Attorneys general from nearly two dozen states, the District of Columbia, and Puerto Rico wrote a letter yesterday to Kathleen Kraninger, the director of the Consumer Financial Protection Bureau, requesting that the agency withdraw its guidance for how debts should be reported to the credit bureaus during the COVID-19 pandemic.
The attorneys general are asking the CFPB to step back from its announcement that it will not enforce a provision of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that requires lenders to continue reporting loans as current if they are subject to a forbearance or other accommodation, as long as the loans were current before the accommodation was made, and that it will give entities more leeway to investigate consumer disputes, which are supposed to occur within 30 days of the dispute being made.
“With the devastating impacts that the coronavirus pandemic has had on the economy, it’s essential for the federal government to use all of the tools at its disposal to protect our financial security,” said Josh Kaul, the attorney general of Wisconsin, in a statement. “The CFPB shouldn’t be watering down a protection the CARES Act provides to borrowers.”
The CFPB had announced that companies could take longer to complete their investigations if consumers provide additional relevant information and if the credit reporting agency (CRA) was “making good faith efforts” to investigate as quickly as possible.
“CRAs only have one job: to maintain accurate credit reports,” the attorneys general wrote in their letter. “Now is not the time to let them fall asleep at the switch. They must be vigilant and protect consumers’ credit. Especially during this crisis, we must hold them accountable when they fail to respond to, and correct, errors on consumers’ credit reports.”