Editor's Note: For all related insideARM articles and other information, please check insideARM's COVID-19 Impact resources page.


On April 27, Senators Elizabeth Warren (D-MA) and Brian Schatz (D-HI) sent letters to the three major credit bureaus requesting information about how they are complying with the new CARES Act requirements to ensure that consumers negatively impacted by the COVID-19 pandemic are not going to be burdened by permanent negative markings on their credit reports. Here are the three letters: Experian, TransUnion, Equifax.

The letters call out the shortcomings of the CARES Act. For example, borrowers may not know who to turn to receive the mortgage relief provided by the CARES Act. Another example includes how the CARES Act provides protections to certain student loan borrowers, but not others. 


The letter then goes on to discuss the shortcomings of disaster codes. The senators take issue with consumers having to proactively contact their creditors to inform them that they are in a disaster and that a prior CFPB study showed that it was difficult for consumers to get the disaster designation. The disaster code also provides only temporary relief, according to the letter, as once the disaster code is removed, then the negative information will continue being considered in the credit score calculations for consumers.

Based on this information, the senators ask the credit bureaus about their efforts to ensure that consumers are protected in a way that complies with the CARES Act. Questions posed by the senators include what actions the bureaus are taking to make sure that the negative effects of the pandemic don't leave permanent negative marks on consumers' credit reports. The letter also specifically asks whether the bureaus will allow consumers to add a COVID-19 related disaster code if their creditors refuse to do so.

Next Article: Rhode Island Exempts Stimulus Checks from Seizure ...