How An Outdated FCRA Law Does More Harm Than Good
May 26, 2025
In a world where wages, home prices, and the cost of living have steadily climbed, some consumer protection laws have been left behind. One of the most glaring examples is found in the Fair Credit Reporting Act (FCRA), a federal law meant to promote accuracy, fairness, and privacy in the use of consumer credit information.
Originally enacted in 1970 and significantly amended in 1996, the FCRA introduced two important financial thresholds:
A $75,000 salary threshold, which if exceeded, would eliminate the standard 7-year reporting limit.
A $150,000 threshold for credit or insurance transactions, which if exceeded, would eliminate the standard 7-year reporting limit.
At the time, these thresholds made sense. But today, they’re wildly outdated. A $75,000 salary in the late 1990s equates to over $140,000 today, and a $150,000 transaction would be closer to $280,000 today. Yet the FCRA hasn’t adjusted these thresholds for nearly 30 years.
The FCRA restricts the reporting of most adverse information—civil records, judgments, tax liens, collections, charge offs, arrest records—to 7-years. But once the $75,000 salary threshold is exceeded, the 7-year limit is lifted. Meaning, by law, there is no time limit on what adverse records can be reported once the threshold is exceeded. In the 1990s, $75,000 represented high-income earners. And the purpose of this threshold was to ensure that high-level executives were vetted with tighter scrutiny given their significant positions. But today, many professionals in mid-tier roles easily exceed this threshold—not only exposing many more people to this exception but also undermining its original purpose.
The same logic applies to mortgages and insurance policies. With median home prices well above $400,000 in many areas, most loans trigger the $150,000 threshold. This again means adverse records older than 7-years can be legally reported—which can impact interest rates, loan terms or eligibility altogether.
Consumer protection laws must evolve alongside the economy. Otherwise, the very people they’re designed to help end up at a disadvantage. Whether it's in hiring, lending, or insurance, the FCRA’s outdated thresholds deserve a second look. Until that happens, more consumers will continue to face unnecessary barriers—not because of new risks, but because of laws frozen in the past.
Author: Paul Chang, Founder & Principal, Indelible Investigations