Chairwoman Maxine Waters and Democrats on the House Financial Services Committee are considering a dramatic overhaul of the credit reporting system within the United States.
The legislation, the Comprehensive CREDIT Act and the Protecting Your Credit Score Act of 2021, was passed out of committee before the beginning of the coronavirus pandemic. The bills were previously introduced by a member of the Democratic “squad” and would implement a new system — similar to that of China.
“Good credit is a gateway to wealth. Yet, 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,” Waters argued in a recent committee hearing.
As a condition of the overhaul, sections of the credit score reporting industry would be taken over and run by the federal government — a mass expansion of the role the government currently plays in the sector. Waters said her goal is to make credit reporting “less racist.”
Further, Waters hosted the counsel for the National Consumer Law Center, Chi Chi Wu, in a recent committee hearing. Wu fiercely advocated for the change of the system. Wu said the shift “would be a major upgrade over today’s broken, biased credit reporting system.”
In line with the desired changes, The Wall Street Journal recently reported that some banks have “issued credit cards to people with no credit scores.”
Many opponents argue that the move to overhaul the credit system is another step in the leftward march of Democratic House members. For example, among many other developments, House Democrats have supported a push to make COVID-19 vaccines mandatory for military service members after low vaccination rates.
— — —