CFPB Issues Compliance Bulletin on FCRA
Written by Brandy Bruyere, Director of Regulatory Compliance
On February 3, the CFPB held a field hearing in Kentucky to discuss consumer access to checking accounts. This is an area of ongoing concern to the bureau, and those following this issue may recall that the CFPB held a previous hearing on this issue back in October, 2014.
As part of last week's hearing, the CFPB issued Compliance Bulletin 2016-01 regarding the Fair Credit Reporting Act and implementing Regulation V's provisions regarding the duties of furnishers of information with regard to credit reporting. As a reminder, these provisions apply to any person that furnishes information to a consumer reporting agency [CRA], and require credit unions to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the consumer information a credit union may provide to CRAs. While these rules are not highly prescriptive, Appendix E to Regulation V provides some basic guidelines regarding the accuracy and integrity of information provided to CRAs.
The CFPB noted in a recent Supervisory Highlights that some financial institutions under the bureau's supervisory authority did not implement these requirements with regard to deposit accounts. Here's an excerpt, starting on page 5:
Examiners found that one or more entities failed to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information furnished to CRAs, as required by Regulation V. Examiners found that while one or more entities had policies and procedures addressing accuracy and integrity with respect to their furnishing of information to CRAs on credit accounts, they failed to have policies and procedures addressing accuracy and integrity with respect to their furnishing information on deposit accounts. Regulation V requires that such policies and procedures be appropriate to the nature, size, complexity, and scope of each furnisher's activities, and requires that furnishers consider Appendix E of Regulation V, the Interagency Guidelines Concerning the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies, and incorporate those guidelines as appropriate. In addition, examiners found that one or more entities failed to periodically review and update their policies and procedures, as required by Regulation V.
Regulation V also requires furnishers to provide consumers with notice of the results of investigations of direct disputes of information furnished to CRAs. Examiners identified one or more entities that failed to provide such notice to consumers and thus violated Regulation V.
(Emphasis added.)
In other words, Regulation V does not only apply to consumer information that a credit union may provide in relation to lending products, but the kind of information share account information a credit union may provide to CRAs like Chexsystems. The regulation requires policies and procedures to address this kind of data in order to be sure the information is accurate and has integrity. Keep in mind that accuracy and integrity are both defined terms under Regulation V.
This bulletin summarizes similar issues, noting that Regulation V applies to furnishing to all CRAs and emphasizing that Regulation V requires furnishers to periodically review and update its policies and procedures to ensure their continued effectiveness. It may be worth reviewing although Regulation V and Appendix E provide more details.
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