We believe it would be permissible to provide a customer in forbearance with a periodic statement reflecting the full payment due under the note while reporting the amount due under a temporary loss mitigation agreement to the credit reporting agencies — although we realize that the discrepancies between your periodic statements and amounts reported to the credit reporting agencies may create operational difficulties.
As you noted, Regulation Z grants servicers the option to list the amount due on a periodic statement as either the full amount due under the promissory note or the amount due under a temporary loss mitigation program. Consequently, we believe you may continue to send periodic statements to a customer in forbearance that reflects the full payment due under the note.
Although we do not have access to the 2021 Credit Reporting Resource Guide, we were able to locate a 2020 version posted online which indicates that for accounts in forbearance, the scheduled monthly payment amount should be the new payment due or “zero fill” if no payments are due during the forbearance period. We believe this is consistent with Regulation V, which requires lenders to furnish information on consumer accounts to credit reporting agencies that accurately “reflects the terms and liability of those accounts” and is “substantiated by the furnisher’s records at the time it is furnished.”
Additionally, we note that due to changes made by the CARES Act to the Fair Credit Reporting Act, furnishers are required to report consumers making payments under a pandemic-related loan accommodation as “current” unless their account was delinquent before the accommodation.
For resources related to our guidance, please see:
- Regulation Z, 12 CFR 1026.41(d)(1) (“The periodic statement required by this section shall include: (1) Amount due. Grouped together in close proximity to each other and located at the top of the first page of the statement: . . . (iii) The amount due, shown more prominently than other disclosures on the page and, if the transaction has multiple payment options, the amount due under each of the payment options.”)
- Regulation Z, Official Interpretations, Paragraph 41(d)(1), Comment 2 (“If the consumer has agreed to a temporary loss mitigation program, the amount due under § 1026.41(d)(1) may identify either the payment due under the temporary loss mitigation program or the amount due according to the loan contract.”)
- Consumer Data Industry Association, 2021 Credit Reporting Resource Guide
- Consumer Data Industry Association, 2020 Credit Reporting Resource Guide, FAQ 45, page 6-59 (“Question: How should accounts in forbearance be reported? Answer: Forbearance is a period of time during repayment in which a borrower is permitted to temporarily postpone making regular monthly payments. . . . The consumer may be making reduced payments, interest-only payments or no payments. If the account is in forbearance, report: . . . Scheduled Monthly Payment Amount = new payment due (If no payments are due during the forbearance period, zero fill.)”)
- Regulation V, 12 CFR 1022.42 (“(a) Policies and procedures. Each furnisher must establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes to a consumer reporting agency. . . .”)
- Regulation V, Appendix E, I(b) (“A furnisher’s policies and procedures should be reasonably designed to promote the following objectives:
(1) To furnish information about accounts or other relationships with a consumer that is accurate, such that the furnished information: (i) Identifies the appropriate consumer; (ii) Reflects the terms of and liability for those accounts or other relationships; and (iii) Reflects the consumer’s performance and other conduct with respect to the account or other relationship;
(2) To furnish information about accounts or other relationships with a consumer that has integrity, such that the furnished information: (i) Is substantiated by the furnisher’s records at the time it is furnished
- Fair Credit Reporting Act, 15 USC 1681s-2(a)(1)(F) (“Reporting information during COVID–19 pandemic.
(i) Definitions. In this subsection:
- (I) Accommodation. The term ‘accommodation’ includes an agreement to defer 1 or more payments, make a partial payment, forbear any delinquent amounts, modify a loan or contract, or any other assistance or relief granted to a consumer who is affected by the coronavirus disease 2019 (COVID–19) pandemic during the covered period.
- (II) Covered Period. The term ‘covered period’ means the period beginning on January 31, 2020 and ending on the later of . . . 120 days after the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.) terminates.
(ii) Reporting. Except as provided in clause (iii), if a furnisher makes an accommodation with respect to 1 or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make 1 or more payments pursuant to the accommodation, the furnisher shall
- (I) report the credit obligation or account as current; or
- (II) if the credit obligation or account was delinquent before the accommodation
- (aa) maintain the delinquent status during the period in which the accommodation is in effect; and
- (bb) if the consumer brings the credit obligation or account current during the period described in item (aa), report the credit obligation or account as current.
(iii) Exception. Clause (ii) shall not apply with respect to a credit obligation or account of a consumer that has been charged-off.”)