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Federal Register / Vol. 86, No. 16 / Wednesday, January 27, 2021 / Notices
disputed tradelines in the months of April and May. However, examiners observed data indicating that, by the end of June 2020, the average time to resolve disputes by furnishers had returned to the average time from prior years.
Some CRCs and furnishers that experienced this problem in the Spring of 2020 took steps to reduce the risk of inaccurate consumer information caused by these staffing challenges.
Specifically, these CRCs and furnishers continued to investigate the disputes and subsequently furnished updated or corrected information about such disputed items after completing their dispute investigations. CFPB
Supervision is continuing to monitor dispute timeliness at CRCs and furnishers.
3.6

Debt Collection
Market Response to Consumers &
Industry Challenges During the review period, some participants in the debt collection industry reported an increase in consumer contacts and payments, which several attributed to more consumers being at home, reduced spending, and the resources provided by pandemic assistance programs.
Debt collectors altered their work practices in response to the pandemic to comply with State orders and reduce their employees risk of infection. In general, collectors responding to the PAs indicated that they transitioned partially or entirely to remote work during the review period. Other workplace changes were reported, including the implementation of remote call-monitoring tools and modifications to telework policies.
Some states instituted pandemic measures that impacted the debt collection industry and consumers.
These measures include prohibitions on new wage garnishments or bank attachments, and a requirement that consumers be offered the option to defer scheduled payments.

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Consumer Risk Examiners review of debt collectors PA responses indicated several issues that raise the risk of consumer harm, discussed below.
In certain instances, there were delays in processing suspensions of administrative wage garnishments AWG, followed by attempts by collectors to rectify the effects of those delays. Several servicers of commercially owned Federal student loans voluntarily suspended AWG
collections. However, some employers
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did not promptly suspend garnishment of consumer wages. As a result, collectors made additional efforts to contact the employers and to provide refunds for wages garnished after the suspension.
Examiners reviewed the potential for FDCPA compliance risks associated with new restrictions on wage garnishment and bank attachments.
FDCPA violations can occur independent of whether State law has been violated. Nonetheless, when evaluating whether an action taken to enforce a judgment violates FDCPA
section 808s prohibition of unfair or unconscionable debt collection practices, one fact the Bureau may consider is whether applicable law permits resort to garnishment or attachment of a consumers assets in a particular set of circumstances. Several State laws or regulations promulgated during the review period appear to prohibit debt collectors from imposing new attachments on bank accounts or new wage garnishments on employers.
Of the examined debt collectors that engage in litigation and judgment enforcement activities, several voluntarily stopped imposing new bank attachments and/or wage garnishments during the review period. Due to significant complexities and a rapidly shifting landscape of State restrictions, continued litigation and judgment enforcement during the pandemic could still pose compliance risks and, as a result, risks to consumers.
There were payment processing delays for some entities caused by the transition to remote work. Certain collectors experienced delays in processing payments that were sent by mail and received at a physical location which was temporarily inaccessible due to the pandemic. In those instances, examiners generally observed the entity retroactively posting payments effective on the date payment was delivered.
3.7

Deposits
Market Response to Consumers &
Industry Challenges As part of the CARES Act, Congress authorized direct monetary payments, known as Economic Impact Payments EIPs, to many consumers. The CARES
Act also increased the amount of State unemployment insurance consumers might receive. Direct deposit was the primary method of distribution for EIPs.
Direct deposit was and is a significant distribution method for State unemployment insurance benefits. Due to the economic hardship caused by the pandemic, consumers ability to access these benefits was critical.

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Depository institutions responded to the challenges posed by the pandemic in several ways. Many institutions closed physical branch locations to protect the health of both their staff and customers. A number of institutions transitioned staff to remote work, increased call center staffing in order to deal with the influx of customer questions, and increased ATM deposit and withdrawal limits to maintain consumers access to their funds.
In response to the pandemic, a number of institutions activated their existing disaster relief programs.
Numerous institutions made temporary changes to existing policies and procedures and documented those changes in informal documents, including job aids, playbooks, and FAQs issued to employees. A few institutions also made changes to formal policies and procedures. Whether through existing disaster relief programs, temporary changes, or formal policy and procedure updates, many institutions reported taking actions to reach out to consumers to offer assistance and provide resources in connection with pandemic-related hardships.
Consumer Risk Examiners review of institutions PA
responses found several issues that elevate the risk of harm to consumers.
The most commonly observed risks arose from the failure of institutions to fully implement the protections states put in place to protect consumers access to the full amount of their government benefits, specifically EIPs and unemployment insurance benefits.
Some states prohibited institutions from using EIPs or unemployment insurance benefits to cover charged-off loan obligations, fees owed to the institutions, or overdrawn account balances. Other states limited actions to garnish government benefits to satisfy judgments, attachments, or levies for third-party creditors.17 These State actions took a number of different forms, including executive orders, emergency legislation, court orders, and State attorney general guidance.
Many institutions sought to identify, analyze, and, as appropriate, ensure compliance with State measures that imposed legal obligations on the institutions. But based on the limited information obtained through the PAs, examiners could not determine that all the institutions identified and/or 17 The Coronavirus Response and Relief Supplemental Appropriation Act of 2021 provides many consumers with a second Economic Impact Payment. The legislation authorizing the payments directs financial institutions to treat these EIPs as exempt from garnishment orders.

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