Since the passage of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), Pub. L. 116-136, on March 27, 2020, there has been much uncertainty and confusion arising from that portion of the CARES Act which amended the Fair Credit Reporting Act, 15 U.S.C. 1681 (“FCRA”). Shortly after the CARES Act was signed into law, on April 1, 2020, the Bureau of Consumer Financial Protection (“Bureau”) issued a “Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in light of the CARES Act” (the “Policy Statement”) in which the Bureau made clear that consumer reporting agencies and furnishers were expected to comply with the CARES Act. While making the expectations clear, the Bureau’s Policy Statement did advise that it would take into consideration the “circumstances that entities face as a result of the COVID-19 pandemic and entities’ good faith efforts to comply with their statutory and regulatory obligations.” The Policy Statement provided examples of the flexibility the Bureau intended to afford to furnishers and consumer reporting agencies specifically as it related to the furnishing of information relating to accommodations under the CARES Act as well as the statutorily prescribed timeframes to investigate disputes.
As further guidance, this week the Bureau issued a Compliance Aid setting out ten frequently asked questions with the Bureau’s answers relating to Consumer Reporting under the CARES Act and COVID-19 Pandemic.
Questions 1, 2, and 3 summarized the Bureau’s April 1, 2020, Policy statement as it related to consumer reporting generally, the enforcement of the CARES Act requirements to report as current accounts for consumers who are affected by the COVID-19 pandemic, and the enforcement for furnishers who fail to meet the statutory requirements surrounding dispute investigations, respectively. The Bureau reiterated in response to these questions that while the Bureau would give consideration to the good faith efforts and surrounding circumstances, furnishers and consumer reporting agencies are still responsible for complying with FCRA and Regulation V.
Questions 4, 5, and 6 address accommodations under the CARES Act including the definition of accommodation, whether furnishers are required to provide accommodations, and how such accommodations are to be reported.
Question 7 speaks to the consideration to be given to reporting an account as current pursuant to the CARES Act and reminds furnishers of the obligation to accurately report consumer information while cautioning furnishers to consider all of the trade line information to ensure consistency.
In Question 8, the Bureau addresses whether furnishers should simply add a special disaster code or special comment code. The Bureau decisively states “[f]urnishing a special comment code indicating that a consumer with an account is impacted by a disaster or that the consumer’s account is in forbearance does not provide consumer reporting agencies with this CARES Act-required information and therefore furnishing such a comment code is not a substitute for complying with these requirements.”
In Question 9, the Bureau advises that a furnisher should not generally report across a given product line but rather should continue to individually report each consumer so as to ensure accuracy in furnishing.
Finally, Question 10 addresses the obligations of furnishers at the conclusion of the CARES Act accommodation. Under the Act, accommodation is to continue for the “covered period” which is defined as January 31, 2020, through 120 days after the date on which the COVID-19 national emergency is terminated. 15 U.S.C. § 1681s-2(a)(1)(F)(i)(II)(bb). At the conclusion of the accommodation, if the consumer satisfied the obligations of the accommodation or was not required to pay as an accommodation, and was reported as current pursuant to the CARES Act during the accommodation, the consumer may not be reported as delinquent for the period covered by the accommodation. The Bureau also advised that delinquency may not be advanced for a consumer who received an accommodation by the period covered by the accommodation.
We anticipate that additional questions will arise and further guidance will be published by the Bureau as furnishers and consumer reporting agencies continue to navigate consumer reporting in the COVID-19 pandemic.