FCRA 623 Reporting Requirements - Are you meeting your responsibilities as a data furnisher?

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FCRA 623 reporting requirements – Are you meeting your obligations as a data furnisher?

© 2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 2

Lee Lundy Experian

Ashley Knight Experian

Carmen Hearn Experian

Introducing:

@ExperianVision | #vision2015

Follow us on Twitter:


Data furnisher

regulatory

obligations

Carmen Hearn

4 © 2015 Experian Information Solutions, Inc. All rights reserved. Experian Public.

Dodd Frank 2010 creates the Consumer Financial Protection Bureau (CFPB)

CFPB asserts examination authority beginning 2011 (large institutions greater than $10B, nonbanks engaged in covered activities, service providers and vendors)

2012, CFPB begins examination on largest FIs and levies financial penalties greater than $1B for deceptive practices, disputes, errors in credit bureau reporting

Regulatory landscape Tidal wave of scrutiny


2013 to current: 13 additional examination procedures are

created for mortgage, education, retail banking, consumer finance, debt collections

CFPB asserts data accuracy and integrity guidance and tests on compliance management systems

CFPB mandating credit reporting agencies responsible for reporting top 25 data furnishers with most disputes and highest overall disputes relative to industry

Regulatory landscape Tidal wave of scrutiny


In addition to the overall expense associated with the heavy fines and consent orders, millions of customers have been impacted

Together with our data providers, we have an obligation to the consumer to minimize their exposure to negative and harmful situations

Consumer impact Beyond consent orders and fines

Financial services provider

250K customers impacted

CFPB FINDINGS:

Deceptive practices

Retail bank

2M customers impacted

CFPB FINDINGS:

Deceptive practices

Credit card provider

3.5M customers impacted

CFPB FINDINGS:

Deceptive practices

Financial services provider

185K customers impacted

CFPB FINDINGS:

Servicing mis-conduct

Mortgage loan servicer

1M customers impacted

CFPB FINDINGS:

Violation of FCRA and inaccurate data

Just under…

7M customers

impacted


Regulation review Fair Credit Reporting Act (FCRA) rules

Duty of

furnishers

Obligations under the Fair Credit Reporting Act (FCRA)

Section 623: Responsibilities of furnishers of information to credit reporting agencies

Provide accurate information

Prohibited from reporting information with known errors

Provide notice of a dispute

Duty to investigate and respond to a dispute

1

The regulatory environment remains a hot topic with protection of the consumer being front and center


Regulation review Fair Credit Reporting Act (FCRA) rules

Duty of

furnishers


Section 623: Duty to correct and update information

If information furnished is not complete or accurate, the data furnisher must:

► Notify the credit reporting agency

► Provide corrections and not furnish any of the information that remains incomplete or inaccurate

2

FCRA provisions to correct and update information ensuring completeness and accuracy


Regulation review Fair Credit Reporting Act (FCRA) Regulation V


Regulation V (part 1022): Responsibilities of policies and procedures concerning the accuracy and integrity of furnished information

Furnishers must implement written policies and procedures ensuring accuracy and integrity of information delivered to the credit bureau

Policies and procedures must be appropriate relative to furnisher’s size, complexity and nature of business

Policies and procedures must be reviewed periodically ensuring continued effectiveness

Accuracy

guidelines 3

Sound policies and procedures can help to validate data quality and to ensure compliance


Recent regulatory changes have created an urgency to further expedite our ability to ‘clean up’ the credit eco system and to focus on the consumer

On December 11, 2014 the Consumer Financial Protection Bureau (CFPB) announced that they will now require credit reporting agencies (CRA’s) to provide accuracy reports on data furnishers that identify key risk areas for consumers

CFPB accuracy reports New requirements

New reporting requirements

Furnishers

with the

most disputes

Industries

with the

most overall

disputes

Furnishers

with high overall

disputes relative

to industry


How to be proactive and prepared Optimizing the new normal

Evaluating your organization’s engagement in these three core areas can help to address pressure from consumers and regulatory agencies


Credit reports play

an increasingly important role in

the lives of American consumers…

Most decisions to grant credit – including mortgage loans, auto

loans, credit cards, and private student loans – include

information contained in credit reports as part of the lending

decision. These reports are also used in other spheres of

decision-making, including eligibility for rental housing, setting

premiums for auto and homeowners insurance in some states,

or determining whether to hire an applicant for a job.

– Consumer Financial Protection Bureau


National

Consumer

Assistance Center Accurate reporting and the

consumer

Lee Lundy


Primary functions

Credit report and credit score fulfillment

Dispute processing and services

Fraud assistance and support

Credit education

Special services related to executive escalations, federal and state regulatory concerns

Maintaining compliance with FCRA and state legislation

NCAC overview Functions and metrics

Allen, TX – 323 employees

Costa Rica – 44 employees

Santiago, Chile – 245 employees

Santa Ana, CA – 4 employees

Multi-national presence


Dispute process overview

Dispute verification

sent to data

furnisher

Web and phone disputes processed immediately; mailed requests processed within five days

Evaluates and processes response, sending results to consumer

Data furnisher researches and responds to Experian

Consumer disagrees with reported information

Using any channel, provides specific reason why they feel information is inaccurate

Consumer may request to send updated copies to creditor who reviewed the disclosure in the past

If consumer disagrees with results: Add statement explaining why they feel

it is inaccurate And / or contact data furnisher directly And / or provide Experian with additional

relevant information

© 2015 Experian Information Solutions, Inc. All rights reserved. Experian Public.

2014 disputes

16

Web Total received – 5,212,316

Annual Credit Report – 2,400,753

Experian – 2,811,563

Phone and mail Total received – 2,502,644

Regular dispute – 2,064,123

Fraud – 318,619

Mixed files – 119,902


NCAC overview How do we talk to consumers?

Going above and beyond for consumers

Stop the clock

Red Carpet dialogue

Customer satisfaction surveys

Policy enhancements considered driven by agent and client feedback to improve service

Dedicated fraud assistance

Continuous agent training and coaching

Phone verifications

Consumer call backs

Consumer-focused initiatives


NCAC overview Disputed items statistics

1) Trade – Not mine – Provide complete ID

2) Trade – Consumer states inaccurate information Provide complete ID / account information

3) Trade – Status disputed

4) Identification – Not mine

Over the last three years, the top 4 dispute reasons have remained the same

These top 4 reasons account for about 50% of the total disputed items

Most common dispute reasons 2012 – 2014

The largest changes were in ident (500K), inquiry (375K) and trade (200K)

Of the increase in inquiry disputes, the largest change was for dispute reason: “Delete fraud investigation / proof provided”

Dispute volumes by category Category 2014 2013 2012

Trade 8,916,108 8,710,672 9,030,906

Identification 3,777,039 3,265,138 3,330,071

Inquiry 1,230,806 852,545 712,691

Statement 578,271 503,072 584,294

Public Record 544,254 499,954 499,416

Total 15,046,478 13,831,381 14,157,378


More than 60% of inbound mail deemed as not from actual consumer

Special attributes are applied to mail for identification (envelope, postmark, form letter style)

Research is done to ensure duplicate disputes are not sent to data furnisher and the consumer is notified

NCAC overview Frivolous disputes

An industry issue that will require a consolidated effort


Experian’s

National Consumer

Assistance Center

Making a difference


Experian Data

Integrity ServicesSM

Ashley Knight


While data reporting is voluntary, data furnishers must adhere to complete and accurate reporting of consumer credit data as mandated in the current Fair Credit Reporting Act (FCRA)

Experian offers reporting tools and metric packages and provides insight and analysis into consumer tradeline and dispute data

How can Experian help? Experian Data Integrity ServicesSM

Data Integrity

ServicesSM

Data reporting tools Custom data review

packages

Metric

Report™* Annualized

metric report** DataArc™ DataArc Plus™

DataArc

Custom™

* Offered to select clients currently

** Not yet offered, currently being built


To help our data providers meet their regulatory obligations and validate the accuracy of their data, we have created Experian Data Integrity ServicesSM

Our packages provide insight and analysis of Metro 2 data submissions, fatal errors, disputes and peer benchmarking

DataArc Plus™ Dashboard capabilities


Disputes have been a big focal point from regulators

The dashboard tool provides a trended view of disputes and the ability to view samples by disputes reference number or account number



In addition to dispute trends, we offer peer benchmarking and industry averages for disputes reason and result


Dispute reason comparison

Dispute reason and result comparison


Experian Data Integrity ServicesSM

What our clients are saying

“

”

… if we hadn’t engaged Experian, we might have implemented routines that would have caused downstream negative impact and potential additional consumer harm.

Top-10 financial institution

The data, delivery, consultation and thought leadership were very detailed. We confirmed positive aspects of our reporting and identified recommendations for best-in-class changes.

Top-10 financial institution

(Card division)

This was an excellent exercise and an investment no other bureau has undertaken with us, ever. The insight we gained was very valuable.

Collection agency


Experian Data Integrity ServicesSM

Where are we going?

Metric Report delivery

DataArc™ product development

Dashboard enhancements

Product expansion

Feedback and collaboration

Joint marketing ventures

Regulatory endorsement

Programs and partnerships


Next steps

Carmen Hearn


Understanding our obligations Our role

We all have a role in the current credit eco-system and Experian is committed to delivering on our obligations to financial institutions and the consumer

Credit

bureaus

Consumers

Financial

institutions

Regulators


Download

New Experian perspective paper “The Impact of Consumer Data Reporting” at: http://www.experian.com/consumerimpact

Visit

Data Integrity Services Website at http://www.experian.com/dataintegrityservices

CFPB Website at http://www.consumerfinance.gov/

Sign up

Experian News Blog posts http://www.experian.com/blogs/news

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Global Regulatory and Public Policy Update

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Learn more Next steps


[email protected]

[email protected]

[email protected]

For additional information,

please contact:

@ExperianVision | #vision2015

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Date post:	23-Jul-2015
Category:	Business
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FCRA 623 Reporting Requirements - Are you meeting your responsibilities as a data furnisher?

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