Written By ESR News Blog Editor Thomas Ahearn
The Consumer Financial Protection Bureau (CFPB) has issued Compliance Bulletin 2016-01 regarding compliance with the federal Fair Credit Reporting Act (FCRA) that emphasizes the obligation of data furnishers under Regulation V to establish and implement written policies and procedures regarding the accuracy and integrity of information being furnished to Consumer Reporting Agencies (CRAs).
The CFPB Compliance Bulletin stresses that this obligation required under Regulation V since 2010 applies to furnishing information to all CRAs, including furnishing to “specialty CRAs.” Regulation V, which can be found in the Code of Federal Regulations at 12 C.F.R. § 1022, App. E, sets out parameters that data furnishers must address when creating and updating the accuracy and integrity policies.
The bulletin from the CFPB states that the bureau’s supervisory experience suggests that not all furnishers are compliant with their obligations under Regulation V with regard to furnishing to specialty CRAs. The bulletin notes that a furnisher’s obligation to have reasonable written policies and procedures applies to “all types of information relating to consumers furnished to each of the CRAs to which it furnishes.”
The CFPB bulletin asserts that an institution must consider the appropriate approach to each type of furnishing in its policies and procedures in order to comply with Regulation V. The bulletin notes that the type, frequency and nature of the information furnished to CRAs can vary significantly, and there also may be significant differences in the reporting formats and codes used to furnish to specialty CRAs.
The bulletin is as a reminder of the CFPB’s focus on credit reporting issues and the need for furnishers to have robust policies and procedures regarding the accuracy and integrity of information as required by Regulation V. Furnishers should create and/or review existing policies and procedures to ensure all of the components listed above that may apply to their particular furnishing activities are addressed.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) established the CFPB to help consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more ESR News blogs about the CFPB, visit https://www.esrcheck.com/wordpress/tag/cfpb/.
Employment Screening Resources® (ESR) believes that there will be increased governmental oversight and enforcement of the background check industry from federal agencies such as the CFPB in 2016, with a particular focus on issues involving accuracy of information. This is the number one trend selected by ESR founder and CEO Attorney Lester Rosen for the ESR Top Ten Background Check Trends for 2016.
As reported earlier by the ESR News Blog in October 2015, the CFPB ordered two of the nation’s largest employment background check firms to pay $13 million – $10.5 million in relief to harmed consumers and a $2.5 million civil penalty – for allegedly failing to take steps to ensure the information they reported about job applicants was accurate, according to a news release on the CFPB website.
NOTE: Employment Screening Resources (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this web site is for educational purposes only.
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