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Federal Register / Vol. 86, No. 16 / Wednesday, January 27, 2021 / Notices their consumer reports. Consumers may dispute information that appears on their consumer report directly with furnishers direct disputes or indirectly through CRCs indirect disputes. When CRCs and furnishers receive disputes, they are required to investigate the disputes to verify the accuracy of the information furnished.10
A timely and responsive reply to a consumer dispute may reduce the impact that inaccurate negative information in a consumer report may have on the consumer.
Market Response to Consumers &
Industry Challenges
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The CARES Act amended Section 623a1 of the FCRA CARES Act FCRA amendment. This amendment applies if a furnisher makes an accommodation with respect to one or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make one or more payments pursuant to the accommodation. For accounts where the CARES Act FCRA
amendment applies, if the credit obligation or account was current before the accommodation, during the accommodation the furnisher must continue to report the credit obligation or account as current. If the credit obligation or account was delinquent before the accommodation, during the accommodation the furnisher cannot advance the delinquent status.11 For more examples regarding the applicability of the CARES Act FCRA
amendment, the Bureau has published detailed FAQs.12
Furnishers and CRCs faced challenges in responding to the pandemic and the new requirements of the CARES Act FCRA amendment. Several furnishers and CRCs reported temporary staffing challenges that affected the entities ability to complete reasonable dispute investigations within the time periods specified in the FCRA and Regulation V.
Many furnishers also adapted to consumer need by offering new or expanded payment accommodations to consumers, which required changes in staffing to handle request volume. In light of the new statutory requirements for furnishing under the CARES Act FCRA amendment, these new or 10 15 U.S.C. 1681ia, 15 U.S.C. 1681s2a8, 15
U.S.C. 1681s2b; 12 CFR 1022.43.
11 CARES Act, Public Law 116136, sec. 4201
2020 amending section 623a1 of the FCRA
subject to certain exceptions.
12 CFPB. June 16, 2020. Consumer Reporting FAQs Related to the CARES Act and COVID19
Pandemic, available at https files.consumer finance.gov/f/documents/cfpb_fcra_consumerreporting-faqs-covid-19_2020-06.pdf.

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expanded accommodations also required that furnishers make changes in procedures to appropriately code accounts so that they would be furnished correctly according to the statutes new requirements.
Notwithstanding these challenges, most CRCs and furnishers provided information indicating that they have adapted to meet their FCRA and Regulation V obligations. This is consistent with the findings of the CFPBs Office of Research that, in several credit markets including mortgage loans, auto loans, and student loans, the reported rate of new delinquencies, as well as the reported share of existing delinquencies that became more delinquent, decreased between March and June 2020.13
Consumer Risk Examiners review of furnishers and CRCs PA responses indicated several issues that present risk of consumer harm.
Inaccurate Reporting of Accommodations Some entities furnished new and/or advancing delinquency information to CRCs after making an accommodation.
As noted above, if a furnisher makes an accommodation, the furnisher must under certain conditions report the credit obligation or account as current, or if the credit obligation or account was delinquent before the accommodation, not advance the delinquent status during the period of the accommodation.14 Certain furnishers made accommodations, and communicated to the consumer that the accommodation had been made immediately after the consumer submitted the application. These furnishers then delayed processing accommodations due to backlogs created by the volume of accommodation requests. This resulted in: i Reporting some consumers who were current as delinquent, and then improperly advancing and reporting their incorrect delinquency status, or ii improperly advancing the delinquency status of other consumers who were delinquent at the time of the accommodation.
13 CFPB. August 31, 2020. The Early Effects of the COVID19 Pandemic on Consumer Credit, available at https files.consumerfinance.gov/f/documents/
cfpb_early-effects-covid-19-consumer-credit_issuebrief.pdf.
14 CARES Act, Public Law 116136, sec. 4201
2020 amending section 623a1 of the FCRA.

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Insufficient Furnishing Policies and Procedures Examiners observed that insufficient furnishing policies and procedures caused an entity to furnish inaccurate account information to CRCs related to the practice of home pickups of leased vehicles.
Furnishers are required to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes to a consumer reporting agency. The policies and procedures must be appropriate to the nature, size, complexity, and scope of each furnishers activities. 15
An auto furnisher failed to update furnishing policies and procedures to address the furnishers changed leased vehicle return practices. This caused the furnisher to erroneously report consumers as delinquent for leased vehicles that had, in fact, been returned.
As a result of the pandemic, many auto dealerships were closed, so vehicles were picked up from consumers homes.
This created delays or errors in the processing of lease termination, causing auto furnishers to report accounts as delinquent even though consumers had returned their vehicles on time.
After making changes to accommodation programs offered to consumers during the pandemic, a number of furnishers did not update their written policies and procedures regarding the accuracy and integrity of the information related to consumers that they furnish to CRCs.
Accommodation programs offered by furnishers may affect how the furnishers report information about its accounts to CRCs. Accordingly, there is a risk of furnishing inconsistent with the CARES
Act FCRA Amendment if furnishers have made changes to accommodation programs without updating related furnishing policies and procedures.
Untimely Dispute Investigations CRCs and furnishers are required to conduct an investigation with respect to the disputed information, review all relevant information provided by the consumers with the dispute, and respond with the results of the dispute investigation.16
In the second quarter of 2020, staffing challenges due to the pandemic impacted dispute investigation capacity at one or more furnishers and CRCs. As a result of these staffing challenges, some furnishers and CRCs were unable to timely conduct investigations of 15 Regulation 16 15

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V, 12 CFR 1022.42a.
U.S.C. 1681ia, 15 U.S.C. 1681s2b1.

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