On June 16th, the CFPB issued a Compliance Aid Frequently Asked Questions (FAQs) addressing the CARES Act changes to the Fair Credit Reporting Act (FCRA) and clarifying furnisher reporting obligations regarding consumers who have received payment assistance or forbearance. In public remarks in connection with Consumer Data Industry Association webinar released June 19, 2020 Director Kraninger highlighted the CFPB’s commitment to consumers: “I do want to stress that we are telling struggling borrowers to reach out to their servicers to see what options are available to them. Under CFPB regulations, servicers are required to have policies and procedures in place to ensure the disclosure of the availability of CARES Act mortgage forbearance to consumers. If a consumer has an issue with their servicer, we encourage them to submit a complaint to us if the consumer can’t first resolve the matter with the servicer.” Here are few of the highlights in the FAQ that address issues which may prove the most challenging for lenders, services and furnishers and agencies.
FAQ #5 “Constructive Work” With Borrowers Encouraged.
“Even if accommodations are not required by the CARES Act or by other applicable law, the Bureau and other Federal and State agencies have encouraged financial institutions in prior guidance (the March 22, 2020 Federal Reserve Intragency Statement) to work constructively with borrowers who are or may be unable to meet their contractual payment obligations because of the effects of COVID-19.” This guidance goes to the spirit of the CARES Act to help consumers impacted by the pandemic, but also asks servicers use their best judgment in offering assistance beyond that required. Understanding borrower’s specific circumstances will be critical in assessing the reasonableness of efforts. Where personnel are applying judgment, having internal servicer guidelines for escalation to ensure uniformity and consistency may prove beneficial. Tracking and monitoring metrics and other characteristics of those loans and borrowers may also help ensure fairness.