The Fair Credit Reporting Act (FCRA) and its implementing regulations and guidance could be updated to provide more clarity and flexibility, CUNA wrote the Senate Banking Committee leadership Wednesday. CUNA sent its letter for the record of the committee’s Thursday hearing on the FCRA and credit bureaus.
“The FCRA does not currently impose caps on recoveries in class action lawsuits. While not uncommon in some legal contexts, both the Equal Credit Opportunity Act (ECOA) and Fair Debt Collecting Practices Act (FDCPA) contain caps on potential recoveries,” the letter reads. “This divergence creates a ripe opportunity for unscrupulous plaintiff’s attorneys to file frivolous lawsuits against financial institutions. To remedy this situation, Congress could explore the potential for modernizing the FCRA to include some limitations on recoveries.
“Credit unions have a reputation for providing responsible credit to their members and engaging in thorough underwriting processes. Complying with the law is of the utmost importance to credit union compliance personnel, and areas of regulatory uncertainty can create unnecessary burdens,” it adds.
CUNA also noted that the Bureau of Consumer Financial Protection should “continue to thoroughly examine its FCRA regulation and guidance documents.
Specifically, CUNA noted the bureau could provide clarity in four areas: