The CFPB has issued a report titled “Payment Amount Furnishing & Consumer Reporting” that highlights changes since 2012 in the furnishing of actual payment data to consumer reporting agencies.
The report indicates that:
- Since 2012, the share of auto, student loan, and mortgage tradelines with actual payment data has generally trended upward. The share of mortgage tradelines with actual payment data increased from less than 70 percent in 2012 to 95 percent in 2020. By March 2020, student loan, mortgage, and auto loans contained actual payment information in more than 90 percent of tradelines.
- During the same period, the share of retail revolving and credit card loans with actual payment information significantly declined. While 95 percent of retail revolving tradelines contained actual payment data in 2015, the share declined to 71 percent in 2020. For credit cards, the share of credit card tradelines containing actual payment data declined from 88 percent in 2013 to 40 percent in 2020.
The report states that the decline in revolving and credit card tradelines with actual payment data may be attributable to concerns about poaching of consumers by other lenders. As the report notes, the unsecured revolving lending industry distinguishes between consumers who pay their balance in full each cycle and consumers who pay a portion of the balance in the current cycle and carry the remaining portion to be paid in future cycles. Since the industry markets services to these two groups differently, lenders may view the furnishing of actual payment data as creating a competitive disadvantage.
The report observes that reductions in available actual payment data could have implications for credit markets and consumers. For example, a lender’s analysis of such data has the potential to provide complementary value to a consumer’s most recent consumer report and enable a more informed assessment of risk. Also, limited access to such data could make it more difficult for lenders to market credit products and price credit for consumers.
The report notes the FCRA requirements concerning furnishing accurate information and for furnishers to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of furnished information. While it does not directly suggest that the FCRA requires financial institutions that furnish to consumer reporting agencies to include actual payment data, the report could presage scrutiny by CFPB examiners of a financial institution’s practices regarding furnishing actual payment data.
It is believed that concerns about customer poaching also caused many credit card issuers not to furnish credit limit amounts. That ultimately led to a statement in the Interagency Guidelines Concerning the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies to the effect that furnishing information “with integrity” requires including the credit limit, if applicable and in the furnisher’s possession.