When was the CCRA of 1996 enacted?

in 1996.

 

Love, I was just kidding. What is the CCRA?

 

Excellent question Love,

I've been waiting for this one. The OLD system was that accounts that were brought current will establish a NEW dla. When the NEW ccrr was enacted in Sept 96, it established a fixed date. That date is the original date of deliquency immediately preceding a negative action.

We all must be VERY careful here not to confuse the 2 different legal ramifications involved in paying off debt. Especially debt that is "old".

If an old debt gets paid 6.5 years after it appears on your report and then you pay it off it will be there for another 7 years. It was Congresses intention to iliminate this "double jeopardy" component, especially because it was a DIS-incentive for the debtor to pay. (Usually called Catch-22).

B.

 

The start date of the 7 years is what has different dates. I must disagree again when you say that paying on old acct will reset the 7 years. It does not. Read this FTC opinion letter. It clearly states that paying on a charged off acct. or an acct that has been sent to collections, as an acct 6.5 years old surely has been, will not reset the reporting clock.


February 15, 2000

Ms. Alaina K. Amason
14155 Shire Oak
San Antonio, TX 78247

Dear Ms. Amason:

This responds to your letter concerning the time limitations imposed by the Fair Credit Reporting Act ("FCRA") on the reporting of chargeoff accounts by a consumer reporting agency ("CRA," usually a credit bureau). We list your inquiries on this topic below in italics, with our replies immediately following each item.

1. What reporting limits does the FCRA provide with respect to chargeoffs, and how long have they been in effect?

Section 605(a)(4), which has been in effect since the FCRA became effective in April 1971, has always prohibited CRAs from reporting chargeoffs that are more than seven years old.(1) Section 623(a)(5), which became law in September 1997, requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605(c)(1) provides that the seven year period begins 180 days from that date. Both provisions were part of the major revision to the FCRA that were enacted in 1996.(2)
2. Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (B) the consumer responds to post-chargeoff collection efforts by making a payment on the debt, or (C) the consumer disputes the account with a CRA? Does it matter whether the 7-year period has expired when any of these events occurs?

No. In enacting the new provisions discussed above, Congress intended to establish a date certain -- 180 days after the start of the delinquency that led to the chargeoff -- to begin the obsolescence period. It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA. Enclosed are two staff opinion letters (Kosmerl, 06/04/99; Johnson, 08/31/98) that discuss the impact of these provisions, and the legislative history relating to their enactment, in more detail. Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a chargeoff.
3. Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do chargeoff accounts now have different obsolescence periods depending on when the chargeoff occurred?

Yes. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after enactment, or December 29, 1997. Therefore, a chargeoff reported to a CRA on or after that date is subject to the new commencement-of-the-delinquency method of calculating the obsolescence period set forth in Sections 623(a)(5) and 605(c)(1). On the other hand, a chargeoff reported to a CRA before December 29, 1997, is not covered by the new provisions, as discussed in one of the enclosed letters (Kosmerl, 06/04/99). If a credit account was reported as a chargeoff before that date, the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off.(3)
The opinions set forth in this informal staff letter are not binding on the Commission.

Sincerely yours,

Clarke W. Brinckerhoff


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Thanx LKH,

Maybe the difference here is a distinction between a debt that IS charged off as opposed to one that is merely delinquent. In Love's original question she didn't specify.

This is why I want to pursue this thread. It IS an area of confusion and I readily admit it may be I who is confused. LOL

I agree that the Amoson opinion appears to state the situation the way you say but seems to concern itself only with debt that is charged-off. Reading the opinion at about the center of the page it says: "In enacting the new provisions discussed above, Congress intended to establish a date certain. ... It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA."

If a debt is charged off whether before or after the enactment of the CCRR the date I believe IS fixed, though different. CA's used to wait 6.5 years to charge a debt off so that when they did it would remain for 7 more years on ones CR. (*******s!) LawMakers sought to solve that problem.

For debts that HAVE NOT been charged off however, the potential exists to restart the obsolescence period, if I'm not mistaken. Is it possible that a debt reported before Dec 29, 1997 is still not charged off? Of course.

Please explain why Congress found it necessary to "establish a date certain" with the CCRR if, as you say, a date certain already existed? One of the later events spoken of here may be the payment of an account sufficient to bring a NON CHARGED-OFF debt OUT of delinquency status. This restarts the clock on the date of last activity if the debt was originally reported under the OLD system. (shit, now I am confused ).

The Amoson opinion mentions 2 other opinions, that of kosmerl and Johnson. These opinions may prove to be more eloquent on the subject. The Kosmerl opinion concerns itself with debt that has been charged-off OR merely delinquent.

In Kosmerl, staff says: "As explained in the enclosed letter (Johnson, 8/31/98), it was Congress' intent in enacting Sections 605(c)(1) and 623(a)(5) to establish a single date -- the start of the delinquency -- to begin the obsolescence period on these accounts. This avoids the "multiple date" problem that arguably existed prior to the 1996 amendments. In the case you described, the date of the "commencement of the delinquency" that led to the creditor's charge-off or collection action would be July 1991 or earlier (depending on how long the account was continuously delinquent before that)."

"The multiple date problem that arguably existed"? Staff opinion just said that your's and my disagreement is well founded.

But the last line says: (In the case you described, the date of the "commencement of the delinquency" that led to the creditor's charge-off or collection action would be July 1991 or earlier (depending on how long the account was continuously delinquent before that). Key here being *continuously delinquent*. If an old debt is brought current it is NOT still delinquent.

And again: " Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after the enactment of those amendments, or December 29, 1997. We read this language to mean that a CRA is not required to use the commencement-of-delinquency date mandated by Section 605(c)(1) on an account where the charge-off or collection ("item of information") was first reported to the CRA ("added to the ... file") prior to that date. Thus, adverse information such as collections or charge-offs reported before December 29, 1997, are not subject to the new "commencement of the delinquency" provision."

This tells me that if a debt was reported prior to Dec 29, 1997 and is NOT as of yet charged-off it IS possible to restart the clock by bringing the debt OUT of delinquency, in other words paying it in full.


In the Johnson opinion, it states, in part:

"Sections 605(c)(1) and 623(a)(5) were recently added to the FCRA to correct the ineffectiveness of the previous FCRA, under which the date that started the seven-year period was uncertain or under the control of the creditor."

" The legislative history of these provisions makes it clear that they were designed to correct the often lengthy extension of the period that resulted from delayed creditor action:
Current law generally prohibits consumer reporting agencies from including in a consumer report accounts placed for collection or charged to profit and loss which antedate the report by more than seven years. The Committee is concerned that this seven year limitation is ineffective. In some cases, the ... action occurs months or even years after the commencement of the preceding delinquency. ... Consequently, the consumer report may contain such information even if the delinquency commences more than seven years before the date on which the report is provided to a user.
The Committee bill specifies that the seven-year period with respect to information concerning a delinquent account charged to profit and loss . . . may begin no more than 180 days after the commencement of the delinquency immediately preceding the ... action."

And again: " If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent."

If the debtor does however, "catch-up" a new 7-year period can begin but only on NON charged-off debt originally reported prior to Dec 29, 1997.

If I'm wrong I'll the very first to admit it.

 

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Well that sure didn't work LOL

Sorry

Edit?

 

June 4, 1999

Mr. Jeff Kosmerl
949 Ormewood Terrace
Atlanta, Georgia 30316

Dear Mr. Kosmerl:

This responds to your request for our views concerning the calculation of the period for which a consumer reporting agency ("CRA") is permitted to report accounts that have been charged off or placed for collection, under the amended Fair Credit Reporting Act ("FCRA").

Section 623(a)(5) requires a party that "furnishes information to a (CRA) regarding a delinquent account being placed for collection, charged to profit or loss, or subject to any similar action" to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the creditor's action. Section 605(a)(4) provides that the CRA may report the information for seven years, in most cases.(1) Section 605(c)(1) provides that the seven year period begins 180 days from the "commencement of the delinquency" date. Section 605(c)(2) provides that the section applies "only to items of information added to the file of a consumer on or after the date that is 455 days after the date of enactment of the Consumer Credit Reporting Reform Act ."

Specifically, you ask (1) how the date is determined if there are multiple obsolescence dates where "you have several delinquencies preceding a collection or charge off (8/91 60+, 9/91 60+, 10/91 30+, 11/91 account closed by creditor)" and (2) if "adverse information listed on a report prior to 9/30/97 is exempt from" the procedure set forth in Section 605(c)(1) .

1. As explained in the enclosed letter (Johnson, 8/31/98), it was Congress' intent in enacting Sections 605(c)(1) and 623(a)(5) to establish a single date -- the start of the delinquency -- to begin the obsolescence period on these accounts. This avoids the "multiple date" problem that arguably existed prior to the 1996 amendments. In the case you described, the date of the "commencement of the delinquency" that led to the creditor's chargeoff or collection action would be July 1991 or earlier (depending on how long the account was continuously delinquent before that). The seven year period would start no later than January 1992 (180 days later), with the result that the chargeoff or collection could no longer be reported in most cases beyond January 1999.

2. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after the enactment of those amendments, or December 29, 1997.(2) We read this language to mean that a CRA is not required to use the commencement-of-delinquency date mandated by Section 605(c)(1) on an account where the chargeoff or collection ("item of information") was first reported to the CRA ("added to the ... file") prior to that date. Thus, adverse information such as collections or chargeoffs reported before December 29, 1997, are not subject to the new "commencement of the delinquency" provision.

The views set forth in this informal staff letter are not binding on the Commission.

Sincerely yours,

Clarke W. Brinckerhoff


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1. Section 605(b)(1) exempts credit transactions involving a principal amount of $150,000 or more.

2. Public Law 104-208, the legislation adding the FCRA provisions discussed in this letter, was signed into law on September 30, 1996. Section 605(c)(1) became effective 455 days after that date, as provided by Section 605(c)(2). Most of the provisions became effective 365 days after enactment.

 

Your point?

 

You're confused, lol.

There's a huge difference between a charged-off account and a delinquent account, HUGE.

The opinions aren't specific to charge-offs, they apply to all things similar.

A delinquent account is open -- it's not similar, just late.

Sassy

 

Dear Sassy,

Please feel free to elaborate. Your response thus far has not helped me clear my confusion.

If I am wrong I need to know why?

Of course there's a difference between delinquent and charge-off. That's why the dla on a CO cannot be adjusted but on a delinquent it can, if it's old. I mean, that's my take as well as at least a few others.

Please pinpoint where I'm wrong and why. I want to get this straight.

AND WHERE THE HECK IS EVERYONE ELSE ON THIS?

BUUUUUUUUUUUUMP!

 

That's what I was gonna say but you beat me to it.

 

The way to eliminate the confusion is go form the date the account was opened in all cases for all accounts.

 

Love,

THE FAIR DEBT COLLECTION PRACTICES ACT

As amended by Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996)

--------------------------------------------------------------------------------

To amend the Consumer Credit Protection Act to prohibit abusive practices by debt collectors.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) is amended by adding at the end thereof the following new title:

TITLE VIII - DEBT COLLECTION PRACTICES [Fair Debt Collection Practices Act]

§ 818. Effective date [15 USC 1692 note]

This title takes effect upon the expiration of six months after the date of its enactment, but section 809 shall apply only with respect to debts for which the initial attempt to collect occurs after such effective date.

Approved September 20, 1977