1. Credit Reporting and the Military Client
American Bar Association Standing Committee on
Legal Assistance for Military Personnel (LAMP)
Tinker Air Force Base, Oklahoma
October 26, 2017
Angela Martin
Senior Enforcement Attorney
Military Affairs Liaison
(Ms. Martin’s contact information is on the final slide.)

2. What’s the CFPB up to?

3. CFPB website
consumerfinance.gov

4. CFPB online complaints
consumerfinance.gov/complaints

5. Other CFPB resources
Online answers to hundreds of financial questions:
consumerfinance.gov/ask-CFPB
Free bulk publications:
pueblo.gpo.gov/CFPBPubs/CFPBPubs.php

6. Office of Servicemember Affairs
consumerfinance.gov/servicemembers

7. Office of Enforcement
consumerfinance.gov/policy-compliance/enforcement/

8. Selected laws we enforce
Alternative Mortgage Transaction Parity Act (AMTPA)
Consumer Financial Protection Act (Title X of Dodd-Frank)
Consumer Leasing Act (CLA)
Electronic Fund Transfer Act
Equal Credit Opportunity Act (ECOA)
Fair Credit Billing Act (FCBA)
Fair Credit Reporting Act (FCRA)
Fair Debt Collection Practices Act (FDCPA)
Federal Deposit Insurance Act (FDIA)
Gramm-Leach-Bliley Act
Home Mortgage Disclosure Act (HMDA)
Home Owners Protection Act (HOPA)
Home Ownership and Equity Protection Act (HOEPA)
Interstate Land Sales Full Disclosure Act (ILSA)
Military Lending Act (MLA)
Omnibus Appropriations Act 2009
Real Estate Settlement Procedures Act (RESPA)
S.A.F.E. Mortgage Licensing Act
Truth in Lending Act (TILA)
Truth in Savings Act (TISA)

9. Examples of core work Electronic fund transfers Fair lending
Auto loans
Bank accounts and deposit products
Consumer reporting (Credit Bureaus, Furnishers, Obtaining Credit reports)
Credit cards
Debt collection
Debt relief and credit counseling
Electronic fund transfers
Fair lending
General consumer finance
Mortgage origination
Mortgage servicing
Payday lending
Prepaid cards
Student loans

10. Fair Credit Reporting Act 15 USC §§1681 et seq.
Consumer Reporting
Fair Credit Reporting Act 15 USC §§1681 et seq.

11. Military legal assistance
annualcreditreport.com
Disputes regarding inaccurate information
Active duty alert
Fraud alert – initial and extended
Security freeze
Security clearances
Denial of credit
Credit scoring
If you were one of the many servicemembers and their families affected by the recent Equifax data breach, it is time for you to secure your identity. Thankfully, active duty servicemembers have special tools at their disposal, like active duty alerts or a security freeze, to reduce the risk of identity theft. 
For more information, please visit the CFPB blog and find our operation order on what you can do next to secure your identity.
You should closely monitor your financial statements and credit reports. If you see anything out of the ordinary, no matter how small, you should take action immediately.
Review your free credit reports for signs of fraud or identity theft.
Sign up for an active duty alert on your credit report.
Consider placing a security freeze on your credit.
Review any free credit monitoring services offered by the company affected by the data breach. Read the fine print, but never give your credit card information for a "free" product.
Service support: If you're run into problems taking these actions, you can submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).

12. Fair Credit Reporting Act 15 USC §§1681 et seq.
Walk through talk through the Statute
Fair Credit Reporting Act 15 USC §§1681 et seq.
Fair Debt Collection Practices Act 15 U.S.C. 1692
State laws
15 USC 1692g “Validation of Debts”
Contacting to the Chain of Command
UCMJ Article 134 – Debt, Dishonorably Failing to Pay
Security Clearances
*** Article Debt, Dishonorably Failing To Pay
Any person who borrows a specific sum of money from an alleged person/persons at the alleged time, and dishonorably fails to pay even after the alleged due date, is in violation of the general Article 134 and shall be punished as deemed fit by the military court.
The elements of crime that the article covers are as follows -
The accused had borrowed a specific sum of money from the alleged person/persons and was indebted to them
The debt had become due and payable by the accused on the said date
The accused dishonorably failed to repay the debt even though it was still due and payable by him or her
Under the alleged circumstances, the accused person's conduct was of the nature such that it brought discredit upon the armed forces or it was to the prejudice of the discipline and good order of the forces.
Explanation of the article
To be charged under the article 134, for dishonorably failing to pay debt, the accused person should have failed to repay the debt not just due to negligence, but because of the absence of due care. A dishonorable failure to pay is characterized by fraud or deceit, with the accused deliberately, willfully evading the debt or evading it in bad faith. It is also dishonorable if the debt was based on false promises, all of which are a result of the accused person's overall indifferent attitude towards his or her obligations.
Also, the conduct of the accused should have been in a manner such that it causes an obvious and direct damage to the good order of the armed forces, or it should be of such a nature that it damages the reputation of the service.
Note - It is important to note that for the debt to be the basis of offense under this article, the accused must not have had a counter claim according to his or her belief or a fact. Also, a person cannot be charged of dishonorably failing to pay a debt if there had been an actual dispute between the accused and the party he or she is indebted to, according to the facts or a law that in any way affects the obligation of the accused to pay.
Situations when accused is proven guilty
If the court finds beyond reasonable doubt that there is sufficient evidence such as the accused person's past debt history, his failure to make payments, late payments made, failure to pay rent or contact rental agent in spite of receiving a formal notice, then the accused can be convicted of the offense of dishonorably failing to pay the debt. In the sense, the accused should have a "criminal state of mind" and he or she should be totally indifferent to his or her obligation with regards to the debt.
The accused, however, may not be proven guilty if the court fails to obtain facts that suggest that the conduct of the accused was dishonorable with regards to the debt. Also, it is not an offense if it fails to resolve inconsistencies which suggest the inability of the accused to pay or lack of evasion or deceit on his part. So if the judge or panel finds evidence that suggests otherwise and a lack of "criminal state of mind", such as the accused being in agreement with the creditor, mistakes in the terms of debt or a satisfaction of the debt, the accused may not be guilty of the offense.
It is necessary to note that mere failure to pay the debt back does not make it dishonorable conduct and the accused may be punished for his or her inability to pay.
Maximum punishment
Should the court find evidence, which proves beyond reasonable doubt, that the accused had willfully evaded his or her debt obligations or has denied the existence of debt, or fails to pay the debt in bad faith even after the due date has passed, he or she will be subject to confinement of no more than six months as maximum punishment.

13. Terminology Credit report (aka consumer report)
Consumer Reporting Agency (CRA)
Nationwide CRA
Specialty CRA
Furnisher
User
Trade line
Credit scores

14. Finding consumer reporting agencies14

15. The Credit Reporting System
Consumer Reporting Agencies
Lenders/Data Furnishers
Trade Line History
Consumer (Credit) Reports
Public Records
Consumer Reporting Agencies (CRAs)
Three nationwide: Experian, Equifax, TransUnion
Includes public records
Smaller: Innovis and CoreLogic/CoreScore
Specialty CRAs: Medical Information Bureau, Teletrack, Chex Systems
Five types: medical, tenant, checks,employment,insurance
Furnishers of information
Credit card, loan issuers, debt collectors, public records, etc.
Users of information
Any entity with a permissible purpose
Consumers

16. Definition of Consumer Report § 603 (d)(1)
any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for:
(A) credit or insurance to be used primarily for personal, family, or household purposes;
(B) employment purposes;
(C) or any other purpose authorized under section 604

17. What is in a Credit Report?*
Basic information about consumer (header)
Name (and alternative names)
Current and former addresses
Birth date
SSN (and alternative SSNs)
Phone numbers
Report Confirmation # (needed for disputes)
* typically

18. What is in a Credit Report? * (continued)
Trade lines (accounts that belong to consumer)
Mortgages
Installment accounts (car loans, student loans, etc.)
Revolving accounts – credit cards
Past due (collection) accounts
Employment history
Inquiries made when seeking credit
Creditor Inquiries (pre-screening)
Alerts (e.g., fraud or identity theft)
Public records (bankruptcy, foreclosure, tax liens, judgments)
* typically

19. Compliance procedures § 607
“Accuracy of report” (§ 607(b))
“Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy.”
Furnisher rule
Each furnisher “must establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumer that it furnishes to a consumer reporting agency”

20. Consumer Disclosure Rights § 609
Every CRA shall upon request, disclose to consumer
All the information in the consumer’s file
The sources of information
Identification of each person that procured a consumer report
All pre-screened inquiries in previous year
Statement that consumer may request and obtain a credit score

21. Permissible purposes of consumer reports § 604
With consumer’s authorization, anyone
Extension of credit, review of account, or account collection
Employment purposes
Insurers
Potential investor in credit card portfolios
Pre-screening for firm offers of credit
Government agencies in certain cases
Legitimate business need

22. Consumer disputes § 611
CRA Responsibilities
Initial Responsibility - §1681e
Reasonable procedures to achieve maximum possible accuracy
Subsequent responsibility - §1681i
A reasonable reinvestigation
Consumer must make dispute with CRA
Must complete investigation of dispute, usually w/n 30 days
Must review and consider all info supplied by consumer
Must forward to furnisher within 5 days
Transmit to furnisher all relevant information
Must delete if inaccurate or cannot be verified

23. FCRA Identity Theft Provisions § 605 (A)
Fraud Alerts
90 day fraud alerts: Consumer asserts in good faith that they are a victim of fraud
Extended fraud alerts: Lasts 7 years. Consumer must submit an identity theft report
Active Duty Alerts: Last 12 months for alert; also excludes military service member from pre-screened offers for two years.
CRA must block reporting of information resulting from alleged identity theft
Credit card number truncation
Address discrepancy rules

24. CFPB Supervisory Highlights
consumerfinance.gov/policy-compliance/guidance/supervisory-highlights/
Consumer Reporting Special Edition (March 2017)
-Highlights-Consumer-Reporting-Special-Edition.pdf

25. Examples of risks to military consumers
Data breaches
Equifax (Sept. 2017)
>143 million
consumerfinance.gov/about-us/blog/equifax-data- breach-updates/
Office of Personnel Management (June 2015)
≈21.5 million SSNs
Office of Personnel Management (Earlier in 2015)
4.2 million files of current and former employees
Identity Theft
Inaccurate or obsolete information
If you were one of the many servicemembers and their families affected by the recent Equifax data breach, it is time for you to secure your identity. Thankfully, active duty servicemembers have special tools at their disposal, like active duty alerts or a security freeze, to reduce the risk of identity theft. 
For more information, please visit the CFPB blog and find our operation order on what you can do next to secure your identity.
You should closely monitor your financial statements and credit reports. If you see anything out of the ordinary, no matter how small, you should take action immediately.
Review your free credit reports for signs of fraud or identity theft.
Sign up for an active duty alert on your credit report.
Consider placing a security freeze on your credit.
Review any free credit monitoring services offered by the company affected by the data breach. Read the fine print, but never give your credit card information for a "free" product.
Service support: If you're run into problems taking these actions, you can submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).

26. Questions? Local and regional training
Individual responses from liaison
Preventive law materials, such as:
consumerfinance.gov/about-us/blog/equifax-data-breach-updates/
“Fraud protection tools to help safeguard servicemembers”
Office of Servicemember Affairs online forums
Distribution list for Enforcement information (send to Angela)
Angela Martin
Senior Enforcement Attorney
Military Affairs Liaison
(202) (cell)