The following are excerpts taken from the CFPB’s fourteenth edition of its Supervisory Highlights published in the April 6, 2017, issue of the Federal Register (82 FR 16808, click here), which includes findings from examinations at consumer reporting companies (“CRCs”) and at companies (“furnishers”) that furnish information to CRCs. These excerpts only pertain to furnishers that supply the information about consumers’ financial behavior to CRCs and are redacted and modified for clarity and length. Supervisory Observations at Furnishers The FCRA (Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.) and Regulation V (12 CFR Part 1022, click here) set forth requirements for furnishers concerning both accuracy and dispute handling. To ensure compliance with these requirements, Supervision has conducted a number of reviews at a variety of furnishers subject to its supervisory authority. Supervision found CMS (“compliance management systems”) weaknesses and numerous violations of the FCRA and Regulation V that required corrective action by furnisher(s). CMS/Data Governance As the CFPB has emphasized, we expect institutions subject to our supervisory authority to structure their CMS in a manner sufficient to comply with Federal consumer financial laws and appropriately address associated risks of harm to consumers. This expectation includes ensuring the furnisher implements and maintains a CMS sufficient to ensure compliance with furnisher obligations required under the FCRA, as appropriate. In one or more reviews of furnisher(s), examiners found several weaknesses in CMS, including the following: • weak oversight by management and the Board of Directors over furnishing practices; • no formal data governance program; • failure to update policies and procedures; • weak training of employees who conduct furnishing and dispute handling operations; and • weak monitoring and corrective action, including failure to conduct follow up testing on consumer account files submitted to and rejected by one or more CRAs. Supervision directed the furnisher(s) to take appropriate action to address these weaknesses in their CMS programs as they relate to their actions in furnishing information to CRCs.

Complete Memorandum