CFPB Proposes to Include Coerced Debt in the Definition of “Identity Theft”

What Happened?

On December 9, the Consumer Financial Protection Bureau (“CFPB”) issued an advance notice of proposed rulemaking(“ANPR”), seeking stakeholder input regarding amending the definitions of “identity theft” and “identity theft report” in Regulation V, which implements the Fair Credit Reporting Act (“FCRA”).

Specifically, the CFPB is proposing to expand the definition of “identity theft” to include actions taken “without effective consent,” which would prevent credit reporting agencies from refusing to block any type of debt obtained through coercion (such as through domestic abuse or elder abuse) from credit reports.

Why Does It Matter?

This proposed rulemaking started as a petition submitted to the CFPB by the National Consumer Law Center and the Center for Survivor Agency and Justice through the CFPB’s public petition procedures. In requesting the rulemaking, the petitioners cited relevant research and statistics, to support its request, including that:

• between 94 and 99 percent of domestic violence survivors experienced economic abuse; and
• a majority of domestic violence survivors remained in abusive relationships in part because of the coerced debt.

Based on public responses to this petition, the CFPB determined that the issue of “coerced debt” warrants rulemaking activity with the expectation that abuse survivors will experience significant increases to their credit scores. According to the CFPB’s blog post accompanying the ANPR, one study found that one third of survivors of abuse who managed to remove coerced debt from their credit report saw their credit score improve at least 20 points.

Specifically, the CFPB is soliciting feedback on the following questions:

1. What information exists regarding the prevalence and extent of harms to victims of economic abuse, particularly coerced debt? How does the consumer reporting system, including provisions relating to identity theft, currently contribute to or reduce those harms?
2. To what extent do protections under the FCRA or other Federal or State laws exist for victims of economic abuse with respect to consumer reporting information? What barriers exist that may prevent survivors of economic abuse from availing themselves of existing protections?
3. Does coerced debt reflect the survivor’s credit risk independent of the abuser? Why or why not? Is there any data addressing the relevance of coerced debt to the survivor’s credit risk independent of the abuser?
4. What are the costs and benefits of the proposed amendment outlined by the petition for rulemaking?
5. The petition defines “coerced debt” as “all non-consensual, credit-related transactions that occur in a relationship where one person uses coercive control to dominate the other person.” What alternatives to that language should the CFPB consider?
6. Comments to the petition identify survivors of intimate partner violence, domestic abuse, and gender-based violence as groups that would benefit from explicit inclusion of coerced debt as a form of identity theft. Commenters noted specific vulnerabilities for older Americans, children in foster care, and survivors of color.
   1. What barriers do these groups face as a result of coerced debt?
   2. How would the proposed amendments outlined in the petition for rulemaking reduce those barriers?
   3. Are there other populations who experience problems with coerced debt and whose experiences should be considered in the proposed rulemaking?
   4. How would the proposed amendments outlined in the petition for rulemaking address the needs of these other populations?
7. Should the CFPB propose the amendments outlined by the petition for rulemaking? What alternatives should the CFPB consider? For instance:
   1. What documentation should a person be required to produce to show that their debt was coerced?
   2. What self-attestation mechanisms could be considered for meeting the standard for an identity theft report?
   3. Are there circumstances that should give rise to a presumption of coercion?
   4. Should the CFPB propose general protections related to coerced debt, specific protections for survivors of domestic or intimate partner violence, or a combination?

What Do I Need To Do?

Any party that would like to submit a comment may do so until March 7, 2025. Any interested party should identify comments by Docket No. CFPB-2024-0057, and should submit them through the Federal eRulemaking Portal, via email at ANPR-Coerced-Debt@cfpb.gov, or through the mail sent to the CFPB’s Legal Division.