b'CREDIT CARDS AUTO LOANSCONSUMER FINANCIAL &TELEPHONE CONSUMER PROTECTION BUREAU PROTECTION ACTMORTGAGESTUDENT LENDINGDEBT COLLECTION For more information, please visit www.lenderlawwatch.com or www.enforcementwatch.comAct of 2017. That bill would have amended the FCRAtors that Sterling made no attempt to verify, and other to allow a person or HUD to report to CRAs informationincomplete or outdated public record information. The related to a consumers performance in making pay- CFPB also alleged that Sterling violated the FCRA by ments under a home lease agreement or pursuant toreporting criminal history information and other adverse a contract for utility services. Although H.R. 435 diedinformation about consumers beyond the maximum CREDIT REPORTINGPAYDAY LENDINGin the Senate, the recent joint CFPB-FTC workshopreporting period allowed by law. Under the proposed FEDERAL COURTS OFDATA SECURITY APPEALS reflects regulatory and industry focus on issues such assettlement, Sterling agreed to pay $6 million in mone-During 2019, Goodwin tracked 3 public enforcement actions related to credit reporting or credit repairuse of alternative credit data to improve access to cred- tary relief to affected consumers and a $2.5 million civil it for consumers, which may prompt additional attemptsmoney penalty to the Bureau.services. Though Goodwin tracked only one fewer action in 2019 than it did in 2018, Goodwin trackedto amend the FCRA in the future.FTC Issues Free Electronic Credit Monitoring for 7 such actions in 2017, so the slight decrease this year is part of a multi-year downward trend. The twoFTC Sues Credit Repair Companies Over MisleadingActive Duty Military Rule. In July, the FTC issued its federal agencies that brought the actionsthe CFPB and FTCemployed familiar enforcement tools,Promises and Advanced Fees. In June, the FTC filed afinal rule implementing legislation included in the 2018 including the Fair Credit Reporting Act (FCRA), FDCPA, CFPA, FTC Act, TILA, Credit Repair Organizationslawsuit against Grand Teton Professionals and affiliatedEconomic Growth, Regulatory Relief, and Consumer Act (CROA), and EFTA. State agencies have not typically brought enforcement actions concerning creditcredit repair companies. The FTC alleged that the com- Protection Act, which amended the FCRA. That legisla-reporting or credit repair services, and that trend continued this year. panies violated Section 5 of the FTC Act, the CROA,tion required credit reporting agencies to notify active TILA, TSR, and EFTA by using deceptive marketingduty military consumers of any material changes to KEY TRENDS rate than they dispute other types of tradelines and thecampaigns that promised to eliminate derogatory credittheir credit information. The final rule will apply to active Bureaus speculation that this may reflect differencesfrom consumers credit reports and increase consum- military consumers only if they are assigned to service Since its creation, the CFPB has been the mostin the underlying accuracy of the data provided toers credit scores, yet typically failed to achieve thoseaway from their usual duty station, as well as all mem-dominant actor in policing credit reporting or creditcredit reporting agencies.results. According to the FTC, the companies furtherbers of the National Guard. CRAs will have 48 hours repair services. This year, the CFPB remained theviolated these statutes by promoting their credit repairto notify an active duty military consumer of a mate-dominant actor despite bringing fewer actions thanIn December, the CFPB released its Supervisoryservices through unsolicited emails and text messag- rial change to their credit information, and must also in prior years. However, the FTC reentered the spaceHighlights Consumer Reporting Special Edition,es, failing to accurately disclose the provided services,provide that consumer with free access to his or her in 2019 after announcing no credit reporting or creditcovering recent examinations in the areas of consumerand accepting fees in advance for their services. Theupdated credit file. For the first year of implementation, repair enforcement actions in 2018. reporting and furnishing of information to Creditparties settled the lawsuit in January 2020, resultingthe FTC is allowing credit reporting agencies to comply Reporting Agencies (CRAs). The Supervisory Highlightsin the credit repair companies being banned from thewith the rule by offering their existing commercial credit While the number of publicly announced enforcementfocused on furnishers failure to implement reasonableindustry.monitoring services for free. actions remains low, both the CFPB and FTC havepolicies and procedures regarding the accuracy andCFPB Settles with Employment Background Screen-signaled that credit reporting is a key enforcementintegrity of the information being furnished, impropering Company. In November, the CFPB announced aLOOKING AHEAD TO 2020 priority for both agencies. In December, the agenciesreporting of information despite actual knowledge ofsettlement with Sterling Infosystems, Inc. (Sterling), hosted a joint credit reporting workshop with panelserroneous information, and burying the address tothe worlds largest background screening company.In 2020, we do not expect to see a significant increase focused on accuracy in furnishing, accuracy fordispute erroneous information in lengthy consumerThe CFPB alleged that Sterling had violated the FCRAin public enforcement actions concerning credit background screening, and credit dispute processing.disclosures. But examiners also observed significantbecause it failed to employ reasonable proceduresreporting or credit repair services, but we do expect Based on the panel discussions and remarksimprovements in some areas, including continuedto ensure the maximum accuracy of the informationboth the CFPB and FTC to remain active in this space. from agency participants, the agencies appear toinvestment by furnishers in FCRA-related complianceincluded in its consumer reports. The CFPB found thatIt is also possible that in the coming year the CFPB be grappling with issues such as the reliability ofmanagement systems.some of Sterlings consumer reports included criminalwill propose new guidance on FCRA-related issues alternative data, the use of automated technology inrecords belonging to the wrong person because theyrelevant to the industry, such as the use of technology credit reporting, and the possibility of regulators issuingWhile the number of publicly announced enforcementhad the same name as the applicant, high-risk indica- or alternative data in credit reporting.specific guidance as to credit reporting accuracy.actions decreased in 2019, the number of private The CFPB also published two reports this year focusedFCRA-related lawsuits continues to rise. According to on credit reporting. In July, the CFPB published astatistics published by WebRecon, the number of new Market Snapshot on Third-Party Debt CollectionsFCRA cases filed in federal court in 2019 is on track toWHAT TO WATCHTradeline Reporting. The Snapshot analyzed trends inincrease 8.7% compared to 2018. Continued enforcement activity by CFPB and FTC the reporting of third-party collections, in some casesFocus on policies and procedures concerning accuracy of credit reportinganalyzing data beginning in 2004. The CFPB may2019 HIGHLIGHTS be particularly concerned with third-party tradelinePotential new regulatory guidance on use of alternative credit datareporting based on its observation that consumersCredit Access and Inclusion Act Fails in Senate. In dispute third-party collections tradelines at a greater2018, we predicted attempts to amend the FCRA, including H.R. 435, the Credit Access and Inclusion 24 25'