United States: Recent CFPB Supervisory Highlights Address FCRA Compliance Issues

Last Updated: September 7 2016
Article by David N. Anthony and Meagan Mihalko

The Consumer Financial Protection Bureau has continued to address FCRA-related compliance issues in its most recent Supervisory Highlights publications from March and June 2016.  The Supervisory Highlights once again reiterate the importance of FCRA compliance for a broad spectrum of FCRA-regulated entities, including mortgage originators, furnishers of consumer information, and nationwide specialty consumer reporting agencies (NSCRAs).

June 2016 Highlights

The CFPB's June Highlights focused on FCRA requirements in the mortgage origination context.  Specifically, CFPB examiners found that one or more institutions took adverse action based on information in consumer reports but failed to provide the required FCRA disclosures.  15 U.S.C. § 1681m(a) requires a specific adverse action notice when adverse action is taken based on information contained in a consumer report.  Specifically, the notice must include: (1) the name, address, and telephone number of the CRA furnishing the report; (2) a statement that the CRA did not make the decision to take the adverse action; (3) statement of the consumer's right to obtain a free copy of a consumer report from that CRA; and (4) statement of the consumer's right to dispute with the CRA the accuracy or completeness of information contained in the consumer report.

Examiners noted that the cause of the violations was linked to a lack of appropriate training and inadequate policies and procedures.  The institutions were directed to revise their training policies and procedures to ensure that employees were providing FCRA-required information on the adverse action notices.  A link to the June 2016 publication can be found here.

March 2016 Highlights

CFPB examiners conducted compliance reviews at certain depository institutions to determine whether the institutions were complying with their furnisher-specific obligations under the FCRA and its implementing Regulation V.  The reviews focused on furnishers that provide consumer information to NSCRAs.

Furnishers of consumer information are required to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information they furnish and are also required to promptly update information that is determined to be incomplete or inaccurate.

Examiners found that certain furnishers had policies and procedures generally pertaining to FCRA furnishing obligations, but that they "failed to have policies and procedures addressing the furnishing of information related to deposit accounts."  Examiners also found that one or more of the furnishers "lacked processes or policies to verify data furnished through automated internal systems."  While certain furnishers had automated systems to inform the NSCRAs when an account was paid in full or when a balance reached zero, the furnishers did not have controls to check whether that information was actually furnished.  Thus, CFPB supervision directed the furnishers to establish and implement policies and procedures to monitor the automated functions of its deposit furnishing process.

On a related-issue, examiners found that when consumers had paid charged off accounts in full, certain furnishers would update their systems of records to reflect the payment, but would not update the change in status from "charged off" to "paid-in-full" and send the update to the NSCRAs.  The examiners concluded that "[n]ot updating an account to paid-in-full or settled-in-full status could adversely affect consumers' attempts to establish new deposit or checking accounts."

With respect to data quality, examiners found certain internal inconsistencies in linking identifying information to consumer records.  These inconsistencies, in some instances, resulted in incorrect information being associated with a consumer's files.  Therefore, CFPB supervision directed further development and implementation of internal processes to "monitor, detect, and prevent the association of account closures to incorrect consumer profiles, and to notify affected consumers."

Finally, the examiners reviewed certain NSCRAs and focused on their systems and processes used to oversee and approve furnishers.  Examiners identified certain weaknesses in their systems for credentialing furnishers prior to allowing those furnishers to supply consumer information to the NSCRAs.  The breakdown in processes included failing to follow their own policies and procedures for issuing credentials, failing to implement a timeframe for furnishers to submit required documentation, and failing to maintain adequate documentation in line with their applicable policies and procedures to demonstrate the steps taken to approve a furnisher during the credentialing process.  A link to the March 2016 publication can be found here.

These recent Supervisory Highlights show the CFPB's continued interest and supervision over nuanced areas of FCRA compliance.  Companies that are required to comply with the FCRA should review their written policies and procedures to ensure not only that the policies and procedures are up to date but also that the policies and procedures are being appropriately implemented and followed by employees.  Troutman Sanders' Financial Services Litigation team has substantial experience in providing FCRA compliance advice.

The Troutman Sanders' Consumer Financial Services Law Monitor blog offers timely updates regarding the financial services industry to inform you of recent changes in the law, upcoming regulatory deadlines and significant judicial opinions that may impact your business. To view the blog, click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

David N. Anthony
Meagan Mihalko
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions