CFPB's Supervisory Highlights: Furnishers of Consumer Report Information
Happy National Boston Cream Pie Day!
Enjoy this photo of a Boston cream pie if there is no actual dessert available in your office. The picture is just as satisfying, right?
Okay, onto the real treat. As mentioned in an earlier blog, the CFPB recently released Supervisory Highlights, issue number 19 (Supervisory Highlights). The Supervisory Highlights reported some of the CFPB's examination findings for exams that the CFPB completed between December 2018 and March 2019. This blog will focus on a credit union's responsibility as a furnisher of consumer report information.
In section 2.4 of the report, the CFPB reminded us that credit unions and other financial institutions, as furnishers of consumer report information, are subject to several requirements under the Fair Credit Reporting Act (FCRA), including accuracy and dispute handling requirements.
Section 623 of the FCRA requires furnishers of consumer report information to furnish accurate information. This section also creates requirements for conducting an investigation when a credit reporting company notifies the furnisher that information in the consumer report has been disputed.
This dispute process includes the following steps:
- Conduct an investigation with respect to the disputed information, generally within 30 days;
- Review all relevant information provided by the consumer reporting company;
- Report the results of the investigation to the consumer reporting company;
- If information is inaccurate or incomplete, report this to all consumer reporting companies to which the information was furnished; and
- If the information is inaccurate or incomplete, report this to all consumer reporting companies to which the information was furnished.
The CFPB found some furnishers failed to complete dispute investigations within the required time period and some failed to complete an investigation at all.
In addition to conducting an investigation to determine whether furnished information is inaccurate, furnishers are required to provide updated and corrected information if it finds that furnished information is inaccurate. The CFPB also found that some institutions completed the investigation, determined information in the consumer report was inaccurate, and then failed to furnish corrected information or notify the consumer reporting companies that the information was inaccurate. More specifically, some furnishers failed to update information about accounts that were paid in full or settled, and continued to report inaccurate information to consumer reporting companies for months after the information was disputed.
Due to these findings by CFPB examiners, the Supervisory Highlights notes furnishers involved are now responsible for "establishing and implementing 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 CFPB reminds furnishers that Regulation V requires reasonable, written policies for furnishing accurate information to consumer reporting companies and procedures for investigating, correcting, and reporting disputed information. These written policies should be commensurate to the nature, size and scope of the institution and its furnishing activities. Examiners found some furnishers either had no written policies to address the accurate reporting of information, or the policies were not appropriate because they did not address the processes for reporting, investigating, or correcting information in line with the complexity of the furnisher creating the policies. Credit unions that report information to consumer reporting companies may want to review their policies and procedures to ensure steps are in place to ensure accurate furnishing of information under the FRCA.
About the Author
Loran Jackson joined NAFCU as Regulatory Compliance Counsel in April 2019 and was named Senior Regulatory Compliance Counsel in February 2021. In her role, she provides daily compliance assistance to member credit unions on a variety of topics. She also writes articles for NAFCU publications and presents at NAFCU conferences