As we begin the new year, many auto finance companies start planning their annual compliance procedure review. If the September and December 2019 Consumer Financial Protection Bureau (CFPB) Supervisory Highlights were any indication, there will be an increased focus on credit reporting policies and compliance with the Fair Credit Reporting Act (FCRA) and related rules in 2020. Auto finance companies that furnish information to credit reporting agencies should review these 7 credit reporting compliance requirements that were noted in the CFPB’s recent Supervisory Highlights.
1. Conduct timely reviews of disputes.
Auto loan furnishers – companies that provide consumer information to credit bureaus – must respond to disputes received by credit reporting agencies or consumers in a timely manner (typically 30 days). This includes implementing procedures to receive notice of disputes, investigate the disputes, and then respond in a timely manner. To help avoid issues, the companies should have a systematic method to track disputes and policies that contain specific details on the types of information or locations individuals should use to investigate a dispute.
2. Update credit reporting agencies of corrected information after an investigation.
After a dispute and investigation, an auto loan furnisher may need to update a consumer’s information. The companies have a duty to report the corrected information to the credit reporting agency that sent the dispute and all other credit reporting agencies that were previously sent the information.
3. Notify credit reporting agencies of any previously furnished information that is incomplete or inaccurate.
Credit reporting laws require auto loan furnishers to update credit reporting agencies of any previously provided information that is incomplete or inaccurate. As a practical pointer, these companies should review their compliance procedures for policies to update credit reporting agencies of any accounts that are paid-in-full or settled-in-full. Further, if a company determines that an account had been opened as a result of identity theft, the furnisher should notify applicable credit reporting agencies of the corrected information. FULL ARTICLE