CFPB and FTC Collaborate to Investigate Corporate Investors’ Impact on Renters
The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) have joined forces to launch a joint inquiry into the influence of corporate investors on renters. The move comes as concerns grow about the rising housing costs faced by tenants and the aggressive tactics employed by corporate investors.
In a recent speech at the Community Table on a White House Blueprint for a Renters Bill of Rights, CFPB Director Rohit Chopra highlighted the alarming behavior of corporate investors. He expressed worry about the imposition of exorbitant rents and the imposition of junk fees on renters. Chopra further revealed that corporate investor owners, including private equity firms, tend to evict tenants more frequently, even when controlling for other factors. Additionally, corporate investor ownership of rental units has skyrocketed to over 45 percent.
Chopra also shed light on the growing use of artificial intelligence (AI) and social scoring in the rental process. He cautioned that these technologies can lead to rent hikes and discriminatory denials of housing based on an algorithm’s definition of high-quality tenants. Addressing this issue, Chopra emphasized that tenants are often denied the opportunity to correct inaccurate information in their background checks, despite the legal obligation for companies to inform consumers of adverse rental decisions based on such data.
Furthermore, the CFPB Director stressed the agency’s commitment to identifying misleading data resulting from inaccurate AI and illegal practices. He specifically mentioned the illegal practice of name-only matching in screening, which often leads to inaccurate information disproportionately affecting individuals with common last names.
To tackle these pressing concerns, Chopra announced the joint inquiry with the FTC. The aim of this initiative is to collect feedback from the public regarding their experiences with tenant screening. By gathering insights directly from renters, the CFPB and FTC hope to gain a comprehensive understanding of the challenges faced by tenants and devise better solutions.
This joint inquiry signifies a significant step in addressing the injustices faced by renters and holding corporate investors accountable for their actions. By shining a light on the detrimental impact of corporate ownership and the misuse of technology in the rental market, the CFPB and FTC aim to create a fairer and more transparent environment for tenants across the nation.
As the joint inquiry begins its work, it will be interesting to see the findings and potential actions that emerge. It is crucial that the voices of renters are heard, and meaningful changes are implemented to safeguard their rights and ensure affordable housing options for all.
