CFPB Continues Focus on FCRA Issues

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In its latest edition of Supervisory Highlights, the CFPB indicated it’s seeing creditors pulling credit without a permissible purpose to do so.  The Fair Credit Reporting Act (FCRA) does not require consumers to consent prior to pulling credit (unless if for employment purposes), if you otherwise have a permissible purpose to do so.  For example, credit reports can be obtained …in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer…

It’s also important to point out, that any contract you have with a consumer reporting agency likely requires you to …certify the purposes for which the information is sought, and certify that the information will be used for no other purposeWhile there are a variety of regulatory risks involved with reusing credit reports, you could be in violation of your contract if you reuse a previously obtained credit report, as well.

In addition to pulling credit without a permissible purpose, the CFPB indicated it’s also seeing issues in the handling of disputes and inaccurate reporting.  It’s clear the FCRA remains a focus of the CFPB, as evidenced by the Fall 2019 Supervisory Highlights, a special edition on Consumer Reporting. 

For more details on issues identified within the summer edition of The CFPB’s Supervisory Highlights, check out our October edition of Banking on BCC.

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