Consumer Groups Urge CFPB To Rescind Credit Reporting Guidance Issued in April

Troutman Pepper

Troutman Pepper

Multiple consumer advocacy groups are demanding the Consumer Financial Protection Bureau (“CFPB”) rescind its April 1, 2020, credit reporting guidance regarding the investigation of error disputes vowed at the beginning of the coronavirus pandemic.

In April, the CFPB said it would not hold companies to strict deadlines for investigating disputes that consumers have about information on their credit reports. Under the Fair Credit Reporting Act (“FCRA”), furnishers and consumer reporting agencies have 30 days to investigate a dispute, which may be extended to 45 days once a consumer initiates a dispute. However, the CFPB acknowledged holding the industry to these deadlines during the pandemic was impracticable, given staff shortages and operational disruptions. The CFPB advised it would not take supervisory or enforcement action against companies that make “good faith efforts to investigate disputes as quickly as possible, even if dispute investigations take longer than the statutory timeframe.”

In a letter to CFPB Director Kathleen Kraninger, consumer groups ask the agency to rescind the current policy, arguing that the accommodation is no longer necessary since its enactment nearly six months prior and gives shelter to companies’ delays causing hardship to consumers.

Currently, the CFPB complaint database has more than 13,000 logged complaints since the guidance issued in April. The consumer groups are arguing consumer disputes have not been addressed by the FCRA deadlines, if at all. The consumer groups further argue that the industry has had enough time to adapt to the pandemic’s challenges.

The letter asserts, “[t]here should no longer be a pressing need for relaxing statutorily mandated deadlines due to ‘reductions in staff, difficulty intaking disputes, or lack of access to necessary information,'” the groups wrote, quoting from the guidance. “These issues should have been addressed during the last six months.”

The CFPB has yet to respond. Given the heightened concerns of many national consumer groups, furnishers and consumer reporting agencies should continue to be mindful of the FCRA deadlines and use good faith efforts to resolve disputes in a timely manner. We will continue to monitor any developments regarding the CFPB’s activities and guidance involving the FCRA.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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