Skip to main content

Accuracy of Data Reported to a Credit Bureau

Jonathan Foxx
Jul 24, 2018

Question: We completed an examination by our regulator and just received the audit report. One item sticks out as an adverse finding and causes some concern. It deals with an FCRA violation. The regulator’s view is that we did not report accurate borrower information to a credit bureau and even questions the integrity of our reported data. So, our question is this: what constitutes accuracy? Also, what is involved in data integrity of borrower information?
 
Answer
The Fair Credit Reporting Act (FCRA) offers a description relating to “accuracy” in the context of reporting information to a Consumer Reporting Agency (CRA). Your financial institution should be providing certain pieces of information to the CRA about an account or other relationship with the consumer. The information should, at minimum:
 
1. Reflect the terms of and liability for the account or other relationship;
2. Reflect the consumer’s performance and other conduct with respect to the account or other relationship; and
3. Identify the appropriate consumer.
 
[12 CFR § 334.41(a)(FDIC); 16 CFR § 660.2(a)(FTC); 12 CFR § 222.41(a)(FRB); 12 CFR § 41.41(a)(OCC); 12 CFR § 717.41(a)(NCUA)]
 
In the context of information, “integrity” means that information the financial institution provides to a CRA about an account or other relationship with a consumer. The information being reported should, at minimum:
 
1. Be substantiated by the financial institution’s records at the time that the information is furnished;
2. Be furnished in a form and manner that is designed to minimize the likelihood that the information may be incorrectly reflected in a consumer report; and
3. Include the information in the financial institution’s possession about the account or other relationship that the appropriate federal financial institution regulator or the FTC, as applicable, has:
a. Determined that the absence of the information would likely be materially misleading in evaluating a consumer’s creditworthiness, credit standing, credit capacity, general reputation, personal characteristics, or mode of living; and
b. Listed in section I.(b)(2)(iii) of the “Interagency Guidelines Concerning the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies” (which section lists the credit limit for an account, if applicable and in the furnisher’s possession).
[12 CFR § 334.41(e)(FDIC); 16 CFR § 660.2(e)(FTC); 12 CFR § 222.41(e)(FRB); 12 CFR § 41.41(e)(OCC); 12 CFR § 717.41(e)(NCUA)]
Jonathan Foxx, Ph.D., MBA, is the Chairman and Managing Director of Lenders Compliance Group, the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a suite of services in residential mortgage banking for banks and non-banks. Information contained in this article is not intended to be and is not a source of legal advice. If you would like to contribute a question, please submit it to [email protected].


 
Published
Jul 24, 2018
Crime Stories From The Trenches

Bad brokers, renegade Realtors, treacherous title agents. It’s getting tough out there.

Regulation and Compliance
Oct 26, 2021
Feds Reviewing Appraisal Standards, Qualifications

Appraisal Subcommittee said requirements are being reviewed to determine whether they ensure and promote fairness, equity, objectivity, and diversity, in both appraisals and in the training and credentialing of appraisers.

Regulation and Compliance
Oct 20, 2021
​​​​​​​FHFA OK's Desktop Appraisals, Expands Refi Criteria

The Federal Housing Finance Agency (FHFA) said Monday it will take two steps to help make home ownership more affordable and sustainable for mortgage borrowers, especially for those in underserved communities. 

Regulation and Compliance
Oct 19, 2021
CFPB Names 4 To Key Senior Positions

The appointees include two who helped create the bureau and two who served on the CFPB staff during the Obama administration.

Regulation and Compliance
Oct 14, 2021
FHFA Raises Enterprises' Multifamily Loan Purchase Caps

The Federal Housing Finance Agency (FHFA) said the 2022 multifamily loan purchase caps will be $78 billion for each Enterprise, for a combined total of $156 billion to support the multifamily market.

Regulation and Compliance
Oct 13, 2021
CFPB Hits AAG With Complaint For Deceptive Marketing Of Reverse Mortgages

The Consumer Financial Protection Bureau filed a complaint and proposed consent order, which alleges that American Advisors Group (AAG) used inflated and deceptive home estimates to attract reverse mortgage consumers.

Regulation and Compliance
Oct 12, 2021