Equifax And Other Credit Bureaus Avoid Oversight In Washington, D.C. The day that Equifax said millions of Americans' personal information had been exposed, lawmakers were considering legislation the industry favored. Now, some are calling for tougher regulation.
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Equifax Breach Puts Credit Bureaus' Oversight In Question

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Equifax Breach Puts Credit Bureaus' Oversight In Question

Equifax Breach Puts Credit Bureaus' Oversight In Question

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DAVID GREENE, HOST:

A hundred and forty-three million. That is the number of Americans whose personal information may have been exposed in the recent data breach at Equifax. This led to a lawsuit against the company by the state of Massachusetts, an investigation by the Federal Trade Commission, also the promise of congressional hearings. It has also shown just how much clout the big three credit-reporting companies have in Washington. Here's NPR's Brian Naylor.

BRIAN NAYLOR, BYLINE: The credit-reporting companies have to comply with rules set by the Federal Trade Commission and the Consumer Financial Protection Bureau. They regulate how the companies can sell your financial data to other companies. But protecting that data is a kind of regulatory black hole. There is very little oversight, say, compared to banks. Rohit Chopra is a former assistant director of the Financial Protection Bureau.

ROHIT CHOPRA: The meltdown at Equifax should be a wake-up call to the public about the outsized role credit-reporting companies play in our lives even without our consent.

NAYLOR: Chopra, now with the Consumer Federation of America, says there are no rules protecting consumers' data or that require credit bureaus to immediately notify consumers in the event of a breach. It took Equifax some six weeks to reveal the hack and left it up to consumers to try to find out if their data had been stolen. Chopra says people have little control over their information.

CHOPRA: Credit bureaus make most of their money selling your information to financial companies, and in some ways you're not the customer, you're the product.

NAYLOR: And Ed Mierzwinski of the U.S. Public Interest Research Group says when it comes to choosing a credit bureau, consumers have no choice.

ED MIERZWINSKI: If you don't like AT&T or Verizon, you can go to T-Mobile to take your business elsewhere. You vote with your feet. You cannot vote with your feet with the credit bureau. You're stuck with them.

NAYLOR: Mierzwinski says the three credit bureaus have fought attempts to make them more transparent. The three companies Equifax, Experian and TransUnion spent nearly $3 billion to lobby lawmakers last year, according to figures compiled by the Center for Responsive Politics. In fact, he says, House lawmakers were considering legislation the industry favored on September 7th.

MIERZWINSKI: On the day of the Equifax breach announcement, the House was holding a hearing on not one but two bills to weaken consumer protections over the credit bureaus.

NAYLOR: One of the measures would cap the amount of damages that consumers could be awarded in a lawsuit against the companies. Its sponsor, Georgia Republican Barry Loudermilk, defended the bill at that hearing.

(SOUNDBITE OF ARCHIVED RECORDING)

BARRY LOUDERMILK: It's also been presented that this is a credit bureau protection act, and this is false. This is to protect consumers and all Americans.

NAYLOR: Since the breach was revealed, Loudermilk issued a statement decrying, quote, "unfounded attacks" on him and saying his committee has not scheduled further action on the measure. Brian Naylor, NPR News, Washington.

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