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Overview
On August 31, 2010, the OTS updated Section 1300 of the
OTS Handbook, which outlines FCRA compliance requirements reviewed
in examinations. The OTS, the Office of the Comptroller of
the Currency, the Federal Reserve Board, the Federal Deposit
Insurance Corporation, the National Credit Union Administration,
and the Federal Trade Commission implemented the FACT Act changes
through final rules that were
effective July 1, 2009.
Section 623 of the Fair Credit Reporting Act (FCRA) was amended by
the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) to
improve the way that institutions furnish information to consumer
reporting agencies (CRAs) and handle direct disputes from
consumers.
Section 1300 of the OTS's Examination Handbook contains procedures
used by OTS examiners to assess compliance with the FCRA. The
module on financial institutions as being "furnishers of
information" (Module 4) has been revised to include the
requirements of the new rules.
Furnishing information to CRAs
is voluntary. However, under the new rules, institutions that do so
must have policies and procedures for furnishing information with
accuracy and integrity.
The rules also lay out the duties of institutions that receive
disputes directly from consumers. The attached examination
procedures address both of these areas.
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Highlights
Summary
of Key Regulatory Provisions
Policies and
Procedures
In developing the required policies and procedures, furnishers
must:
- consider the guidelines that are in Appendix E to the rule
- develop policies and procedures that fit the institution's
activities
- provide for reasonable investigations of disputes
- use standard data reporting formats
- maintain records for enough time to respond to direct
disputes
- review procedures upon transfers of accounts to prevent
re-aging of information
- periodically review and update practices and procedures for
investigating and correcting information
- review and update their procedures periodically
Direct
Disputes
- When a consumer disputes information reported to a CRA directly
with an institution, the institution must conduct a reasonable
investigation of a direct dispute if it relates to consumer
liability on the account, the terms of the account, the consumer's
performance, or other
information in a credit report regarding the account with the
furnisher that bears on the consumer's creditworthiness and
reputation.
- When an institution receives a direct dispute, it must review
all relevant information that the consumer provided and report
investigation results to the consumer.
- If the institution finds that it provided incorrect information
to a CRA, it must provide the correct information to each affected
CRA.
- An investigation is not required if the institution determines
that the dispute is frivolous or irrelevant and sends the consumer
a notice within five days of making that determination.
- The notice may be on a standard form and must include the
reasons for the determination and identify information that the
institution needs to investigate the dispute.
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Visit
Library for Issuances
Issuances available in our Library:
- Furnishing Information to Consumer Reporting Agencies and
Direct Disputes Regulation: FCRA Examination Procedures, OTS Letter
363 (8/31/10)
- Regulatory Bulletin, RB 37-60, Handbook: Examination, Subject:
Fair Credit Reporting Act, Section 1300 (8/31/10)
- Final Rule/Guidelines on Furnishing Consumer Information to
Credit Reporting Agencies and Direct Disputes; and Advance Notice
of Proposed Rulemaking (ANPR) Seeking Comment on Additions to
Guidelines, OTS Letter 313 (7/17/09)
- Guidelines for Furnishers of Information to Consumer Reporting
Agencies, Proposed rule, Federal Register, Vol. 74, No. 125, pp
31529-31533 (7/1/09)
- Procedures To Enhance the Accuracy and Integrity of Information
Furnished to Consumer Reporting Agencies Under Section 312 of the
Fair and Accurate Credit Transactions Act, Final rules, Federal
Register, Vol. 74, No. 125, pp 31484-31528 (7/1/09)
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