WASHINGTON, D.C. –
The Consumer Financial Protection Bureau addressed a crucial element of financial services thrown into a tailspin because of the COVID-19 pandemic.
On Wednesday, the CFPB released a policy statement outlining the responsibility of credit reporting companies and furnishers during the crisis. In response to the pandemic, the bureau acknowledged many lenders and finance companies are being flexible when it comes to consumers’ making payments.
The bureau said its statement underscores that consumers benefit if lenders and finance companies report accurate information about these arrangements to credit bureaus, so that the credit reports of consumers are accurate.
“During this time of uncertainty, we are providing clarity to ensure the consumer reporting industry can continue to function,” CFPB director Kathleen Kraninger said.
“Consumers rely on their credit report to purchase a new car, their new home or to finance their college education,” Kraninger said. “An effective consumer reporting system is critical in promoting fair and efficient access to credit in the consumer financial services market.”
As lenders and finance companies continue to offer struggling borrowers payment accommodations, Congress last week passed the CARES Act. The act requires lenders and finance companies to report to credit bureaus that consumers are current on their loans if consumers have sought relief from their lenders due to the pandemic.
Officials explained the bureau’s statement informs lenders and finance companies they must comply with the CARES Act. Officials added the bureau’s statement also encourages lenders and finance companies to continue to voluntarily provide payment relief to consumers and to report accurate information to credit bureaus relating to this relief.
“The continuation of reporting such accurate payment information produces substantial benefits for consumers, users of consumer reports and the economy as a whole,” the CFPB said.
In addition, in response to staffing and resources constraints on lenders and credit bureaus due to the pandemic, officials went on to mention the bureau’s statement also provides flexibility for lenders and credit bureaus in the time they take to investigate disputes.
“The bureau specifically states that it does not intend to cite in an examination or bring an enforcement action against firms who exceed the deadlines to investigate such disputes as long as they make good faith efforts during the pandemic to do so as quickly as possible,” officials said.