Credit Bureau Reporting
The issue of Credit Bureau Reporting continues to be a hot topic. As a result, this issue was most recently addressed in the CFPB Supervisory Highlights Issue 19, Summer 2019.
Financial institutions that furnish information relating to consumers to consumer reporting companies for inclusion in consumer reports (furnishers) are subject to requirements under the Fair Credit Reporting Act (FCRA) and its implementing regulation, Regulation V. These include accuracy of information reporting and dispute handling.
In recent reviews, examiners have cited furnisher compliance deficiencies within these FCRA accuracy and dispute investigation requirements.
The FCRA requires that when a furnisher receives notice of a dispute from a credit reporting company (CRC) pursuant to FCRA section 623(b)(1), the furnisher must complete its investigation of disputes normally 30 days from the date the CRC receives a dispute. This can be extended to 45 days in certain limited circumstances.
Examiners have noted instances of furnishers failing to complete dispute investigations within the required time period. Examiners also cited certain disputes of which the furnisher(s) received notice from the CRC but failed to conduct an investigation or respond to the CRC. Has your institution established and implemented enhanced monitoring activities and policies and procedures regarding compliance with furnisher-specific requirements of the FCRA?
The FCRA requires that if a furnisher's dispute investigation finds that disputed information is incomplete or inaccurate, the furnisher must report the results not only to the CRC that sent the dispute to the furnisher but also to all nationwide CRCs to which the furnisher provided the information. Examiners cited failure to report updates or corrections to information found to be incomplete or inaccurate following a dispute investigation to all applicable CRCs. Examiners noted systematic failure of reporting dispute investigation results to a particular CRC. Has your institution established and implemented enhanced monitoring activities, as well as policies and procedures regarding compliance with furnisher-specific requirements of the FCRA, and providing validation of corrective action?
The FCRA requires that if a furnisher determines that previously furnished information is not complete or accurate, the furnisher must promptly notify the CRC of that determination and provide the CRC with any corrections to that information, or any additional information, that is necessary to make the information complete and accurate. A furnisher cannot thereafter furnish to the CRC any of the information that remains incomplete or inaccurate.
Examiners noted failure to promptly send corrections or updates to all applicable CRCs after making a determination, as reflected in the relevant system of record, that previously furnished information about certain accounts was no longer accurate. Has your institution established and implemented enhanced monitoring activities, as well as policies and procedures regarding compliance with furnisher-specific requirements of the FCRA, as well as procedures providing validation of corrective action?
Examiners cited failure to furnish updated information regarding accounts that were paid-in-full or settled-in-full. Has your institution taken action to update and correct information previously furnished when determined that the information was not complete or accurate?
The FCRA prohibits furnishers from furnishing information to any CRC without notice that such information is disputed if the completeness or accuracy of the information furnished is disputed by a consumer. Examiners noted where furnishers of deposit account information received consumer disputes and then continued furnishing information about the disputed accounts for several months without notifying a nationwide specialty CRC that the information furnished was disputed. Does your institution provide timely notice to CRCs upon receipt of a direct dispute from a consumer who has disputed information previously furnished?
Regulation V requires furnishers to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes to a CRC. Examiners cited furnishers of deposit account information who failed to implement reasonable written policies and procedures regarding the accuracy and integrity of deposit account information it furnished to nationwide specialty CRCs. Such policies and procedures were also not appropriate to the nature, size, complexity, and scope of the furnishing activities. For example, there were no written policies and procedures for handling disputes regarding account information from certain files. The existing policies also did not address compliance with FCRA dispute requirements, such as the duty to conduct a reasonable investigation. There were also no policies and procedures for training, monitoring, or conducting internal audits regarding a business unit's responsibilities to forward disputes of furnished information. Has your institution taken action to comply with the Regulation V requirements to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information furnished to nationwide CRCs?
Regulation V requires furnishers to consider and incorporate, as appropriate, the guidelines in Appendix E of Regulation V. Examiners cited furnishers of deposit account information who failed to consider the guidelines in appendix E of Regulation V including, as an example, that a furnisher's policies and procedures should consider and incorporate, as appropriate, conducting “reasonable investigations of consumer disputes and take appropriate action based on the outcome of such investigations.” Has your institution taken action to consider and incorporate, as appropriate, the guidance in appendix E of Regulation V?
October 10, 2019