Federal: AFC Letter in Support of the Ending Scam Credit Repair Act

The Honorable Young Kim
U.S. House of Representatives
Washington, DC 20515

The Honorable Sarah McBride
U.S. House of Representatives
Washington, DC 20515

Re: The American Fintech Council’s Support of the Ending Scam Credit Repair Act

Dear Representatives Kim and McBride,

On behalf of our members1 , we are writing to express our strong support for the Ending Scam Credit Repair Act (the Act) and thank you for your bipartisan leadership on this issue.

The American Fintech Council’s (AFC) mission is to promote an innovative, transparent, inclusive, and customer-centric financial system by fostering responsible innovation in financial services and encouraging sound public policy. AFC members are at the forefront of fostering competition in consumer finance and pioneering ways to better serve underserved consumer segments and geographies. Our members are also improving access to financial services and increasing overall competition in the financial services industry by supporting the responsible growth of lending and lowering the cost of financial transactions, allowing them to help meet demand for high-quality, affordable financial products.

The responsible innovation and development of a more inclusive financial services industry that AFC and its members seek requires that all participants in the ecosystem operate in a forthright and transparent manner. In no circumstances should an industry participant, innovative or not, be allowed to deceive consumers through their practices or lack of proper disclosures. Unfortunately, the credit repair industry has long been plagued by organizations that exploit legal 1 [1] AFC’s membership spans community development financial institutions (CDFIs), Benefit Corporations, technology platforms, non-bank lenders, banks, payments providers, loan servicers, credit bureaus, and personal financial management companies. loopholes and harmful practices to deceive consumers, particularly those with low credit scores, by charging large upfront fees based on false promises of debt reduction. These predatory practices undermine consumer trust and negatively impact the overall health of the American economy.

The measures laid out in the Act align with AFC’s commitment to supporting responsible innovation while protecting consumers from deceptive financial practices by actors including credit repair organizations. For example, in 2024, AFC and our members engaged on the issues facing the credit reporting ecosystem through meetings with representatives from the Consumer Financial Protection Bureau (CFPB) and collaboration with the Consumer Data Industry Association’s Metro 2 Task Force. However, Congressional action remains essential to effectively address the root causes of the predatory behaviors of credit repair organizations directed towards consumers.

If passed, this Act would mark a major step forward for consumers and the financial services industry. Specifically, by eliminating the loopholes that have allowed predatory credit repair practices to flourish, the Act will contribute to a more transparent and fair financial system. Further, the creation of explicit requirements regarding the communication of credit disputes submitted by or on behalf of a credit repair organizations to furnishers would ensure that all participants of the financial services industry can effectively manage the disputes they receive.

AFC has long advocated for the continued development of sound, pragmatic policymaking. This bipartisan effort reflects the hallmarks sound, pragmatic policymaking and exemplifies a steadfast commitment to fostering transparency and setting a strong, collaborative tone for the 119th Congress. AFC fully supports your efforts on this legislation and encourages Congress to take action that will enhance consumer protections by addressing fraudulent practices within the credit repair industry. AFC believes that modernization of the nation’s credit reporting ecosystem will empower consumers and promote responsible innovation while ensuring transparency and curbing fraudulent practices.

Sincerely,

Phil Goldfeder, CEO
American Fintech Counci

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1[1] AFC’s membership spans community development financial institutions (CDFIs), Benefit Corporations, technology platforms, non-bank lenders, banks, payments providers, loan servicers, credit bureaus, and personal financial management companies