Congress Requests CFPB Investigate Whether Nationwide Consumer Reporting Agencies Violated FCRA

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Congress Requests CFPB Investigate Whether Nationwide Consumer Reporting Agencies Violated FCRA
November 24, 2022

The Chairman of the House Select Subcommittee on the Coronavirus Crisis has raised concerns that the US’s three largest nationwide consumer reporting agencies (NCRAs) violated the federal Fair Credit Reporting Act (FCRA). According to the chairman, the NCRAs failed to respond to consumer disputes throughout the pandemic. The chairman bases this claim on data from the Consumer Financial Protection Bureau (CFPB), which revealed that these CRAs only resolved 4.1% of consumer complaints in 2021.

In a letter written on October 13th to the Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, the Representative stated:

“Information obtained by the Select Subcommittee indicates that there are longstanding problems with the practices employed by the NCRAs in responding to consumers who challenge credit reporting errors. These data also raise concerns about whether the NCRAs are fulfilling all of their obligations to consumers and to the Consumer Financial Protection Bureau under the FCRA. Accordingly, I write to share this new evidence and request that CFPB use its supervisory authority to further investigate and address these important issues.”

According to the subcommittee’s announcement, it began investigating whether the NCRAs had violated the FCRA in the wake of the CFPB report. This investigation found that the agencies’ rates of correcting or removing errors had dropped significantly during the pandemic. For example, in 2019, approximately 25% of consumers acquired relief in response to a dispute. However, by 2021, this number had dropped to only 4.1%.

According to the Representative, despite the increased importance of accurate reporting during these troubling times, a far greater number of consumers have filed disputes in recent years. According to the CFPB, the NCRAs received roughly eight million disputes in 2011. However, in 2021, one of the agencies alone received almost 14 million.

However, the subcommittee reported that at least 13.8 million of these disputes went discarded without investigation between 2019 and 2021. According to the NCRAs, this occurs for disputes suspected of someone other than the consumer filing the dispute. However, the subcommittee states that the criteria used to judge this is vague. In some cases, this comes down to factors such as “envelope characteristics” and “same/similar font” in deciding whether to discard.

Under the FCRA, consumer reporting agencies must “follow reasonable procedures to assure maximum possible accuracy” and investigate legitimate consumer disputes. Therefore, when using consumer reports to make employment decisions, it is necessary to partner with a trustworthy screening provider to ensure that reports are accurate and meet all state and federal requirements.

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