Looking Ahead to 2025
In 2024, Goodwin tracked four public enforcement actions related to credit reporting or credit repair services, consistent with the four actions tracked in 2023. Between 2017 and 2024, there were an average of four actions related to credit reporting per year, but year-over-year enforcement continues to vary. Looking ahead to 2025, the Consumer Financial Protection Bureau (CFPB) has persisted in its previously announced efforts to promulgate notice-and-comment rulemaking to remove medical bills from consumers’ credit reports, although whether it will continue taking actions in accordance with that goal under the new Trump administration is uncertain. Additionally, this year, the CFPB focused primarily on credit reporting accuracy; but going into 2025, with a new administration and new priorities, that may no longer be a focus.
In the News
Agency Guidance
Federal agencies were somewhat quiet regarding guidance to the industry on credit repair and reporting. The CFPB released guidance in January 2024 to consumer reporting companies to address inaccurate background check reports and to address sloppy credit file sharing, but the Federal Trade Commission (FTC) released no related guidance this year. This level of agency attention to the topic of credit repair and reporting is more in line with 2023, when few circulars and guidance were released, indicating that the significant amount of guidance that was released in 2022 may have been an anomaly.
CFPB Rulemaking Efforts
However, the CFPB maintained its effort, announced in 2022, of “address[ing] medical debt reporting problems,” and in October of 2024, former Director Rohit Chopra announced that the CFPB was working to “finalize [a] credit reporting rule” that would “remove medical bills from most credit reports.” This rule, which was proposed in June via notice-and-comment rulemaking, “would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical information.” The CFPB sees this as a dual-purpose solution: to confront the burden that medical debt has on consumers and their credit reports and to challenge what they view as coercive credit reporting practices. This announcement on the progress of the CFPB’s multiyear effort to promulgate a rule to address the effect that medical debt has on credit reporting followed their announcement of an advisory opinion aimed at debt collectors to remind them of their Fair Debt Collection Practices Act obligations and the act’s prohibition on false, deceptive, or misleading representations or means in connection with the collection of any medical debt. For more information about medical debt collection in connection with consumer finance developments in the debt collection space, refer to Chapter 6 of this report, Debt Collection and Debt Settlement.
The CFPB also announced in December 2024 that it was seeking information as part of advance notice of proposed rulemaking on the topic of amending the definition of “identity theft” and “identity theft report” in Regulation V and implementing regulation for the Fair Credit Reporting Act (FCRA) to include information from transactions that were garnered without consumers’ effective consent. This proposed rulemaking is intended to help protect survivors of domestic violence and elder abuse, among other forms of financial abuse. The CFPB is seeking comments and information on prevalence of harms of coerced debt with respect to credit reporting, evidence concerning relevance of coerced debt to credit risk, and challenges resulting from coerced debt to certain populations, among other related topics.
2024 Enforcement Highlights
CFPB Examinations Results in Findings of Inaccuracy in Credit Reporting by Consumer Reporting Companies and Furnishers and Leads to Corrective Actions
In April, the CFPB published an edition of its Supervisory Highlights, detailing the results of several CFPB examinations of both consumer reporting companies and credit furnishers. Examiners found that furnishers were violating the FCRA duty to promptly correct and update furnished information after learning of inaccuracies or incompleteness in their reporting and also violating the duty to notify consumer reporting companies that the accuracy of furnished data was in dispute. This included failures to accurately report delinquency dates and bankruptcy status, among other information, and sometimes resulted in month- or yearlong delays in corrections. Examiners also found that consumer reporting companies were accepting information from furnishers that was deemed unreliable and inadequately monitoring furnisher metrics that would indicate unreliability. In response to the findings by the CFPB, the at-issue furnishers were directed to update their policies and procedures to correct these violative practices. Likewise, the consumer credit reporting companies were directed to revise their accuracy procedures to identify and monitor furnishers and take corrective action regarding data from furnishers whose dispute response behavior indicates the furnisher is not a source of reliable, verifiable information about consumers.
CFPB Enters Consent Order and Stipulation With National Bank to Pay $28 Million for Failure to Resolve Allegations of Inaccurate Furnishing of Credit Information and Dispute Investigations
In September 2024, the CFPB announced that it had entered into a consent order and stipulation with a national bank, TD Bank, resolving allegations that the bank repeatedly furnished inaccurate credit information and knew of the inaccuracies for a year or more before correcting them in violation of the FCRA; its implementing regulation, Regulation V; and the Consumer Financial Protection Act (CFPA). The CFPB alleged that the bank “systematically” reported inaccurate information and further failed to conduct investigations within the FCRA’s “reasonable investigation standard.” The stipulation requires the bank to initiate steps to prevent future violations, as well as requires the bank to pay $7.76 million in redress to affected consumers and a $20 million civil money penalty. Former Director Chopra indicated that regulators would “need to focus major attention” on the bank to “change its course.”
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