ESCRA Act

Payment Protections: A credit repair organization cannot request or receive payment for improving a consumer's credit history until they provide documentation from a consumer reporting agency showing the service was achieved (Section 3(b)(2)).

Truthful Statements: The bill adds a requirement that entities must "knowingly" make statements, providing a finding that it is unlawful to make false or fraudulent statements to the Bureau of Consumer Financial Protection (Section 3(a)(1)).

Transparency in Disclosures: Organizations must now disclose in writing that "Credit repair organizations do not provide any services that you cannot do yourself for free" (Section 4(1)(A)).

Enhanced Record Keeping: Consumers are entitled to receive copies of all communications sent on their behalf at the time the communication is sent (Section 5).

Consumer Protection via Licensing: To ensure legitimacy, the act mandates that no person may act as a credit repair organization without a State license starting January 1, 2026 (Section 6).

Clearer Dispute Processes: The bill prevents "jamming" by requiring that a reasonable investigation period has passed and that new disputes include a specific description of what information is inaccurate (Section 3(b)(3)).

Accountability through Damages: The bill adds a provision allowing for damages of $500 for each violation of the title (Section 8).

Increased Requirements for Disputes: Disputes sent by mail must now include specific identifying information such as the organization's name and State license number on the envelope (Section 7(a)(1)).

Mandatory Disclosures on Letters: When sending a dispute, organizations are required to include a specific disclosure statement identifying themselves as a credit repair organization (Section 7(a)(7)).

Strict Rules for Multiple Disputes: Organizations are prohibited from submitting multiple disputes regarding the same information unless specific conditions regarding investigation results and material changes are met (Section 3(b)(3)).