The CFPB has issued a Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act (the Policy Statement) to address amendments to the Fair Credit Reporting Act (FCRA) contained in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and challenges facing consumer reporting agencies (CRAs), financial companies that report consumer data to CRAs (i.e., furnishers), and other entities in the consumer credit reporting ecosystem. The Bureau notes that "[t]he continued operation of the consumer reporting system will play a critical role in the functioning of the consumer financial services market, promoting fair and efficient access to credit and benefiting consumers and creditors alike."
With regard to the legal and regulatory obligations under the FCRA and Regulation V, the Bureau states that it intends to consider the current circumstances and "entities' good faith efforts to comply with their statutory and regulatory obligations as soon as possible." The Policy Statement includes examples of the types of regulatory flexibility that the CFPB "intends to provide in the consumer reporting system."
The Policy Statement encourages financial companies to continue furnishing information despite the current crisis. The Bureau stresses that providing accurate information to CRAs "produces substantial benefits for consumers, users of consumer reports, and the economy as a whole."
The CFPB also highlights the need for financial companies to comply with the CARES Act amendments to the FCRA, which generally require furnishers to report as "current" certain credit obligations for which furnishers make payment accommodations to consumers affected by COVID-19 who have sought such accommodations.
The Bureau further notes that payment flexibility provided by financial companies (either under the CARES Act or voluntarily) "will avoid the reporting of delinquencies resulting from the effects of COVID-19." The CFPB states that "it does not intend to cite in examinations or take enforcement actions against those who furnish information to consumer reporting agencies that accurately reflects the payment relief measures they are employing."
Credit Reporting Disputes
The Bureau also notes that operational disruptions and other pandemic-related challenges may impact CRAs' and furnishers' abilities to investigate disputes within the time frames required by the FCRA (typically within 30 days of receipt of the consumer's dispute, with a possible extension to 45 days if additional relevant information is provided by the consumer during the investigation). The CFPB states that it "does not intend to 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 such investigations take longer than required by the FCRA.
With regard to disputes, the CFPB also states that CRAs and furnishers "may take advantage of statutory and regulatory provisions that eliminate the obligation to investigate disputes submitted by credit repair organizations and disputes they reasonably determine to be frivolous or irrelevant."
Application in the Financial Services Industry
The Policy Statement provides helpful guidance, but it is a non-binding statement of the Bureau's supervisory and enforcement policies. Notwithstanding that, it does seem that the Bureau is intent on listening to and assisting consumers and the industry to relieve stress associated with the current pandemic.
Industry participants should assess their compliance obligations under the FCRA and Regulation V as they relate to the changes detailed in the CARES Act to ensure that they are appropriately deploying currently available compliance resources and capabilities. Most importantly, all industry participants should continually monitor and evaluate their compliance in light of the Policy Statement. We encourage companies to document such assessments and decisions, and maintain records to demonstrate good faith efforts discussed by the CFPB.