QUESTION
We completed an examination by our regulator and just received the
audit report. One item sticks out as an adverse finding and causes some
concern. It deals with an FCRA violation. The regulator’s view is that we did
not report accurate borrower information to a credit bureau and even questions
the integrity of our reported data. So, our question is this: what constitutes
accuracy? Also, what is involved in data integrity of borrower information?
ANSWER
The Fair Credit Reporting Act (FCRA) offers a description relating to “accuracy”
in the context of reporting information to a Consumer Reporting Agency (CRA). Your financial institution should be providing certain pieces of information to the CRA about an
account or other relationship with the consumer. The information should, at
minimum:
1. Reflect the terms of and liability for the account or other relationship;
2. Reflect the consumer’s performance and other conduct with respect to
the account or other relationship; and,
3. Identify the appropriate consumer.
[12 CFR § 334.41(a)(FDIC); 16 CFR §
660.2(a)(FTC); 12 CFR § 222.41(a)(FRB); 12 CFR § 41.41(a)(OCC); 12 CFR §
717.41(a)(NCUA)]
In the context of information, “integrity” means that information the
financial institution provides to a CRA about an account or other relationship
with a consumer. The information being reported should, at minimum:
1. Be substantiated by the financial institution’s records at the time
that the information is furnished;
2. Be furnished in a form and manner that is designed to minimize the
likelihood that the information may be incorrectly reflected in a consumer
report; and,
3. Include the information in the financial institution’s possession
about the account or other relationship that the appropriate federal financial
institution regulator or the FTC, as applicable, has:
a. Determined that the absence of the information would likely be materially misleading in evaluating a consumer’s creditworthiness, credit standing, credit capacity, general reputation, personal characteristics, or mode of living; and
b. Listed in section I.(b)(2)(iii) of the “Interagency Guidelines Concerning the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies” (which section lists the credit limit for an account, if applicable and in the furnisher’s possession).
[12 CFR § 334.41(e)(FDIC); 16 CFR § 660.2(e)(FTC); 12 CFR § 222.41(e)(FRB); 12 CFR § 41.41(e)(OCC); 12 CFR § 717.41(e)(NCUA)]Jonathan Foxx
Managing Director
Lenders Compliance Group
