Regulating Credit Reporting Agencies

Credit is a vital aspect of the global financial system, as it allows consumers and businesses to maintain a constant flow of money that fuels the economy. Without credit, most individuals would not be able to major purchases like a car or a home, and businesses would not be able to acquire the necessary capital to cover initial costs. Yet credit, as the Latin origin of the word implies, comes a required degree of trust, which for individual consumers is measured by credit reporting agencies with a FICO credit score. Today, three credit reporting agencies – TransUnion, Experian, and Equifax – collect vast amounts of personal information on millions of Americans in order to fulfill this role. While there are existing laws that regulate these agencies, the recent breach of Equifax data, which affected a large percentage of the American population, calls into question whether more regulation is needed. In this report, we address a question posed by the Vermont House Committee on Ways and Means looking into what options state governments have available to regulate credit reporting agencies on behalf of consumers.