Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On December 22, 2020, the Consumer Financial Protection Bureau (CFPB) issued a consent order that imposed a $4,750,000 civil money penalty against “a leading originator and servicer of nonprime auto loans and leases” that furnished credit information on the auto loans it serviced to Consumer Reporting Agencies (CRAs) to address alleged violations of the federal Fair Credit Reporting Act (FCRA), according to a press release from the CFPB.

The consent order found that the consumer loan data furnished by Santander Consumer USA Inc. to CRAs between January 2016 and August 2019 allegedly contained numerous systemic errors that, in many instances, could have negatively impacted consumers’ credit scores and access to credit. The consent order required the company to take certain steps to prevent future violations and imposed a $4,750,000 civil money penalty.

The CFPB claimed Santander furnished consumer loan information to CRAs that it knew or reasonably should have known was inaccurate, failed to promptly update and correct information furnished to CRAs later determined was incomplete, failed to provide the date of first delinquency, and failed to establish and implement written policies and procedures regarding the accuracy and integrity of information provided to CRAs.

The conduct by Santander violated the FCRA and its implementing rule, Regulation V, and these violations of the FCRA and Regulation V constituted violations of the Consumer Financial Protection Act (CFPA) of 2010. Under the terms of the consent order, the company must correct all inaccuracies and errors that the CFPB identified and take certain steps to improve and ensure the accuracy of the consumer information it provides to CRAs.

The Consumer Financial Protection Bureau (CFPB) is an agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. To learn more about the CFPB, visit www.consumerfinance.gov.

Enacted by Congress in 1970, the Fair Credit Reporting Act (FCRA) 15 U.S.C § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs, protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulates the collection, dissemination, and use of consumer information, including consumer credit information.

Employment Screening Resources® (ESR) – a leading global background check provider that was named the number one screening firm by HRO Today – offers two white papers titled “Common Ways Consumer Reporting Agencies are Sued Under the FCRA” and “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” to help employers comply with the FCRA. To learn more about ESR, visit www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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