Consumer Reporting Compliance: Insights and Best Practices
Consumer Reporting Compliance, or Credit Bureau Compliance, has been a top focus of the CFPB for the last several years. For companies that report to Consumer Reporting Agencies (CRAs) – including banks, credit unions, non-banks, student lenders, mortgage servicers, telecomm companies, and others – this means establishing effective compliance controls for the Fair Credit Reporting Act (FCRA) is essential.
One of the core requirements of the FCRA that furnishers must comply with is the duty to report accurate information. However, the controls required to satisfy this duty are not black and white. Bridgeforce recommends a robust 8-stage validation process which serves as the baseline set of control to help support compliance with the data accuracy requirement of the FCRA.
While strong credit reporting data accuracy controls can minimize credit bureau disputes, it is unlikely they can eliminate them. Disputes handling requires furnishers to conduct a “reasonable investigation” when a consumer disputes the accuracy of information reported to a CRA. What is “reasonable” is largely subjective and is based upon the information received in the dispute – which makes implementation of sufficient controls difficult.
Both credit reporting and disputes present challenges for many in the industry, however, a fast response in recognizing and mitigating these risk factors can minimize any potential impact and allows furnishers to face internal and external examinations with a high degree of success. For more detail on these topics and actionable recommendations to establish robust reporting accuracy controls and reasonable disputes investigations, download the full special report, Consumer Reporting Compliance: Insights and Best Practices.