By Nikku Khalifian
We recently discussed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and how it amends the duties of a furnisher of information under the Fair Credit Reporting Act (FCRA) in light of the COVID-19 pandemic. Furnishers, however, must still be mindful not to relax their procedures for responding to consumer disputes during the pandemic.
Following enactment of the CARES Act, the Consumer Financial Protection Bureau (CFPB) issued a non-binding policy statement addressing “Supervisory and Enforcement Practices” regarding FCRA in light of the CARES Act. The purpose of the statement was to “highlight furnishers’ responsibilities” and to inform consumer reporting agencies and furnishers of the Bureau’s “flexible supervisory and enforcement approach” regarding compliance with FCRA during the pandemic. In order to manage the challenges the current crisis poses and to maintain confidence in the consumer reporting system, the CFPB intends to consider the circumstances entities face and the good faith efforts they make to comply with their statutory and regulatory obligations in deciding whether to cite the entity in an examination or bring an enforcement action against them.
Despite this flexible approach, the CARES act does not extend the deadline to respond to consumer disputes – consumer reporting agencies and furnishers still have an obligation to investigate disputes within 30 days of receipt of the consumer’s dispute. However, the CFPB “reminds” consumer reporting agencies and furnishers that they may benefit from statutory and regulatory provisions that eliminate the obligation to investigate (i) disputes they reasonably determine to be frivolous or irrelevant or (ii) disputes submitted by credit repair organizations.