Nationwide Specialty Consumer Reporting Agencies (NSCRAs) are defined under
the Fair Credit Reporting Act (FCRA) as agencies that collect and sell
personal information to companies for use when deciding to offer credit,
insurance, employment, bank accounts, or other similar services. While
most think of the traditional CRAs (Experian, Equifax, and TransUnion)
when discussing credit reporting, there are over
40 NSCRAs that exist today, many impact the financial services industry.
As a financial services consulting firm that spends a significant amount
of time helping our clients enhance their credit bureau compliance programs,
the majority of time and effort is typically spent on enhancing credit
reporting accuracy and disputes practices for the traditional CRAs. However,
while this focus is warranted – as the traditional CRAs impact the
largest number of consumers – many of the same types of compliance
expectations that apply to traditional CRAs can also apply to NSCRAs.
CFPB Expectations for NSCRAs
The CFPB has specifically focused on the expectations that apply to NSCRAs,
issuing a bulletin in
February 2016 highlighting some of these regulatory expectations. Those highlighted
- Having “reasonable written policies and procedures regarding the
accuracy and integrity of information relating to consumers that they
furnish to consumer reporting agencies”.
- Policies and procedures being appropriate to the nature, size, complexity
and scope of each furnisher’s activities (for each CRA).
- Considering the factors listed in the “Interagency Guidelines Concerning
the Accuracy and Integrity of Information Furnished to Consumer Reporting
Agencies” when furnishing data to the NSCRAs.
Additionally, other core FCRA requirements for furnishers also apply to
NSCRAs – including those related to disputes, the handling of identity-theft,
and consumer notifications.
Operational Challenges for Managing NSCRAs
The business operational challenges associated with managing NSCRA data
reporting are similar to those of reporting to traditional CRAs, but also
have unique complexities, that include:
- Handling of ownership and accountability for reporting processes
- Handling of disputes within a controlled framework
- Managing the file transmission process for NSCRAs
- Ensuring that data reported does not include incomplete records
While these operational challenges can make compliance management related
to NSCRAs complex, the good news is that most organizations have put in
place enhanced compliance controls when reporting to the traditional CRAs,
and these controls can be adjusted to address the risks from NSCRAs as well.
View our full white paper,
Compliance Management: Best Practices for NSCRAs, to learn in greater detail about compliance expectations, operational
challenges, and strategies to address these risks.