California Democratic Congresswoman Maxine Waters wants Consumer Financial Protection Bureau Director Rohit Chopra to put a “moratorium” on Equifax, after it reported faulty credit scores of millions of consumers.
Waters, who chairs the House Financial Services Committee, asked Chopra to stop the credit bureau from sending scores to financial institutions until it can demonstrate it has “the necessary systems and controls to ensure each credit score they provide on millions of consumers is verified to be accurate.”
“Equifax’s latest egregious abuse of consumers and its leadership’s team’s efforts to downplay the harm is yet another example of harm caused by what is quickly becoming a recidivist bad actor,” said Waters.
In May, Equifax told Fannie Mae and Freddie Mac that a “coding issue” may have resulted in erroneous consumer credit scores and credit data the company reported for about three weeks. Equifax CEO Mark Begor downplayed the impact at a trade conference, the Wall Street Journal reported, saying the impact would be “quite small, not something that’s meaningful to Equifax.”
Fannie Mae and Freddie Mac rely on Equifax, as well as the other credit reporting bureaus, to determine loan pricing. In a letter to lenders earlier this year, Freddie Mac said the error “may have impacted” 12% of credit reports issued during this period.
“Any lender that received credit report data directly from Equifax online or via a third-party consumer reporting agency/ reseller over this period may be affected by this incident,” a Freddie Mac official wrote in a letter to lenders at the time.
Fannie Mae declined to comment on a potential Equifax moratorium. Freddie Mac did not respond to a request to comment.
An Equifax spokesperson said Equifax had fixed the issue “months ago and we have further strengthened our processes and data controls since that time.”
“We are working closely with our customers on this issue and stand behind our customers and impacted consumers,” an Equifax spokesperson said. “We will respond transparently to the letters we have received requesting additional information.”
The CFPB has the authority to seek “limits on the activities or functions” of a firm for violations of laws, regulations, and orders, Waters said in her letter to the CFPB.
Earlier this year, in the context of repeat offenders, Chopra said the CFPB should use that statutory authority.
“We need to move away from just monetary penalties and consider an arsenal of options that really work to stop repeat offenses,” said Chopra.
Equifax has settled with the CFPB twice in recent years over allegations it harmed consumers.
In 2017, it paid $3.8 million in restitution to harmed consumers, along with a $2.5 million civil money penalty, for alleged violations of consumer financial protection laws. In 2019, Equifax settled with the Federal Trade Commission, the CFPB and states for up to $700 million, to resolve allegations that it shared the information of 147 million consumers.
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