1. On September 4, 2013, the CFPB issued a bulletin stating that it expects every person or entity that provides information to credit reporting agencies to have the technological means to receive all information, specifically supporting documentation that a consumer submits to a consumer reporting agency when the consumer disputes an item on his or her credit report. The bulletin is here. Several consumer reporting agencies communicate consumer disputes electronically with furnishers, but that electronic communication sometimes does not allow the CRA to also send supporting documents that the consumer may have submitted to the CRA. As a result, there were times that the allegedly inaccurate information was never changed to accurate information because the furnisher did not have any evidence sufficient to justify the requested change. The CFPB, which enforces the Fair Credit Reporting Act, warned furnishers that it expects them to comply with the FCRA by:
(1) Maintaining a system reasonably capable of receiving from CRAs information regarding disputes, including supporting documentation;
(2) Conducting an investigation of the disputed information including reviewing:
a. ‘all relevant information’ forwarded by the CRA and;
b. the furnisher’s own information with respect to the dispute;
(3) Reporting the results of the investigation to the CRA that sent the dispute;
(4) Providing corrected information to every nationwide CRA that received the information if the information is inaccurate or incomplete; and
(5) Modifying or deleting the disputed information, or permanently blocking the reporting of the information if the information is incomplete or inaccurate, or cannot be verified.”
This is nothing new for the CFPB, as the Bureau talked about this around Thanksgiving (see our November 30, 2012 weekly update), Christmas (see our December 14, 2012 weekly update) and Valentine’s Day (see our February 15, 2013 weekly update). Now Labor Day is in the mix. Although it appears that the CFPB missed Groundhog Day and the Fourth of July, it is quite obvious that credit reporting accuracy is a major issue for the Bureau. Make sure that all of the information that you send to CRAs is accurate and investigate all notifications of inaccuracies. Consumers have been complaining to the CRAs about information that may be inaccurate, and some consumers have even resorted to litigation against the consumer reporting agencies as a means to correct allegedly inaccurate information. Now the CFPB will add another layer to the already existing litigation (through enforcement) if CRAs and furnishers are not careful and thorough. Make sure that your electronic systems are accurate with respect to customer delinquencies and the information that you send to CRAs. Make sure that your paper files, if you still use paper, support all of the information to the CRAs.
2. There are a few things that I did not report on last week because it was Labor Day weekend and I did not want my precious little in box to be flooded with your kindly worded (but largely uninformative as to your whereabouts) out-of-office replies. Last week, the CFPB addressed two of its major commitments in one fell swoop (actually three, but fell “swoops” and fell “sweep” do not sound grammatically correct) with the issuance of new literature: These commitments are students and lending. The CFPB issued literature for public service employers and employees on how to address student loan issues with public service employees. Not surprisingly, paying the public service employees more money is not in any of the information that the CFPB issued. The CFPB student loan/public service employee literature can be found here, here, and here.
3. In case you were thinking about challenging the legitimacy of Director Cordray’s actions as the Acting Director of the CFPB, he has ratified all of those prior acts in anticipation of your challenge. The ratification in which Director Cordray one-ups you is here.
That is all for this week. Have a very good weekend and remember that all of the weekly updates are on our website, www.cfpaguide.com/weeklyupdates.