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Committee debates rent-reporting bill to help renters build credit; providers warn of costs and data risks
Summary
House File 2123 would require landlords to offer tenants the option to have on-time rent payments reported to credit agencies. Supporters said rent reporting can expand credit access and raise scores, while housing providers cautioned about implementation costs, data security, and that reporting only positive payments could be misleading.
House File 2123, which would create a framework for rent-reporting to major credit bureaus, was presented to the Housing Finance & Policy Committee and laid over after detailed testimony and lengthy member questions.
Representative Racine (bill sponsor) said the proposal offers an option for renters to have on-time rent payments reported to credit-reporting agencies to help them build credit and access financial products. The bill exempts small landlords, allows renters to opt in or out, and proposes grant funding to offset implementation costs.
Samuel Benda, a policy fellow at the African American Leadership Forum, testified that rent reporting can materially increase credit scores for some renters; he cited private-sector findings (TransUnion) that rent-reporting can yield average score increases (he mentioned an "average 60 point credit increase" in testimony). Kim Munley of Exodus Lending, testifying as a renter and community-lending coordinator, said "credit is not a luxury" and urged the committee to enable renters to translate consistent rent payments into credit history.
Cecil Smith of the Minnesota Multi Housing Association urged caution. He said mandatory reporting would impose new operational requirements, including secure handling of credit data, portal setup, staff training, and recurring reporting fees. He also argued that a system that reports only positive payments without late or missed payments would be one-sided and could be rejected by credit agencies; he recommended the committee consult the three major credit bureaus and ensure safe-harbor protections for good-faith reporting errors.
Committee members asked many implementation questions: whether late or missed payments would also be reported (testimony indicated current language focuses on positive reporting but does not preclude reporting negatives), how opt-in/opt-out would operate, and the likely cost to housing providers. Witnesses and members agreed it would be important to consult credit bureaus and refine the bill’s technical language before advancing.
Next steps: The committee adopted the A3 amendment and laid House File 2123 over for further work and technical consultation.
