The following statement was delivered by Beverly Anderson to the House Financial Services Subcommittee on Oversight and Investigations in a hearing entitled Consumer Credit Reporting: Assessing Accuracy and Compliance on May 26, 2021. Beverly Anderson’s full written testimony can be found here.
Chairman Green, Ranking Member Barr, and members of the Subcommittee, thank you for the opportunity to testify today. I am Beverly Anderson, President of Global Consumer Solutions. I am responsible for providing free and paid Credit and Identity products, services and education to consumers.
I want to recognize that credit reporting accuracy is a common priority that Equifax shares with consumers, lawmakers, regulators, and financial institutions. Under the Fair Credit Reporting Act, consumer reporting agencies and data furnishers must meet stringent requirements of accuracy, fairness and privacy.
I have a personal passion to support financial inclusion, and a professional responsibility to assist consumers as they consider their most significant financial decisions. I understand how frustrating it can be for a consumer to be on the cusp of an exciting financial event only to discover an issue with their credit report. When I hear these stories, it strengthens my resolve to do better.
The increase in complaints against Equifax through the CFPB Consumer Complaint Database is concerning. I interpret the increase not as an indictment that the credit bureau system is broken, but rather as evidence that the national credit bureaus play an important role in facilitating the dispute process between consumers and their creditors. Let me briefly review three factors to contextualize the increase in complaint volume.
First, consumers submitted more complaints against the national credit bureaus through the CFPB portal as the CARES Act protections appeared on their credit reports. The COVID pandemic presented an extraordinary set of challenges to American consumers. Congress moved quickly in early 2020 to pass the CARES Act that included new consumer protections such as mortgage forbearance, eviction moratoria, and a pause on student loan payments. As a result, lenders took swift action to comply with the new CARES Act provisions and data reporting requirements.
With the combination of consumer economic uncertainty and the implementation of new loan accommodations, consumers reviewed their credit reports more often.
Second, consumers routinely submit complaints to the CFPB that are not complaints about credit bureau actions, but rather disputes about data reported to us. Consumer reporting agencies serve as the intermediary between consumers and their lenders. Our data show that 95% of the portal complaints involve disputes that typically relate to information provided by a lender, an outdated address, or a credit score. Therefore, most complaints against the national credit bureaus in the CFPB portal should not be attributed to errors made by the credit bureaus.
Third, the portal has been inundated by submissions from credit repair organizations disputing adverse but accurate information on consumer reports. Recent internal Equifax reviews indicate that 65% of complaints in the portal appear to be associated with credit repair organizations.
Let me close my opening remarks by reviewing Equifax’s efforts to assist consumers through the pandemic. In April 2020 and at my direction, we quickly launched a COVID and Credit Financial Resource Center to help consumers understand and evaluate the impact of the pandemic on their finances. I personally conducted public webinars and recorded podcasts to assist consumers.
As the pandemic took hold, the three national credit bureaus collectively decided to provide consumers with free credit reports each week. In March of this year, we extended the initiative through April 2022.
Equifax continues to invest millions of dollars to deliver exceptional care to consumers in our quest to become the most consumer-friendly CRA. We modernized our telephony and back-office infrastructure, automated core processes, expanded call center hours, and upskilled our agents. My goal is for Equifax to be accessible, responsive, caring and efficient at every touchpoint in a consumer’s engagement.
I am proud of the work the Equifax team has done to assist consumers through the pandemic and pledge to do more. I look forward to answering your questions