Credit Reporting + Data Brokers

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On July 5, the California Privacy Protection Agency (CPPA) published a Notice of Proposed Rulemaking regarding Data Broker Registration pursuant to Senate Bill 362 (the Delete Act). The Delete Act requires the CPPA to establish an accessible deletion mechanism. This mechanism allows a consumer, through a single verifiable consumer request, to request that every data broker delete any personal information related to that consumer held by the data broker or associated service provider or contractor. The stated aim of the proposed rulemaking is to clarify and enhance the registration process for data brokers.

Both houses of the New Jersey Legislature recently passed Assembly Bill No. 3861 (AB 3861), known as the Louisa Carman Medical Debt Relief Act. The legislation’s stated aims are to prevent undue financial hardship and protect patients from aggressive debt collection practices. Medical debt in general and how and whether it can be included in consumer reports has been a hot topic at the state and federal level. We have written on recent developments regarding medical debt here, here, here, and here.

On June 11, the Consumer Financial Protection Bureau (CFPB or Bureau) released a proposed rule amending Regulation V, which implements the Fair Credit Reporting Act (FCRA), concerning medical debt. The proposed rule would remove a regulatory exception that currently allows creditors to obtain and use information on medical debts for credit eligibility determinations. Additionally, the proposed rule would generally prohibit consumer reporting agencies (CRAs) from furnishing consumer reports containing medical debt information to creditors. Comments on the proposed rule are being accepted until August 12, 2024. The Bureau aims to finalize the rule by early 2025.

On May 16, the Illinois legislature passed Senate Bill (SB) 2933. The bill amends the Illinois Consumer Fraud and Deceptive Business Practices Act making it unlawful for a consumer reporting agency (CRA) to create a consumer report containing any adverse information that the CRA knows or should know relates to medical debt incurred by the consumer or a collection action against the consumer to collect medical debt. The bill would also make it unlawful for a CRA to maintain a file on any consumer containing information relating to medical debt. The bill is currently awaiting Governor Pritzker’s signature.

Last week, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a complaint against SoLo Funds, Inc., a fintech company operating a small-dollar, short-term lending platform. The CFPB alleges that SoLo Funds engaged in deceptive practices related to the total cost of loans, servicing, and collection of void and uncollectible loans in violation of the Consumer Financial Protection Act (CFPA) and engaged in providing consumer reports governed by the Fair Credit Reporting Act (FCRA) but failed to ensure the maximum possible accuracy of those consumer reports.

In Holden v. Holiday Inn Club Vacations Inc., the U.S. Court of Appeals for the Eleventh Circuit recently upheld a consolidated district court ruling granting summary judgment for the defendant furnisher in two Fair Credit Reporting Act (FCRA) actions centering on whether the consumers’ disputes with the furnisher were actionable. While the Eleventh Circuit declined to impose a bright-line rule that only FCRA claims based on factual disputes are actionable, it affirmed the district courts’ summary judgment ruling, finding that for consumer disputes to be actionable against furnishers, the alleged inaccuracy must be “objectively and readily verifiable.”

In an unpublished decision, the U.S. Court of Appeals for the Ninth Circuit recently affirmed the decision of a California district court finding that the furnisher conducted a reasonable investigation under the Fair Credit Reporting Act (FCRA) when it updated its credit reporting to more accurately reflect the plaintiffs’ payment history.

A U.S. District Court in the Eastern District of Missouri recently granted a defendant’s summary judgment motion in a Fair Debt Collection Practices Act (FDCPA) case, holding that the plaintiff lacked standing because she did not show an injury in fact traceable to the defendant’s alleged consumer reporting.

Recently, the Consumer Financial Protection Bureau (CFPB or Bureau) submitted letters to senators in Connecticut and California supporting their proposals to prohibit medical debt reporting.