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Locked Out

Citing a Markup Investigation, Senators Question Regulators About Tenant Screening Oversight

They raise concerns over racial disparities, effects of pandemic

A photo of Massachusetts Senator Elizabeth Warren
Senator Elizabeth Warren

Citing last year’s joint investigation by The Markup and The New York Times, six Democratic senators raised concerns about the tenant screening industry in a letter sent to the Consumer Financial Protection Bureau last week.

Senators Elizabeth Warren (D-MA) and Cory Booker (D-NJ) led the effort, with Ron Wyden (D-OR), Edward Markey (D-MA), Chris Van Hollen (D-MD), and Richard Blumenthal (D-CT) also signing the letter. The senators specifically focused on the disproportionate effect that errors in tenant screening reports to landlords can have on renters of color and questioned the CFPB in detail about how it investigates violations by tenant screening companies.

The CFPB declined to comment for this story. The agency shares oversight with the Federal Trade Commission over this rapidly expanding industry.

Last year’s Markup investigation, and subsequent articles in our Locked Out series, revealed that people can be unfairly blacklisted from rentals when these tenant screening reports—which are often automated—contain mistakes. The screening companies buy and scrape public records in bulk, including criminal records, eviction filings, job histories, and more. They search for negative information on prospective tenants, compiling the results into background reports for landlords, for a fee. Nine in 10 landlords use tenant screening services such as these, according to an industry survey.

Bad data and screeners using sloppy “wild card” matching algorithms can saddle people with others’ criminal records, which leads to wrongful rejections.

The Consumer Data Industry Association, an industry trade group, says the number of errors are small when compared to the volume of reports produced and that the companies work to clear up errors when they do occur.

Latinos are often victims of name mix-ups, as our investigation found. In part, it’s because Anglo-centric data entry fields struggle with multiple last names. But Latinos in the U.S. also have fewer unique surnames compared to people of other backgrounds. According to Census data, more than 12 million Latinos in the U.S. share just 26 surnames.

Our initial investigation reported on people like Hector Hernandez, who with his wife and newborn was left temporarily homeless in the Washington, D.C., suburbs after a tenant screening company mixed him up with someone named Hector Hernandez-Garcia, an accused drug smuggler. And Marco Fernandez, who lives in Maryland, works for an elite military cybercommand strike force, and has a top-secret security clearance. He sued another screening company for mistaking him for Mario Fernandez Santana, who lives in Mexico and is on the federal watch list for suspected terrorists.

“We are particularly concerned that communities of color that have been disproportionately affected by job losses in the pandemic, and have historically been precluded from homeownership, will be the hardest hit,” the letter reads. “As a direct result of our nation’s legacy of racist, harmful policies, Black families are less likely to own homes, less likely to have generational wealth from past homeownership to afford a down payment, and more likely to be renters—so Black families are at greater risk in the absence of renter protections.”

The Markup also found that people can be denied housing because of old, minor criminal records that they may have thought had been expunged. And evictions filed in error or that were quickly settled can also haunt people for years—a problem that has become particularly acute during the COVID-19 crisis.

The senators’ letter argues that now, during a global pandemic, barriers to securing safe housing threaten not only individual families’ well-being but public health overall. And they ask the CFPB how it will ensure that tenant screeners don’t report COVID-19 evictions “despite a federal, state, or local moratorium at the time.”

That is among several detailed questions about just how the agency evaluates tenant screening companies and their practices, whether it has the ability to audit the companies’ data-collection methods and matching algorithms, and whether there is evidence that those methods and algorithms discriminate against communities of color. The letter cites The Markup’s reporting 11 times.

The lawmakers requested that the CFPB respond to their questions by March 14.

Their letter comes at an opportune moment. President Biden’s nomination for the next CFPB director is Rohit Chopra, who, as a commissioner of the FTC, called for more federal oversight of tenant screening companies, and stricter penalties when their mistakes caused people harm.

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