Reed leads call for credit bureaus to better protect service members financial reports

PROVIDENCE – Erroneous information that shows up on a credit report can be costly for any consumer – making it harder and more expensive to get a loan – but for U.S. service members, errors on a credit report can have especially severe consequences, such as loss of a security clearance or threaten their career advancement.

Nonetheless, each year, the Consumer Financial Protection Bureau receives thousands of complaints from U.S. service members, military families and veterans about inaccurate information on their credit reports. Now U.S. Sen. Jack Reed, D-R.I., has teamed with Sen. Sherrod Brown, D-Ohio, and others to call for major credit bureaus – Equifax, Experian and TransUnion – to take additional steps to ensure servic emembers and their families are receiving the credit report protections required by law.

“This is about protecting our troops, their families, and our veterans from undue financial hardship, said Reed, a senior member of the Banking Committee and chairman of the Armed Services Committee. “Credit bureaus have a duty to comply with the law and we must hold them accountable. The information in these reports has to be accurate because a lot of big decisions are based on it.

“So if the credit bureau makes an error, there needs to be a way to fix it without burdening the consumer. We will not tolerate credit reporting companies wrongfully charging service members money for services that they are entitled to for free.”

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Reed wrote the bipartisan law that created the CFPB’s Office of Servicemember Affairs, which supports service members, veterans and military families by helping them address unexpected financial challenges and working to protect them in the consumer marketplace.

And in 2018, Reed helped pass a law requiring nationwide credit reporting companies to provide a free electronic credit monitoring service that, at a minimum, notifies active duty members (including reservists called to active service) stationed away from their usual duty station and National Guard members about material changes in their credit files.

Earlier this month, Reed and Brown –  who is chairman of the Senate Committee on Banking, Housing, and Urban Affairs – as well as Sens. Catherine Cortez Masto, D-Nev., Chris Van Hollen, D-Md., and John Fetterman, D-Pa.,  penned a letter to the CEOs of the three major credit reporting bureaus stating that when credit reports contain errors, they should be fixed, and the bureaus themselves have a duty to ensure service members are actually receiving free credit monitoring services, active-duty alerts, and free access to credit reports, to protect these crucial reports from financial scams, identity theft and other errors.

“We are writing to express our concern that service members are not receiving the consumer benefits they are entitled to from credit reporting agencies,” the letter said. “We urge your company to proactively work to ensure service members and their families have the rights that Congress intended them to have.”

Reed noted that credit reports have a substantial impact on many service members’ work. Some service members, and all officers, must pass a national security clearance check that includes a detailed review of their credit history.

Deployed service members may be out of the country and not able to monitor their credit report. Service members are also often targets of identity theft because they must change addresses frequently.