On April 1, 2020, the Consumer Financial Protection Bureau (“CFPB”) released a policy statement providing guidance on credit reporting companies’ and furnishers’ responsibilities during COVID-19. The CFPB’s policy statement encourages lenders to voluntarily provide relief and to accurately report any relief to credit bureaus. The policy statement further indicates furnishers should comply with the CARES Act, which, with certain exceptions, requires lenders to report accounts as current if consumers have sought relief from their lenders due to the pandemic, or, if an account was delinquent prior to the pandemic, to continue to report the account as delinquent until the account is brought current. Specifically, the Act amends the Fair Credit Reporting Act to state the following:
- [I]f a furnisher makes an accommodation with respect to 1 or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make 1 or more payments pursuant to the accommodation, the furnisher shall–(I) report the credit obligation or account as current; or (II) if the credit obligation or account was delinquent before the accommodation–(aa) maintain the delinquent status during the period in which the accommodation is in effect; and (bb) if the consumer brings the credit obligation or account current during the period described in item (aa), report the credit obligation or account as current.
Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, § 4201 (2020).
Additionally, the policy statement provides some flexibility to lenders and credit bureaus on the deadlines for investigating disputes. Specifically, the policy statement provides:
- [T]he [CFPB] will consider a consumer reporting agency’s or furnisher’s individual circumstances and 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 dispute investigations take longer than the statutory timeframe.
CFPB, Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act, p. 3 (April 1, 2020). The policy statement notes, however, that it is a “non-binding general statement of policy” and appears to relate only to CFPB enforcement actions and examinations. Thus, it is unclear whether the CFBP’s guidance could be used as a defense in a civil lawsuit brought by a consumer claiming failure to comply with the statutory timeframe. Best practice would be to continue to comply with the investigation and response timelines as stated in the FCRA, as amended by the CARES Act.
Throughout the policy statement, the CFPB emphasizes the importance of furnishing and reporting information as accurately as possible during the COVID-19 pandemic, as “consumer report information is critical to consumers and industry in determining who obtains credit, insurance, and housing, and at what price, and who obtains employment in many cases.” Therefore, credit furnishers and reporters should ensure they are complying with the CARES Act and reporting consumer information accurately.
Burr & Forman, April 2020