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U.S. Senate: Credit Bureaus Data Security and Equifax

shutterstock_198818447The U.S. Senate Committee on Banking, Housing, and Urban Affairs met Tuesday morning in an open session titled “Consumer Data Security and the Credit Bureaus” to address how credit bureaus intend on protecting consumer data—specifically in light of the recent Equifax data breach.

U.S. Senator Mike Crapo (R-Idaho), Chairman of the committee delivered the opening remarks.

“As a follow-up to our hearing on the Equifax data breach, today we will receive testimony on the protection of consumer data at credit bureaus,” Sen. Crapo said.

At the Equifax hearing, Crapo said that members expressed interest in better understanding how credit bureaus are regulated, how they protect consumer data, and whether there are gaps that Congress needs to fill.

“It is critical that personal data is protected, consumer impact in the event of a breach is minimized, and consumers’ ability to access credit is not harmed,” Sen. Crapo said. “Credit bureaus play a valuable role in our financial system by helping financial institutions assess a consumer’s ability to meet financial obligations, and also facilitating access to beneficial financial products and services.

During the hearing, three testimonies were delivered addressing the future of cybersecurity. Testimonies came from Andrew M. Smith, Partner, Covington & Burling LLP on behalf of the Consumer Data Industry Association, Marc Rotenberg, President of Electronic Privacy Information Center, and Chris Jaikaran, Analyst in Cybersecurity Policy Congressional Research Service.

In the aftermath of the Equifax data breach, it is important to note just how much this cyber attack impacts consumers’ credit ability to receive a mortgage. According to a recent New York Times article, when consumers apply for a home mortgage or to refinance an existing loan, Equifax is more than likely a part of that process.

Why? The article notes that of the three major credit reporting agencies only Equifax has a division, Equifax Mortgage Solutions, that supplies lenders with a merged credit report.

How can the data breach impact consumers trying to achieve mortgages? According to an article by Cornerstone Home Lending, Inc., anyone affected by the data breach may face significant credit setbacks. As one’s credit score plays the most significant role in obtaining a competitive mortgage rate—the breach can prevent someone from being able to have proper credit to get a mortgage.

In the end, what can one do to stay protected? The article notes that it is simply important for homebuyers to stay cautious. One practice that is advised is pulling personal credit reports as soon as one starts thinking about becoming a homeowner—giving the chance to stay alert on suspicious information and clear it up before applying for a mortgage.

About Author: Nicole Casperson

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Nicole Casperson is the Associate Editor of DS News and MReport. She graduated from Texas Tech University where she received her M.A. in Mass Communications and her B.A. in Journalism. Casperson previously worked as a graduate teaching instructor at Texas Tech's College of Media and Communications. Her thesis will be published by the International Communication Association this fall. To contact Casperson, e-mail: nicole.casperson@thefivestar.com.

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