1. Fair Credit Reporting Act and CRA Settlements: What Data Furnishers Need to Know Now.

3. What does the FCRA do? Promotes fair and accurate credit reporting. Promotes efficiency in the banking system. Protects personal information. Imposes duties on parties that furnish information to CRAs, known as “furnishers.”

4. Duties imposed on furnishers Provide accurate information to CRAs. “Reasonably investigate” disputes. Review materials provided by CRAs supporting dispute. Report results to CRAs. If investigation reveals that prior report is inaccurate or incomplete, furnishers must report that to all CRAs. If information provided by furnisher is inaccurate, incomplete or cannot be verified, the info must be blocked.

5. Liability under the FCRA Furnisher has no civil liability to consumer for inaccurate initial report to CRA. Furnisher can be liable to consumer for willful or negligent non-compliance with obligations once consumer disputes report. –Willful noncompliance results in statutory damages or actual damages. –Negligent noncompliance is actual damages.” –Legal fees also available for both types of claims.

6. FCRA – Statute of Limitations The statute of limitations for violations of the FCRA requires that an action must be brought by the earlier of: 1.two years after the consumer discovers the alleged violation by the furnisher; or 2.five years after the violation occurred.

7. CRAs’ Settlements With State AGs CRAs settled with NY AG in March 2015. Settled with 31 other states in May 2015. Settlements impose similar requirements on CRAs. Require CRAs to make changes over three different phases, from 90 days to 3 years and 90 days.

8. Changes required within 90 days (June 2015) Metro 1 Retirement: –Have to announce retirement of the Metro 1 data reporting format. –Have to begin making “commercially reasonable efforts” to help data furnishers use Metro 2 data reporting format. –Transition to Metro 2 data reporting format must begin on “rolling basis.”

9. Changes required within 6 months (Sept. 2015) Simplifying/improving dispute process: –CRAs cannot condition dispute process on consumer first obtaining credit report or file disclosure. –Can’t lead consumer to believe these are required for consumer to dispute the completeness or accuracy of information in consumer’s file. –More changes to dispute process later on.

10. Sept. 2015 Changes Continued Requiring CRA involvement in dispute resolution: –For reinvestigations where the consumer provides supporting documentation, the dispute must be reviewed independently by CRA. –Does not apply to disputes by credit repair firms or disputes CRAs “reasonably determine to be frivolous or irrelevant.”

11. Sept. 2015 Changes Continued Begin “escalating” certain disputes: –Disputes concerning mixed files, fraud, and identity theft require “escalated handling.” –CRAs to identify other disputes that require escalated handling. –CRAs to implement process for escalated handling. –Requires skilled personnel to handle dispute. –Doesn’t apply to credit repair firm disputes.

12. Sept. 2015 Changes Continued National Credit Reporting Working Group: –Working Group meets quarterly for 3 years. –Working Group comprised of “internal data experts from each CRA.” –Working Group must identify and share: “best practices” for data furnishers “data quality metrics” for data furnishers.

13. Sept. 2015 Changes Continued e-OSCAR changes: –CRAs must begin to analyze data on consumer disputes that is available in e- OSCAR to determine whether actions should be taken to enhance the e-OSCAR system and furnishers’ conduct in processing automated consumer disputes. –CRAs must do this at least semi-annually.

14. Phase 2 – September 2016 Changes Improving creditor info disclosures: –Furnishers must include original creditor and correct Creditor Classification Code. –CRAs will reject the reports lacking this information. –CRAs to adopt policies to ID furnishers who “misreport or misuse Creditor Classification Code on a recurring basis.” –CRAs to take “corrective action” against these furnishers.

15. Sept. 2016 Changes Continued Limiting type of debt that can be reported: –Must be debt that comes from an agreement to pay – credit card, personal services, etc. –Cannot include other types of debt, including: Fines; Penalties; Tickets; Overdue library books.

16. Sept. 2016 Changes Continued Medical debt reporting changes begin: –CRAs must instruct furnishers on the use of Metro 2 special comment codes “BP” and “AB” for medical debt to show that debt is being paid by insurance. –CRAs must instruct furnishers not to report debt paid by insurance as an obligation of the consumer.

17. Sept. 2016 Changes Continued Reporting debt involving the dead (and not so dead) : –CRAs must implement automated process for sharing info when a consumer disputes a deceased indicator provided by a furnisher. –CRAs must investigate disputed deceased indicators. –CRAs must take steps to prevent dissemination of deceased indicators that are disputed. –Furnishers must verify documentation confirming consumer’s death before reporting deceased indicators.

19. Sept. 2016 Changes Continued Reconciliation requirements: –CRAs require that furnishers be vigilant in ensuring that reported information remains accurate. –Furnishers must reconcile data for accounts every six months. –If it’s not done, the CRAs will remove the account data.

20. Sept. 2016 Changes Continued Further e-OSCAR enhancements: –CRAs must update terms of use of e-OSCAR to require that furnishers certify that they: Considered all data, including images of documents in responding to a dispute; Have complied with recent bulletins from the CFPB regarding handling and investigating consumer disputes.

21. Sept. 2016 Changes Continued Working Group deadlines: –Working Group must identify best practices for CRAs to adopt for data accuracy. –Working Group will also identify best practices for monitoring furnishers, including:. Credentialing and onboarding of furnishers; Furnisher monitoring techniques;

22. Phase 3 Changes (June 2018) Limits on reporting medical debt: –CRAs will not allow reporting or display of medical debt until 180 days after the first delinquency; –CRAs must implement a process for removing known medical collections that are reported as having been paid or as being paid by insurance.

23. Phase 3 Changes (June 2018) Working Group Requirements: –Working Group shall establish minimum standards for additional identifying information that furnishers must provide for new accounts to avoid mixed files. –Working Group shall establish minimum standards for reporting of public records data, taking into consideration how the records are stored, updated and made available.

24. Phase 3 Changes – June 2018 More Working Group requirements: –Working Group must coordinate the development and review of reports and metrics that analyze “key data” related to furnishers, including Metrics about disputes, including numbers per furnisher and furnisher failures to respond to disputes; Furnisher compliance with legal obligations, best practices, and Metro 2 reporting requirements.

25. Phase 3 Changes – June 2018 Corrective action against furnishers: –CRAs to implement policies to monitor furnisher performance. –CRAs to take corrective action against furnishers who does not comply with obligations regarding data furnishing and reinvestigating consumer disputes. –CRAs can refuse info from furnishers that repeatedly fail to satisfy metrics established by CRAs and Working Group.

26. Phase 3 Changes – June 2018 Improving notifications to consumers on reinvestigation results: –The actions the CRAs have taken to investigate the dispute; –The results of the dispute; –Options if the consumer is dissatisfied with the result, including making further complaints to the CRA, furnisher or government agencies.

27. For More Information/Questions Contact Information: Ben Stone Lewis Brisbois Bisgaard & Smith LLP 1111 Third Avenue, Suite 2700 Seattle, Washington 98101 206-455-7413 Benjamin.Stone@lewisbrisbois.com