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.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
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…

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 were defeated through dispositive pre-trial motions.
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:

  • Delivered wins in multiple nationwide class actions on behalf of large financial companies related to fees, disclosures, and other banking practices, including the successful defense of numerous lenders accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recent recognition as a “Class Action Group Of The Year.”
  • Successfully defending several of the nation’s leading financial institutions in a wide variety of litigation and arbitration proceedings involving alleged violations of RICO, FCRA, TILA, TCPA, FCBA, ECOA, EFTA, FACTA, and state consumer protection and unfair and deceptive acts or practices statutes, as well as claims involving breach of contract, fraud, unjust enrichment, and other torts.
  • Successfully defended several of the nation’s leading companies and brands from claims that they deceptively marketed their products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
  • Obtained favorable outcomes for numerous clients in commercial disputes raising contract, fraud, and other business tort claims.

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.

Photo of David Stein David Stein

David Stein advises clients on credit reporting, financial privacy, financial technology, payments, retail financial services, and fair lending issues. He assists a broad range of financial services firms, consumer reporting agencies, financial technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and…

David Stein advises clients on credit reporting, financial privacy, financial technology, payments, retail financial services, and fair lending issues. He assists a broad range of financial services firms, consumer reporting agencies, financial technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and transactional matters.

Mr. Stein has significant experience advising clients on compliance with the FCRA, GLBA, ECOA, EFTA, E-Sign Act, TILA, TISA, FDCPA, Dodd-Frank Wall Street Reform and Consumer Protection Act, and FTC Act, as well as state financial privacy laws. Mr. Stein is a member of the firm’s fintech and artificial intelligence initiatives and works with clients on issues related to cutting edge technologies, such as blockchain, virtual currencies, big data and data analytics, artificial intelligence, online lending, and payments technology.

Mr. Stein previously served in senior regulatory, policy-making, and management positions at the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board (FRB). He played a significant role in developing regulations and policy on credit reporting, financial privacy, retail payments systems, consumer credit, fair lending, overdraft services, debit interchange, unfair or deceptive acts or practices, and mortgage origination and servicing. Mr. Stein draws upon his government experience in representing clients before the CFPB, the FRB, and other regulatory agencies and leverages his insights into the regulatory process to provide clients with practical, actionable advice.