CFPB Outlines Responsibilities of Credit Reporting Agencies and Furnishers in Response to the COVID-19 Pandemic

By Gregory J. Marshall and Adam E. Lang

The Consumer Financial Protection Bureau (the “CFPB”) released a Policy Statement outlining the responsibilities of credit reporting companies and furnishers during the COVID-19 pandemic.

As lenders continue to offer struggling borrowers payment accommodations regarding pandemic-related hardships, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).  A section of the CARES Act amends the Fair Credit Reporting Act (the “FCRA”) and generally requires furnishers to report as current certain credit obligations for which furnishers make payment accommodations to consumers affected by COVID-19.  With certain exceptions, “if a furnisher makes an accommodation with respect to one or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make 1 or more payments pursuant to the accommodation, the furnisher shall—(I) report the credit obligation or account as current; or (II) if the credit obligation or account was delinquent before the accommodation—(aa) maintain the delinquent status during the period in which the accommodation is in effect; and (bb) if the consumer brings the credit obligation or account current during the period described in item (aa), report the credit obligation or account as current.”  CARES Act, Pub. L. No. 116-136, § 4201 (2020). 

The FCRA generally requires that credit 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. 

In its Policy Statement, the CFPB acknowledged that some credit reporting agencies and furnishers may face significant operational disruptions that pose challenges in investigating credit disputes.  For example, some credit reporting agencies and furnishers may experience significant reductions in staff, difficulty intaking disputes, or lack of access to necessary information, rendering them unable to investigate credit reporting disputes within the timeframes the FCRA requires.  Therefore, in evaluating compliance with the FCRA as a result of the pandemic, the CFPB has said that it will consider a credit reporting agency’s or furnisher’s individual circumstances and does not intend to cite in an examination or bring an enforcement action against a credit reporting agency or furnisher making good faith efforts to investigate disputes as quickly as possible, even if dispute investigations take longer than the statutory timeframe.

The Policy Statement might be welcome news for credit reporting agencies and furnishers subject to stay-at-home orders or whom are otherwise experiencing staff reductions and shortages, making it difficult for these businesses to comply with their statutory obligations.  Not everyone, however, was pleased with the Policy Statement.  Borrower watchdog groups have been critical of the Policy Statement, claiming it encourages credit reporting agencies and furnishers to continue the reporting of consumers’ negative credit during the COVID-19 crisis while, at the same time, taking away some of the consumers’ ability to keep those credit reporting agencies and furnishers in check or to incentivize them to quickly investigate disputes as a result of decreased enforcement mechanisms and a severely curtailed furnisher and credit reporting agency workforce.  See, e.g., National Consumer Legal Center.

The Policy Statement does not purport to provide any safe haven for credit reporting agencies and furnishers in the civil enforcement context, through which consumers may bring civil suits.  15 U.S.C. § 1681, et seq.  Thus, despite the CFPB making it clear that it will be easing some of its oversight on credit reporting agencies and furnishers while the country responds to the COVID-19 crisis, credit reporting agencies and furnishers may want to consider still being vigilant in directing what limited resources they may have to comply with the FCRA’s reporting and re-investigation procedures in an effort to avoid lawsuits and civil liability throughout the pandemic and beyond.