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AG Derek Schmidt urges federal agency to implement rules to help trafficking victims repair damaged credit

KANSAS, May 10 - TOPEKA – (May 10, 2022) – Kansas Attorney General Derek Schmidt is urging the federal Consumer Financial Protection Bureau (CFPB) to implement the provisions of the Debt Bondage Repair Act to provide a path for victims of human trafficking to repair credit histories that were harmed through no fault of their own.

The Debt Bondage Repair Act was signed into law in December 2021. It prohibits credit rating agencies from providing consumer reports that contain negative items about human trafficking survivors from any period during which the individual was being trafficked. Schmidt and a coalition of 40 other state and territorial attorneys general this week wrote the CFPB in support of implementing the changes in federal law into Section 605C of the Fair Credit Reporting Act.

Schmidt said it is a common tactic of traffickers to strip their victims of their financial independence or stability in order to keep them trapped. Even after they escape their trafficking, these survivors are often left with a wrecked credit history that leaves them unable to rent an apartment, purchase a car, or find employment. More than one in four survivors of human trafficking reported that a bank account or credit card that was opened in their name was then used or controlled by their trafficker.

“Restoring financial independence is a crucial component of a survivor’s recovery," the attorneys general wrote. "By regaining control over their finances, survivors reclaim and reassert their personhood in defiance of their traffickers. This takes bravery and time. Without some mechanism to help them, negative consumer reports that resulted from their trafficking become an almost insurmountable obstacle to simple tasks, like opening a bank account, renting an apartment, and applying for a job – all foundational steps as they try to get back on their feet.”

A copy of the letter to CFPB can be found at https://bit.ly/3vZS2NH.