It’s been a week since the Equifax controversy first broke, and the scope of the story is still coming into focus. One of the nation’s largest credit reporting agencies was apparently the target of a major hack that “may have exposed private information belonging to 143 million people,” including Social Security numbers, credit card numbers, birth dates, home addresses, and in some instances, driver’s license numbers.
Making matters worse, three Equifax executives sold stock in the company after the breach was discovered (they deny any wrongdoing). Making matters worse still, it took about six weeks for the company to tell the public about the breach.
So, what does this have to do with politics? Quite a bit, actually. The Equifax mess has made it vastly easier for progressives to make the case that federal officials should be regulating the heck out of the credit-reporting agencies, but as the New York Times reported, that’s unlikely to happen given the direction of the prevailing political winds.
The credit bureaus have for decades successfully fended off calls in Congress for more oversight, despite warnings about potential problems that go back to Senator William Proxmire, a Wisconsin Democrat, in the 1960s. Now, the industry is likely to find support in the agenda of President Trump, who has pledged to strip away “burdensome” business regulations. […]
Equifax spent $1.1 million on lobbying last year, up from $300,000 in 2006, according to data collected by the Center for Responsive Politics.
Roll Call reported last week that Democrats on the Senate Banking Committee have been pressing for hearings on the Equifax scandal, but Banking Committee Chairman Michael Crapo (R-Idaho) was undecided on whether to bother. (The bipartisan leadership of the Senate Finance Committee, however, sent a written request for information to Equifax last week.)
And what about the Consumer Financial Protection Bureau, which congressional Republicans have been trying to gut?
The New York Times’ report noted that the CFPB has made some progress in reining in the credit bureaus, forcing the industry’s largest companies to create new quality controls and make it easier for consumers to have errors in their reports corrected. This, however, was the striking detail:
The consumer bureau recently finalized a rule prohibiting companies from forcing customers into arbitration over disputes, a method that companies have used to block class-action lawsuits. Equifax initially included a mandatory arbitration clause in the fine print of the free credit monitoring product offered in the wake of the attack – language that could have prevented victims from banding together in court.
Customers immediately cried foul. Equifax quickly backed down and removed the clause.
A bill to repeal the consumer bureau’s arbitration rule passed the House in July, but has not yet been voted on in the Senate.
So, Senate Republicans, in the wake of Equifax’s controversy, just how willing will you be to endorse the measure House Republicans already approved?
Postscript: Several Senate Democrats last week wrote to Equifax, asking the company to drop its support for the GOP-sponsored bill. The idea, evidently, is that Congress is less likely to pass this if the credit-bureau giant isn’t asking for it.