Fair Credit Reporting Act Reporting Requirements Refresher
Inaccurate credit reporting is usually discussed as a harm to consumers , causing damage to their credit reports , leading to lower credit scores and adverse lending consequences . However , it also harms financial institutions as well , putting them under scrutiny from the authorities and risking millions of dollars in fines and fees .
The Fair Credit Reporting Act ( FCRA ) regulates the collection of consumers ’ credit information and access to their credit reports , including loan payments and leases . The FCRA allows individuals to access their own credit reports for free and assess their own credit and plan accordingly . Both the Federal Trade Commission ( FTC ) and the Consumer Financial Protection Bureau ( CFPB ) oversee and enforce the FCRA .
The implementing regulation , Regulation V , states the lender , insurer , landlord , employer or any other individual seeking a credit report must have a legally permissible purpose to obtain the report . There are also requirements for negative credit information to be removed after seven years , and bankruptcies within seven to ten years .
Financial institutions are given access to information and communications that can drastically affect their customers / members and their own business . This access comes with a degree of responsibility . According to the FCRA , financial institutions have regulatory guidelines that must be followed to encourage fairness . The most basic responsibility is due diligence on the financial institution ’ s part — correcting inaccurate information and sending out the information to credit reporting agencies ( CRAs ) in a timely manner .
FCRA Violation
One of the more recent violations of the FCRA comes from Hyundai , an automaker based in Seoul , South Korea . In July a consent order was released , which included a $ 19 million fine for violations of Regulation V and the Consumer Financial Protection Act ( CFPA ).
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