Credit reporting agencies, equifax, trans union, and experience. On Consumer Credit reporting. You are watching live coverage here on cspan. Thank you for the Witnesses Today for joining us. Three Witnesses Today, plain and simple, determined the Financial Futures of every american. Equifax, experian, trans union. This countrys biggest credit unions, im sorry, biggest Credit Reporting agencies. As you know, we have talked tremendous power over peoples life. The information you collect and putting peoples Credit Reports determined, determines whether people can get a mortgage or buy a car, where Interest Rates they pay, what credit cards they can get at what rate, whether they will get insurance, what they pay for it, whether they will be able to rent an apartment, whether they will be accepted for a job. All of that, in some, sense is in your hands. These companies are not just keepers of consumer data. They essentially managed or mismanaged, its the case, maybe, americans financial reputations. When your reports matter this much with consequences this drastic, its important that you get it right. It is vitally these reports contained only information that is useful and fair and, above all, accurate. In 2017, when equifax experience the massive data breach, the American Public was frankly, shocked, to find out exactly how much Credit Reporting agencies are involved in their lives. No offense, they dont think about you a whole lot. The company compromised the personal information of more than 147 Million Consumers, including Social Security numbers. Millions of people were forced into a crash course, on how frustrating it can be to deal with Credit Reporting Companies when they make a mistake. They had to place a credits freeze. They had to request their Credit Report. They were told to constantly monitor this information for inaccuracies. People are busy enough with their children and their jobs and their lives. They shouldnt have to spend that kind of time, because some company theyve never heard of screwed up. But thats a breach affected millions of people at once and got a lot of attention. But that was far from the only case of costly mistakes by your companies. Today, Credit Reports are still riddled with errors. According to an ftc study, one and five consumers had errors and at least one of three Credit Reports. One in 20 had errors that affected the likelihood of receiving credit or affected the credits, they are credit right. More than 200 million americans are in experian, equifax, and transunion Credit Reporting system. That means potentially, 40 million customers have errors on their Credit Reports. In 2022 reports, Financial Protection Bureau fired at equifax, experian, and transunion brutally failed to adequately respond to consumers with evers and that reports. After this report, the creek Credit Reporting agencies instituted some reforms to better respond to consumer complaints about errors when theyre Credit Reports. Its an important, long overdue first step. But errors like mixed files, or the information of different consumers appears in the credit file, are still far too common. Mixed files are such a pervasive problem that in 2015, 30 attorney generals settled a lawsuit with three Credit Reporting agencies, understanding you are not ceos then, over this problem, among other reforms the Credit Reporting agencies were required to establish minimum standards for matching criteria and producing mixed files. Its much more than just mixed up files. Some people still very much alive are declared that. They had their identity stolen. The list goes on. Errors are introduced into the system by what are called furniture. Companies supplying information to the reporting agencies. Debt collectors are some of the worst offenders when it comes to supplying wrong information. Cfpb found even though they are that collectors supply just 13 of the accounts to Credit Reports, they are responsible for 40 of the disputes in Credit Reports, 30 , 40 . Americans can be doing it on the reports for deaths, some cases, they do not even know. Its not just errors that do not belong on Credit Reports. Medical debts in particular. Ive spoken to each of you about that. It has absolutely no place on critical reports in 2022. And just in this country, an estimated 43 million americans held 88 billion dollars of medical debt on their Credit Reports. Low income families, black and hispanic households, veterans, older americans, are hit particularly hard. But medical debt can happen to anyone. It doesnt matter if you do everything right. Anyone can get sick. And they want to get in a car accident. Nothing really to do with your ability to pay your bills or, at least, it shouldnt. Medical debt does not correlate with credit risk. It correlates with illness or injury. No one should have financial future destroyed because of an emergency or a sick family member. Its why im asking your companies to stop putting medical debt, period, on your reports. After increasing scrutiny and pressure a year ago, the three if you announced he would significantly change out medical collection that is reported. One of the major reforms announced the removal of all medical deaths of 500 or below on reports. This is a good step, thank you. But its also not enough. If you have 1000 medical debts, you are no less creditworthy than someone with 500. It stems from the same problem. Someone in your family or youve got sick or injured. Cfpb found the remaining medical debt on Credit Reports will disproportionately belong to consumers living in majority minority and lower income neighborhoods. Your Company Provide tenant screaming services, another way you have tremendous power over people lives. Another white your evers can have disastrous consequences. When tenant screening turns up erroneous eviction filings, people cant find a place to live. Because tenant screening reports arent as available as a regular Credit Reports, creditors may cycle through rejection after rejection without even knowing there is an error on their Credit Report. After pressing cfpb to address these errors, i was glad to see they and the ftc announced the request for information on how background screening like tenet screening reports effect renters ability to attain housing. Yesterday, the Committee Held a committee about the challenges americans face affording housing. It is a highly competitive Housing Market. Inaccurate that means renters lose out on a home, making things, of course, worse. Its hard enough for americans to get a foothold in the middle class. Lasting workers should have to attend with careless mistake some companies that have too much power over some of their most important aspects of their lives. It is vital the reports your Companies Issue be accurate, not include medical debt, period, and avarice be fewer and correctable. I dont think its a lot to ask senator scott. Thank you mister chairman, and thank, you for being with us this morning. Really an important topic, when we worked on for the last five years of my time in the senate. Making sure we have access to but best credit we can get based on someone being creditworthy. I think thats really important part. I say that because i look back on my own familys history, back to the 1920s and 30s for my grandfather was growing up in the jim crow south, where we had more to do with your relationships, not credit worthiness. When we move to a model that allows people to access credit based on their relationships, it can sometimes lead to discrimination. We have an objective standard that is applied to everyone fairly and consistently, the nation is a better place. Accessing credit, accessing the american dream, homeownership, its more realistic. Based on her creditworthiness. My story continues in the various direction my grandfathers did in 19. 85, i started my Small Business without any question, i went to the bank and i had a conversation with the banker about assets versus liability. At that point, my best asset was a 1990s, 240 s acts that had 250,000 miles on it. Not necessarily the definition of an asset. I try to use it to borrow some money. They rightly left me out of the bank, but i developed a relationship where we had an opportunity to look at my very like credit score. I didnt have much credit at all. So, that works against you when you are starting to start a new Small Business. You need the revolving line of credit. Banks are less likely to loan against no assets, the ability to come back and forth to the same institution. That is a challenge. The more i work with the bank to appreciate building that credit score, understanding the principles that are so important to american prosperity, i was able to achieve my goal of opening my first Allstate Insurance agency, with the help of a friend who put some money into the business, as well as a bank filing, the bank finally concluding i wasnt appropriate risk. That situation today manifests in different ways. That credit score now impacts your rates and your insurance business, having been in the business, insurance, you are auto insurance. Your home insurance. Not just your loans or, literally, theyre decided by your credit worthiness. Because if i, i think we have to do everything in our power to make sure that as we head towards a continue to make progress on risk based method, that takes the nature of subjective nature out of landing that relied only on relationships, reputation, or word of mouth, and in turn, created, in my opinion, a fairer, objective measure of credit worthiness, increasing access to credit and frankly, making it more inclusive as well. This is so important, because with hard work and responsible financial decisions, anyone can develop and improve they are credit score. And obtain access to credit in a manner that represents their financial opportunity. Increasing taxpayer backed risk in the Housing Market assist administrations economic policies pushes towards a recession, is anything other than equitable. At the same time, the cfpb has the audacity to announce its exploring new avenues of Regulatory Overreach on a whole numbers of different issues, raising from data privacy to late payment fees, despite the fact that the agency itself experienced a data breach. Exposing the information of more than 250,000 americans. And then hiding that breach for several weeks. Its amazing how tirelessly this administration works to put dollars on the sidelines instead of in the taxpayers pockets. I look forward to getting answers and holding the rector shopper responsible. At the end of the day, the data that lenders use becomes less secure, less reliable, and predictive. It will simply result in higher rates and fewer loans made to people at the margins of the credit box. People just like me. Another example of the biden administrations policy hurting the people who can afford the least. However, there is good news. American innovation, the free market competition, or creating new avenues towards prosperity. As technology develops and lenders are able to use new or alternative sources of data, to better predict the risk of default, credit invisible americans will increasingly be able to participate in our financial markets. And that is really good news. Common sense and technological innovation has the potential to bring an estimated 50 million americans with feign or no credit files into the Financial System, and is a goal i have been working on, as i said, beginning for years. Micro to access and inclusion acts, Building Access for veterans act, and finally, the credit score competition act, signed the law in 2018, are all designed to allow for the use of new, reliable, predictive data in our system. As we push forward with the use of technology and new sources of data, which are already showing promise at making our markets fair and accessible, we should also consider what guardrails may be needed to ensure responsible growth and Consumer Protection. I look forward to hearing from the Witnesses Today on this really important topic. And i look forward to asking you some questions as well. Thank, you senator scott. The three witnesses joining us today, mark Bankers Service eo of equifax since april 2015. From our 2016 to april 2018, he served as the board of directors at fico, im sorry. Chris cartwright has earned his presidency of transunion, since may 2019. He joined transunion august 2014. Welcome. Mr. Bryan cassin, service ceo of experian since july 2014. He was previously appointed to the port of cfo on april 2012. Thank you all for joining us and mr. Begor, please begin. Good morning. Chairman brown, Ranking Member scott, distinguished members of the committee, thank you for the opportunity to be here today. Im mark begor, the executive director of equifax. Since 2018, i flew the transformation of our company to build a new equifax and a culture that values and supports consumers, customers, and communities. I recognize the Important Role that equifax plays in the Financial Lives of consumers, and i take this responsibility very seriously. Our Companies Purpose is to help people live their financial best. And equifax its committed to putting consumers first and helping people access useful and affordable Financial Products and services, and responsible, sustainable ways. We know that every financial first, whether its a college loan, a credit card, or a mortgage to purchase i dont, can spur positive economic change. We constantly look for ways to bring greater financial opportunity to more people in more places. Over the past five years, weve invested it incremental more than 1. 5 billion dollars to rebuild our i. T. Infrastructure for the most advanced Cloud Technology capabilities available. This is one of the largest Cloud Investments ever undertaken in our industry. It is changing every facet of our infrastructure and our operations. Our new cloud capabilities are allowing us to enhance the accuracy of data and to more effectively leverage our alternative data to expand access to credit, while also delivering industry leading security. We know that one of the keys to responsibly expanding consumer access to credit and supporting a more inclusive a common enemy is leveraging information that is not traditionally included in the Credit Report. Were focused on Offering Innovative Solutions that can bring increased visibility to underserved consumers. For example, we recently became the first in our industry to provide a new mortgage Credit Report that combines utility and cell phone data with traditional credit data. The majority of American Adults have at least one utility or cell phone bill in their name, and using this Additional Data in a mortgage underwriting could raise the Credit Scores of as many as 2. 4 Million Consumers by an average of 30 points, moving them into a higher score bands, and potentially enabling them to either get approved or to receive more favorable mortgage Interest Rates. In addition to our efforts to expand access to credit, equifax is taking strong steps to be more consumer friendly at every touch. Weve invested over 75 million to improve the overall experience that consumers have with equifax. We are ensuring our written communications are in plain language. We have added tools like video clips to our website to help consumers navigate the dispute process. We have made it easier for consumers to both manage their disputes online, and tracked their disputes throughout the process. We are committed to correcting errors on Consumer Reports quickly and transparently, and we are working with our industry colleagues to limit errors from occurring in the first place. Another element of our focus on consumers is ensuring that we maintain the most accurate data possible. Even one single error on a consumers Credit Report is one ever too many. Its a personal priority for me that Consumers Trust their Credit Reports to contain accurate and complete data. To strengthen our Accuracy Program equifax, we are driving initiatives in three key areas. We are streamlining our dispute processes and rewriting our Consumer Communications to use more plain language. We are implementing automation, to identify errors and data before it