CFPB Urged to Stop Allowing Credit Reporting Industry to Violate FCRA

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On September 24, 2020, a letter sent by a coalition of 21 consumer, faith, and advocacy groups to the Consumer Financial Protection Bureau (CFPB) urged the CFPB to revoke the permission they granted the credit reporting industry to violate the 30-day deadline imposed by the Fair Credit Reporting Act (FCRA) for investigating disputes.

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

According to a news release from the United States Public Interest Research Group (U.S. PIRG), the groups urged CFPB Director Kathy 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.

“Even before the pandemic, the credit reporting agencies were sending disputes to India and Chile for processing, so there’s no reason they need extra time now to process disputes remotely,” Ed Mierzwinski, senior director for consumer programs at U.S. PIRG, noted in the news release. “The CFPB should protect consumers.”

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.

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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