CFPB Supervisory Highlights Focuses on Accuracy of Credit Reporting

Earlier this month, the Consumer Financial Protection Bureau (“CFPB”) published the latest edition of its Supervisory Highlights for Spring 2024. The latest edition of supervisory highlights focuses on credit reporting and cites instances involving both credit reporting companies and furnishers of reporting information as needing correction under the Fair Credit Reporting Act (“FCRA”).

Of particular concern to the CFPB, were the following identified trends or issues:

• Failure to remove or block ID theft information: Examiners founds that consumer reporting companies committed numerous violations in connection with honoring consumer requests to block or remove information associated with identify theft, including by refusing such requests based on overbroad disqualifying criteria that applied automatically and was not tailored to support a reasonable determination regarding any basis to decline removal based on the statutory language of the FCRA.
• Accepting information from unreliable furnishers: Examiners also found that consumer reporting companies accepted information from furnishers that may no longer have been reliable. As an example, the CFPB noted the practice of continuing to accept information form furnishers that failed to respond to disputes or responded to all disputes with the same answer.
• Furnishers Providing False Information; Failing to Note Dispute: With respect to furnishers, examiners found that furnishers, particularly in the auto loan space, continued to share incomplete or inaccurate information long after learning that such information was false, incomplete, or inaccurate or shared information after determining it was fraudulent or due to identify theft. In addition, examiners found that many furnishers shared information subject to a dispute without indicating the dispute or failed to properly investigate the dispute.

Here are some key takeaways with the foregoing supervisory highlights in mind –

• Beware automation: Consumer reporting agencies or furnishers that rely on automated systems to share information, resolve disputes, or address reports of identity theft or fraud, should be wary. Reliance on such systems can result in overbroad results and violations of the FCRA.
• Reasonable Investigations: Providers should ensure that investigations into disputed credit report information – and identity theft and fraud in particular – are reasonable and tailored to support actions the provider may take based on the statutory provisions of FCRA.

The CFPB’s full 2024 Spring Supervisory Highlights is available here.