Senators Warren and Schatz Urge Credit Reporting Agencies to Protect Consumers During the Economic Crisis Triggered by COVID-19
Over 26 million Americans filed for unemployment in the last five weeks, unemployment and other benefits have been slow to arrive, and families are receiving bills they cannot afford; Warren, Schatz to credit reporting agencies: "Our economic revival depends on millions of Americans' ability to resume their lives after the pandemic abates and the economy reopens"
Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Brian Schatz (D-Hawai'i) sent a letter to three major credit reporting agencies (CRAs) -- Experian, TransUnion, and Equifax -- about the actions they are taking to ensure that Americans affected by the novel coronavirus disease (COVID-19) pandemic won't have permanent negative damage to their credit scores that will prevent them from recovering from the crisis financially. Their letter urges CRAs to ensure consumers' credit scores are not affected if they take advantage of relief to which they are entitled under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The CARES Act includes a number of protections for homeowners, renters, and student loan borrowers, but these protections do not guarantee that Americans will avoid lower credit scores that could negatively impact their ability to recover from this unprecedented crisis. The CARES Act also won't help countless American families and consumers who have other debts that received no protections, including auto loans, credit card debt, payday loans, and other forms of debt.
"If American families and consumers are piled under a mountain of debt during this pandemic and once it ends, the country will struggle to emerge from a deep recession," Senators Warren and Schatz wrote. "This means that when the crisis is over, months of late or missed payments could add up to not just a mountain of debt, but a cratering credit score that takes away the shovel they might use to dig themselves out."
This is particularly true if consumers receive a blot on their financial records in the form of a lower credit score. Credit scores are crucial tools for Americans seeking to find a new job, take out a loan, buy a new car or house, and even get basic health and other insurance.
"Our economic revival depends on millions of Americans' ability to resume their lives after the pandemic abates and the economy reopens. Permanently marred credit scores pose a risk to individuals and to our collective recovery," concluded the lawmakers.
Senators Warren and Schatz have requested responses to their letters no later than May 1, 2020.
Senator Warren has been fighting to protect consumers during the COVID-19 crisis. Last week, she and Senator Sherrod Brown (D-Ohio) announced a six-part proposal to reduce the debt burden facing millions, including by protecting consumers from the long-term impact of adverse items on their credit reports.
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