Bill > A2789

Introduced Session

This bill requires the Department of Community Affairs to establish a "Rent for Credit Pilot Program" ("pilot program") for low-income tenants. The purpose of the pilot program is to enable low-income tenants that rent a subsidized dwelling unit to generate and build credit without taking on an unsustainable debt burden by allowing tenants to report rent payments to consumer reporting agencies. Under the bill, a landlord may volunteer to participate in the pilot program. If a landlord participates, information is to be provided to tenants detailing the "Rent for Credit Pilot Program." Landlords involved with the pilot program will be required to agree in writing to: (1) comply with the rules promulgated by the department pursuant the bill; and (2) provide information, to the extent practicable, to the department concerning the execution of the program for the purpose of the report in section 4 of the bill. The bill further provides that if a tenant elects to participate in the pilot program, the landlord may require that the tenant pay a monthly fee of $10 or a fee to cover the cost of reporting the tenant's rent payment information, whichever is less. If a tenant fails to pay the monthly fee required by the landlord, nonpayment of the fee will not: (1) establish a cause for removal of the participant tenant from the dwelling unit; or (2) provide the landlord with justification to deduct the fee from the participant tenant's security deposit.If the monthly fee remains unpaid for more than 30 days, the landlord will cease to report the participating tenant's rental payments. Additionally, the department will be required to adopt rules and regulations under the Administrative Procedure Act that include and accomplish the following: (1) provide a list of eligible credit reporting agencies that a landlord may use to report a tenant's rental payment information; (2) approve a software vendor that will develop a program for a landlord to transmit reports of a tenant's payment or nonpayment of rent to a credit reporting agency; (3) ensure that each landlord reports rent payment information concerning a tenant's payment or nonpayment of rent after the date upon which the tenant elected to participate in the pilot program; and (4) establish a standard form for a tenant to use to elect to participate--or cease to participate--in the pilot program. The standard form will be distributed to tenants by the tenant's landlord and will include the following: (a) a statement that the tenant's participation in the pilot program is voluntary and that a tenant may cease participating in the pilot program at any time and for any reason by providing notice to the participant tenant's landlord; (b) information on the positive and negative effects of credit reporting on an individual's credit standing; (c) a department website address where a tenant may view information concerning financial literacy; (d) a statement that all of participant participating tenant's rent payments may be reported, regardless of whether the payments are timely, late, or missed, and that reporting may commence within 30 days after the tenant elects to participate in the pilot program; (e) a statement that if a tenant elects to cease participating in the pilot program, the tenant may not resume participating in the pilot program for at least 6 months; (f) a statement that a participating tenant may be subject to a monthly credit reporting fee established by the landlord that shall not exceed $10, and that nonpayment of the fee after 30 days will serve as notice to the landlord of the tenant's decision to cease participating in the pilot program; (g) instructions describing how to elect to cease participating in the pilot program; and (h) a signature block where the tenant may sign and date the form. Finally, the bill provides that the department will be required to conduct a review of the cumulative effectiveness of the pilot program on or before February 1 of the program's second fiscal year. The review will include, but not be limited to: (1) the number of landlords participating in the pilot program; (2) the number of participating tenants, including the number of those who ceased participating in the pilot program; (3) the demographics of participating tenants, including race, ethnicity, gender, income, and age, as may be voluntarily provided by participant tenants; (4) the cost of administering the pilot program; (5) the number of residential properties offered by each landlord; (6) the city and county of each property offered by the landlords involved in the pilot program; (7) a short narrative of the challenges faced by landlords and participating tenants during the pilot program; (8) an assessment of how the pilot program, in aggregate, positively or negatively affected participating tenants' credit; and (9) a recommendation from the department concerning the continuation of the pilot program. Once the review is completed, the department will be required to compile a report based upon the review's conclusions and submit the report to the Governor and the Legislature.

AI Summary

Committee Categories

Lou Greenwald (D)*, 

Introduced, Referred to Assembly Housing Committee (on 01/09/2024)

Official Document