The Financial Consumer Protection Act of 2018

Maryland PIRG is proud to support SB1068/HB1634 to enact recommendations by the Maryland Financial Consumer Protection Commission.

Our Consumer Director, Edmund Mierzwinksi testified before the Commission. We are pleased to see the final product and to support the Financial Consumer Protection Act of 2018. There are a few components of the bill that we want to highlight:

1. Protecting Marylanders from mistake-ridden credit bureaus and giving them more control of their financial information by requiring free access to the placement, temporary lift, of removal of a credit freeze;
2. Ensuring that the Attorney General has the power and staff to enforce violations of the Consumer Financial Protection Act and other consumer protection laws;
3. Protecting college students by enacting a Student Loan Ombudsman’s Office;

1. Protecting Marylanders from mistake-ridden credit bureaus and giving them more control of their financial information.

The Financial Consumer Protection Act of 2018 strengthens procedures for correcting inaccurate information contained within a consumer report and requires consumer reporting agencies to notify the public promptly (or within 30 days) after a data breach is discovered. It also gives Marylanders free access to the placement, temporary lift, of removal of a security freeze.

In the last year we have had a startling reminder of why consumers need even more control over their financial information. Through one security breach alone, Equifax put approximately 3 million Marylanders at increased risk of identity theft.  That is more than half our population and every Maryland family is likely at risk because of this breach. Just this month, it was revealed that Equifax lost even more of our personal information than initially reported including tax ID numbers, phone numbers, and email addresses. 

A credit freeze prohibits the credit bureaus from sharing your information without your consent. And by doing so, it prevents identity thieves from creating fake accounts in your name. Getting a free credit freeze at all three national credit bureaus, as enabled by Maryland law, is the best action consumers can take after the Equifax breach, whether they were affected by it or not. 

Unfortunately, Marylanders can still be charged $5 by with Equifax, TransUnion and Experian each time they want to “thaw” or “temporarily lift” a freeze. Consumers need to be able to temporarily lift a freeze to apply for credit to do things like buy a car or home or get a credit card. In some cases, Marylanders need to do so to apply for a job or apartment. Thaw and lifts should be available to all Marylanders free of charge.

We didn’t hire Equifax, Experian, and TransUnion to collect financial data about us, and we certainly didn’t give them permission to lose it. We should not have to pay them to keep our financial information private and secure.

2. Ensuring that the Attorney General has the power and staff to enforce violations of the Consumer Financial Protection Act (Title 10 of the Dodd-Frank Act) and other consumer protection laws.

While the Dodd-Frank Act provides for states to enforce the federal law, a potential hostile Consumer Bureau could choose to block those efforts. The Fin ancial Consumer Protection Act of 20184 will help ensure that our Attorney General has the authority, resources, and power needed to protect consumers under state law. 

3. Protecting college students by enacting a Student Loan Ombudsman’s Office.

Student loan debt is the second largest type of debt held by American households and the burden of student loan debt increased rapidly in recent years. From 2008 to 2012, the average debt level for graduating seniors who had student loans rose by 25 percent, from $23,450 to $29,400. Nationwide, Americans hold almost $1.2 trillion in student loan debt.

The Financial Consumer Protection Act of 2018 creates a Student Loan Ombudsman’s Office to protect borrowers from abusive student loan practices and to expand licensing requirements for student loan servicing.

We respectfully request a favorable report on The Financial Consumer Protection Act of 2018 to protect Maryland consumers.