CFPB Imposes Several New Duties On Big Data Brokers – Financial Services

The Consumer Financial Protection Bureau (“CFPB”) has
issued several statements affecting the credit reporting industry
in the last few months, including one on medical debts and one on auto financing, while at the same time
emphasizing that the definition of a consumer reporting agency
(“CRA”) should be interpreted broadly to include not just
credit reporting companies and tenant screeners but also “other data brokers.” This
means that any company collecting “Big Data” and hoping
to convert that data into profit by offering reports on individual
consumers should beware and consider themselves a CRA that is
subject to the Fair Credit Reporting Act (“FCRA”) and the
CFPB.

CRAs now must provide consumers with a means to remove,
challenge or update items on their credit report that appear
because the consumer has been the victim of a severe form of human
trafficking or sex trafficking. This means that CRAs must develop
new processes to accept, evaluate and police these kinds of reports
from consumers. New changes to Regulation V, the implementing
regulation of the FCRA, require completely new processes to be
established to accommodate and manage such reports, and these
obligations apply not just to the nationwide credit bureaus but to
all companies that qualify as a CRA. Another new duty all CRAs will
have to face is to track and monitor state laws addressing credit
reports, as a result of the CFPB’s Interpretive Rule that seeks to limit the
preemptive effects of the FCRA. As the CFPB says in the rule, this
means that, “[s]tates therefore retain substantial flexibility
to pass laws involving consumer reporting to reflect emerging
problems affecting their local economies and citizens.”

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