Human trafficking survivors would not be subject to negative credit reports under proposal

Survivors of human trafficking would no longer be subject to negative credit reporting under a proposal unveiled Thursday by the federal consumer financial protection agency.

Under the proposed rule, consumer reporting agencies (CRAs) would be prevented from including negative information resulting from abuse of human trafficking survivors. The Consumer Financial Protection Bureau (CFPB) said the rule was required under the Debt Bondage Repair Act (DBRA) passed by Congress and signed into law late last year.

It also asserted that the proposal would aid survivors seeking to open bank accounts, access credit, and gain employment.

The bureau said it is proposing a rule that will include guidelines to:

  • Help survivors know how to report their status as having experienced a form of trafficking. “The Bureau is proposing a broad definition of, and seeking comments on, appropriate forms of documentation to help all survivors receive the protections offered under the Debt Bondage Repair Act,” the agency said. It noted that now, only survivors trafficked abroad, who are now in the U.S., are likely to have a standard form of documentation. The CFPB said it is interested in understanding how to allow multiple types of documentation since survivors may receive documentation from nonprofits, courts, or any level of government (i.e. local, state, tribal, or federal).
  • Require CRAs to block adverse information in consumer reports after receiving a survivor’s submission of documentation. Also, under the proposal, CRAs must notify a survivor of actions taken in response to a submission, retain evidence of the survivor’s submission for seven years, and establish written policies and procedures to remain in compliance with the rule.
  • Make the rules applicable to all CRAs. Aside from the “big three” CRAs (TransUnion, Experian and TransUnion), specialty CRAs will be covered. The CFPB said those include firms focusing on areas like employment screening, tenant screening, check and bank screening, personal property insurance, medical, low-income and subprime, supplementary reports, utilities, retail, and gambling.

Under the legislation, the CFPB said, CRAs are prohibited from providing consumer reports that contain any negative item of information about a survivor of trafficking from any period the survivor was being trafficked. Under the law, the CFPB was required to revise its Regulation V (which protects the confidential information of consumers and which, the CFPB said, ensures consumers’ credit information is fairly reported by CRAs).

CFPB Seeks to Halt Negative Credit Reporting for Survivors of Human Trafficking