WBK Industry News - Federal Regulatory Developments

CFPB and FTC File Joint Amicus Brief in 3rd Circuit FCRA Case

Recently, the CFPB and FTC filed an amicus brief in a Third Circuit FCRA case asserting that furnishers are required to investigate any dispute forwarded to them by a credit reporting company (i.e., indirect disputes) and cannot avoid that obligation by asserting the dispute is frivolous. 

In the brief, the agencies argued that the text of FCRA is unambiguous and that nothing in the statute that would exempt furnishers from investigating a dispute because it deems the dispute frivolous or inadequately supported.  And they asserted that had Congress intended FCRA to allow furnishers to decline to investigate disputes furnishers determine to be frivolous, it knew how to say so.  Next, the agencies claimed that FCRA consistently provides that consumers are entitled to receive notice regarding the outcome of their disputes and an opportunity to cure.  Reasoning that if furnishers were allowed to ignore disputes that would create an unintended loophole resulting in the outcome of consumer disputes remaining unknown to the consumer.  Further, the agencies stated that FCRA envisions credit reporting companies acting in the role of “gatekeeper” and protecting furnishers from investigating frivolous disputes.

See WBK’s prior coverage of the amicus briefs filed by the CFPB and FTC supporting the position that credit reporting companies and furnishers must ensure reported consumer information does not contain “legal” or “factual” inaccuracies.