Written By ESR News Blog Editor Thomas Ahearn
In November of 2021, the Consumer Financial Protection Bureau (CFPB) launched a report about “Disputes on Consumer Credit Reports” that discovered shoppers in majority Black and Hispanic neighborhoods, youthful shoppers, and people with low credit score scores had been much more more likely to have disputes seem on their credit score stories.
“Families living in majority Black and Hispanic neighborhoods are far more likely to have disputes of inaccurate information appear on their credit reports,” CFPB Director Rohit Chopra said in a news release about the report. “Error-ridden credit reports are far too prevalent and may be undermining an equitable recovery.”
In almost each credit score class the report reviewed, shoppers residing in majority Black areas had been greater than twice as more likely to have disputes seem on their credit score stories thai shoppers residing in majority white areas. For auto loans, shoppers in majority Black areas had been greater than 3 times as more likely to have disputes.
Under the federal Fair Credit Reporting Act (FCRA), shoppers have a proper to file a dispute with shopper reporting businesses (CRAs) to appropriate inaccuracies on their stories. The FCRA requires CRAs to course of and examine the disputes in a well timed method and proper any inaccuracies uncovered by the investigation.
The CFPB is dedicated to additional researching the causes of credit score report disputes. In October of 2021, the CFPB – together with the Federal Trade Commission (FTC) and the North Carolina Department of Justice – filed an amicus transient in a case relating to an organization in search of to realize immunity from inaccurate shopper reporting.
In November of 2021, seven U.S. Senators despatched a letter urging the CFPB to reform the credit score reporting business by utilizing the CFPB’s current supervisory, rulemaking, and enforcement authority over the biggest nationwide CRAs to enhance the accuracy of credit score stories, streamline the dispute course of, and maintain CRAs accountable for errors.
Consumer complaints acquired by the CFPB replicate vital concern about inaccuracies in shopper stories. In 2020 alone, companies provided responses to more than 191,000 such complaints, which represented roughly 68 % of credit score or shopper reporting complaints responded to by corporations that 12 months.
Enacted in 1970, the FCRA regulates shopper reporting. Because of the significance of accuracy of shopper stories to companies and shoppers, the FCRA requires CRAs to “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”
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