Blog » 2016 » April » Credit Bureau Management Compliance

Posted on Apr 11, 2016 1:00pm PDT

When the Fair Credit Reporting Act (FCRA) was passed in 1970, it protected privacy rights of consumers and enacted rules for all Consumer Reporting Agencies (CRAs). The FCRA—and all subsequent amendments—promised to protect consumers’ credit profiles from inaccuracies, giving them access to appropriately-priced loans, employment opportunities, or receive advantageous pricing of insurance premiums.

Compliance with the FCRA compels companies furnishing information to CRAs to have procedures in place to ensure accuracy and timeliness of the information reported. Additionally, furnishers must follow specific procedures to help customers inquire into inconsistencies or unfamiliar parts of their credit report. As a result, these companies are given the opportunity to practice compliance by providing a better customer experience for their customers.

In this regard, Section 607 of the FCRA requires CRAs to “follow reasonable procedures to assure the maximum possible accuracy of the information concerning the individual about whom the [credit] report relates.” In sum, as the number of CRAs has continued to grow, so has the need to create structures that ensure accurate reporting to all* CRAs.

The time to enhance consumer reporting systems and service structures has never been more ideal.

*The CFPB publishes a list of all consumer reporting agencies, which can be found here: http://files.consumerfinance.gov/f/201601_cpfb_list-of-consumer-reporting-companies.pdf

Credit Bureau Management Best Practices

Although there can be wide differences in how furnishers manage their credit bureau usage, reporting, and disputes practices, the following highlights some key best practices that can position organizations for long-term success in this area:

  1. Ensure ownership and accountability for the Credit Bureau Management processes in the organizations:
    • Establishing enterprise-wide or department level ownership to ensure that Enterprise Reporting and Dispute Policies and Practices are available, used and updated will enable consistency and success.
  2. Detail and consistency in reporting, usage, and disputes documentation:
    • Enterprise Credit Bureau Reporting, Dispute, or Usage policies that provide a foundation for procedures with sufficient detail to understand the “ins and outs” of how the processes work is a must.
    • As part of this, having Metro 2® conversion documentation, which outlines how the Metro 2 file is created from the source system, is central to monitoring reporting accuracy and ensuring processes are not impacted when system changes are implemented.
  3. Strong control frameworks to ensure reporting accuracy, dispute resolution quality and permissible usage:
    • Lenders should establish sufficient controls to validate the accuracy and integrity of information being furnished to CRAs, ensure that disputes are completed in a timely fashion and address the root cause, or ensure the organization only provides credit bureau data to those individuals who require it.
  4. Resolving system constraints that may lead to challenges complying with Metro 2 Standards
    • Establishing robust “in process” mitigation plans to address existing system constraints and thus reduce risks while long-term solutions are pursued, is an important first step for organizations to take when constraints are identified.

How We Fit In

By leveraging our subject matter knowledge and experience, Bridgeforce has helped multiple organizations perform assessments and implement enhancement plans in as little as eight weeks. We have also developed proprietary data quality tools (Bridgeforce® Data Quality Scanner™) and intellectual property around credit bureau management compliance, which can be deployed quickly.