The chief executives of the three major credit reporting agencies yesterday testified before the Senate Banking Committee that they would exclude all medical debts from consumers’ credit reports if they were ordered to do so by the Consumer Financial Protection Bureau, but only if they were ordered to do so. The CEOs stood their ground despite relentless grilling from Democrats like Sen. Sherrod Brown [D-Ohio], the chair of the committee, and Sen. Elizabeth Warren [D-Mass.].
When Mark Begor, the chief executive of Equifax said he did not have information to indicate whether medical debt was predictive of a consumer’s ability to pay their bills, Sen. Warren went on the attack.
“You don’t have that information available?” she said. “Are you kidding me? You are the head of one of the biggest credit reporting agencies in the country and you don’t know the relative predictability of one of the major forms of debt that you report on?”
Then Sen. Warren asked if Begor would remove medical debt from credit reports if the CFPB determined that medical debt tradelines had too many errors, and Begor said “we’d certainly support that.”
[EDITOR’S NOTE: This is the point where you mark your calendars and start counting the days until the CFPB issues a report on the volume of errors that exist on medical debt tradelines on consumers’ credit reports]
Said Brian Cassin, the CEO of Experian, when asked the same question: “If the CFPB directs us, of course we would comply with that. If the CFPB concluded that it was so problematic and that the industry also agreed that it wasn’t an issue to remove that data from credit reports, we would do so too, but I think it is a complex issue, Senator.”
Yesterday marked the first time that the CEOs of all three major credit reporting agencies testified before Congress at the same time.
Republicans, meanwhile, lauded the objective approach used by the credit reporting agencies to determine a consumer’s creditworthiness, saying the models used by Experian, Equifax, and TransUnion remove subjectivity and potential discrimination from the process.
“When we move towards a model that allows people to access credit based on their relationships, it can sometimes lead to discrimination,” said Sen. Tim Scott {R-S.C.], the Committee’s top Republican. “But when we have an objective standard that is applied to everyone fairly and consistently, the nation is a better place.”