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Financial Services Law Insights and Observations

GAO recommends CFPB define supervisory expectations for CRAs

Federal Issues CFPB GAO Supervision Consumer Reporting Agency FCRA

Federal Issues

On July 16, the U.S. Government Accountability Office (GAO) submitted a report to the ranking members of the Senate Banking Committee and the House Committee on Financial Services recommending that the CFPB improve communications to consumer reporting agencies (CRAs) and furnishers about the Bureau’s supervisory expectations. Specifically, the report—based on a CRA performance audit conducted by GAO from July 2018 to July 2019—presents two recommendations to the CFPB director on communicating expectations to CRAs concerning: (i) “reasonable procedures for assuring maximum possible accuracy of consumer report information;” and (ii) “reasonable investigations of consumer disputes.” According to the report, there are various causes for consumer report inaccuracies: errors in the data collected by CRAs and data not being matched to the correct consumer by CRAs. While the Bureau has “generally focused on assessing compliance with Fair Credit Reporting Act (FCRA) requirements,” GAO notes that the CFPB “has not defined its expectations for how CRAs can comply with key statutory requirements.” For instance, under the FCRA, CRAs must follow reasonable procedures for ensuring maximum possible accuracy and reasonably investigate consumer disputes. However, although the CFPB has identified deficiencies concerning these requirements in its CRA examinations, the Bureau “has not defined its expectations—such as by communicating information on appropriate practices—for how CRAs can comply with these requirements.” Therefore, GAO concluded, there exist opportunities for the Bureau to improve its oversight of CRAs. The CFPB neither agreed nor disagreed with GAO’s recommendations, and stressed that “it has made oversight of the consumer reporting market a top priority and that its supervisory reviews of CRAs have focused on evaluating their systems for assuring the accuracy of data used to prepare consumer reports.” The Bureau also commented on CRAs’ significant advances in promoting greater accuracy.

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