President Donald Trump has signed into law two consumer safety provisions championed by U.S. Senator Gary Peters of Michigan.
The provisions will allow private student loan borrowers to rehabilitate their credit if they default on their loans and help prevent identity theft from the stolen Social Security numbers (SSN) of children.
“Borrowers with private student loans should have the opportunity to restore their credit when recovering from a default. With this legislation, more borrowers will be able to get back on their feet and pursue the careers that their education helped them prepare for,” said Senator Peters.
Based off the bipartisan Federal Adjustment in Reporting (FAIR) Student Credit Act – which Peters introduced with Senator Shelley Moore Capito (R-WV) – the first provision signed into law today will allow private student loan borrowers who have successfully completed a series of on-time payments to remove negative reporting from their credit report. Previously, only federal student loan borrowers can have a default removed from their credit report, and Peters’ provision will give private student loan recipients the same opportunity.
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.
“Our kids should not be saddled with a negative credit report before they are even old enough to open a credit account, and I’m pleased that additional safeguards are now in place to prevent thieves from stealing children’s identities and ruining their financial future,” said Senator Peters.
The provision will require the Social Security Administration to accept electronic signatures so that financial institutions can verify customer ID, helping to identify synthetic identity fraud more quickly. It is estimated that one in ten children has their SSN information stolen by bad actors to open bank or credit card accounts, apply for loans, utility accounts and more – negatively impacting a child’s credit before adulthood. This provision is based off bipartisan legislation Peters introduced with U.S. Senators Tim Scott (R-SC), Claire McCaskill (D-MO) and Bill Cassidy (R-LA).