Financial Services Committee has a bill here on the floor. Committee Republicans stand ready to work with the Democrats on issues that are important to the American people, and this bill is a prime example of this. We support policies that create jobs, grow our economy, and make our Nation more secure. Today is no different. Republicans want to work with Democrats to help all consumers, especially consumers who may be struggling to access the necessary credit to apply for a home loan or replace a broken washing machine or perhaps even start a small business. We want to reach a bipartisan compromise to reform the Fair Credit Reporting Act, or FCRA. We want to find a compromise that meaningfully helps consumers and, at the same time, stands a chance of being signed into law. This bill is not that. I fear my colleagues have thrown out bipartisanship in favor of satisfying political allies in an election year. This bill socializes credit modeling giving, the CFPB, an unaccountable bureau within the government, the ability to develop, maintain, and regulate credit modeling and factors used in analysis. You will have politicians making the decisions on how credit is scored, Mr. Chairman. That is a dangerous thing and something in the United States we should not stand for. This bill prevents employers from knowing the creditworthiness of employees. This creates a situation in which employees who are in significant debt could be targets of bribes or extortion or perhaps take money that is owed to other people. This bill creates a boon for the trial lawyers, creating new reinvestigation and appeals processes to be exploited by the trial bar. This bill diminishes the value of a credit score as a determining factor in extending credit--I don't think that is a secondary fact; I think that is the primary goal of this bill--by removing past credit scores after 2 years from a report and prohibiting those scores within the 2-year period from being used as a factor. This bill also arbitrarily changes the time period negative information, such as a missed payment, remain on a consumer's credit report. This bill makes it more difficult for private lenders to compete in the student loan industry by allowing delinquent borrowers or a borrower who has defaulted on a loan to rehabilitate their credit outside of the contractual terms. This bill imposes unfunded mandates on the private sector to really an unprecedented degree. These provisions make clear what Democrats want to accomplish in this bill. They want to socialize credit and the models underlying credit allocation. This bill takes credit reporting out of the hands of the private sector and gives it to the government. Let me be clear. I am no fan of the large credit reporting agencies, also known as CRAs. In fact, during our one hearing on this topic last February, nearly 1 year ago at this point--I use the term loosely--that we discussed this bill, because it was just a discussion draft and much different from what we have before us. But in that hearing, we didn't discuss the implications of this bill or the FCRA. I made it clear at that hearing that I share the chairwoman's concerns with the credit reporting agencies, their lack of competition, and their oligopoly. In fact, there were aspects of the original discussion draft of this bill that are not part of what we have today that I thought had merit and should be explored in greater detail. For example, I have concerns that CRAs' operations are not as consumer-friendly as they could be or should be. Moreover, not once after that hearing did the committee consult with additional subject matter experts on the inefficiencies, ineffectiveness, or improvements needed to the Fair Credit Reporting Act. Not once after that February hearing did we discuss how to make CRAs work better for the consumer. Not once did we have real bipartisan discussions about what we could achieve and get signed into law. This is something that both Republicans and Democrats actually agree on, the need to reform this process. I agree that we should be disclosing public record data sources. I agree we should exclude paid medically necessary medical debt from consumer credit reports. I agree we should prohibit certain adverse information resulting from financial abuse or predatory lending from being included in consumer credit reports. In fact, the substitute amendment I filed with the Rules Committee that was not made in order this day includes the bipartisan reform I described and more. Committee Republicans support reforms such as prohibiting the use of Social Security numbers to verify consumers. Now, this is a primary source and a primary ingredient for identity fraud. We should take action there, and I think we can. Committee Republicans also support facilitating online credit freezes and the removal of credit files for minors and children. We also support studying the use of nontraditional data in credit scoring as well as codifying the Consumer Financial Protection Bureau's, or the CFPB's, credit reporting registry. I think there are things that we can do. Bipartisanship is within our grasp. All my colleagues have to do is reach out and grab it. As I said, Republicans stand ready to work with Democrats to help consumers. But this bill is about socializing credit and credit allocation, and this bill is not the answer to the consumers' challenge. In fact, the Democrats' bill will only hurt the very consumers we are trying to help. Mr. Chairman, I urge my colleagues to oppose this socialization of credit reporting and vote ``no'' on this bill. I reserve the balance of my time.

Mr. McHENRY. Mr. Chair, I yield 2\1/2\ minutes to the gentleman from Missouri (Mr. Luetkemeyer), who is the ranking member of the Consumer Protection and Financial Institutions Subcommittee.

Mr. McHENRY. Mr. Chair, I yield myself the balance of my time. Mr. Chair, this is more aggressive than the bad Federal student loan program. If you are a delinquent borrower, you cannot access this like- kind program. What this amendment is saying is, if you are a delinquent borrower, you can get in the front of the line and get that waived away as if you had been paying the whole time. This is a bad idea. If you want to address the problem, let's address the cost of college, not doing this gamesmanship of trying to socialize on the back end through credit scores and credit reporting agencies. Mr. Chair, I oppose the amendment, and I yield back the balance of my time.

Mr. McHENRY. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Texas (Mr. Williams), my colleague from Weatherford.

Mr. McHENRY. Mr. Chairman, I rise in opposition to this amendment, though I am not opposed to it.

Mr. McHENRY. Mr. Chairman, I reserve the balance of my time.

Mr. McHENRY. Mr. Chair, I yield 3\1/2\ minutes to the gentleman from Kentucky (Mr. Barr), the Republican ranking member of the Oversight and Investigations Subcommittee.

Mr. McHENRY. Mr. Chair, this amendment epitomizes what is wrong with the approach taken by the majority in this bill. This amendment is about socializing credit score models and putting that power within the government, and clearance from the government in order to use different models. In short, this amendment says, if you don't like the outcome of something, we will just have the CFPB lean in and deem it inappropriate. That is what it is about. This amendment directs the CFPB to review the reasons a class of consumers may have been negatively impacted by a newly introduced credit scoring model and determine whether the model is inappropriate. I would say to my colleague, this amendment appears to be duplicative of the authority already given, already vested in the CFPB's organizational statute and in the underlying bill for the CFPB to intervene in private-sector decisions. I would also further ask the House: Do we really want to give a government agency veto power over new credit models? As I raised in our committee markup, as I raised in our hearing back in February, and as I have raised on this day here on the House floor and many times before, I have concerns about the consumer credit reporting agencies and their structure. I think there is a way for us to have a bipartisan consensus. While I respect my colleague on the other side of the aisle, and there are times when we can work together, this is not one of those times. I see this is as further vesting governmental power in something that the private sector should be deciding in the private-sector allocation of risk, rather than socializing credit models. Mr. Chairman, I urge a ``no'' vote, and I reserve the balance of my time.

Mr. McHENRY. Mr. Chairman, I reserve the balance of my time.

Mr. McHENRY. Mr. Chair, again, for the overall bill, to put a bow on this, if you will, this bill is about socializing credit scores. If you socialize credit scores, you can socialize credit. If you can socialize credit, then you can have government make the decision about the allocation of credit in the private sector. This is a larger narrative from the far left in this country, which has now taken the opportunity to attempt to make legislative gains. The President has said he will not sign this bill, thankfully, which is good for the American consumer. Furthermore, I don't see this seeing the light of day in the Senate. Having said that, we still need to have a serious bipartisan conversation about how to reform the credit reporting agencies and the law that underlies their regulatory framework. Mr. Chair, I am grateful for the opportunity to debate here on the House floor. While I am not opposed to this amendment, I remain opposed to the overall bill and will urge my colleagues to vote ``no'' on that. But, again, I commend the gentleman from California (Mr. Panetta) for his offering of a thoughtful amendment dealing with homelessness and raising this issue, not as a local issue, but as one of national import and one worthy of debate here on the House floor. Mr. Chair, I yield back the balance of my time.

Mr. McHENRY. The second document is a letter to Members of the House of Representatives expressing opposition to each of the bills that was included in this overarching bill, including opposition to: H.R. 3621, H.R. 3614, H.R. 3618, H.R. 3622, H.R. 3642, from the United States Chamber of Commerce. Chamber of Commerce of the United States of America, January 27, 2020. To the Members of the U.S. House of Representatives: The U.S. Chamber of Commerce strongly opposes H.R. 3621, the ``Comprehensive Credit Act of 2020,'' which is composed of a number of bills regarding credit reporting that were reported out of the House Financial Services Committee in 2019. The Chamber has previously expressed opposition to each of the bills below which are now included as part of this comprehensive package: H.R. 3621, the ``Student Borrower Credit Improvement Act,'' would arbitrarily remove repayment information regarding student loans issued by private lenders. Reducing the quality of information in credit reports would in the aggregate reduce their utility, making it more difficult for consumers to access credit or other services. H.R. 3614, the ``Restricting Use of Credit Checks for Employment Decisions Act,'' would restrict an employer from initiating a credit check of an employee despite the fact that the Fair Credit Reporting Act requires an employee to first provide consent. This legislation would make it more difficult for employers to review the backgrounds of prospective employees, which would make it more difficult to hire for sensitive positions or would otherwise delay the hiring process. H.R. 3618, the ``Free Credit Scores for Consumers Act,'' would require credit bureaus to pay for and disclose for free a credit scoring model that is owned by a third party. Credit bureaus already provide ample information to consumers at no charge to assist them with understanding their credit standing. The legislation would make it more difficult for credit bureaus to provide for the accurate flow of useful information between consumers, furnishers, and entities that need to make informed decisions. H.R. 3622, the ``Restoring Unfairly Impaired Credit and Protecting Consumers Act,'' would reduce the quality of credit reports by arbitrarily reducing the term of adverse information and instituting redundant remediation mechanisms. Disrupting the utility of information in credit reports would make it more difficult for credit providers, and nonfinancial entities such as telecommunications companies and utilities to efficiently provide their services to consumers. H.R. 3642, the ``Improving Credit Reporting for All Consumers Act,'' would create dispute resolution requirements that are redundant to services voluntarily provided by credit bureaus and existing requirements under both the Fair Credit Reporting Act and a recent agreement among 38 State Attorneys General. Additionally, the legislation would frustrate the ability of credit bureaus to provide information to consumers by imposing new restrictions on the marketing of products intended to improve credit standing. H.R. 3629, the ``Clarity in Credit Score Formation Act of 2019,'' would make the CFPB, not lenders, the de facto underwriter of consumer loans and is redundant to existing supervisory and regulatory authority. The CFPB currently supervises larger participants in consumer reporting under its authority in the Dodd-Frank Act and has broad regulatory authority via enforcement of the Fair Credit Reporting Act. Interference in the proprietary models developed by credit bureaus and used by lenders would increase lenders' risk and decrease their ability to provide objective information. The Chamber urges you to oppose the Comprehensive Credit Act. Sincerely, Neil L. Bradley.

Mr. McHENRY. Mr. Chairman, I yield myself such time as I may consume. I am happy to see my friends on the other side of the aisle take the same interest that we have on this side of the aisle in protecting cybersecurity and protecting consumer data. I think it is great that this is a bipartisan concern that we share. This amendment reaffirms the data security concerns that Republicans have highlighted in the past with respect to credit reporting agencies, including back in February of last year, the only time we had a hearing in the House Financial Services Committee on the credit reporting agencies. We want to ensure that these credit reporting agencies protect our data. The collection and maintenance of our personal information and exposing that to risk is deeply problematic. All we need to do is look back a few years ago to the Equifax breach to understand how vital cybersecurity standards are, not only at the consumer credit reporting agencies, but across the financial sector. I appreciate the gentleman from Maryland using the language from my substitute amendment that I offered before the Rules Committee and before the House Financial Services Committee and incorporating it into this amendment. I am disappointed that the rest of the bill was not as bipartisan as this amendment text. Since this bill is not going anywhere, I would ask whether or not the author of the amendment would be interested in drafting a separate suspensionable--I think it has wide bipartisan support--a suspension- worthy version of this as a stand-alone bill. I yield to the gentleman from Maryland.

Mr. McHENRY. I have the right to close and I intend to do so.

Mr. McHENRY

Mr. McHENRY. Madam Speaker, on that I demand the yeas and nays.