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Financial Services Law Insights and Observations

New York Demands Credit Score Changes for Hurricane Sandy-Impacted Consumers

Consumer Reporting Disaster Relief

Consumer Finance

On April 25, New York Governor Andrew Cuomo announced that the New York Department of Financial Services (DFS) sent a letter to several consumer credit bureaus, demanding that the firms (i) ensure that credit scores are not lowered for consumers adversely impacted by Hurricane Sandy, (ii) reset any scores that have been lowered, (iii) work with banks and other lenders to red flag any negative information relating to storm-impacted consumers, and (iv) meet with the DFS to permanently change procedures to prevent credit scores from going down for consumers impacted by a disaster. The letter asserts such actions are required because financial challenges created by the storm could negatively impact individual credit scores for reasons that are unrelated to their creditworthiness. The state’s press release provides a phone number for consumers to call if they believe that their credit has been “unfairly impacted” by the storm.

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