Congresswoman Sarah McBride Introduces Her First Bill in Congress

Washington, D.C. – Today, Congresswoman Sarah McBride (DE-AL) and Congresswoman Young Kim (CA-40) introduced the Ending Scam Credit Repair Act (ESCRA) to crack down on fraudulent practices in the credit repair industry. The bipartisan bill targets credit repair organizations (CROs) that deceive consumers with high fees and empty promises to improve credit scores. The bill will ensure transparency and accountability for consumers. With this bill, Congresswoman McBride became the first freshman Democrat to introduce a piece of legislation in the 119th Congress.

“For too long the credit repair industry has been scamming Delawareans with low credit scores by promising easy credit fixes,” said Congresswoman Sarah McBride. “These CROs exploit legal loopholes to target cash-strapped Delawareans by charging large upfront fees based on false hopes of debt reduction. Our bipartisan bill eliminates those loopholes that have allowed predatory practices to flourish by banning upfront fees, improving transparency, and enhancing consumer protections. Delawareans deserve real results, not empty and costly promises. I am grateful to Congresswoman Kim for working across the aisle with me on common sense solutions to deliver for our constituents.”

“Fraudulent credit repair organizations, or CROs, should not get away with scamming hardworking Americans seeking to improve their scores and unlock their American dream,” said Congresswoman Young Kim. “The Ending Scam Credit Repair Act helps consumers and hikes penalties for scammers. I’m thrilled to introduce the bipartisan Ending Scam Credit Repair Act and will continue to work on commonsense policies that empower Americans of all backgrounds to grow their wealth and achieve their dream.”

The Consumer Financial Protection Bureau (CFPB) recently took action against a conglomerate of the nation’s largest credit repair organizations for illegally collecting fees. Following the lawsuit, the CFPB is now distributing $2.7 billion to over four million consumers nationwide, including more than $8 million to Delawareans. To prevent such abuses in the future, the Ending Scam Credit Repair Act prevents credit repair organizations from charging illegal upfront fees.

The bipartisan Ending Scam Credit Repair Act protects consumers by prohibiting CROs from charging consumers until six months after they’ve provided proof that their credit score has improved while also increasing civil penalties for violations. The bill prohibits CROs from “jamming” financial institutions with duplicative requests, which has prevented consumer reporting agencies and data furnishers from addressing legitimate credit report issues.

Advocates, industry leaders, and elected officials representing Delawareans and Americans applauded Congresswoman McBride and Kim on the introduction of this bill, noting the far impact it will have on cracking down on scammers.

Delaware Attorney General Kathy Jennings applauded the introduction of ESCRA, “Our office is Delaware’s principal consumer protection agency, and the deceptive practices of so-called “credit repair” companies harm some of our most vulnerable neighbors. Scammers like these are a growing threat to consumers all over the country, and I applaud Congresswoman McBride for taking on critical consumer protection work in her first week in Congress. I look forward to partnering with our Congresswoman to champion more of these critical protections.”

John Whitelaw, Advocacy Director for Community Legal Aid Society, Inc (CLASI), released the following statement in support of ESCRA, “Delaware Community Legal Aid Society, Inc. (CLASI) is thrilled to support this important bill being introduced by Congresswoman McBride. It is well known that credit repair scams are widespread and have devastating financial impacts on some of the most financially challenged and vulnerable Delaware residents. These scams hurt people who are in the most need. ESCRA is a critical step in the fight to stamp out this abusive conduct and protect low-income families from financial exploitation. We strongly support this bill and are grateful to Congresswoman McBride for introducing it. We call upon the House of Representatives to act quickly and in a bipartisan manner to address this issue.” CLASI is a statewide nonprofit law firm in Delaware whose mission is to combat injustice through creative and persistent advocacy on behalf of vulnerable and underserved Delawareans. CLASI is also Delaware’s designated Protection and Advocacy agency for individuals with disabilities. 

The Executive Director of Delaware Community Reinvestment Action Council (DCRAC), Rashmi Rangan said, “Every consumer deserves the opportunity to fix their financial past if needed, without predatory schemes getting in the way or bad-faith middlemen extorting payments. Congresswoman McBride's Ending Scam Credit Repair Act holds scammers accountable for posing as legitimate credit repair organizations and improves transparency industry-wide. As a consumer finance advocacy agency, DCRAC wholeheartedly supports this and any effort that provides such critical protections for and education of anyone trying to improve their credit.”

“Financial-services companies and consumer advocacy groups are grateful for congressional action on behalf of consumers, having seen first-hand the real harm credit repair organizations cause consumers, often charging hundreds of dollars a month, but yielding few if any positive results,” said American Financial Services Association (AFSA) President and CEO Bill Himpler.

“Paying for credit repair is almost always a waste of money,” said Andrew Pizor, senior attorney at the National Consumer Law Center (NCLC). “The amendment from Representatives McBride and Kim will help ensure consumers are not prey to credit repair scams and that they don't get charged unless they get the results they are paying for.”

Ed Boltz, Legislative Chair of the National Association of Consumer Bankruptcy Attorneys (NACBA), whose members represent people in and after bankruptcy, agreed that the “Ending Credit Repair Scams Act” will stop credit repair jamming schemes that mislead consumers by holding themselves out as “lawyers,” but “will also now make it clear that honest attorneys can provide advice and assistance to those who need real help with credit report errors.”

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