EXPGY Experian Plc (QX)

By Yuka Hayashi 

The credit-reporting industry has largely escaped new oversight from Washington following the 2017 hack of Equifax Inc. that exposed the personal information of millions of Americans. That could change in 2019 when Democrats take over the House of Representatives.

House Democrats have put legislation responding to the Equifax hack at the top of their agenda next year. A handful of existing proposals, some bipartisan, offer a road map for possible changes to how the industry handles consumer information, including subjecting credit-reporting companies to tougher cybersecurity standards and making it easier for consumers to fix errors on their credit reports.

"The Equifax data breach response is far from over," said Jaret Seiberg , an analyst for Cowen Washington Research Group. "There will be more legislation in the next two years that impacts Equifax and the other credit bureaus."

An Equifax spokesman said the company has already undertaken "a host of security, operational, and technological improvements" since the breach.

Lawmakers from both parties harshly criticized Equifax after the company announced the data breach that resulted in the loss of Social Security numbers and other sensitive personal information of 147.9 million people.

That led to the proposal of several bills to increase oversight of credit- reporting companies, which collect data on consumers' financial history to help lenders vet applications for mortgages, credit cards and other products that require a gauge of credit-worthiness. Legislation mostly stalled, however, amid pushback from the industry and disagreement between Republicans and Democrats over what should be done.

One exception was a provision to allow adults and children to freeze and unfreeze their credit reports free of charge to prevent identity thieves from using their information to open new accounts. That was approved earlier this year as part of a broader banking bill.

Rep. Maxine Waters (D., Calif.), the incoming chair of the House Financial Services Committee, wants to revive the credit-reporting debate, saying her panel would focus on the industry and use as a template a bill she introduced last year to overhaul the industry.

Those proposals include enhancing consumers' ability to fix credit-reporting errors by making it easier to dispute the accuracy of information contained in reports, and requiring companies to present documents used as a basis for disputed information. Another provision would prohibit employers from using credit reports.

"I believe that credit reporting reform and holding Equifax accountable for its massive breach are bipartisan issues that touch nearly every American," she said in November. Her committee is expected to hold a hearing in early 2019 on the issue, possibly with testimony from top officials at the three main credit- reporting companies, Equifax, Experian PLC, and TransUnion.

Any proposals must have bipartisan support to clear both chambers of Congress, where Democrats will control the House and Republicans the Senate.

Some Senate Republicans, including Senate Banking Committee Chairman Mike Crapo (R., Idaho), have expressed interest in the issue, raising the prospect of a bipartisan deal. Sens. John Kennedy (R. La.,) and Brian Schatz (D., Hawaii), for instance, proposed legislation in March to give consumers more control over their credit reports. This included requiring the top credit-reporting companies to create a website for consumers to get free access to their credit information and easily opt out of having their data shared or sold to third parties.

Rep. Patrick McHenry (R., N.C.), expected to be the top Republican on the House financial services panel, has proposed submitting credit-reporting companies to government cybersecurity examinations as part of a bill he introduced in 2017.

Trying to fend off the legislative proposals, the credit-reporting industry said government oversight has already increased in response to the hack, with the Consumer Financial Protection Bureau starting to examine the companies for data security.

"A lot has already been done," said Francis Creighton, chief executive of the Consumer Data Industry Association, a trade group for the industry. "It's important to point out good things have happened since the Equifax crisis."

Mike Litt, consumer campaigns director for U.S. PIRG, a consumer group, urged Congress to do more. "More than a year later, Equifax hasn't paid the price for losing nearly 150 million Social Security numbers," he said.

The House Oversight Committee, which has responsibility for data security, issued reports in December that were critical of the Equifax breach, setting the stage for the congressional debate next year. The Republican report, based on findings from a 14-month investigation, concluded the incident was "entirely preventable."

Democrats in their own report separately listed several legislative solutions, including requiring Equifax and other government contractors to comply with tougher cybersecurity standards and drawing up a framework for how companies notify data-breach victims.

Write to Yuka Hayashi at yuka.hayashi@wsj.com

(END) Dow Jones Newswires

January 01, 2019 13:08 ET (18:08 GMT)

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