The CFPB has sent letters to the chief executive officers of five major credit card issuers regarding their companies’ payment furnishing practices.
In the letters, the CFPB cites a 2020 report in which it provided data showing a decline in the share of credit card tradelines containing actual payment data since 2012. The CFPB states in the letters that based on easily accessible credit report information, the CFPB understands that each of the companies to which a letter was sent currently does not regularly or consistently report actual payment amount information to the nationwide credit reporting agencies. It asserts that without this information, lenders may have more difficulty pricing credit and offering consumers the best valued credit offers. In addition, according to the CFPB, consumers’ reasonable expectation that they will receive competitively priced credit based on their ability to pay is impaired by the “suppression” of actual payment information. The letters include a series of questions regarding the companies’ practices in furnishing actual payment data, including the companies’ rationales for furnishing or not furnishing actual payment data.
In its 2020 report, the CFPB noted 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 the CFPB did not directly suggest that the FCRA requires financial institutions that furnish to consumer reporting agencies to include actual payment data, in our blog post about the report, we suggested that it could presage scrutiny by CFPB examiners of a financial institution’s practices regarding furnishing actual payment data. The new letters to CEOs indicate that the CFPB remains focused on this issue.
The CFPB might have addressed the payment furnishing issue as a supervisory matter or by using its authority under Section 1022 of the CFPA to send market monitoring orders (as it did last October to request information from the six large technology platforms). In requesting the payment furnishing information from the card issuers through the use of a public letter, Director Chopra is demonstrating his stated intention to use all of the CFPB’s available tools.