AG Kaul and States’ Coalition Request CFPB To Protect Consumers’ Credit During COVID-19 Pandemic
MADISON, Wis. – Attorney General Josh Kaul and a coalition of 22 other attorneys general are demanding the Consumer Financial Protection Bureau (CFPB) enforce the CARES Act and require credit reporting agencies to follow the Fair Credit Reporting Act (FCRA) during the COVID-19 crisis. The CFPB’s recent announcement that they would not enforce the law would leave consumers at the mercy of unresponsive credit agencies at a critical time.
“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 Attorney General Kaul. “The CFPB shouldn’t be watering down a protection the CARES Act provides to borrowers.”
“In addition to its enormous health toll, the COVID-19 global pandemic is causing significant economic disruption as well. Businesses are closed and millions of workers have already filed claims for unemployment compensation,” said the attorneys general in their letter to the CFPB. “If we hope to have a quick economic recovery when this crisis is over, American consumers must be fully equipped to reenter the market. The status of Americans’ credit reports will be vital to ensuring strong participation in the economy. The importance of protecting consumers’ credit is even greater during this crisis.”
The letter was written in response to an announcement by the Consumer Financial Protection Bureau that: (1) the CFPB would not enforce an amendment to the Fair Credit Reporting Act that requires lenders to report as current any loans that are affected by a COVID-19-related accommodation; and (2) the CFPB would not take action against consumer reporting agencies that violate the FCRA’s 30-day deadline to investigate consumer disputes.
The attorneys general outlined their opposition to the Consumer Financial Protection Bureau’s announcement:
- The CFPB’s announcement that it will not enforce the CARES Act’s requirements could discourage consumers from taking advantage of the accommodations that lenders are required to offer under the CARES Act or those that they are offering voluntarily;
- The CFPB’s announcement it will not require consumer reporting agencies to investigate consumer disputes within 30 days puts consumers at risk;
- Consumer reporting agencies must be vigilant about accurately reporting consumer credit, which can only be done by following the requirements established by the FCRA as amended by the CARES Act.
In addition to Attorney General Kaul, the letter to the Consumer Financial Protection Bureau was joined by 22 other attorneys general from California, Colorado, Washington D.C., Hawaii, Iowa, Illinois, Massachusetts, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Vermont, Virginia, and Washington.