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Nessel and Coalition of Attorneys General Call On CFPB To Protect Consumers' Credit During COVID-19 Pandemic
April 14, 2020
LANSING ― Michigan Attorney General Dana Nessel and 21 other attorneys general urged the Consumer Financial Protection Bureau (CFPB) to enforce the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and require credit reporting agencies to follow the Fair Credit Reporting Act (FCRA) during the COVID-19 crisis. The CFPB’s recent announcement that they would not enforce the law would leave consumers at the mercy of unresponsive credit agencies at a critical time.
“At a time when scams are abundant and mistaken reporting can detrimentally affect consumers’ credit, the Consumer Financial Protection Bureau should be working toward even greater protections rather than relaxing them,” said Nessel. “By choosing to not enforce many of the requirements of the Fair Credit Reporting Act during the COVID-19 pandemic, the CFPB is opening the door to potential harm to consumers’ credit and buying power along with jeopardizing the nation’s economic rebound.”
The letter, sent Monday, was written in response to an announcement by the CFPB stating: (1) the CFPB would not enforce an amendment to the FCRA that requires lenders to report as current any loans that are affected by a COVID-19-related accommodation; and (2) the CFPB would not take action against consumer reporting agencies that violate the FCRA’s 30-day deadline to investigate consumer disputes.
In their letter, the attorneys general cited three main concerns:
- The CFPB’s announcement that it will not enforce the CARES Act’s requirements could discourage consumers from taking advantage of the accommodations lenders are required to offer under the CARES Act or those they are offering voluntarily;
- The CFPB’s announcement it will not require consumer reporting agencies to investigate consumer disputes within 30 days puts consumers at risk; and
- Consumer reporting agencies must be vigilant about accurately reporting consumer credit, which can only be done by following the requirements established by the FCRA as amended by the CARES Act.
“If we hope to have a quick economic recovery when this crisis is over, American consumers must be fully equipped to reenter the market,” the coalition writes. “The status of Americans’ credit reports will be vital to ensuring strong participation in the economy. The importance of protecting consumers’ credit is even greater during this crisis.”
Nessel joins the attorneys general of California, Colorado, the District of Columbia, Hawaii, Illinois, Iowa, Main, Massachusetts, Minnesota, Nevada, New Jersey, New York, New Mexico, North Carolina, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Vermont, Virginia, Washington and Wisconsin in sending this letter.