In the wake of the Coronoavirus (COVID-19) pandemic’s effect on the economy, the United States Senate has taken steps towards protecting consumer credit. In a new bill introduced by Senators Brian Schatz and Sherrod Brown, the Fair Credit Reporting Act will be amended to establish a 4-month period (120 days) in which an “adverse item of information relating to a consumer that was the result of any action or inaction that occurred during the covered coronavirus disease (COVID–19) outbreak period” will not result in negative credit reporting. The outbreak period is defined as beginning January 31, 2020 and ending either 120 days after enactment, or 120 days after “the public health emergency declared by the Secretary of Health and Human Services on January 31, 2020 … terminates.” Consumers can extend this 4-month period an additional 9-months if economic trouble continues, so long as they inform a CFPB database.
Another important portion of this bill relates to free, unlimited credit reports and credit scores for all consumers for an entire year from the end of the pandemic.
This is an important bill in that consumers will be sheltered from adverse credit information affecting their post-pandemic economic prospects. Moreover, these protections are not only applicable during this pandemic, but also extend to future disasters as well. It is also noteworthy that this bill applies only to consumer credit and does not impact commercial credit accounts. If you have any questions about this bill and its effect on you, please feel free to reach out to us at 919-859-6840.