Below is a summary of the recent relevant actions taken by CFPB:
- On October 20, 2022, CFPB issued guidance to consumer reporting companies about their obligation to screen for fake “junk data” from consumers’ credit reports. This effort by CFPB is aimed at reducing the false information on the credit reports of children in foster care, as well as the general public. The guidance states that companies must take steps to reliably detect and remove inconsistent or impossible information from consumers’ credit profiles. Specifically, companies’ policies and procedures should be able to detect and remove pieces of information that cannot all be true, or for obvious impossibilities such as tradelines, including a date that predates the consumer’s date of birth. Read Press Release
- On November 10, 2022, CFPB published a circular to affirm that neither consumer reporting companies nor information furnishers can skirt dispute investigation requirements. The circular outlines how federal and state consumer protection enforcers can bring claims against companies that fail to investigate and resolve consumer report disputes. With this issuance, CFPB is requiring consumer reporting companies to investigate all disputes that are not frivolous or irrelevant. All relevant information regarding the dispute must be provided to the disputing party within five business days, and the companies may not limit a person’s dispute rights. Read Press Release
- On November 15, 2022, CFPB released two reports on the tenant background check industry in which they describe how errors in background checks contribute to higher costs and barriers to quality rental housing. CFPB plans to work with the Federal Trade Commission to hold the tenant screening industry accountable for their use of unvalidated and erroneous information in screenings, including negative information that belongs to someone else, outdated information and misleading details about arrests, evictions and criminal records. CFPB encourages consumers to submit tenant background check complaints if they believe they may have been impacted by such reports. Read Press Release
- On November 16, 2022, CFPB released a Supervisory Highlights report on the legal violations identified by the agency during their supervisory examinations in the first half of 2022. The report details findings across consumer financial products and services, including but not limited to violations of the Fair Credit Report Act (FCRA) by consumer reporting companies that did not report the outcome of their reviews of complaints to the CFPB, instances where mortgage servicers charged illegal “pay-to-pay” fees to homeowners and deceptive practices in auto loans. CFPB shared their findings with companies in hopes of remediating the violations. When companies fail to take corrective actions, CFPB opens investigations for potential enforcement actions. Read Press Release; Read the Supervisory Highlights Report
- On December 12, 2022, CFPB proposed establishing a data base and requiring certain nonbank financial firms to register with the CFPB when they become subject to certain local, state or federal consumer financial protection agency or court orders. The agency proposed that such orders be published via an online registry. According to the Bureau, this proposed rule would help CFPB identify and mitigate risks to consumers and ensure that supervised companies meet their obligations to consumers. The rule would mandate that covered nonbanks report certain agency and court orders connected to consumer financial products and services, and mandate that larger supervised nonbanks designate a senior executive to attest regarding the firm’s compliance with covered orders. Read Press Release
