Written By ESR News Blog Editor Thomas Ahearn
On April 1, 2020, the Consumer Financial Protection Bureau (CFPB) – which helps businesses comply with federal consumer financial law – issued guidance to help data furnishers and consumer reporting agencies (CRAs) comply with the Fair Credit Reporting Act (FCRA) in response to the passing of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to lessen the economic impact of the Coronavirus (COVID-19) pandemic.
On March 27, 2020, President Donald Trump signed the CARES Act, which provides emergency assistance to consumers and businesses affected by Coronavirus (COVID-19) and includes provisions addressing consumer reporting requirements. Less than a week later, the CFPB issued its Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act.
“Consumer report information is critical to consumers and industry in determining who obtains credit, insurance, and housing, and at what price, and who obtains employment in many cases. Consumer reporting has enormous reach, as evidenced by the over 200 million consumers in the United States who have credit files and trade lines furnished by over 10,000 providers,” the CFPB guidance stated.
The CFPB guidance highlights the responsibilities of data furnishers under the CARES Act and informs CRAs and furnishers of the CFPB’s flexible supervisory and enforcement approach during this pandemic regarding compliance with the FCRA and Regulation V, regulations that protect consumer information. Below are examples of the flexibility the CFPB (“The Bureau”) intends to provide in the consumer reporting system:
- Furnishing Consumer Information Impacted by COVID-19: The Bureau reiterates its prior guidance encouraging financial institutions to work constructively with borrowers and other customers affected by COVID-19 to meet their financial needs. While companies generally are not legally obligated to furnish information to consumer reporting agencies, the Bureau encourages them to continue furnishing information despite the current crisis. Furnishers’ providing accurate information to consumer reporting agencies produces substantial benefits for consumers, users of consumer reports, and the economy as a whole. The CARES Act, a section of which amends the FCRA, generally requires furnishers to report as current certain credit obligations for which furnishers make payment accommodations to consumers affected by COVID-19 who have sought such accommodations from their lenders. The Bureau expects furnishers to comply with the CARES Act and will work with furnishers as needed to help them do so. Many furnishers are or will be offering consumers affected by COVID-19 various forms of payment flexibility, including allowing consumers to defer or skip payments, as required by the CARES Act or voluntarily. Such payment accommodations will avoid the reporting of delinquencies resulting from the effects of COVID-19. The Bureau supports furnishers’ voluntary efforts to provide payment relief, and it does not intend to cite in examinations or take enforcement actions against those who furnish information to consumer reporting agencies that accurately reflects the payment relief measures they are employing.
- Disputes: The FCRA generally requires that consumer reporting agencies and furnishers investigate disputes within 30 days of receipt of the consumer’s dispute. The 30-day period may be extended to 45 days if the consumer provides additional information that is relevant to the investigation during the 30-day period. The Bureau is aware that some consumer reporting agencies and furnishers may face significant operational disruptions that pose challenges for them in investigating consumer disputes. For example, some consumer reporting agencies and furnishers may experience significant reductions in staff, difficulty intaking disputes, or lack of access to necessary information, rendering them unable to investigate consumer reporting disputes within the timeframes the FCRA requires. Furnishers include a wide variety of businesses that vary in size and sophistication and can range from small retailers to very large financial services firms, each of which will face unique challenges due to the COVID-19 pandemic. In evaluating compliance with the FCRA as a result of the pandemic, the Bureau will consider a consumer reporting agency’s or furnisher’s individual circumstances and does not intend to cite in an examination or bring an enforcement action against a consumer reporting agency or furnisher making good faith efforts to investigate disputes as quickly as possible, even if dispute investigations take longer than the statutory timeframe. The Bureau reminds furnishers and consumer reporting agencies that they may take advantage of statutory and regulatory provisions that eliminate the obligation to investigate disputes submitted by credit repair organizations and disputes they reasonably determine to be frivolous or irrelevant. The Bureau will consider the significant current constraints on furnisher and consumer reporting agency time, information, and other resources in assessing if such a determination is reasonable.
The CFPB believes that this flexibility will help furnishers and CRAs “to manage the challenges the current crisis poses. It also will enable consumers, as well as lenders, insurers, employers, and other consumer report users, to maintain confidence in the consumer reporting system.” Resources for consumers facing the impacts of the COVID-19 pandemic are available on the CFPB website at www.consumerfinance.gov/coronavirus/.
On March 13, 2020, the CFPB offered information to consumers (en Español) on how to protect themselves financially from the impact of the Coronavirus (COVID-19). Federal, state, and local governments are working to respond to the growing public health threat of the Coronavirus. As the country deals with an increase in reported cases, many areas may be impacted by the closure of businesses, schools, public facilities, or events.
These actions – while necessary to help reduce exposures – may bring financial uncertainty for people who could experience a loss of income due to illness or workplace closures. The CFPB is offering information to help consumers in these situations. Consumers with a problem with a financial product or service should try reaching out to the company first. Consumers with complaints can call the CFPB at (855) 411-2372 or submit a complaint.
Coronavirus (COVID-19) is a respiratory illness that can spread from person to person with symptoms of fever, coughing, and shortness of breath. As of April 7, 2020, there more than 1.4 million total confirmed global cases of Coronavirus and the United States leads the world with more than 386,000 confirmed cases, according to research from the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU).
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