03.16.18

Peters Consumer Protection Provisions Pass the Senate

WASHINGTON, D.C. – The Senate passed two consumer protection provisions introduced by U.S. Senator Gary Peters that will help private student loan borrowers rehabilitate their credit and protect children from identity theft. The provisions were approved as part of a broader banking bill.

“Student debt is one of the biggest hurdles to financial success for young people,” said Senator Peters. “My commonsense provision will help student loan borrowers in default fix their mistakes and get back on track, while increasing the likelihood of repayment for lenders.”

Under current law, federal loans may be rehabilitated one time, and borrowers can repair their credit by removing a default. However, private lenders currently do not have the ability to remove negative credit information on borrowers who participate in loan rehabilitation programs. Peters’ provision, based on the bipartisan Federal Adjustment in Reporting (FAIR) Student Credit Act, he introduced with Sen. Shelley Moore Capito (R-WV) would allow private student loan borrowers who have successfully completed a series of on-time payments to remove a default from their credit report.

Peters’ second provision would help protect children from “synthetic ID fraud,” a form of identity theft that relies on pairing stolen Social Security numbers with fake names and birth dates.

“Identity theft is devastating for all victims, particularly children whose credit is ruined before they are even out of school,” said Senator Peters.  “Enhancing lenders’ access to Social Security Administration data will help modernize fraud detection, stop identity thieves from opening fraudulent accounts and protect the financial future of American consumers.”

This provision is based on the bipartisan Protecting Children From Identity Theft Act, that Peters introduced with Senators Tim Scott (R-SC), Claire McCaskill (D-MO) and John Kennedy (R-LA). It would require the Social Security Administration to accept electronic signatures from consumers so financial institutions can verify customer ID and root out synthetic ID fraud. A recent study found that one in every ten children had their SSN used by identity thieves to fraudulently open bank accounts or credit card accounts, negatively affecting a child’s credit before they become adults.