Starting Today, New Federal Law Allows Consumers to Place Free Credit Freezes And Yearlong Fraud Alerts

"Starting today, consumers who are concerned about identity theft or data breaches can freeze their credit and place one-year fraud alerts for free.

Under the new Economic Growth, Regulatory Relief, and Consumer Protection Act, consumers in some states – those who previously had to pay fees to freeze their credit – will no longer have to do so.

A credit freeze, also known as a security freeze, restricts access to a consumer’s credit file, making it harder for identity thieves to open new accounts in the consumer’s name. The new law also allows parents to freeze for free the credit of their children who are under 16, while guardians, conservators, and those with a valid power of attorney can get a free freeze for their dependents.

In addition, the new law extends the duration of a fraud alert on a consumer’s credit report from 90 days to one year. A fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account.

As part of its work to implement the new law, the Federal Trade Commission has updated its IdentityTheft.govwebsite with credit bureau contact information, making it easier for consumers to take advantage of the new provisions outlined in the law..."
Credit freezes

Quarterly Report on Household Debt and CreditT

"Aggregate household debt balances increased in the first quarter of 2017, for the 11th consecutive quarter, finally surpassing the 2008Q3 peak of $12.68 trillion. As of March 31, 2017, total household indebtedness was $12.73 trillion, a $149 billion (1.2%) increase from the fourth quarter of 2016. 
Overall household debt is now 14.1% above the 2013Q2 trough.

 Mortgage balances, the largest component of household debt, increased again during the first quarter. Mortgage balances shown on consumer credit reports on March 31 stood at $8.63 trillion, an increase of $147 billion from the fourth quarter of 2016. Balances on home equity lines of credit (HELOC) declined by $17 billion and now stand at $456 billion. Non-housing balances were mixed in the first quarter. Auto loans and student loan balances grew, by $10 billion and $34 billion respectively, while credit card balances declined by $15 billion..."
Household debt and credit

Data Point: Credit Invisibles

"Consumers with limited credit histories reflected in the credit records maintained by the three nationwide credit reporting agencies (NCRAs) face significant challenges in accessing most credit markets.1 NCRA records are often used by lenders when making credit decisions. In particular, lenders often use credit scores, such as one of the FICO or VantageScore scores, that are derived entirely from NCRA records when deciding whether to approve a loan application or in setting a loan’s interest rate. If a consumer does not have a credit record with one of the NCRAs or if the record contains insufficient information to assess her creditworthiness, lenders are much less likely to extend credit. As a result, consumers with limited credit histories can face substantially reduced access to credit.."
credit, consumer finance

FTC Videos Remind Consumers to Check AnnualCreditReport.com

"As consumers turn back their clocks, it’s a good time to check their free annual credit report.

Consumers shopping for a car, looking for a job or just getting their financial house in order should check their free annual credit reports.  The FTC is offering new videos, in English and Spanish, explaining why, and advising them what to do if a report contains inaccurate information.

During the fall, when people turn back their clocks at the end of daylight savings time, it’s a good time to order a free credit report from one of the three national consumer reporting companies at AnnualCreditReport.com or 1-877-322-8228..."
FTC Videos Remind Consumers to Check AnnualCreditReport.com

Building a Better Credit Report
"If you've ever applied for a credit card, a personal loan, or insurance, there's a file about you. This file is known as your credit report. It is chock full of information on where you live, how you pay your bills, and whether you've been sued or arrested, or have filed for bankruptcy. Credit reporting companies sell the information in your report to creditors, insurers, employers, and other businesses with a legitimate need for it. They use the information to evaluate your applications for credit, insurance, employment, or a lease.

Having a good credit report means it will be easier for you to get loans and lower interest rates. Lower interest rates usually translate into smaller monthly payments.

Nevertheless, newspapers, radio, TV, and the Internet are filled with ads for companies and services that promise to erase accurate negative information in your credit report in exchange for a fee. The scam artists who run these ads not only don't deliver — they can't deliver. Only time, a deliberate effort, and a plan to repay your bills will improve your credit as it's detailed in your credit report..."

Credit Card Repayment Calculator
"Welcome to the Federal Reserve’s Credit Card Repayment Calculator. Based on the information you provide, the calculator will give you an estimate of how long it will take you to pay off your credit card balance. The calculator assumes:

you make no more charges; and
you make only the minimum payment each month.

A second calculation can help you develop a plan for paying off your balance sooner..."

"What You Need To Know: New Rules about Credit Decisions and Notices,"
"Lenders often consider a consumer's credit history or credit score when deciding whether, and at what cost, to extend credit. A new online Federal Reserve publication helps consumers better understand new notices they may receive from lenders when credit reports or credit scores affect a decision to grant credit.

The publication, "What You Need To Know: New Rules about Credit Decisions and Notices," describes the types of notices consumer may receive and provides links to sample notices. It includes information about what consumers should do if they receive a notice, including instructions on how to dispute credit report errors..."

New Federal Reserve Publications on Credit Reports and Credit Scores
"A new online resource from the Federal Reserve provides practical answers to questions about credit reports, credit scores, and the importance of protecting personal credit histories. The Consumer's Guide to Credit Reports and Credit Scores describes the content of a credit report, explains how a credit score is used, and discusses the role of credit bureaus in collecting and disseminating this information.

Mortgage lenders, banks, insurers, utilities, employers, and other businesses may obtain credit reports from credit bureaus to assess how an individual manages their financial responsibilities. Consumers need to know what's in their credit report and understand how negative information, such as late payments or a bankruptcy filing, might affect a lender's decision to grant credit. The guide answers questions ranging from "What is a credit score?" to "How can I get a free copy of my credit report?" to "How long does negative information stay on my credit report?" It contains tips to help consumers improve their credit scores and provides step-by-step instructions for correcting an error in a credit report.

The Consumer's Guide to Credit Reports and Credit Scores can be found at www.federalreserve.gov/creditreports. It is one of several online Federal Reserve publications, such as 5 Tips for Improving Your Credit Score and 5 Tips for Getting the Most from Your Credit Card. Many of these publications are available in Spanish."

FTC Testifies on the Rights of Employees Under the Fair Credit Reporting Act
"The Federal Trade Commission today told the Equal Employment Opportunity Commission that the Fair Credit Reporting Act (FCRA) imposes requirements on Consumer Reporting Agencies (CRAs) - which include the three major credit bureaus - and on employers that use the information “to ensure that sensitive consumer report information is used with fairness, impartiality, and respect for consumers’ privacy.”

Commission testimony given by Maneesha Mithal, Associate Director of the FTC’s Division of Privacy and Identity Protection, states that FCRA requirements placed on CRAs and employers are designed to promote privacy, accuracy, and fairness in the use of consumer reports. For example, before giving a consumer report to an employer, the CRA must take reasonable steps to ensure that the employer has a legitimate basis to obtain the report; must inform the employer of his or her obligation to provide certain notices to consumers; and must obtain the employer’s certification that he or she is complying with the FCRA and will not use consumer report information in violation of equal opportunity laws..."

SEC Issues Report Cautioning Credit Rating Agencies
"The Securities and Exchange Commission today issued a report cautioning credit rating agencies about deceptive ratings conduct and the importance of sufficient internal controls over the policies, procedures, and methodologies the firms use to determine credit ratings.

The SEC's Report of Investigation stems from an Enforcement Division inquiry into whether Moody's Investors Service, Inc. (MIS) — the credit rating business segment of Moody's Corporation — violated the registration provisions or the antifraud provisions of the federal securities laws..."

New Credit Rules Effective August 22, 2010
"More new rules from the Federal Reserve mean more new credit card protections for you. Here are some key changes you should expect from your credit card company beginning on August 22, 2010:

Reasonable penalty fees

Let's say you are late making your minimum payment.

Today: Your late payment fee may be as high as $39, and you likely pay the same fee whether you are late with a $20 minimum payment or a $100 minimum payment.
Under the new rules: Your credit card company cannot charge you a fee of more than $25 unless:
One of your last six payments was late, in which case your fee may be up to $35; or
Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.
In addition, your credit card company cannot charge a late payment fee that is greater than your minimum payment. So, if your minimum payment is $20, your late payment fee can't be more than $20. Similarly, if you exceed your credit limit by $5, you can't be charged an over-the-limit fee of more than $5..."

FTC Proposes Changes to Update and Improve Credit Reporting Notices
"The Federal Trade Commission is proposing revisions to the notices that consumer reporting agencies provide to consumers, and to users and furnishers of credit report information under the Fair Credit Reporting Act (FCRA). The FCRA requires the FTC to publish model notices for several forms that must be provided by consumer reporting agencies. The proposed changes are designed to reflect new rules that the FTC and other financial regulators have enacted under the Fair and Accurate Credit Transactions Act of 2003, and to make the notices more useful and easier to understand.

In addition to revising the general Summary of Rights notice, which informs consumers about their FCRA rights, such as how to obtain a free credit report and dispute inaccurate information in credit reports, the FTC also is proposing improvements to the notices that credit reporting agencies provide to users and furnishers of credit report information. The User Notice and Furnisher Notice inform users and furnishers of their obligation to provide certain protections to consumers. The model notices were originally issued in 1997 and revised in 2004. The FTC is accepting public comments on the proposed changes until September 21, 2010. The Commission vote authorizing the Federal Register notice was 5-0. (The staff contact is Pavneet Singh, Bureau of Consumer Protection, 202-326-2252.).."

Small Business and Credit: How Small Business Uses Bank Credit, Trade Credit or No Credit
"Today the Office of Advocacy released a study examining the type of credit utilized by small business. Bank Credit, Trade Credit or No Credit: Evidence from the Surveys of Small Business Finances, by Rebel A. Cole, compares firms that use credit (leveraged) with those that do not (unleveraged). The study also looks at which kind of credit leveraged firms use–bank credit (loans or lines of credit) trade credit (from suppliers) or both. The study found that the two types of credit (bank credit and trade credit) used by small firms are complements, with many small firms using both types of credit simultaneously.

“Access to credit is one of the most important issues facing small business today” said Acting Chief Counsel for Advocacy Susan Walthall. “A study that provides a better understanding of the credit used by small business is invaluable to policymakers, small business and their suppliers.”

The study finds that small firms that use no credit are significantly smaller, more profitable, more liquid, and have better credit quality; yet they hold fewer tangible assets. The study also finds that those firms that use credit are larger, and the amount of credit used as a percentage of assets is positively related to the firm’s liquidity. In addition, three-fifths of the small firms that use credit use trade credit..."
View full report

FTC Amends Free Credit Reports Rule To Help Consumers Steer Clear of ‘Free’ Offers that Cost Money
"Starting April 1, advertising for “free credit reports” will require new disclosures to help consumers avoid confusing “free” offers – which often require consumers to spend money on credit monitoring or other products or services – with the no-strings-attached credit reports available at AnnualCreditReport.com, or 877-322-8228.

The Federal Trade Commission’s Free Credit Reports Rule will require new prominent disclosures in advertisements for “free credit reports.” For example, any Web site offering free credit reports must include a disclosure, across the top of each page that mentions free credit reports, which states:

THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV.
You have the right to a free credit report from AnnualCreditReport.com
or 877-322-8228, the ONLY authorized source under federal law..."

From the GovGab blog:
Keep Your Free Credit Report Free
"I'm sure after your Black Friday shopping some of you are wondering if you hurt your credit. By law you are entitled to one free credit report a year from each of the major credit bureaus---Experian, Equifax and TransUnion---and you can find out how to get it at annualcreditreport.com.

It's important to go to that website in particular because as Colleen showed us back in March some websites lure you in and charge you monthly fees. You may have seen TV advertisements from other companies which show people singing about their misfortune due to not checking their credit. When I wanted to check my credit, I signed up for a credit report from one of these websites. Suddenly, I found myself paying $15 a month to find out that nothing on my credit report had changed.

The Federal Trade Commission (FTC) gets complaints about situations like mine and has aired advertisements like the one above to get people to the right website. In October, the FTC proposed new rules to curb consumer confusion and stop deceptive marketing regarding free credit report advertisements. The proposed rules include requirements for these companies to put disclaimers on their advertisements and websites so consumers are less confused. FTC's deadline to implement the new rules is February 22, 2010.

Agencies Publish Final Rules and Guidelines to Promote Accurate Reports About Consumers
"The federal financial regulatory agencies and the Federal Trade Commission yesterday published final rules and guidelines to promote the accuracy and integrity of information furnished to credit bureaus and other consumer reporting agencies, and widely used to determine consumers' eligibility for credit, employment, insurance, and rental housing.

As required by the Fair and Accurate Credit Transactions Act, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Federal Trade Commission, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision are publishing these final rules and guidelines, with an effective date of July 1, 2010.

Under the rules, entities that furnish information about consumers to consumer reporting agencies generally must include a consumer's credit limit in the information provided. The federal agencies are also publishing an Advance Notice of Proposed Rulemaking (ANPR) to identify possible additions to the information that furnishers must provide to consumer reporting agencies, such as the account opening date.

Also, under the rules, if a consumer believes his or her credit report includes inaccurate information, the consumer may submit a dispute directly to the entity that provided the information to the consumer reporting agency, and that entity must investigate the dispute. The rules do not change a consumer's ability to submit a dispute to a consumer reporting agency or a furnisher's duty to investigate a dispute referred by a reporting agency."

Chairman Ben S. Bernanke, At the National Press Club Luncheon, National Press Club, Washington, D.C. February 18, 2009.
"Federal Reserve Policies to Ease Credit and Their Implications for the Fed's Balance Sheet"

Hearing on Causes and Effects of the Lehman Brothers Bankruptcy, Committee on Oversight and Government Reform
"The Committee held a hearing to examine the regulatory mistakes and financial excesses that led to the bankruptcy filing by Lehman Brothers. The hearing was held at 10:00 a.m. on October 6, 2008, in Rayburn House Office Building room 2154."

Examining the Causes of the Credit Crisis of 2008, Minority Staff Analysis[Republicans]
"In the midst of the most serious financial crisis in a generation, some claim that deregulation is entirely to blame. This is simply not true and more importantly serves to grossly oversimplify a problem whose roots run deep and involve myriad actors and issues. The simple truth is that many share the blame, and pointing to just one person or organization does a disservice to the American people.

In a time of crisis, the American people cannot afford the same old partisan finger pointing; they need and deserve real, non-partisan oversight. We need a series of hearings that will focus on the root causes and how we can fix a system in order to avoid financial meltdowns in the future. This minority staff analysis attempts to objectively explore the causes of the financial crisis we are in and how companies like Lehman Brothers and AIG contributed to this crisis..."

SEC Proposes Comprehensive Reforms to Bring Increased Transparency to Credit Rating Process
"The Securities and Exchange Commission today voted to formally propose a comprehensive series of credit rating agency reforms to bring increased transparency to the ratings process and curb practices that contributed to recent turmoil in the credit markets."