10/26/2022 12:30 P.M.
2 minute read
The Consumer Financial Protection Bureau’s advisory opinion discussing Fair Credit Reporting Act requirements related to procedures for ensuring the prevention of false information in credit reports is now in effect.
According to the advisory opinion published in the Federal Register Oct. 26, “a consumer reporting agency that does not implement reasonable internal controls to prevent the inclusion of facially false data, including logically inconsistent information, in consumer reports it prepares is not using reasonable procedures to assure maximum possible accuracy under section 607(b) of the FCRA.”
For example, the bureau explains that “junk data” left on many foster children’s credit reports can have a detrimental effect on their ability to enter into future contracts for credit.
“When a credit report accuses someone of defaulting on a loan before they were born, this is nonsensical, junk data that should have never shown up in the first place,” CFPB Director Rohit Chopra said in a news release. “Consumer reporting companies have a clear obligation to use better procedures to screen for and eliminate conflicting information, or information that cannot be true.”
The advisory opinion is one in a series of actions by the CFPB to ensure CRAs comply with consumer financial protection laws, according to the news release.
“Consumer complaints submitted to the CFPB continue to reflect significant concern about inaccuracies in consumer reports,” according to the CFPB. “Complaints about ‘incorrect information on your report’ have represented the largest share of credit or consumer reporting complaints submitted to the CFPB for at least the last six years, and the CFPB receives more complaints about credit reporting than any other subject.”
Access the advisory opinion here.
ACA Insights
Whether finding solutions to problems or creating new regulatory measures, the CFPB’s actions need to be based on current data and results from working with all stakeholders.
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