Senator Brown Calls for Review of Tenant Screening Industry
Senator Sherrod Brown of Ohio, Chair of the Senate Banking, Housing, and Urban Affairs Committee is calling on newly-confirmed Consumer Financial Bureau (CFPB) Direct Rohit Chopra to conduct a comprehensive review of the tenant screening industry. This industry is made up of companies that collect consumer data and provide reports on prospective tenants to landlords.
Brown’s letter comes after the committee he chairs conducted an inquiry into industry practices.
“Despite efforts to validate information, the Committee found that a significant number of tenant screening reports contained inaccurate information. Inaccuracies in tenant screening reports may result in landlords denying applicants rental housing or charging higher security deposits,” Brown noted.
“For example, an inaccurate report leading to an adverse decision could cause a family to lose its non-refundable application fee,” he continued. “For families that live paycheck to paycheck, being denied housing as a result of a screening report’s inaccuracies could strain much needed resources and deplete a household’s savings. Inaccuracies can also limit the number of applications a household can reasonably afford to submit, and may prevent households from securing safe, decent, and conveniently-located affordable housing.”
Brown’s letter to Chopra calling for review of the industry noted several key areas of concern:
The Committee’s review of submissions show that tenant screening companies appear to respond expeditiously to resolve complaints related to inaccurate information contained in screening reports. Nonetheless, prospective tenants may be harmed by inaccurate tenant screening reports as landlords are not required to delay renting a property to another tenant while an adverse decision is being challenged. This results in applicants potentially losing out on both the housing opportunity and the non-refundable rental application fee, which includes the cost of the tenant screening report, required when applying for rental housing.
Inaccuracies occur often:
For example, one company reported that over 80 percent of requests for data suppression were a result of records not matching the subject of the screening report. Additionally, according to complaint data provided to the Committee, one tenant screening company received over 33,000 complaints between January 1, 2019 and April 8, 2021. Of these complaints, approximately one-third resulted in the company modifying data within a tenant screening report.
As a result of the committee’s review of the industry, Brown is suggesting that Chopra and the CFPB dig deeper and explore ways to protect consumers adversely impacted by the tenant screening industry.
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