The CFPB issued ten FAQs for industry that address the CARES Act’s credit reporting requirements and other COVID-19-related credit reporting issues.
Several of the FAQs discuss the Bureau’s Policy Statement issued in April 2020 concerning COVID-19 considerations relevant to how the Bureau will exercise its supervisory and enforcement authority regarding FCRA and Regulation V compliance, especially in light of the CARES Act. The first FAQ restates the Policy Statement and two FAQs highlight the Bureau’s enforcement approach, with FAQ 2 confirming that the Bureau is enforcing the CARES Act’s requirements for furnishers and FAQ 3 elaborating on the Bureau’s flexible supervisory and enforcement approach during the COVID-19 pandemic that was set forth in the Policy Statement. The Bureau states that while it indicated it would provide some flexibility to help furnishers and consumer reporting agencies, it did not say in the Statement that it “would give furnishers or consumer reporting agencies an unlimited time beyond the statutory deadlines to investigate disputes before the Bureau would take supervisory or enforcement action.” The Bureau further states that it expects furnishers and consumer reporting agencies to make good faith efforts to investigate disputes as quickly as possible and will “evaluate individually the efforts and circumstances of each furnisher and consumer reporting agency in determining if it made good faith efforts to investigate disputes as quickly as possible.” The Bureau’s discussion suggests that such circumstances will include a furnisher’s or CRA’s size and sophistication.
Other highlights of the FAQs include:
- FAQ 6 states that if an account was current before an accommodation, the furnisher, during the accommodation, must continue to report the account as current. If an account was delinquent before an accommodation, the furnisher, during the accommodation, cannot advance the delinquent status. The FAQ gives an example in which a furnisher was reporting a consumer as 30 days past due at the time of the accommodation and states that the furnisher may not report the account as 60 days past due during the accommodation. If the consumer brings the account current during the accommodation, the furnisher must report the account as current. Situations when this could occur include where the accommodation itself brings the account current (such as a modification that resolves amounts past due so that the borrower is no longer considered delinquent) or where the consumer makes past due payments that bring the account current. The FAQ states that CARES Act credit reporting requirements for accommodations do not apply to charged off accounts.
- FAQ 7 states that if a furnisher is reporting information to CRAs about an account that is current, it should consider all of the trade line information it furnishes that reflects a consumer’s status as current or delinquent. As an example, information a furnisher provides about an account’s payment status, scheduled monthly payment, and amount past due may all need to be updated to accurately reflect that the account is current consistent with the CARES Act.
- FAQ 8 states that furnishing a special comment code indicating that the consumer is impacted by a disaster or the account is in forbearance does not satisfy the CARES Act requirement for a furnisher to report an account as current if it was current before an accommodation or not to advance the level of a pre-accommodation delinquency. As worded, the FAQ could be read to say that a furnisher may not use disaster/forbearance coding for an account subject to an accommodation that it must report as current or as to which it cannot advance the level of delinquency. Nevertheless, it seems more likely that the Bureau’s position is that while such coding can be used, a furnisher must also report the delinquency status field to comply with the CARES Act.
- FAQ 10 states that the CARES Act’s credit reporting protections continue to apply to the time period covered by an accommodation after the accommodation ends. If payments were not required or the consumer met the accommodation’s payment requirements, a furnisher cannot report a consumer who was reported as current pursuant to the CARES Act as delinquent based on the time period covered by the accommodation after the accommodation ends. Also, a furnisher cannot advance a consumer’s delinquency that was maintained pursuant to the CARES Act based on the time period covered by the accommodation after the accommodation ends.