The entire financial services sector relies on the accuracy and integrity of the information flowing throughout the consumer reporting system. Consumer reporting agencies include nationwide agencies such as Experian, Equifax and TransUnion as well as specialty agencies, such as employment screening agencies, check verification companies, and tenant screening services.

Credit unions as furnishers of information to credit reporting agencies play a vital role in the consumer reporting system. Therefore, it came as no surprise that NCUA’s list of 2020 supervisory priorities (Letter 20-CU-01) included reviewing credit unions’ consumer reporting policies and procedures.

Furnisher duties

Section 623 of the FCRA imposes specific responsibilities on credit unions as furnishers of information to consumer reporting agencies. Generally, these responsibilities include the duties to:

• Provide accurate and complete information to credit reporting agencies.
• Investigate consumer disputes regarding reported information. Disputes may be submitted to the agency or directly to the credit union.
• Correct and update inaccurate information.
• Notify consumers in writing within 30 days of reporting negative information (e.g., late payments, delinquencies) to a consumer reporting agency.
• Report the voluntary closing of credit accounts.
• Notify the agency when a consumer disputes the completeness or accuracy of furnished information.
• Report within 90 days the month and year that a delinquency resulted in a referral to collection.
• Address incidences of identity (ID) theft. That includes responding to notices of ID theft from consumer reporting agencies, correcting inaccurate information, and preventing that information from being refurnished in the future.
• Note that any debts resulting from ID theft may not be sold, transferred, or placed for collection except under certain limited circumstances.

The Consumer Financial Protection Bureau’s (CFPB’s) Regulation V primarily implements the FCRA with the exception of NCUA and Federal Trade Commission rules governing the proper disposal of consumer report information and the requirements that credit unions maintain a program to detect and address identity theft “red flags.”

Not all of the FCRA provisions have implementing regulations.

Policies and procedures

FCRA’s “furnisher” regulation (Regulation V, subpart E) requires credit unions to establish and implement reasonable written policies and procedures to ensure the accuracy and integrity of information it furnishes to consumer reporting agencies (“Accuracy defined”).

Regulation V, appendix E contains guidelines for developing these policies and procedures. In general, a credit union’s policies and procedures should:

• Be appropriate to the nature, size, complexity, and scope of your activities.
• Be reviewed periodically and updated as necessary.
• Ensure that information provided to a consumer reporting agency is for the right person and reflects the terms of the account and the consumer’s performance on the account.
• Require maintenance of records for a reasonable amount of time.
• Establish internal controls for the accuracy and integrity of information, such as through random sampling.
• Prevent re-aging (inaccurately changing the date of first delinquency on a consumer’s account to a later date) and duplicative reporting, particularly following portfolio acquisitions or sales, mergers, and other transfers.
• Require updating of furnished information where necessary.
• Train staff to implement the policies and procedures.

NEXT: Resolving consumer disputes