Washington, DC – U.S. Sen. Ron Wyden and five colleagues said today they’re asking the Consumer Financial Protection Bureau (CFPB) for information about its oversight authority and regulatory history of tenant screening technology companies, which about 90 percent of landlords use for reviewing income and employment history, eviction history, and criminal background in deciding about whether to rent to potential tenants.
Wyden and the five senators noted in their letter to the CFPB that these data sources are often plagued by inaccuracies and are known to collect faulty, publicly available data from court records — disproportionately harming tenants of color.
“We are particularly concerned that communities of color that have been disproportionately affected by job losses in the pandemic, and have historically been precluded from homeownership, will be the hardest hit, and we write to request more information on the regulation of these tenant screening software companies,” the six senators wrote. “As a direct result of our nation’s legacy of racist, harmful policies, Black families are less likely to own homes, less likely to have generational wealth from past homeownership to afford a down payment, and more likely to be renters – so Black families are at greater risk in the absence of renter protections.”
Many tenant screening companies employ search algorithms and use web scrapers to search for and collect data on publicly available court websites. Companies then compile this data into reports containing either a numerical recommendation score or a “thumbs-up or thumbs-down” recommendation of whether a landlord should rent to the potential tenant. However, many screening services only search for whether the potential tenant has been named in an eviction case – and don’t include the reasons for the landlord filing the eviction, how long ago it occurred, or the outcome of the case including whether it was dismissed. Because of these and other flaws, renters can find themselves blacklisted as a result of incomplete data from the screening software.
“This problem of incomplete and incorrect data on eviction filings poses a risk to renters every year, but may create a heightened threat in 2021,” the lawmakers wrote. “Due to the economic and housing instability wrought by the COVID-19 pandemic, an estimated 30-40 million Americans remain at risk of eviction; in January 2021, more than 20% of renters reported being behind on rent.”
These evictions pose a severe threat to families and to public health, and people of color are disproportionately at risk of the harms of eviction. Communities of color and women have been hardest hit by job losses during the pandemic—with women of color at particular risk.
“It is vital, with the recent wave of evictions nationwide caused by the pandemic, that these companies do not further disadvantage Americans looking to find safe and reliable housing,” the lawmakers wrote.
In addition to Wyden, the letter was signed by U.S. Sens. Elizabeth Warren (D-Mass.), Cory Booker (D-N.J.), Edward J. Markey (D-Mass.), Chris Van Hollen (D-Md.), and Richard Blumenthal (D-Conn.).
The senators requested a response by no later than March 14, 2021.
A PDF of the entire letter is here.
A web version of this release is here.