Crditors Urged Not to Withhold Data

Federal Regulators Urge Creditors Not to Withhold Debtor Data

The Federal Financial Institutions Examination Council released a statement on January 18 that called for financial institutions to refrain from withholding certain items of consumer credit information from credit bureaus.

CDIA had been in contact with the Office of the Comptroller of the Currency concerning the issue and was informed by the office that the issuance of the statement was imminent.

The statement comes at a time when regulators and consumer organizations have expressed concern about creditors who do not provide complete data. In addition, many subprime lenders do not provide information about borrowers and their payment histories.

The letter states that â??both financial institutions and their customers generally have been well served by the long-established, voluntary self-reporting mechanism in place within the industry. Credit bureau information provides a useful and efficient means for financial institutions to collect data used to assess the financial condition, debt service capacity, and creditworthiness of retail borrowers.â?

The council is comprised of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.

In addition, the American Financial Services Association announced that its members have agreed not to hold back data about borrowers from credit bureaus to keep competitors from luring away customers. The trade group, which represents almost 400 consumer finance companies and other consumer credit providers, voluntarily adopted the standard to encourage full-file reporting.
According to the agreement, AFSA companies will give consumer reporting agencies borrower information that was previously protected to keep competitors from poaching customers. However, lenders may choose to withhold data about certain accounts under special circumstances, such as when an individual and a company are involved in a dispute.

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