NCLC Advocates Had Requested the Rulemaking to Help Victims of Financial Abuse
WASHINGTON – Today, the Consumer Financial Protection Bureau (CFPB) commenced action to address the harmful effects of inaccurate credit reporting affecting survivors of domestic violence, elder abuse, and other forms of financial abuse. More specifically, the CFPB issued an advance notice of proposed rulemaking seeking information about potential amendments to the regulation that implements the Fair Credit Reporting Act.
Inaccurate credit reporting can wreak havoc on victims of “coerced debt,” which occurs when an abuser uses coercive control or identity theft to incur debt in the name of an individual.
Coerced debt can occur via threat, force, or fraud in the context of ongoing domestic abuse, elder abuse, foster youth, and human trafficking, and disproportionately affects domestic violence survivors of color. Because coerced debt causes long-lasting damage to credit, perpetrators of abuse use coerced debt to gain financial control over survivors’ current and future economic choices.
“We are pleased to see the CFPB take a meaningful step to address the critically important issue of coerced debt,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center. “Currently, victims of coerced debt have difficulties obtaining much-needed resources such as housing, employment, utilities, and insurance. A proposed rule expanding the identity theft protections of the Fair Credit Reporting Act to victims of coerced debt would help provide relief.”
Today’s Advance Notice of Proposed Rulemaking, in response to a petition submitted by the National Consumer Law Center and the Center for Survivor Agency and Justice, asks consumer advocates, credit reporting companies, and the public to comment on:
- The prevalence and extent of harm to people with coerced debt, including through the credit reporting system and the relevance of the debt to credit risk.
- Barriers to accessing existing protections under federal or state law.
- Challenges facing specific populations, including survivors of intimate partner violence and gender-based violence, older Americans, and children in foster care.
- Potential requirements for showing that a person’s debt was coerced.
“In its rulemaking, it is imperative that the CFPB prioritize the safety of the coerced debt victim and other family members,” said Sanchez-Adams. “Asserting a claim for coerced debt must not be allowed to result in retribution and harm to the victim, and the final rule must be drafted with these concerns in mind.”
The Consumer Financial Protection Bureau is a watchdog agency created to protect consumers, though it is facing threats in the next Administration.
Comments regarding coerced debt are due to the CFPB March 7, 2025.
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