Relates to requirements when landlords offer tenants the option of rent reporting

Showing the cosponsors who are on Agora, A to Z. The official record may list more.

• Democratic2

Shown in neutral colors by design; Agora is non-partisan.

◆ The sponsor's argument

Why Cordell Cleare says this is needed

A person's credit score has an outsized impact on their ability to secure loans for housing, vehicles and other needs, their ability to obtain credit cards, calculation of insurance rates and other important financial matters. However, a person's credit score is calculated based on certain data gathered and reported to credit agencies and does not include on-time payments of rent, representing a missed opportunity for tenants who pay their rent on time to establish or improve their credit score and for landlords who want rent paid in a timely fashion. Some landlords have chosen to report rental payments to credit agencies, both to incentivize tenants to pay on time, and to help tenants raise their credit scores. For tenants with low or no credit, the impact can be particularly meaningful. In September 2022, Fannie Mae launched a Positive Rent Payment pilot program, working with landlords nationwide to facilitate the reporting of rent payments to credit agencies. For some tenants, reporting on-time rental payments each month resulted in establishment of credit and in other cases an increase of up to 40 points in their credit score. Such an increase can open up many new financial opportunities for tenants, allowing them to obtain loans, a mortgage or other benefits. As the practice of rent reporting expands, guidelines must be in place to ensure fairness and transparency. This legislation would require that any landlords who contemplate offer reporting of positive rental payment information to credit agencies first obtain a tenant's authorization to participate in the program and notify them of which agencies the infor- mation is reported to, any fees associated with participation in the program and a notice of their right to opt out at any time. Such notice must be provided to tenants at the signing of a lease, as well as at each renewal.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.