The Consumer Financial Protection Bureau (CFPB) has prioritized the consumer reporting market for oversight, focusing on both the “furnishers” that supply consumer information and the “consumer reporting companies” (CRC) that aggregate and disseminate the consumer report data.
According to the CFPB’s “Winter2017 Supervisory Highlights: Consumer Reporting Special Edition,” the agency promotes its vision of a consumer reporting system “where furnishers provide and CRCs maintain and distribute data that are accurate [and] supplemented by an effective and efficient dispute management and resolution process for consumers.”
CFPB has supervisory authority over many of the key institutions in the consumer reporting system, including:
Nevertheless, institutions that are not directly supervised by CFPB are still affected by the agency’s Fair Credit Reporting Act (FCRA) regulation (Regulation V) and any data accuracy directives CFPB requires CRCs to implement.
Supervisory observations at CRCs
CFPB has identified FCRA violations and compliance management system deficiencies at CRCs and at furnishers, particularly in the areas of data accuracy and consumer dispute resolution.
As a result, the CFPB directed specific improvements in these areas at one or more CRCs, including:
Credit unions as furnishers might notice changes in their business relationships with CRCs as result. For example, CFPB previously noted that some CRCs lacked systematic or consistent policies and procedures for providing feed-back to furnishers regarding the quality of data furnished.
Therefore, credit unions as furnishers might find CRCs providing more detailed data-quality reports, or making these reports mandatory for all contracted furnishers.
CRCs may also amend their policies and procedures for monitoring furnisher dispute data, and establish corrective measures to minimize the risk of reporting inaccurate data.
Supervisory observations at furnishers
FCRA Section 623 and Reg V generally require information furnishers to provide complete and accurate information to CRCs.
This includes a duty to respond to consumer disputes and correct/update reported data as appropriate. Furnishers also are required to establish and implement reasonable written policies and procedures regarding the “accuracy” and “integrity” of consumer information furnished to CRCs.
To ensure compliance with these requirements, CFPB reviewed a number of furnishers subject to its supervisory authority. The agency found that some furnishers didn’t meet these requirements by failing to have policies and procedures to:
With regard to furnishing consumer deposit account information, CFPB examiners found that furnisher(s):
CFPB uncovered other weaknesses such as insufficient oversight by management, lack of a formal data governance program, failure to update policies and procedures, and inadequate employee training.
Credit unions should also be aware of the National Consumer Assistance Plan. The three nationwide consumer credit reporting companies—Equifax, Experian, and TransUnion—launched this initiative to “make credit reports more accurate and make it easier for consumers to correct any errors on their credit reports.”
The plan stemmed from a 2015 settlement between the three credit bureaus, New York State Attorney General Eric Schneiderman, and several other state attorneys general.
Under the plan, which has a three-year implementation period:
VALERIE Y. MOSS is CUNA’s senior director of compliance analysis. Contact CUNA’s Compliance Team at email@example.com.