Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

In a letter dated November 9, 2020, Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger told the National Consumer Law Center (NCLC) the CFPB would maintain guidance issued in response to the Coronavirus (COVID-19) pandemic that eased dispute deadlines under the Fair Credit Reporting Act (FCRA).

“I want to make clear that all companies continue to remain responsible for FCRA compliance with dispute resolutions in a timely fashion,” CFPB Director Kraninger wrote in the letter, which maintained that the CFPB would keep looking at the administration of consumer disputes on a company-by-company basis.

“However, during the extraordinary times in which we find ourselves, the bureau does not intend to cite in an examination or bring an enforcement action against firms who exceed the deadlines to investigate such disputes – but only as long as efforts are made in good faith to do so as quickly as possible,” Kraninger added.

In guidance issued on April 1, 2020, the CFPB had permitted credit and consumer reporting agencies (CRAs) – and the banks, lenders, and debt collectors that report information to CRAs – to exceed the 30-day FCRA dispute deadline due to “reductions in staff, difficulty intaking disputes, or lack of access to necessary information.”

On September 24, 2020, a coalition of 21 consumer, faith, and advocacy groups that included the NCLC sent a letter to the CFPB that urged the agency to revoke the permission granted the credit reporting industry to violate the 30-day deadline for investigating disputes imposed by the FCRA, a federal law regulating credit reporting.

Under the FCRA, businesses have 30 days to investigate a dispute – extending to 45 days in some circumstances – but the CFPB stated it would not take supervisory or enforcement action against companies trying but failing to meet the deadlines because of “significant operational disruptions” facing the industry due to the pandemic.

According to a news release from the United States Public Interest Research Group (U.S. PIRG), the coalition of groups urged Kraninger to rescind the permission to exceed the 30-day deadline in part because of a dramatic increase in complaints to the CFPB from consumers alleging delays in resolving their disputes.

The letter provided by U.S. PIRG stated: “From the time period of April 1 to September 23, 2020, there were 6,864 complaints in the credit reporting category that are in the subcategory ‘Was not notified of investigation status or results;’ there were 6,262 complaints in the subcategory ‘Investigation took more than 30 days.’”

The letter continued: “Thus, consumers have lodged over 13,000 complaints just in the past six months alleging that their disputes have not been addressed within the FCRA deadline, if addressed at all. In comparison, there were only 2,000 complaints in both of these two subcategories cumulatively for the same time period in 2019.”

The letter concluded that those statistics meant that there had been a 550 percent increase in credit reporting complaints “likely as a result of the CFPB guidance.” The letter proposed, as an alternative to revoking the guidance, that the CFPB should limit the extra time provided to the credit industry to 15 or 30 days.

Enacted by Congress in 1970, the FCRA 15 U.S.C § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs, and protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information.

COVID-19 is a deadly respiratory illness that spreads from person to person. As of November 20, 2020, there are approximately 57 million global cases and 1.3 million global deaths, while the United States leads the world with approximately 11.7 million cases and 252,000 deaths, according to research from Johns Hopkins University.

Employment Screening Resources® (ESR) – a leading global background check provider – offers background screening solutions that comply with the FCRA as well as whitepapers on how employers may avoid FCRA lawsuits and on how CRAs may avoid FCRA lawsuits. To learn more about ESR, visit www.esrcheck.com.

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