Fair Credit Reporting Act

Elizabeth Warren Bill Targets Employer Use of Credit Reports in Hiring

A new bill, introduced by Senator Elizabeth Warren and Representative Steve Cohen, aims to prohibit employers from using credit checks during the hiring process. The legislation seeks to amend the Fair Credit Reporting Act, preventing employers from requesting or considering an applicant’s credit history. This action is based on the assertion that the practice disproportionately impacts minorities and women, and has no correlation to job performance. The proposed bill follows a trend, as multiple states and cities have already implemented similar bans.

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Federal Judge Reverses Rule Protecting Americans from Medical Debt in Credit Reports

In a recent ruling, a federal judge in Texas overturned a Biden administration rule aimed at removing medical debt from credit reports, impacting approximately 15 million Americans. The rule, which sought to alter how credit scores are calculated by removing $50 million in medical debt, was deemed unlawful by Judge Sean Jordan, who argued the Consumer Financial Protection Bureau (CFPB) exceeded its authority under the Fair Credit Reporting Act. The CFPB had projected that the changes would improve credit scores and increase mortgage approvals. The judge’s decision prevents these changes from being implemented, but he did note the bureau can “encourage” creditors to use other categories of information.

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