Tlaib introduces bill to make auto insurance use of credit data illegal 

click to enlarge Rashida Tlaib. - SHUTTERSTOCK
  • Shutterstock
  • Rashida Tlaib.

U.S. Rep. Rashida Tlaib introduced legislation that would make it illegal for auto insurance companies to use consumers' credit scores in calculating insurance rates.

Critics consider the controversial practice a form of economic redlining, and the Detroit Democrat said it punishes people for being poor. Regardless, it's part of the reason Detroit sees some of the nation's highest auto insurance rates.
HR 1756 would bar the nation's credit bureaus from providing consumer reports or consumer information "to any person for use in making any decision to underwrite or rate auto insurance." It would also prohibit auto insurers from using credit scores in auto insurance underwriting.

"Historically marginalized populations have already had less access to wealth and credit building opportunities, and the continued use of credit histories to set auto insurance pricing compounds racial discrimination and exacerbates wealth inequality,” Tlaib said in a letter to colleagues seeking support.

The legislation, which was co-sponsored by 25 Democrats, comes after a proposal floated by Detroit Mayor Mike Duggan and the state GOP twice died for lack of support. Unlike Tlaib's bill, it wouldn't have addressed insurers' use of credit scores.

Politico reports that auto insurance companies don't expect the bill to become law, but it's possible that the proposal could be slipped in as an amendment to a larger bill overhauling the nation's credit rating system.
"It is one of the issues that brings all my residents together," she said. "They don't want their credit score shared with the car insurance industry because they know it has no linkage, no connection, with their driving record, and it's unfair."

If approved, the bill likely would provide relief to Detroiters, whose average credit scores are among the lowest in the nation.

Stay on top of Detroit news and views. Sign up for our weekly issue newsletter delivered each Wednesday.

We welcome readers to submit letters regarding articles and content in Detroit Metro Times. Letters should be a minimum of 150 words, refer to content that has appeared on Detroit Metro Times, and must include the writer's full name, address, and phone number for verification purposes. No attachments will be considered. Writers of letters selected for publication will be notified via email. Letters may be edited and shortened for space.

Email us at [email protected].

Support Local Journalism.
Join the Detroit Metro Times Press Club

Local journalism is information. Information is power. And we believe everyone deserves access to accurate independent coverage of their community and state. Our readers helped us continue this coverage in 2020, and we are so grateful for the support.

Help us keep this coverage going in 2021. Whether it's a one-time acknowledgement of this article or an ongoing membership pledge, your support goes to local-based reporting from our small but mighty team.

Join the Metro Times Press Club for as little as $5 a month.

Related Locations

Read the Digital Print Issue

January 26, 2022

View more issues


Never miss a beat

Sign Up Now

Subscribe now to get the latest news delivered right to your inbox.

Best Things to Do In Detroit

© 2022 Detroit Metro Times - Contact Us

Website powered by Foundation