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NAFCU files amicus brief against expanding credit reporting requirements under FCRA
NAFCU, along with several other organizations, Thursday filed an amicus brief with the United States Court of Appeals for the Second Circuit arguing that any expansion of obligations for consumer reporting agencies (CRAs) under the Fair Credit Reporting Act (FCRA) to require not only a check for factual accuracy, but also the requirement to arbitrate legal disputes, should be rejected.
NAFCU, joined by the American Bankers Association, Independent Community Bankers of America, American Financial Services Association, Credit Union National Association, and Consumer Bankers Association filed the brief in support of the defendant in the case of Gia Sessa v. TransUnion, LLC.
In the brief, the groups outlined how the expansion proposed by Sessa, which has since been argued by the CFPB and Federal Trade Commission (FTC), would raise operating costs and lead to unpredictable and unwarranted legal liability for CRAs.
The CFPB, joined by the FTC, filed an amicus brief in May arguing that the FCRA provision requiring credit reporting companies to follow reasonable procedures to assure maximum possible accuracy of the information included in consumer reports does not contain an exception for legal inaccuracies.
“The Fair Credit Reporting Act requires credit reporting agencies to guard against factual inaccuracies, not to resolve legal disputes,” stated the group. “We’re asking the Second Circuit to reject the CFPB’s theory, which would require credit reporting agencies and furnishers to adjudicate legal disputes that courts should resolve.
“That approach would have damaging economic consequences for consumers, furnishers, and credit reporting agencies,” the group concluded.
NAFCU will continue to monitor FCRA regulations and litigation and share updates with credit union members.