On April 1, 2020, the Consumer Financial Protection Bureau (“CFPB”) released a statement on “Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act.” This statement provides guidance outlining the CFPB’s expectations of furnishers and consumer reporting agencies (“CRAs”) during the COVID-19 pandemic, and signals that the CFPB will take a flexible supervisory and enforcement approach to compliance with the Fair Credit Reporting Act (“FCRA”) and its implementing regulation, Regulation V.

The key points of the CFPB’s guidance are discussed below.

Furnishing Consumer Information

In the statement, the CFPB reiterated its prior guidance, which urged lenders to meet customers’ financial needs during COVID-19, and encouraged lenders to continue reporting accurate customer information, notwithstanding these accommodations.

The CFPB emphasized that it expects all lenders to comply with section 4021 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). This section of the CARES Act amends the FCRA to require that, if furnishers make an accommodation on a credit obligation or account of a consumer and the consumer meets their new obligation, the furnisher must report the credit obligation or account as current. The CFPB also signaled that it would work with furnishers as needed to achieve compliance with this new provision.

The CFPB also reiterated its support for lenders’ voluntary efforts to provide payment relief, and it indicated that lenders’ continued accommodations to borrowers affected by COVID-19 will avoid the reporting of delinquencies. Importantly, the CFPB stated that “it does not intend to cite in examinations or take enforcement actions against those who furnish information to [CRAs] that accurately reflects the payment relief measures they are employing.”

Some additional clarification may be necessary as section 4021, for accommodations on accounts that are already delinquent, requires the furnisher to “maintain” the delinquency status during the accommodation period. That could pose operational challenges for furnishers because delinquency reporting typically advances the status from 30 to 60 to 90-days delinquent as a delinquent account ages toward charge-off. As a result, some financial institutions may find that they cannot continue to offer certain accommodations to delinquent borrowers if they cannot align their delinquency reporting with the reporting requirements of the CARES Act.

Flexibility in Investigating Disputes

The guidance also indicates that the CFPB will “consider a [CRA] or furnisher’s individual circumstances and does not intend to cite in an examination or bring an enforcement action against a [CRA] or furnisher making good faith efforts to investigate disputes as quickly as possible, even if the dispute investigations take longer than the statutory timeframe.” The FCRA generally requires CRAs and furnishers to investigate disputes within 30 days. In the statement, the CFPB recognized that COVID-19 may cause significant operational disruptions that create difficulties in investigating disputes.

The guidance also encouraged CRAs and furnishers to take advantage of existing regulatory provisions that allow them to forego investigations of disputes from credit repair organizations where the CRA or furnisher determines the dispute to be frivolous or irrelevant. The CFPB stated that it will consider the current COVID-19 pandemic, and resulting difficulties, in determining the reasonability of a CRA or furnisher’s conclusion that a dispute is frivolous or irrelevant.

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Photo of Andrew Soukup Andrew Soukup

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which…

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Andrew is co-chair of the firm’s Class Action Litigation practice group.

Andrew has helped his clients achieve successful outcomes at all stages of litigation, including through trial and appeal. He has helped his clients prevail in litigation against putative class representatives, government agencies, and commercial entities. Representative victories include:

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Because many of Andrew’s clients are subject to extensive federal regulation and oversight, Andrew has significant experience successfully invoking federal preemption to defeat litigation.

Andrew also advises clients on their arbitration agreements. He has successfully helped numerous clients avoid multi-district class-action litigation by successfully enforcing the institutions’ arbitration agreements.

Clients praise Andrew for his personal attention to their matters, his responsiveness, and his creative strategies. Based on his “big wins in his class action practice,” Law360 named Mr. Soukup a “Class Action Rising Star.”

Prior to practicing law, Andrew worked as a journalist.

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