Plain Language Summary
# ESCRA Act Summary **What the Bill Does:** The Ending Scam Credit Repair Act (HR 306) would strengthen federal rules governing credit repair organizations—companies that claim to improve consumers' credit scores. The bill makes it illegal for these companies to make false or misleading statements not just to credit agencies, but also to federal regulators like the Consumer Financial Protection Bureau and the FTC. It also prevents credit repair companies from charging consumers upfront fees; instead, they could only charge after proving their work succeeded, with a waiting period of at least six months. **Who It Affects:** This bill primarily affects credit repair organizations and the millions of Americans who use their services—particularly those with damaged credit histories.
The stricter rules are intended to protect consumers from fraudulent companies that make false promises about fixing credit scores or charge fees without delivering results. **Current Status:** The bill was introduced in the 119th Congress by Representative Sarah McBride (D-Delaware) and is currently in committee, meaning it has not yet been debated or voted on by the full House of Representatives. The bill's summary was incomplete in the provided text, but it appears designed to close loopholes in existing credit repair laws and add consumer protections.
CRS Official Summary
Ending Scam Credit Repair Act or the ESCRA ActThis bill revises the Credit Repair Organizations Act and creates additional requirements for credit repair organizations (CROs).Under current law, it is illegal for a person (including a CRO) to make false or misleading statements regarding a consumer’s creditworthiness or standing to a consumer reporting agency or to a consumer credit provider. The bill additionally prohibits making such statements to the Consumer Financial Protection Bureau, the Federal Trade Commission, or law enforcement. To be subject to this prohibition, the bill also requires such statements to be made knowingly.The bill also revises CRO obligations to consumers. A CRO is prohibited from charging a consumer for a service (e.g., getting inaccurate information removed from a credit report) until the CRO provides proof of success not less than six months after providing the service. The bill also requires additional disclosures to consumers, requires the retention of any recorded telephone calls, and increases the time records must be retained from two to five years. In addition, consumers must be given copies of all communications sent on their behalf.Under the bill, all persons must be licensed by a state to act as a CRO. The bill also restricts a CRO’s ability to submit multiple credit disputes regarding the same information.The bill also sets a minimum liability amount for damages of $500 for each violation of the Credit Repair Organizations Act.
Latest Action
Referred to the House Committee on Financial Services.