CFPB Issues Bulletin on Responsibilities of Furnishers of Information to Credit Reporting Agencies

by Jeff Sovern

One of the things Ira Rheingold and I wrote about in our Times op-ed earlier this summer was the need to require lenders that furnish information to conduct better investigations when they receive complaints about inaccurate information supplied to credit bureaus.  Today, the CFPB issued a bulletin about the duties of furnishers.  The Bureau cautioned that furnishers have to review all relevant information they receive about the disputes, including "documents that the CRA includes with the notice of dispute or transmits during the investigation, and the furnisher’s own information with respect to the dispute."  In an accompanying statement, the Bureau noted that "The “e-OSCAR” system [used by credit reporting agencies to tell lenders about disputes] has been upgraded so that the three [credit bureaus] can now send furnishers any relevant dispute documents mailed in by consumers." Up until that upgrade, credit bureaus often boiled down consumer complaints to a two-digit code.

So what does the Bulletin mean? In the past, the investigation process was reportedly so automated that creditor computers would verify that the disputed entry matched the entries in their databases and report the item as verified without a human being reviewing the information. The Bureau Bulletin doesn't say in so many words that a living person must read the documents, but it is hard to see how a computer could do so in a meaningful way.  I interpret the Bulletin as saying that a person must review the documents and must make a judgment about whether the entry is erroneous.  It will be interesting to see how furnishers respond to the Bulletin, and how the Bureau itself interprets it in its enforcement and supervisory actions.

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