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AG Shapiro To Consumer Reporting Agencies: If You Don’t Protect Consumer Credit, We Will

April 28, 2020 | Topic: Consumers

AGs Shapiro and James Lead Group of Attorneys General in Letter to Companies

HARRISBURG―Attorney General Shapiro today led a group of 22 Attorneys General warning the nation’s three Consumer Reporting Agencies (CRAs) that they will not hesitate to enforce safeguards set in place to ensure consumers’ credit is properly protected and that their credit reports are fairly and accurately reported as Americans continue to struggle from the economic fallout of the coronavirus disease 2019 (COVID-19) public health crisis.

In a letter to Experian Information Solutions, Inc.; Equifax Information Services, LLC; and TransUnion LCC, the group outlines their commitment to enforcing the consumer credit protections outlined in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed last month, as well as in the Fair Credit Reporting Act (FCRA), despite the federal government’s failure — under the Trump Administration — to commit to enforcing the FCRA’s 30- to 45-day deadline to investigate consumer disputes. The letter emphasizes that the coalition will continue to actively monitor and enforce compliance during the COVID-19 crisis and will hold the CRAs accountable for failure to meet their obligations.

“I won’t leave Pennsylvanians’ financial security up to the interests of credit reporting agencies,” said Attorney General Shapiro. “During this emergency, people across the Commonwealth need more financial security, not less. These financial protections are critical to consumers and to our overall economy. My Office will enforce the CARES Act and the FCRA to make sure these credit reporting agencies don’t harm Pennsylvanians.”

In March 2020, Congress enacted the CARES Act to extend relief to struggling consumers and amend the FCRA to enable consumers to obtain CARES Act relief without incurring lasting harm to their credit scores. To prevent such harm, the CARES Act requires furnishers to report a credit obligation as “current” if the obligation was current prior to the grant of a CARES Act accommodation. The FCRA also protects consumers by requiring CRAs to take no more than 30 days (or in some cases 45 days) to investigate when consumers dispute the accuracy of information on their credit report. But the Consumer Financial Protection Bureau — under the Trump Administration’s leadership — recently issued guidance that suggests that it will not enforce these deadlines during the COVID-19 crisis, instead imposing a weaker requirement that CRAs make “good faith efforts to investigate disputes as quickly as possible.”

In today’s letter, the group warns the three CRAs that each state will enforce the requirements of the FCRA and agreements between CRAs and states to conduct meaningful and timely investigations of consumer disputes of credit information.

“This CARES Act provision is critically important both to individual consumers and to the overall recovery of the economy because it ensures that consumers obtain essential relief without jeopardizing their future ability to secure employment, rent or buy a home, obtain a credit card, or purchase a car,” the Attorneys General write in their letter. “The state Attorneys General expect compliance with this vital provision of the CARES Act, and we will actively monitor for and enforce such compliance.”

At a time when the nation faces significant economic uncertainty, it is more important than ever that CRAs meet their obligations under the law to protect consumers against incorrect information in their credit reports that could prevent them from conducting all of the normal activities they would be able to do before the COVID-19 pandemic began.

Today’s letter follows a letter the coalition sent to the Consumer Financial Protection Bureau on April 13, urging the agency to rescind its announcement that it would not enforce certain provisions of the CARES Act and the FCRA.

The letter, co-led by Attorney General Shapiro of Pennsylvania and Attorney General James of New York, was joined by Attorneys General from California, Colorado, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Virginia, Washington, Wisconsin, the District of Columbia.

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