Fair Credit Reporting Act
There are new FCRA provisions that require furnishers
of information to report date of delinquency in a certain way, and also require
data furnishers to ensure that the data they submit is accurate and complete.
While an obligation to report disputed information already existed in the
FCRA, the 1997 amendments have revised the manner in which such information
must be reported to credit bureaus.
Data furnishers have two main reporting obligations under
Section 623 of the FCRA:
- First, new section 623 (a)(2) of the FCRA states that the information
provider has a "duty to correct and update information" that
is inaccurate or incomplete on the consumer's credit record. The information
provider must "promptly" notify the credit bureau of any information
it learns is incorrect.
- Second, new section 623(b) requires that data furnishers work with a
credit bureau to investigate and resolve disputes raised by consumers
with regard to the accuracy of their credit report. It is this latter
requirement that I want to focus on.
The FCRA requires the credit reporting agency to send
a notice to a data furnisher, called a "Section 611 notice", if
the credit bureau receives notice of a dispute from a consumer. The credit
bureau is required to notify the information provider of the dispute within
5 days of receipt from the consumer. The credit bureau must then resolve all
disputes within 30 days of receipt from the consumer. The time period may
be extended for up to 15 additional days if the extension is warranted.
Under section 623(b)(2), data furnishers are required
to work with the credit bureau to complete its investigation within that 30-day
time frame. As a data furnisher, you will need to research and respond to
the dispute communicated to you by the credit bureau and still give the credit
bureau time to respond to the consumer within the 30 day time limitation imposed
on the credit bureau. In other words, a furnisher can expect to have 15 to
23 days to respond to a dispute investigation request from a consumer reporting
agency.
It is important to note that the amended FCRA does not
mandate the use of specific forms to transmit notice of a dispute to a consumer
reporting agency or report back the findings of an investigation. The FCRA
merely discusses the sorts of steps that must be taken to resolve a dispute.
The statute states that data furnishers are required to do the following as
part of the dispute resolution process:
- conduct an investigation with regard to the disputed information;
- review all relevant information provided by the consumer reporting agency
in its notice;
- report the results of the investigation to the consumer reporting agency;
and
- if the investigation finds that the information is incomplete or inaccurate,
report those results to all other credit bureaus to which that person
furnished the inaccurate information.
Technically, the FCRA states that a data furnisher is
only required to follow these procedures and meet these time deadlines when
it receives a Section 611 notice of dispute directly from the credit bureau.
In consultation with the four credit bureaus and some
creditors, the Associated Credit Bureaus has finalized its revisions to the
existing Metro reporting format. The credit bureaus are currently working
to implement changes to their systems, and expect to be using the new format,
"Metro 2," by early fourth quarter. All information reporters will
be required to send information to the credit bureaus in the new Metro 2 format
by October 1, 1999. The Metro 2 format was developed as a standard for the
credit reporting industry and accomplishes the following:
- Provides on standard computer layout to be used for reporting accurate
consumer credit information
- Meets all requirements of the Fair Credit Reporting Act (FCRA), the
Fair Credit Billing Act (FCBA), and the Equal Credit Opportunity Act (ECOA)
- Meets the requirements for reporting dates in the year 2000 and beyond.
The Metro 2 Format was designated to allow reporting of
the most accurate and complete information on consumers' credit history. It
is imperative that all accounts are reported on a monthly basis and that they
are reported with a final status code when they are ultimately paid or closed.
The new format is available on the World Wide Web at
ACB’s Web
site. In order to download the format and report, you will first need
to contact a credit bureau to obtain a user identification and a password.
Instructions and telephone numbers are provided on the web site.
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