Survivors of abuse financially suffer when their credit reports contain loans and accounts that they were forced into
The Consumer Financial Protection Bureau (CFPB) launched a rulemaking to address the harmful effects of inaccurate credit reporting affecting survivors of domestic violence, elder abuse, and other forms of financial abuse. The agency is issuing an advance notice of proposed rulemaking to gather additional public input on potential amendments to the regulation that implements the Fair Credit Reporting Act (FCRA). After gathering public comment, the CFPB intends to issue a proposed rule.
“People trapped by domestic abuse must often sign documents under the threat of violence, ruining their financial lives and making it even more difficult to escape,” said CFPB Director Rohit Chopra. “Expanding identity theft protections could help survivors rebuild their financial lives and would ensure that our credit reporting system is not used as a tool for domestic and elder abuse.”
Abusers often use coerced debt as a tool of control, forcing their partner or other family members to take out credit cards or loans through threats, physical violence, or manipulation. They may secretly open accounts in survivors’ names, force them to sign financial documents, or run up charges on existing accounts.
Studies show that this type of financial abuse creates substantial, long-lasting harm for survivors. For example, nearly three-quarters of domestic violence survivors report staying longer in abusive relationships in part because of coerced debt. The impact falls particularly hard on women of color, who face higher rates of financial abuse resulting in nearly double the average debt burden. When survivors are able to remove these debts from their credit reports, one third see their credit scores improve by 20 points or more – enough to qualify for better rates on loans.
Today’s Advance Notice of Proposed Rulemaking asks consumer advocates, credit reporting companies, and the public to comment on:
- The prevalence and extent of harms to people with coerced debt, including through the credit reporting system.
- Evidence regarding the relevance of coerced debt to a survivor’s credit risk.
- Barriers to accessing existing protections under federal or state law for survivors of economic abuse.
- Challenges resulting from coerced debt facing specific populations including survivors of intimate partner violence and gender-based violence, older Americans, and children in foster care.
- Potential documentation or self-attestation requirements for showing that a person’s debt was coerced.
Today’s rulemaking is in response to a petition for rulemaking submitted by the National Consumer Law Center and the Center for Survivor Agency and Justice. To help Americans exercise the constitutional rights to petition the government, the CFPB established a petition process in 2022. The new protocols ensure that there is an easy and transparent way to request action.
In 2022, the CFPB finalized a rule to prohibit credit bureaus from providing reports that contain any negative item of information about a survivor of human trafficking that resulted from the trafficking. Earlier this year, the CFPB reported that it is actively working to identify potential violations of these rules. Public input will inform the CFPB’s intended proposed rule. The deadline for submitting comments on the advance notice is March 7, 2025.
Read the Advance Notice of Proposed Rulemaking
Consumers experiencing issues with credit reporting or other consumer financial products or services can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).