Scott Brown, corporate consumer finance partner, at Lewis Roca Rothgerber Christie LLP, spoke at a recent compliance conference on the Fair Credit Reporting Act ("FCRA"). The Consumer Financial Protection Bureau ("CFPB") issued a Policy Statement on April 1st regarding the CARES Act amendments to the FCRA. Below are points that may be of interest as outlined in the Policy Statement:
- This is a "non-binding" Policy Statement.
- The CFPB will apply a "flexible supervisory and enforcement approach" during the pandemic regarding compliance with the FCRA and Regulation V.
- The CFPB will consider "circumstances" that furnishers face as a result of COVID-19, as well as good faith efforts to comply.
- Furnishers should continue furnishing information during the crisis even though they are not legally obligated to furnish information to the CRAs in the first place.
- Furnishing Information. The CARES Act requires furnishers to report as "current" certain credit obligations for which they make "payment accommodations" to consumers affected by COVID-19. In other words, payment accommodations will avoid the reporting of delinquencies resulting from the effects of COVID-19. Additionally, the CFBP will not "cite in examinations or take enforcement actions" against those who furnish information that "accurately reflects" the relief measures they are employing.
- Disputes. The 30-day period to investigate disputes may be extended to 45 days "if the consumer provides additional information that is relevant to the investigation during the 30-day period." Further, the CFPB will not 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."
- Reminder. Furnishers and consumer reporting agencies should take advantage of the statutory and regulatory provisions that eliminate the obligation to investigate disputes submitted by credit repair organizations and disputes they reasonably determinate to be frivolous or irrelevant
Originally published 6 April, 2020
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