FRB to Study Credit Investigations

The FACT act requires the Federal Reserve Board to study the adequacy of investigations of disputed consumer information reported to credit bureaus. While mandated by the FACT Act, this study may have more extensive implications. The FRB has long taken stands in Regulations Z and E (which both require investigations when customers allege errors) of setting a high standard for investigations. It is possible that the findings of this study will have implications for many consumer protections.

In the study, the FRB will look at timing - how promptly disputed information is investigated. Timing is an issue in Regulation E. It's importance in the context of credit reports will be measured by consumer harm resulting from incorrect information.

The FRB will also study the completeness of information reported to consumer agencies. This consideration may also have an effect on accuracy as the withholding or non-reporting of some information is considered harmful to consumers. Any information that is not reported is likely to have an impact on the consumer's credit score.

Finally, the FRB study will consider the promptness with which information is corrected or deleted.

Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 9, 9/04