Create a public credit reporting agency

President Joe Biden did not deliver on a campaign promise to create a new agency within the Consumer Financial Protection Bureau to provide credit scores.

Currently, the three private agencies — Equifax, Experian, and TransUnion — collect individuals' credit account information, including the size of loans outstanding, current credit card balances and problems with past payments, adverse judgments and bankruptcies. Financial institutions use this information to help decide the risks involved in offering people loans and lines of credit.

Critics, including Rep. Maxine Waters, D-Calif., have accused the three private agencies of disadvantaging victims of identity theft, predatory lending, and reporting errors — problems they argue a public alternative could ease.

During Biden's presidency, the Consumer Financial Protection Bureau, an independent federal agency that applies and enforces federal consumer financial law, has taken oversight of the three private agencies. Along with the Federal Trade Commission, the bureau reached a settlement agreement with TransUnion over allegations of inaccuracies in its reports about tenants and published a report detailing consumer complaints about all three private agencies' practices.

However, the administration did not launch a new, public credit reporting agency, as Biden promised. 

"Nothing has changed" on creating a new public agency, said Thomas Kingsley, director of financial services policy at the American Action Forum, a center-right think tank.

We rate this a Promise Broken.

President Joe Biden's campaign proposal to create a new agency within the Consumer Financial Protection Bureau to provide credit scores has not been successful.

The Consumer Financial Protection Bureau, which implements and enforces federal consumer financial law, told PolitiFact it has "taken significant actions" to help consumers combat coercion through increased guidance to the consumer reporting industry, agency enforcement and rulemaking powers.

A bureau spokesperson also said the agency is "taking an expansive look at" how to hold the largest three credit reporting agencies — Experian, Equifax and TransUnion (which are all private) — accountable for complying with their legal obligations to investigate consumers' disputes and correct errors, among other things.

But the agency did not confirm the creation of a public credit reporting entity, as Biden promised.

Rep. Ayanna Pressley, D- Mass., in July introduced a bill to amend the Fair Credit Reporting Act and require nationwide consumer reporting agencies to use a person's current legal name on consumer reports, among other documents. The bill's main goal is to protect transgender people from unlawful discrimination based on their gender identity. It did not propose creating a public credit reporting agency.

A separate bill that Pressley introduced in 2021, the Comprehensive CREDIT Act of 2021, aimed to overhaul credit agency regulation but also left out a public credit reporting agency. Neither bill moved out of committee for a full House review.

Other credit reform bills died in the Senate of the current 117th Congress.

Many were proposed after a June 2021 House Financial Services Committee hearing on racial and income inequities in the credit reporting system.

PolitiFact contacted the press office of Rep. Maxine Waters, D-Calif., who chairs the House Financial Services Committee, inquiring about actions taken to advance Biden's promise. We did not hear back.

Dan Quan, an adjunct scholar at the Cato Institute's Center for Monetary Policy and Financial Alternatives who testified at the House Financial Services Committee hearing, told PolitiFact that without Congress passing a law authorizing a public credit reporting agency, the Consumer Financial Protection Bureau cannot create it. Yet even if one were to be created, he said "accuracy still has been a very thorny issue" of the regulator's recent work.

Overall, despite the agency's latest efforts to hold the consumer financial reporting industry accountable, there haven't been substantial actions from the Biden administration or Congress to move forward Biden's pledge to create a new public credit reporting agency. We rate this promise Stalled.

As a presidential candidate, Joe Biden proposed to create a new agency within the Consumer Financial Protection Bureau to provide credit scores, rather than relying only on the three private agencies that currently track Americans' credit, TransUnion, Equifax, and Experian.

On June 29, the House Financial Services Committee held a hearing on several legislative proposals on credit reporting, including one that would support Biden's promise, though no more concrete action has followed.

In announcing the hearing, the committee argued that "for far too long, our credit reporting system has kept people of color and low-income persons from access to capital to start a small business; access to mortgage loans to become homeowners; and access to credit to meet financial emergencies."

In a statement, the committee's chair, Rep. Maxine Waters, D-Calif., said that the current system disadvantages people who have been the victims of identity theft, predatory lending, or reporting errors in the system. She added that the economic disruptions from the pandemic have worsened the challenges for many Americans in keeping a strong credit score. 

In advance of the hearing, Waters asked her staff to draw up a "discussion draft" of legislation to create a public credit reporting agency within the Consumer Financial Protection Bureau to provide credit scores in ways that do not have a discriminatory impact. She said her view is that "creating a consumer-oriented public credit reporting agency would be a major upgrade" over the current credit reporting system. 

The hearing also addressed other proposed bills that would overhaul credit agency regulation but would not create a public agency. 

Much work remains before Biden's promise is fulfilled, but the House hearing shows that it is on Congress' radar. We rate the promise In the Works.