news.cuna.org/articles/123271-fcra-proposals-are-unwarranted-expansion-lack-concrete-data
CFPBLogo

FCRA proposals are ‘unwarranted’ expansion, lack concrete data

November 6, 2023

The Consumer Financial Protection Bureau’s (CFPB) outline of proposals on the Fair Credit Reporting Act (FCRA) are an “unwarranted and vast expansion” of the statute and has an inappropriately limited timeline for feedback, CUNA and NAFCU wrote to the CFPB Monday.

The CFPB’s proposals would increase the scope of the Fair Credit Reporting Act (FCRA) to establish new responsibilities for credit unions that CUNA and NAFCU believe, “do not align with Congress’s intent in passing the FCRA” and would create massive litigation risk, operational burdens, and other challenges.

“The CFPB has skirted its statutory obligations by initiating this rulemaking with an inappropriately limited timeline that does not permit the SERs and other interested stakeholders an adequate opportunity to review the Outline and offer meaningful feedback regarding the potential impact on small entities,” the letter reads. “The Bureau’s Outline also lacks the necessary details for SERs to fully comment on the implications and costs of these proposals. Accordingly, the Bureau should consider convening another SBREFA Panel only after releasing a new Outline containing more data and concrete proposals.”

The organizations note the CFPB distributed the outline Sept. 15, did not publish for review on its website until Sept. 21, and scheduled the first pre-SBREFA panel meeting Oct. 2.

“Further, subsequent to the Pre-Panel and Panel events, SERs have been given less than three weeks to articulate any written comments they wish to make. Guests have been encouraged to submit comments by October 30, only eleven days after the final Panel meeting closed on October 19, 2023,” the letter reads. “Moreover, the Bureau requested SERs provide cost estimates as to the impact of the proposed changes. However, cost estimates require more detail than is currently provided in the Outline and time to gather information from internal business units, and the Bureau provided neither in sufficient measure.”

The letter also notes:

  • The FCRA only requires factual issues to be resolved in disputes, despite CFPB arguments to the contrary.
  • The outline should use a narrow definition of “data broker” and recognize credit unions’ existing regulatory obligations.
  • Creditors should be permitted to continue using medical debt information as appropriate.
  • The CFPB should provide covered data provider with ample time to implement a future proposal.