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We recently discovered a small number of loans that have been incorrectly reported to the credit bureaus. Several years ago, these customers went through bankruptcy and then reaffirmed the debts with our bank; however, the bankruptcy and reaffirmation never were reported to the credit bureaus. I believe we must report these as reaffirmed accounts per our contract with the credit bureaus. Are we subjecting ourselves to any additional legal, financial or other risks? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

We recently discovered a small number of loans that have been incorrectly reported to the credit bureaus. Several years ago, these customers went through bankruptcy and then reaffirmed the debts with our bank; however, the bankruptcy and reaffirmation never were reported to the credit bureaus. I believe we must report these as reaffirmed accounts per our contract with the credit bureaus. Are we subjecting ourselves to any additional legal, financial or other risks?

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We believe there could be risk for your bank if it fails to correctly report the missing information.

The Fair Credit Reporting Act (FCRA) requires furnishers of consumer information to promptly correct any erroneous information. While the FCRA does exclude certain bankruptcy information from consumer credit reports, the responsibility to remove excluded bankruptcy information falls on the consumer reporting agencies, not on banks or other information furnishers.

Also, your bank’s agreements with the consumer reporting agencies may impose reporting responsibilities (such as the use of particular codes) for debts that are subject to bankruptcy protection or that have been reaffirmed, and we recommend reviewing those agreements before proceeding.

For resources related to our guidance, please see:

  • FCRA, 15 USC 1681-2(a)(2) (“(2) Duty to correct and update information. A person who (A) regularly and in the ordinary course of business furnishes information to one or more consumer reporting agencies about the person’s transactions or experiences with any consumer; and (B) has furnished to a consumer reporting agency information that the person determines is not complete or accurate, shall promptly notify the consumer reporting agency of that determination and provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to the agency complete and accurate, and shall not thereafter furnish to the agency any of the information that remains not complete or accurate.”)
  • FCRA, 15 USC 1681c (“(a) Information excluded from consumer reports. Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information: (1) Cases under title 11 of the United States Code or under the Bankruptcy Act that, from the date of entry of the order for relief or from the date of adjudication, as the case may be, antedate the report by more than 10 years.”)