New York Gov. Andrew M. Cuomo announced Thursday that his office has asked credit scoring and reporting bureaus to take immediate action to stop lowering credit scores for Superstorm Sandy victims.
Superintendent of Financial Services Benjamin M. Lawsky has sent letters to FICO, TransUnion, Experian, Equifax and the Consumer Data Industry Association (CDIA) requesting that they quickly move to protect Sandy victims and that senior executives from those organizations meet at the New York State Department of Financial Services (DFS) as soon as possible to resolve this issue.
“Hitting Sandy victims with an unfair black mark on their credit scores would add insult to injury for the thousands of New Yorkers fighting to rebuild and recover after this devastating storm,” said Cuomo. “The credit reporting agencies must take swift action so that Sandy victims don’t have their credit scores unjustly tarnished.”
The financial challenges that many New Yorkers are facing due to Superstorm Sandy could negatively impact their credit scores for reasons that are unrelated to their creditworthiness, Cuomo's office cautioned. For example, many homeowners missed mortgage payments because of Sandy or were forced to seek forbearance of their mortgage payments in the face of mounting recovery-related expenses.
Many others were unable to make rent payments when their homes became uninhabitable and they were forced to pay for alternative housing. Homeowners and business owners also found themselves taking out loans for equipment essential to the rebuilding of their homes and businesses.
Lawsky added, “No Sandy victim should face a hit to their credit history simply because they caught a bad break from Mother Nature and got caught in the path of this destructive storm. This issue is critically important to Governor Cuomo because a person’s credit score can impact everything from the rate they pay for a mortgage to their prospects for getting a new job.”
Cuomo's office has demanded credit bureaus take the following four actions:
1. Take immediate action to ensure credit scores are not lowered for Sandy victims;
2. Reset any scores that were already lowered;
3. Work with banks and other lenders to red flag any negative information that comes from disaster victims;
4. And meet with the Department of Financial Services to permanently change procedures to prevent credit scores from going down for disaster victims.
There was no immediate response from the major credit bureaus pending receipt of the letters requesting action.