Ending Scam Credit Repair Act or the ESCRA Act
This 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.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 306 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 306
To amend the Credit Repair Organizations Act to add additional
protections against harmful practices within the credit repair
organization industry, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 9, 2025
Ms. McBride (for herself and Mrs. Kim) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Credit Repair Organizations Act to add additional
protections against harmful practices within the credit repair
organization industry, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ending Scam Credit Repair Act'' or
the ``ESCRA Act''.
SEC. 2. CREDIT REPAIR ORGANIZATION DEFINITION.
Section 403(3) of the Credit Repair Organizations Act (15 U.S.C.
1679a(3))--
(1) in subparagraph (A), by inserting ``(not including
anything received in return for representing a consumer in
preparation for or during litigation)'' after
``consideration''; and
(2) in subparagraph (B)--
(A) by inserting ``an entity or individual that is,
in good faith and not for the purpose of evading this
title'' after ``include'';
(B) in clause (ii), by striking ``or'';
(C) in clause (iii), by striking the period and
inserting ``; or''; and
(D) by adding at the end the following:
``(iv) any attorney that provides legal
services rendered or to be rendered to a
consumer in contemplation of or in connection
with a case filed, or to be filed within 12
months, under title 11 or title 15, United
States Code, by an attorney within the same law
firm.''.
SEC. 3. PROHIBITED PRACTICES.
(a) Untrue or Misleading Statements.--
(1) In general.--Section 404(a)(1) of the Credit Repair
Organizations Act (15 U.S.C. 1679b(a)(1)) is amended--
(A) by inserting ``knowingly'' before ``make any
statement, or'';
(B) in subparagraph (A), by striking ``or''; and
(C) by adding at the end the following:
``(C) the Bureau of Consumer Financial Protection
directly or through an online portal established to
receive complaints, disputes, or reports of fraud;
``(D) the Federal Trade Commission directly or
through an online portal established to receive
complaints, disputes, or reports of fraud; or
``(E) any Federal, State, local, or Tribal law
enforcement agency, directly or through an online
portal established to receive complaints, disputes, or
reports of fraud;''.
(2) Finding.--The Congress finds that it is already
unlawful to make materially false, fictitious, or fraudulent
statements or representations to the Bureau of Consumer
Financial Protection.
(b) Additional Prohibited Practices.--Section 404 of the Credit
Repair Organizations Act (15 U.S.C. 1679b) is amended--
(1) in subsection (a)(2)--
(A) in subparagraph (B)(ii), by inserting ``or''
after ``credit;''; and
(B) by adding at the end the following:
``(C) the Bureau of Consumer Financial Protection
or the Federal Trade Commission;'';
(2) by amending subsection (b) to read as follows:
``(b) Payment in Advance.--
``(1) In general.--No credit repair organization may
request or receive payment of any fee or consideration from a
consumer for services represented to remove derogatory or
inaccurate information from, or improve, such consumer's credit
history, credit record, or credit rating, or services related
to such a representation, until the credit repair organization
has provided such consumer with documentation in the form of a
consumer report, issued not less than 6 months after such
service, from a consumer reporting agency that demonstrates
that such representation has been achieved.
``(2) Rule of construction.--Nothing in this subsection
shall be construed to alter the permissible purposes of
furnishing a consumer report described in section 604 of the
Fair Credit Reporting Act.''; and
(3) by adding at the end the following:
``(c) Jamming.--A credit repair organization may not submit
multiple disputes described in section 611 of the Fair Credit Reporting
Act of the same information unless all of the following are true:
``(1) The consumer reporting agency or data furnisher has
had the time permitted under the Fair Credit Reporting Act to
conduct a reasonable investigation on the prior dispute.
``(2) The consumer reporting agency or data furnisher has
returned the results of its investigation to the consumer with
respect to such dispute, unless there are material changes to
the information submitted with the dispute.
``(3) The credit repair organization includes with the
resubmitted dispute a specific description of what information
is inaccurate.''.
SEC. 4. DISCLOSURES.
Section 405 of the Credit Repair Organizations Act (15 U.S.C.
1679c) is amended--
(1) in subsection (a)--
(A) by striking ``due to fraud.'' and inserting
``due to fraud. Credit repair organizations do not
provide any services that you cannot do yourself for
free.'';
(B) by striking ``regulates'' and inserting ``and
the Bureau of Consumer Financial Protection regulate'';
and
(C) by inserting ``The Bureau of Consumer Financial
Protection 1700 G St. NW, Washington, DC, 20552 Tel:
855-411-2372 TTY/TTD: 855-729-2372'' after ``20580'';
and
(2) in subsection (c)--
(A) in paragraph (1), by striking the period at the
end and inserting ``and any recordings of telephone
communications with the consumer.''; and
(B) in paragraph (2)--
(i) by striking ``2'' in the heading and
inserting ``5'';
(ii) by inserting ``and any telephone
recordings with the consumer'' after
``consumer's statement'';
(iii) by striking ``2'' and inserting
``5''; and
(iv) by striking ``statement is signed by
the consumer'' and inserting ``statement or the
telephone recordings are created''.
SEC. 5. CONSUMER CONTRACT REQUIRED.
(a) In General.--Section 407(c) of the Credit Repair Organizations
Act (15 U.S.C. 1679e(c)) is amended by adding at the end the following:
``(3) copies of all communications sent on behalf of the
consumer, at the time the communication is sent.''.
(b) Technical Amendment.--Section 407(c) of the Credit Repair
Organizations Act (15 U.S.C. 1679e(c)) is amended--
(1) by striking ``at the time the contract or the other
document is signed.'';
(2) in paragraph (1), by striking ``; and'' inserting ``,
at the time the contract or the other document is signed;'';
and
(3) in paragraph (2), by adding at the end ``at the time
the contract or the other document is signed; and''.
SEC. 6. NONCOMPLIANCE.
Section 408 of the Credit Repair Organizations Act (15 U.S.C.
1679f) is amended by adding at the end following:
``(d) Legal Services Within Credit Repair Organizations.--A credit
repair organization shall be subject to this title regardless of
whether the organization is, or employs, an attorney who also provides
legal services to a consumer, except if such attorney is an attorney
described in section 403(3)(B)(iv).
``(e) Credit Repair Organizations Without a State License.--On or
after January 1, 2026, no person may act as a credit repair
organization unless such person is licensed by a State.''.
SEC. 7. CREDIT REPAIR ORGANIZATION COMMUNICATIONS WITH FURNISHERS OF
INFORMATION.
(a) In General.--The Credit Repair Organizations Act (15 U.S.C.
1679 et seq.) is amended by inserting after section 408 the following
new section:
``Sec. 408A. Credit repair organization communications with furnishers
of information
``Disputes submitted to a person who furnishes information to a
consumer reporting agency by or on behalf of a credit repair
organization shall meet the following requirements:
``(1) If sent by mail, the dispute shall be transmitted by
first class mail and list on the envelope the--
``(A) name of the credit repair organization; and
``(B) State license number of the credit repair
organization, if applicable.
``(2) The dispute shall list the--
``(A) name of the credit repair organization;
``(B) State license number of the credit repair
organization, if applicable; and
``(C) name of the consumer on whose behalf the
dispute is submitted.
``(3) In the case of any additional communication after an
initial dispute, the additional communication shall clearly and
conspicuously identify any material changes to the information
provided in the initial written dispute and include the
information described in paragraphs (1) and (2).
``(4) In the case where a credit repair organization sells
or otherwise provides an online or paper blank dispute form to
be completed and filed by the consumer, such form must contain
the--
``(A) name and address of such credit repair
organization; and
``(B) State license number of such credit repair
organization, if applicable.
``(5) In the case where the person responds to a dispute
submitted by a credit repair organization seeking clarifying
information, verifying if the customer has actually engaged
with the credit repair organization, or denying the accuracy of
the underlying claim, the credit repair organization shall
respond in writing within 15 business days.
``(6) In the case where the credit repair organization is
an attorney, the attorney shall certify that any communication
is consistent with any information or documentation provided by
the consumer, confirmed based upon methods or means proven to
be historically reliable and accurate.
``(7) A credit repair organization, when sending a dispute,
shall disclose the fact that it is a credit repair organization
by placing the following disclosure on the dispute letter:
`This communication was submitted or prepared on behalf of the
consumer by a credit repair organization, as defined in section
403 of the Credit Repair Organizations Act (15 U.S.C.
1679a).'''.
(b) Clerical Amendment.--The table of contents for the Credit
Repair Organizations Act is amended by inserting after the item
relating to section 408 the following:
``408A. Credit repair organization communications with furnishers of
information.''.
SEC. 8. CIVIL LIABILITY.
Section 409(a)(1) of the Credit Repair Organizations Act (15 U.S.C.
1679g(a)(1)) is amended--
(1) by striking ``Actual damages'' and inserting
``Damages'';
(2) in subparagraph (A), by striking ``or'';
(3) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(4) by adding at the end the following:
``(C) the amount of $500 in damages for each
violation of this title.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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