Collector - May 2020 - 24

CFPB ISSUES CREDIT
REPORTING GUIDANCE
DURING COVID-19 PANDEMIC
The Consumer Financial Protection Bureau
released a policy statement in April outlining the
responsibilities of credit reporting companies and
furnishers under the Coronavirus Aid, Relief, and
Economic Security (CARES) Act.
FURNISHING CONSUMER INFORMATION
During the pandemic, many lenders have been
flexible with when and how consumers make
payments. The bureau's statement reminds
lenders they must comply with the CARES Act. It
also encourages lenders to continue to voluntarily
provide payment relief to consumers and to report
accurate information to credit bureaus relating to
this relief. The continuation of reporting accurate
payment information produces substantial benefits
for consumers, users of consumer reports and the
economy as a whole.
DISPUTES
In response to staffing and resource constraints on
lenders and credit bureaus due to the pandemic,
the bureau's statement also provides flexibility
in the time they take to investigate disputes. The
FCRA generally requires that consumer reporting
agencies and furnishers investigate disputes within
30 days of receipt of the consumer's dispute.
The 30-day period may be extended to 45 days
if the consumer provides additional information
that is relevant to the investigation during the
30-day period.
The CFPB specifically states that it does not intend
to cite in an examination or bring an enforcement
action against firms that exceed the deadlines to
investigate disputes as long as they make good
faith efforts during the pandemic to do so as
quickly as possible.
The bottom line: make sure you're creating written
policies and procedures surrounding your credit
reporting activities and documenting everything.

24

FCO denies the allegations in the CFPB's
complaint and has filed a motion to dismiss,
but Porter Heath Morgan IV, general counsel
at Morgan Financial Group, suggests that one
of the most helpful things ARM companies can
do is flag a handful of recent FCRA lawsuits
and CFPB actions-like the FCO complaint-
and make sure your current policies and
procedures would prevent those allegations.
"If nothing else, even if an agency is already
doing everything right, going through 10
different lawsuits would give you insight into
the mindset of a plaintiff 's attorney to see
what kind of information and data they are
looking at so you can adjust your policies if
needed," he said. ACA members can read
more of Morgan's takeaways on the FCO case
in his ACA Daily article: http://bit.ly/2T4fDrR.
Furnishers should be aware of the
different requirements for responding to
disputes from CRAs and consumers and
have policies and procedures specific to
handling credit reporting disputes.
"One thing that is unique under [the]
FCRA is that your policies and procedures
can be a defense to your case," Anthony said.
"But to use them, you need to follow them
and keep them updated. If you get sued over
a dispute, what's your story going to be? If
it's: 'We put our lowest-ranking employee
in charge of handling disputes, we've never
agreed with a consumer on a dispute, no
portion of our CMS covers disputes, we don't
have regular dispute training and we don't go
to conferences to learn about credit reporting
issues,' you're going to be in trouble."

GRAPPLING WITH: MEDICAL DEBT
The credit reporting process is filled with
landmines, but especially so when it comes
to medical debt. State and federal regulators
are very sensitive to the way medical debt
arises and want to ensure consumers are
treated fairly.
For the most part, any debt payment that is
more than 30 days overdue can be reported to
a CRA. This is not the case for medical debt.
Experian, TransUnion and Equifax wait 180
days before reporting unpaid medical bills.
The major CRAs have also made some
changes to the dispute process, which have

ACAINTERNATIONAL.ORG


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