CFPB Summer 2020 Supervisory Highlights part II: credit reporting

Last Friday’s blog looked at some of the Regulation E issues that came up in the Consumer Financial Protection Bureau’s (CFPB) Summer 2020 Supervisory Highlights. The Supervisory Highlights document some of the CFPB’s findings “in the areas of consumer reporting, debt collection, deposits, fair lending, and mortgage servicing that were completed between September 2019 and December 2019.” Today’s blog will focus on one of the findings relating to consumer reporting.

Permissible Purpose Violations

The CFPB explained it found at least one lender pulled the credit report of a consumer without making sure a permissible purpose existed under the Fair Credit Reporting Act (FCRA). The CFPB noted at least one lender revised its policies and procedures to require documenting the consumer’s consent to pull a credit report even though the consumer’s express consent was not required by the FCRA.

What Does the FCRA Require?

Section 604 of the FCRA describes when a credit union has a permissible purpose to obtain a consumer report from a consumer reporting agency. Under section 604(a), consumer reporting agencies can provide consumer reports:

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