January 9, 2025
Ms. McBride (for herself and Mrs. Kim) introduced the following bill; which was referred to the Committee on Financial Services
To amend the Credit Repair Organizations Act to add additional protections against harmful practices within the credit repair organization industry, and for other purposes.
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:
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:
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.