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CFPB outlines proposals for FCRA rulemaking
The CFPB Thursday announced an outline of proposals under consideration for the bureau’s rulemaking effort related to the Fair Credit Reporting Act (FCRA). NAFCU is engaged with regulatory and legislative efforts to ensure a fair and accurate credit reporting system.
While the bureau’s release focused primarily on removing medical debt from credit reports, the outline of proposals, issued under the requirements of the Small Business Regulatory Enforcement Fairness Act (SBREFA), also focuses on data brokers and other FCRA issues. CFPB Director Rohit Chopra last month provided an update on the FCRA rulemaking process, which included clarifying whether credit header data, which is primarily identifying information, is a consumer report. This could have implications for the applicability of FCRA rules, such as the permissible purpose restriction.
NAFCU provided feedback to the bureau on its request for information related to data broker practices. Credit unions rely on data aggregators to understand members better, access alternative data, verify personal information, and detect fraud. The industry complies with strong data security standards to ensure its members remain protected. The association argued the CFPB’s application of the FCRA should not impair credit unions’ access to data, nor increase their regulatory burdens; however, NAFCU has called on the CFPB to subject data aggregators to similar supervision as financial institutions to ensure they are complying with applicable laws.
Earlier this year, the CFPB released a report on trends in credit reporting of debt in collections from 2018 to 2022, noting some “debt collectors are moving away from furnishing collections information to credit reporting companies in part due to their concerns about data integrity and their ability to comply with the Fair Credit Reporting Act (FCRA).” Medical debt was also featured in the bureau’s Supervisory Highlights report on unfair, deceptive, or abusive acts or practices (UDAAP).
NAFCU will closely monitor the SBREFA process related to the FCRA rulemaking, as well as FCRA-related litigation and the bureau’s UDAAP efforts.