Chairman of the Senate Committee on Banking, Housing and Urban Affairs Calls for CFPB Investigation into Tenant Screening Businesses | Pillsbury – Gra…

Chairman of the Senate Committee on Banking, Housing and Urban Affairs Calls for CFPB Investigation into Tenant Screening Businesses | Pillsbury – Gra…

November 18, 2021 Off By administrator

Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, has written to newly confirmed Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, asking him to review companies in the tenant screening industry for possible Fair Credit Reporting Act violations and other violations of U.S. laws. The CFPB, for its part, has already published a bulletin alerting Consumer Reporting Agencies (CRAs) and other furnishers of consumer information that, as federal, state and local pandemic-related housing protections expire, the Bureau will be giving greater enforcement focus to these businesses’ compliance with accuracy and dispute obligations under the Fair Credit Reporting Act (FCRA) and Regulation V. While it is still unclear whether Director Chopra will direct the Bureau to investigate specific businesses flagged by Chairman Brown, the tenant screening industry will likely face increased scrutiny in the coming months, which may impact their service offerings and cause interruptions for landlords relying on these businesses and services.

There are approximately 2,000 tenant screening companies across the United States. These companies are used by landlords to better identify and perform background checks on prospective tenants. These reports typically provide a prospective tenant’s rental and eviction histories, credit score, debt-to-income ratio, and outstanding credit obligations, among other financial metrics. The reports also usually include a criminal background check, including searches of sex offender registries and other public records searches. Many tenant screening companies then use this information to provide an estimate of the risk that each tenant presents, calculated through proprietary algorithmic formulas. These reports are usually available to landlords at a cost ranging from approximately $5 to $55 per report, usually passed through to the prospective tenant through application fees.

Given the direct impact that these reports have on the ability of prospective tenants to secure housing rentals, the Senate Committee on Banking, Housing, and Urban Affairs has started to turn its attention to allegations that tenant screening reports are regularly including inaccuracies and other misleading information, potentially in violation of the Fair Credit Reporting Act and other laws.

In April 2021, Chairman Brown wrote to 10 companies asking for information on their business practices. In these letters, he flagged concerns that the COVID-19 pandemic and other housing market instability is leading to a “growing number of lower-income renters competing for a limited number of housing units” and that “the results of a tenant screening report can mean the difference between a renter and their family finding a home or being locked out of the rental market.” Sen. Brown also flagged the particular impact that inaccurate information in the reports may have on low-income renters,…

(Excerpt) To read the full article , click here
Image credit: source