CFPB Announces Flexibility Regarding Credit Reporting Obligations During COVID-19 Pandemic

On April 1, 2020, the Consumer Financial Protection Bureau (CFPB) issued a Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act (Policy Statement). To highlight the importance of credit reporting during the current crisis, the CFPB issued the Policy Statement to outline the responsibility of furnishers under the CARES Act, and its “flexibility” as it relates to compliance under the Fair Credit Reporting Act (FCRA) and Regulation V. Particularly, to better manage the crisis and maintain confidence as it relates to credit reporting, the CFPB announced that it will consider the good faith efforts of financial institutions to comply with their statutory and regulatory obligations during this time.

First, the CFPB encourages financial institutions to continue to work with borrowers and consumers whose finances have been impacted by COVID-19. According to the CFPB, this includes financial institutions continuing to provide accurate information to credit reporting agencies, as doing so is beneficial to consumers, users of information, and to the economy as a whole.

Under § 4021 of the CARES Act, furnishers are required to report as current those credit obligations subject to payment “accommodations” provided to consumers impacted by COVID-19. Given such, the CFPB expects continued compliance with the CARES Act and reinforces its intent to assist furnishers as needed. Furthermore, as furnishers are likely to voluntarily offer various forms of financial relief to consumers during the current crisis, the CFPB has made clear that it supports those efforts and does not intend to take enforcement action against furnishers whose reported information accurately reflects their COVID-19 financial relief measures.

Additionally, the CFPB announced flexibility relating to the time period in which credit reporting agencies and furnishers must investigate disputes under the FCRA. Typically, disputes must be investigated within 30 days of receipt. This time period may be extended 15 days if the consumer provides additional information relevant to the investigation during the initial 30-day period. In recognizing that amidst COVID-19 some credit reporting agencies and furnishers may face disruptions and challenges impacting the ability to timely investigate disputes, the CFPB will consider the circumstances involved and refrain from bringing an enforcement action against those credit reporting agencies and furnishers putting forth good faith efforts to investigate disputes in a timely manner. Moreover, the Policy Statement reminds furnishers and credit reporting agencies that certain statutory provisions allow them to circumvent any obligation to investigate disputes deemed frivolous or irrelevant.

While certainly good news for furnishers and credit reporting agencies, the CFPB did note that the “Policy Statement is a non-binding general statement of policy articulating considerations relevant to the Bureau’s exercise of its supervisory and enforcement authorities.” Thus, the Policy Statement may be of limited value when defending claims by aggrieved consumers relating to their credit reporting.

A copy of the CFPB’s April 1, 2020 Policy Statement can be found here.

Posted in: CFPB, FCRA
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