March 02, 2021

Warren and Booker to CFPB: How Are You Preventing Tenant Screening Technologies From Hurting Tenants of Color

Text of Letter (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Cory Booker (D-N.J.), along with Senators Ron Wyden (D-Ore.), Edward J. Markey (D-Mass.), Chris Van Hollen (D-Md.), and Richard Blumenthal (D-Conn.), sent a letter requesting information from the Consumer Financial Protection Bureau (CFPB) about its oversight authority and regulatory history with regard to tenant screening technology companies, which approximately 90% of landlords use for reviewing income and employment history, eviction history, and criminal background to make decisions about whether to rent to a potential tenant. However, these data sources are often plagued by inaccuracies and are known to collect faulty, publicly available data from court records -- disproportionately harming tenants of color. 

"We are particularly concerned that communities of color that have been disproportionately affected by job losses in the pandemic, and have historically been precluded from homeownership, will be the hardest hit, and we write to request more information on the regulation of these tenant screening software companies," wrote the lawmakers. "As a direct result of our nation's legacy of racist, harmful policies, Black families are less likely to own homes, less likely to have generational wealth from past homeownership to afford a down payment, and more likely to be renters - so Black families are at greater risk in the absence of renter protections."

Many tenant screening companies employ search algorithms and use web scrapers to search for and collect data on publicly available court websites. Companies then compile this data into reports containing either a numerical recommendation score or a "thumbs-up or thumbs-down" recommendation of whether a landlord should rent to the potential tenant. However, many screening services only search for whether the potential tenant has been named in an eviction case - and don't include the reasons for the landlord filing the eviction, how long ago it occurred, or the outcome of the case including whether it was dismissed. Because of these and other flaws, renters can find themselves blacklisted as a result of incomplete data from the screening software.

"This problem of incomplete and incorrect data on eviction filings poses a risk to renters every year, but may create a heightened threat in 2021," wrote the lawmakers. "Due to the economic and housing instability wrought by the COVID-19 pandemic, an estimated 30-40 million Americans remain at risk of eviction; in January 2021, more than 20% of renters reported being behind on rent."

These evictions pose a severe threat to families and to public health, and people of color are disproportionately at risk of the harms of eviction. Communities of color and women have been hardest hit by job losses during the pandemic-with women of color at particular risk.

"It is vital, with the recent wave of evictions nationwide caused by the pandemic, that these companies do not further disadvantage Americans looking to find safe and reliable housing," concluded the lawmakers

The senators have requested a response by no later than March 14, 2021. 

This letter is the latest in a broad series of oversight inquiries into concerns of bias in banking, health, criminal justice, and employment technology disproportionately impacting communities of color.

  • In January 2021, Senators Warren, Booker, and Wyden urged U.S. Food and Drug Administration (FDA) to address concerns about dangerous pulse oximeter inaccuracies for patients of color.
  • In September 2020, Senators Warren, Wyden, Booker, and Congresswoman Barbara Lee (D-Calif.) questioned the use of race-based clinical algorithms in standard medical practices. Five months later in February 2021, the Agency for Healthcare Research and Quality approved their request.
  • In November 2019, Senators Warren and Sherrod Brown (D-Ohio) sent a letter to the CFPB, following reports of alleged gender discrimination in underwriting for the Apple Card, which is issued by Goldman Sachs. 
  • In August 2019, Senator Warren, along with Representatives Raja Kristhnamoorthi (D-Ill.), Ayanna Pressley (D-Mass.), and Katie Porter (D-Calif.), pressed the CFPB for information about a proposal that would indefinitely exempt financial technology companies from complying with consumer protection and anti-discrimination laws.
  • In June 2019, Senator Warren asked regulators about discrimination built into automated lending decisions that resulted in Latino and Black borrowers being charged higher interest rates.