The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law on March 27, 2020. On April 1, 2020 the Consumer Financial Protection Bureau (CFPB issued a statement of policy on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act.
The statement highlights furnishers’ responsibilities under the CARES Act and inform consumer reporting agencies and furnishers of the CFPB’s flexible supervisory and enforcement approach during this pandemic regarding compliance with the Fair Credit Reporting Act (FCRA) and Regulation V. The statement addresses furnishing information to CRAs and resolving disputes submitted directly or indirectly by consumers.
Furnishing Consumer Information Impacted by COVID-19:
- While companies generally are not legally obligated to furnish information to consumer reporting agencies, the CFPB encourages them to continue furnishing information despite the current crisis. Furnishers’ providing accurate information to consumer reporting agencies produces substantial benefits for consumers, users of consumer reports, and the economy as a whole.
- The CARES Act, a section of which amends the FCRA, generally requires 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 from their lenders. The CFPB expects furnishers to comply with the CARES Act and will work with furnishers as needed to help them do so.
- If 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:
- report the credit obligation or account as current; or
- if the credit obligation or account was delinquent before the accommodation:
- maintain the delinquent status during the period in which the accommodation is in effect; and
- if the consumer brings the credit obligation or account current during the period in which the accommodation is in effect, report the credit obligation or account as current”).
- If 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:
- Many furnishers are or will be offering consumers affected by COVID-19 various forms of payment flexibility, including allowing consumers to defer or skip payments, as required by the CARES Act or voluntarily. Such payment accommodations will avoid the reporting of delinquencies resulting from the effects of COVID-19. The CFPB supports furnishers’ voluntary efforts to provide payment relief, and 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.
Disputes:
- The FCRA generally requires that consumer reporting agencies and furnishers investigate disputes within 30 days of receipt of the consumer’s dispute. The 30-day period may be extended to 45 days if the consumer provides additional information that is relevant to the investigation during the 30-day period.
- The CFPB is aware that some consumer reporting agencies and furnishers may face significant operational disruptions that pose challenges for them in investigating consumer disputes. For example, some consumer reporting agencies and furnishers may experience significant reductions in staff, difficulty intaking disputes, or lack of access to necessary information, rendering them unable to investigate consumer reporting disputes within the timeframes the FCRA requires. Furnishers include a wide variety of businesses that vary in size and sophistication and can range from small retailers to very large financial services firms, each of which will face unique challenges due to the COVID-19 pandemic. In evaluating compliance with the FCRA as a result of the pandemic, the 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.
- The CFPB reminds furnishers and consumer reporting agencies that they 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. The CFPB will consider the significant current constraints on furnisher and consumer reporting agency time, information, and other resources in assessing if such a determination is reasonable.