CFPB Orders Bank to Pay $4.6 Million Penalty for Violating FCRA Requirements for Checking Account Screening Reports

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Written By ESR News Blog Editor Thomas Ahearn

On August 2, 2017, the Consumer Financial Protection Bureau (CFPB) ordered JPMorgan Chase Bank, N.A. to pay a $4.6 million penalty for failing to comply with obligations outlined in the federal Fair Credit Reporting Act (FCRA) related to the accuracy of information about consumer checking account behavior provided for checking account screening reports, according to a news release on the CFPB website.

The CFPB found Chase failed to have adequate policies in place regarding the accuracy of information reported about the checking account behavior of consumers, failed to provide results of investigations to consumers who disputed their information, and failed to tell consumers which consumer reporting company supplied the information resulting in denial of their checking account applications.

Banks screen potential customers based on reports about prior checking account behavior created by consumer reporting companies. Banks that supply information for those reports are legally required under the FCRA to have proper processes in place for reporting accurate information. Along with the $4.6 million penalty, the CFPB order requires Chase to implement the following changes to its policies:

  • Ensure accurate information is reported: Chase must implement reasonable policies and procedures regarding the accuracy of information on consumers’ checking account behavior that it sends to consumer reporting companies.
  • Inform consumers of investigation outcomes: Chase must report the results of its investigations to consumers who filed disputes with the bank regarding the information reported about them to consumer reporting companies.
  • Provide consumers with contact information: Chase must provide consumers with the contact information of the consumer reporting company that supplied information that Chase used to deny an application for a deposit account.

“Because Chase did not have the required processes to report this information accurately, and kept consumers in the dark about reporting disputes and application denials, the Consumer Bureau is imposing a $4.6 million penalty and other measures to stop these violations in the future,” CFPB Director Richard Cordray stated in the press release about the consent order.

The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the CFPB authority to take action against institutions or individuals engaging in unfair, deceptive, or abusive acts or practices or that otherwise violate federal consumer financial laws. The text of the CFPB consent order against JP Morgan Chase Bank is available at: http://files.consumerfinance.gov/f/documents/201708_cfpb_JPMorgan-Chase_consent-order.pdf.

The CFPB also has information for consumers on how to get a copy of the report banks use to decide whether to let them open a checking account. Information on how to obtain reports from specialty consumer reporting companies can be found at: www.consumerfinance.gov/askcfpb/2035/How-do-I-get-a-copy-of-the-report-banks-use-to-decide-whether-to-let-me-open-a-checking-account.html.

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