By Rhonda Coggins, CRCM, National Compliance Services Director
Amidst all of the recent regulatory issuances providing guidance during the COVID-19 pandemic, compliance stakeholders likely saw the CFPB’s April 1st issuance. In the Bureau’s communication, they provide guidance on credit reporting during the pandemic, as addressed by the CARES Act.
So, what is the CARES Act?
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a new piece of legislation that was just signed into law by the President on March 27th. The Act was written in response to the COVID-19 pandemic and its impact on the economy, public health, state and local government, individuals and businesses. The law covers an exceptionally wide range of issues and activities as reflected in its six titles and almost 190 sections, which includes:
- Funding various loans, grants, and other forms of assistance for businesses, industries, states, local governments, and hospitals
- Providing tax rebates of up to $1,200 per individual and an additional $500 per child, subject to limits based on adjusted gross income
- Temporarily expanding unemployment benefits
- Suspending payments and interest on federal student loans
- Oversight of the activities and funding authorized by this bill
- The tax treatment of withdrawals from retirement accounts, business income, losses, and charitable contributions
- Medical product supplies
- Health insurance coverage for COVID-19 testing and vaccinations
- The health care and aviation workforces
- Mortgage payments, evictions, and foreclosures for properties with federally backed mortgages
- Student loans and financial aid
- Aviation excise taxes
- Medicare and Medicaid
- The Food and Drug Administration drug approval process
- The emergency paid sick leave program
- Banking and accounting rules
- The U.S. Postal Service’s borrowing authority
So, how does this impact credit reporting?
Title IV of the law is focused on Economic Stabilization and Assistance to Severely Distressed Sectors of the United States Economy. Therein, in section 4021, it describes how the Fair Credit Reporting Act (FCRA) was amended to address reporting information during the COVID-19 pandemic. More specifically, the amendment directs that, except when a consumer credit or account is charged off, if a furnisher makes an “accommodation” with respect to one or more payments and the consumer makes the payments or is not required to make the payments because of the accommodation, the furnisher shall report the credit or account as current. Or, if the credit or account was delinquent before the accommodation, maintain the delinquent status during the period in which the accommodation was in effect and if the consumer brings the credit or account during that period, report the credit or account as current.
Stakeholders wanting to learn more about the CARES Act, may find it here: https://www.congress.gov/bill/116th-congress/house-bill/748/text?q=%7B%22search%22%3A%5B%22actionDate%3A%5C%22116%7C2020-03-27%5C%22+AND+%28billIsReserved%3A%5C%22N%5C%22+OR+type%3A%5C%22AMENDMENT%5C%22%29%22%5D%7D&r=1&s=1#toc-H0833DD4491144A65ABA1DCE34FB19055
Also, interested persons wanting to read the Bureau’s Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act may find it here: https://files.consumerfinance.gov/f/documents/cfpb_credit-reporting-policy-statement_cares-act_2020-04.pdf