SACRAMENTO – California Attorney General Xavier Becerra today, as part of a coalition of 23 attorneys general, urged the Consumer Financial Protection Bureau (CFPB) to immediately withdraw its guidance to regulated entities indicating that the agency would not enforce part of the Fair Credit Reporting Act (FCRA) during the COVID-19 public health crisis. The FCRA establishes rules for credit reporting agencies (CRA), and protects consumers from abusive credit practices. The CARES Act – the nation’s economic stimulus bill – was passed by Congress on March 27, and included an amendment to the FCRA that requires lenders to report as current any loans that are subject to a COVID-19-related forbearance or other accommodation. In today’s letter, the coalition asserts that CFPB’s decision could discourage consumers from taking advantage of the forbearances and other accommodations that lenders are offering during a time of economic uncertainty.
“In the face of the COVID-19 public health crisis, it is incumbent that we protect Americans during times of financial uncertainty,” said Attorney General Becerra. “There could not have been a worse time for the Consumer Financial Protection Bureau to loosen its oversight of lenders and credit reporting agencies. Today we are telling the Bureau to do its job and protect consumers during this national emergency.”
As part of its guidance, the CFPB will no longer take enforcement or supervisory actions against CRAs for failing to investigate consumer disputes in a timely fashion. In the letter, the coalition argues that CFPB’s decision to permit CRAs to ignore the statutory 30 day timeline for investigating consumer disputes will put consumers at risk by allowing false and incorrect information to remain on consumers’ credit reports. This incorrect information could prevent borrowers from renting or buying a home, purchasing a new car, or opening a credit card account. The letter emphasizes the importance of holding CRAs accountable, and urges the CFPB to resume vigorous oversight of consumer reporting agencies and enforcement of the FCRA.
Today’s letter is the latest of Attorney General Becerra’s ongoing efforts to protect consumers’ credit. Last week, Attorney General Becerra filed a comment letter urging the Comptroller of the Currency and the Federal Deposit Insurance Corporation to withdraw a proposed rule that would undermine efforts to combat banking discrimination. In July 2019, Attorney General Becerra announced a nationwide settlement against Equifax for improperly exposing the personal information of 147 million consumers after a massive data breach in 2017. And, in February 2019, Attorney General Becerra submitted a comment letter to the Federal Trade Commission recommending updates to strengthen their Identity Theft Rules.
In submitting the letter, Attorney General Becerra is joined by the attorneys general of Pennsylvania, Colorado, Hawaii, Iowa, Illinois, Massachusetts, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Puerto Rico, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia.
A copy of the letter can be found here.