July 6, 2022

Volume XII, Number 187

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July 06, 2022

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July 05, 2022

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CFPB Report: Major Credit Bureaus Failed to Meet Statutory Obligations in Response to Consumer Complaints

On January 5, the CFPB released its Annual Report of Credit and Consumer Reporting Complaints that analyzes complaint responses by the three major consumer reporting agencies (CRAs).  The CFPB’s analysis reveals that recent changes in complaint responses provided by the CRAs resulted in fewer meaningful responses and with fewer instances of relief to consumers.  As a result, the CFPB concludes that the CRAs failed to meet their obligations under Section 611 of the Fair Credit Reporting Act, which requires that CRAs review consumer allegations of incomplete or inaccurate information on consumer credit reports, including allegations made by an authorized third-party representative of the consumer.

Complaints submitted about the CRAs accounted for more than 50% of all complaints received by the CFPB in 2020 and more than 60% in 2021.  In 2021, the CRAs reported relief in less than 2% of complaints.

A statement from CFPB Director Chopra was also included in the Bureau’s press release to the report, where he stated that “America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors.  Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”

Putting it Into Practice:  The CFPB is a heavily data-driven agency, and  consumer complaint data is a crucial tool that informs the CFPB’s understanding of various consumer experiences and its enforcement activities.  Notwithstanding the focus on CRAs, the recent report likely signals the CFPB’s renewed scrutiny of FCRA compliance for all companies that report to credit bureaus, including policies related to the handling of consumer complaints.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 7
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About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices. 

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
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