McHenry and Booker Introduce Fintech Bill to Automate Income Verification
Washington, September 28, 2017
Today, Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, and Senator Cory Booker (D-NJ) introduced the IRS Data Verification Modernization Act of 2017. This bipartisan bill will require the Internal Revenue Service (IRS) to automate the Income Verification Express Services process by creating an Application Programming Interface (API) allowing small businesses and consumers to access accurate credit assessments more efficiently. Joining McHenry as an original cosponsor of H.R. 3860 is Congressman Earl Blumenauer (D, OR-03), a senior member of the House Committee on Ways and Means.
“Innovation in financial services has created more convenient and secure ways to meet the demands of American consumers," said Congressman McHenry. "For financial innovation to succeed, however, Washington must update its information technology infrastructure to keep up with the growth and creativity in the private sector.
"Our federal government needs to do a better job in updating and securing its technology to make lending more accessible for all Americans," McHenry continued. "In light of the recent SEC and Equifax breaches, now is the time for Congress to take a leading role in creating a more safe and affordable process so that consumers are protected. This bill takes a small but important step in that direction by modernizing one of the most important processes in the financial system: income verification.”
“Helping small businesses access capital is one of the best things we can do to support their development and grow the economy," said Senator Booker. "Our commonsense bill simplifies the loan process for small businesses and entrepreneurs by providing lenders quicker access to financial records and data, while safeguarding private information. This bill will cut red tape and unreasonably lengthy waiting periods, making the process more efficient in getting much-needed capital into the hands of small businesses.”
Joining Senator Booker as an original cosponsor to the Senate companion legislation to H.R. 3860 is Senator Mike Crapo (R-ID).
Background: As part of the loan and mortgage processes for consumers and small businesses, each applicant completes an IRS form called a “4506-T,” which gives the lender the right to access a summarized version of their tax transcript, which is used to confirm certain data points on their application. According to industry reports, this manual process at the IRS takes two to eight days, which creates needless delay for fintech companies and banks that rely on leveraging data and technology to make faster, informed decision for consumer and small business lending.