Costly Credit Reports & Potential 1st Amendment Violation

Costly credit reporting proposal could be First Amendment violation

Requires only positive reporting to credit bureaus

OLYMPIA… Companion bills in the Washington State Legislature are progressing that would require housing providers to report monthly on-time rent payments. Under House Bill 2323, landlords would also be prohibited from disclosing late or missed payments if the tenant elects to have payment history reported at all.

Industry groups also point to the significant startup costs for providers to report, let alone the administrative and compliance challenges. One estimate from the Washington Business Properties Association found that housing providers would spend more than $3,500 to start on-time reporting and $2 per unit per month going forward. So for a small housing provider with one single-family home rental, the first year’s cost would be $3,524.

William Shadbolt, Managing Director of the WBPA said, “This proposal will give the false impression that tenants only pay on time. I’m concerned that this will have adverse consequences on the housing and credit markets that could drive up costs even more. I think there could be a strong argument that this is a form of government-compelled speech and censorship at the same time that may also violate the Federal Fair Credit Reporting Act.”

Both the House proposal and companion, Senate Bill 6212 are scheduled for hearings this week. The WBPA and partner associations plan to tell lawmakers just how chilling enacting this law would be. 

“In the past several years, the Legislature has moved at break-neck speeds to impose all kinds of new, complex regulations and costly taxes and fees. We simply need a breather,” said Shadbolt. “Our state’s housing issues aren’t being addressed by policies like this. Instead, it’s driving rents up and pushing owners out. Does the Legislature honestly think that someone should just absorb a $3,500 government-imposed cost? It’s unreasonably unfair."