CFPB proposes rule to help survivors of human trafficking get credit

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On April 7, 2022, the Consumer Financial Protection Bureau (CFPB) announcement he proposes a rule that would help survivors of human trafficking achieve financial independence. The proposed rule would help survivors of human trafficking seeking to open bank accounts, access credit and find jobs, by preventing credit reporting agencies (CRAs) from reporting negative information about survivors resulting from their abuse. The CFPB reports that human trafficking in the United States affects hundreds of thousands of victims and families, and that government efforts are needed to address the needs of survivors who have suffered financial abuse, as they attempt to rebuild their financial lives.

The CFPB Notice of Proposed Rulemaking follows the recently enacted Debt Bondage Relief Act, which requires the CFPB to use its regulatory powers to implement the law through rule changes to Regulation V, which ensures that consumer credit information are reported fairly by rating agencies. The Debt Bondage Relief Act prohibits rating agencies from providing consumer reports containing negative information about a survivor of human trafficking from any period during which the survivor was trafficked. Accordingly, the CFPB’s proposed rule, if enacted, will include guidelines to (i) assist survivors in submitting documentation to CRAs to report their status as having experienced a form of trafficking; (ii) require rating agencies to block adverse information in consumer statements after receiving a survivor’s submission of documents, to notify a survivor of actions taken in response to a submission, and to retain evidence of the survivor’s submission. surviving for seven years; and (iii) make the rules applicable to all credit rating agencies, regardless of scope or scope, including specialist rating agencies focused on areas such as job screening, tenant screening, check and bank verification, personal property insurance and medical insurance.

In its advisory, the CFPB notes that “in the United States, human traffickers coerce victims into engaging in the sex trade and working in legal and non-legal industries and sectors, including, for example , agriculture, janitorial services, construction, landscaping, restaurants, factories, childcare, disability care, domestic work, salon services, massage parlours, trafficking and begging, and drug trafficking and distribution.The CFPB further reports that while being trafficked, many of these victims suffer financial exploitation, which is used by traffickers as means of making money and as a method of control. For example, traffickers can accumulate charges in the name of survivors and on their accounts, knowing that afterwards their victims will not be able to rent an apartment, buy a car for all er work, or even find a job with a decent salary. The rule proposed by the CFPB is therefore essential to the ability of victims to be able to take basic measures such as obtaining housing and employment and to move towards greater stability and independence. financial.

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