COVID-19’s Impact on Credit Reporting

By Litigation Practice Group

On April 1, 2020, and as part of the federal government’s response to the COVID-19 pandemic, the Consumer Financial Protection Bureau (“CFPB”) issued a policy statement (“Statement”) to guide lenders and credit reporting agencies as to their reporting obligations under the recently-passed Coronavirus Aid, Relief and Economic Security Act (“CARES Act”).

In the Statement, the CFPB encourages lenders and other furnishers of credit information to continue providing credit information as they make accommodations to borrowers and consumers so that credit reports remain accurate. However, the Statement stresses that the CARES Act requires lenders to report as current “certain credit obligations” for which lenders make accommodations to the consumers who have sought them. The CFPB also reiterates its prior guidance to lenders to work with borrowers, which could help avoid the need to report delinquencies. Finally, the CFPB announced that it would work with lenders and reporting agencies as challenges arise in carrying out their duty to investigate reporting disputes. For example, good faith efforts to investigate disputes “as quickly as possible” will not subject a lender or credit reporting agency to enforcement action even if it takes longer than the applicable statutory time period of 30 or 45 days.

Although it is not binding, the Statement is a good resource and reminder to lenders as they work with borrowers on accommodations in response to the coronavirus. The attorneys at Saalfeld Griggs continue to monitor the legal responses to the pandemic and will provide additional updates as they become available.