Compliance Center: CFPB Issues Bulletin on Reporting Negative Account Histories

The Consumer Financial Protection Bureau (CFPB) recently issued Compliance Bulletin 2016-01, warning financial institutions that if they fail to meet accuracy obligations when reporting negative account histories to credit reporting companies, the result could be bureau action.

The bulletin stated banks and credit unions must have systems in place to ensure accuracy when they pass on information, such as negative account histories, to checking account reporting or other credit reporting companies. 

“The Consumer Bureau will continue to insist, through its oversight authority, that banks and credit unions furnishing information, as well as the consumer reporting companies collecting information and selling reports, must comply with their respective duties under the law,” CFPB Director Richard Cordray said Wednesday in prepared remarks for a field hearing in Louisville, Kentucky, on the matter. “When we see this is not being done, we will take appropriate supervisory and enforcement actions.”

Compliance Question of the Week

What does the FCRA require us to do if we report credit information to the credit bureaus?

The FCRA requires furnishers to have reasonable policies and procedures regarding the accuracy and integrity of furnished information.

(a) Policies and procedures. Each furnisher must establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes to a consumer reporting agency. The policies and procedures must be appropriate to the nature, size, complexity, and scope of each furnisher’s activities.

(b) Guidelines. Each furnisher must consider the guidelines in appendix E of this part in developing its policies and procedures required by this section, and incorporate those guidelines that are appropriate.

(c) Reviewing and updating policies and procedures. Each furnisher must review its policies and procedures required by this section periodically and update them as necessary to ensure their continued effectiveness.

Creditors should review Appendix E to the FCRA for interagency guidance on how to comply with this requirement.

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National Credit Union Administration (NCUA)

The NCUA announced that it will hold a Twitter chat on Tuesday, February 16, 2016 beginning at 11am EST. The Twitter chat will focus on saving money and building financial security.

Consumer Financial Protection Bureau (CFPB)

CFPB Acting Deputy Director Silverman delivered written testimony to the House Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit.

Federal Trade Commission (FTC)

The FTC announced its 10-year regulatory review schedule. The FTC plans to review the CAN-SPAM rule, among other rules.

The FTC sent a report to the CFPB detailing the FTC’s enforcement activity related to compliance with the Equal Credit Opportunity Act.

Federal Deposit Insurance Corporation (FDIC)

The FDIC announced that it will hold its next board meeting on Wednesday, February 17, 2016.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of February 11, 2016. The last update prior to this was February 10, 2016.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance News.