Captiol Building in Washington
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It’s been months since news broke about the Equifax data breach. The exposure of Social Security numbers, credit card data and other personal information left roughly 147.9 million Americans vulnerable to scams and fraud.

Equifax has made several attempts to right its wrongs, including temporarily waiving fees for freezing and unfreezing its credit reports. In January, the company extended the final deadline for free security freezes to June 30, saving customers in many states as much as $10 a pop.

In March, the Senate passed a bill challenging key provisions in the Dodd-Frank Act of 2010. The bill, which would loosen banking regulations, includes some goodies for consumers, too, like requiring the credit agencies to offer free credit freezes for consumers nationwide.

Credit freezes prevent lenders from accessing your credit report. If you were a victim of the Equifax hack, freezing your credit file is one way to prevent someone from opening a new credit card or another account in your name.

However, there are still plenty of reasons consumers should not be happy about the final Senate bill.

The bill’s flaws

The U.S. House of Representatives will soon vote on the regulatory relief bill. Among other things, it offers:

  • Free credit monitoring for all active-duty military service members.
  • Free credit freezes in every state.
  • A new Federal Trade Commission web page with helpful links for requesting fraud alerts and credit freezes.
  • Benefits for veterans, including the chance to remove certain delinquent medical debt from credit reports.

Consumer advocates aren’t impressed.

Eight states and the District of Columbia already offer free credit freezes. And unlike the Senate bill, in multiple state laws, free freezes also apply when employers and insurance companies want to review credit reports, says Mike Litt, a director at U.S. PIRG, a nonprofit consumer advocacy group.

“Aside from the core provisions of the bill that increase the likelihood of mortgage fraud and racial discrimination and risky banking practices, there are provisions that benefit Equifax and the other credit bureaus at the expense of consumers and service members,“ Litt says. “That includes a weak free credit freeze provision that actually preempts and overrides stronger state laws regarding freezes.“

Another problem with the bill, Litt says, is that although it offers military service members free credit monitoring, it limits their legal options if problems arise.

“It also denies service members their ability to enforce the new right,” Litt says. “It excludes that section from enforcement in the Fair Credit Reporting Act, which allows people to have their day in court, replacing it with sole enforcement from federal and state agencies.”

Francis Creighton, president and CEO of the Consumer Data Industry Association, says he’s fine with the language in the Senate bill about credit freezes. But when the House considers the bill, he would support efforts to remove provisions that support free credit monitoring.

“We appreciate the fact that the Senate agrees that credit monitoring is a good product and that people should have access to it,” Creighton says. “As thousands of employers do across the country, it should be given to them as an employee benefit purchased from our companies, not where our companies are forced to give away the product that they developed over many years for free.”

Automatic credit freezes?

Litt and his colleagues support a different bill that would freeze credit reports automatically.

“It would essentially create a default freeze,” Litt says. “Then you as the consumer would simply lift the freeze.”

Not everyone thinks making credit freezes automatic is the best idea. If you freeze your credit, you’ll need to unfreeze it if you want a new credit card or a new iPhone, Creighton says. And to lift the freeze, you’ll need to keep up with a PIN number.

“Most people aren’t going to actually keep their PIN in this world of so many passwords and pins and everything else,” Creighton says. “And it’s unlikely that a consumer is going to have that PIN on their person every single time that they go and get credit.”

The credit scoring debate

The Senate bill also adds fuel to the fire in an ongoing debate about the use of credit scores in mortgage lending. One provision would require the Federal Housing Finance Agency (FHFA) to consider alternative credit scoring models for borrowers interested in getting a mortgage from Fannie Mae or Freddie Mac. But the FHFA is already reviewing the possibility of using an updated scoring model.

“What this bill would do is actually scrap that process, make them start from scratch, which we just find very suspect,” Litt says.

Protecting yourself

As a consumer, you should pay close attention to what’s happening in Congress. Consider reaching out to your elected officials and speaking up if you feel strongly about any particular issue.

In the meantime, it’s important to monitor your checking and savings accounts and your credit card statements. Check your credit score here for free and get a free copy of your credit report by visiting annualcreditreport.com. Since residents in most states can only review one credit report from each credit bureau annually, you may want to order a different report every four months.

If you’re seriously concerned about fraud or identity theft, consider whether you want a credit freeze or a credit lock. Both can stop a stranger for applying for credit in your name. But unlike freezing your credit report, locking your credit file is something you can do from your smartphone or computer. Still, some experts warn that credit locks provide fewer legal protections.

“If the lock fails and you become a victim of identity theft, you have no recourse,” explains National Consumer Law Center staff attorney Chi Chi Wu. “Consumers are better off getting a freeze, at least in terms of legal recourse if something goes wrong.”