Credit Reporting + Data Brokers

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On October 19, the Consumer Financial Protection Bureau (CFPB) issued its highly anticipated notice of proposed rulemaking under Section 1033 of the Consumer Financial Protection Act of 2010 (CFPA). The proposed Personal Financial Data Rights Rule would require depository and nondepository entities to make available to consumers and authorized third parties certain data relating to consumers’ accounts, establish obligations for third parties accessing a consumer’s data, and provide basic standards for data access. Notably, the proposed rule only provides for narrow exceptions, such as community banks and credit unions that have no digital interface with their customers. The CFPB is currently accepting comments on the proposed rule until December 29, 2023.

On October 12, the U.S. District Court for the Northern District of Illinois denied certification of a putative class action asserting that TransUnion violated the Fair Credit Reporting Act (FCRA) and the Missouri Merchandising Practices Act (MMPA) by allegedly misleading consumers about the accuracy and popularity of VantageScore 1.0, TransUnion’s proprietary credit scoring model. The court held that the plaintiff was an inadequate class representative due to his lack of credibility, and the asserted class claims failed both the commonality and predominance prongs of Federal Rule of Civil Procedure (FRCP)23.

A new enforcement action provides more detail on the expectations of the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) (collectively, the agencies) for the content of tenant screening reports.

The Third Circuit Court of Appeals overruled a district court’s reading of an exception into §1681s-2(b) of the Fair Credit Reporting Act (FCRA) that would allow a furnisher discretion to refuse to investigate an indirect dispute it deems frivolous or irrelevant. Instead, the Third Circuit held that a furnisher must investigate even frivolous indirect disputes — disputes submitted by a consumer first to a consumer reporting agency (CRA) that are then transmitted by the CRA to the furnisher. A copy of the decision can be found here.

As discussed here, on September 21 the Consumer Financial Protection Bureau (CFPB) released an outline of its plans for rulemaking under the Fair Credit Reporting Act (FCRA). The outline was supplied for initial comment to a panel of small business representatives convened under the Small Business Regulatory Enforcement Fairness Act (SBREFA).

Yesterday, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) (collectively, the agencies) filed an amici curiae brief urging the U.S. Court of Appeals for the Second Circuit to reverse a district court’s decision finding a furnisher’s investigation of a consumer’s dispute and subsequent furnishing of the disputed information to be reasonable under the Fair Credit Reporting Act (FCRA).

When using artificial intelligence (AI) or complex credit models, can lenders rely on the checklist of reasons provided in Regulation B sample forms for adverse action notices? According to today’s guidance issued by the Consumer Financial Protection Bureau (CFPB or Bureau), the answer to that question is, in many circumstances, no.

On September 7, the U.S. District Court for the Eastern District of Michigan granted summary judgment in the defendant’s favor finding that the plaintiff had not suffered a concrete injury and therefore lacked standing to assert a claim under the Fair Debt Collections Practices Act (FDCPA).

In Hansen v. Mountain America Federal Credit Union, the plaintiff became delinquent on a credit card account with her credit union. The credit union then assigned the debt to a third-party collection agency. Following the assignment, the collection agency opened its own tradeline for the debt, while the credit union also continued to report the debt. Although the credit union’s tradeline was updated to reflect that the account was “closed” and in collections, and the collection agency’s tradeline indicated that the credit union was the original creditor, both tradelines showed a balance, albeit for different amounts — $18,340 for the credit union and $20,875 for the collection agency.

The U.S. Supreme Court has been asked to decide whether a homeowner association (HOA) assessment constitutes a “credit transaction” under the Fair Credit Reporting Act (FCRA), which would open up an inquiry to the fundamental scope of one of the FCRA’s most important permissible purposes.