On November 10, 2022, the Consumer Financial Protection Bureau (CFPB) released Consumer Financial Protection Circular 2022-07 (hereinafter, “the Circular”). The Circular resolves two issues for credit reporting agencies (CRA’s) and entities that furnish information to CRA’s (“furnishers”): 1. Whether the Fair Credit Reporting Act (FCRA) permits CRA’s and furnishers to impose obstacles in order to deter consumers from submitting disputes; and 2. Whether CRA’s need to forward consumer-provided documents attached to a dispute to furnishers.
Regarding the first issue, the Circular states that CRA’s and furnishers may not create obstacles in an attempt to deter consumers from bringing disputes. The Circular specifies that enforcers may bring claims against CRA’s and furnishers for limiting consumers’ dispute rights by requiring specific formatting or specific attachments, such as a copy of a police report or consumer report beyond what the FCRA and corresponding regulations allow.
With respect to the second issue, the Circular suggests that whether CRA’s need to forward consumer-provided documents attached to a dispute to furnishers is contingent upon the ability of a consumer dispute to be reasonably investigated. The Circular clarifies that while CRA’s are not affirmatively required to provide original copies of documents submitted by consumers, it would be difficult for a CRA to prove that they provided all relevant information if they fail to forward even an electronic image of documents that constitute a primary source of evidence, such as copies of letters from creditors, bank statements, checks, or periodic billing statements. Additionally, the Circular states that CRA’s must comply with the obligation to provide all relevant information to furnishers to protect the right of consumers to have their disputes reasonably investigated.
Of chief importance to CRA’s and furnishers is the Circular’s statement that both CRA’s and furnishers may be held liable under the FCRA for failing to investigate disputes, and for attempting to deter consumers from submitting disputes by creating barriers. The Circular further states that both federal and state consumer protection regulators and attorneys general can bring claims against companies that fail to appropriately investigate and resolve consumer disputes.