I have realized that our bank does not indicate bankruptcy in the credit report when a customer files against the bank. We do report that the loan has been charged off when the loan is charged off due to bankruptcy. Is this a FCRA violation? Do we need to go back and report the multitude of bankrupt customers so bankruptcy will show up on the credit reports?

Yes this is a violation as it is not an accurate reporting of the debt. You have to indicate the type of bankruptcy filed, the fact that there is a 0 balance due at this time (After discharge). Charge off can remain on but the bankruptcy cite must be there as well.

Can anyone cite the statute that would make it a violation to not report that the loan being reported is included in a bankruptcy? I have looked at Sec 623 "Duties of Furnishers", but it does not seem like it is addressed here.

It has come out in numerous case law opinions, in my prior life when I was practicing law (I am no longer an attorney so this is not meant as legal advice, nor should it be taken as such) we had a decent sized FCRA program (from the consumer side) and this is one thing that we picked up on a lot. I most likely have something filed away at home that could point to particulars.

Something similar is being reported on my son's credit report, although it doesn't involve bankruptcy. He owed a university for some online classes. The University reported the amount as delinquent, and although my son ultimately paid the balance in full, the University refuses to report anything except a charge off. Is this a FCRA violation?

This commentary is still the best we have and shouldn't be impacted by the FACTA, but take it with a grain of salt. While I'd go by this, I'd discuss it with counsel if I were in litigation.

From the FCRA commentary.

A consumer report need not be tailored to the user’s needs. It may contain any information that is complete, accurate, and not obsolete on the consumer who is the subject of the report. A consumer report may include an account that was discharged in bankruptcy (as well as the bankruptcy itself), as long as it reports a zero balance due to reflect the fact that the consumer is no longer liable for the discharged debt. A consumer report may include a list of recipients of reports on the consumer who is the subject of the report.

I don't know why that wouldn't follow with a paid off debt as the responsibility is the same. Information must be accurate under the FCRA.

It is both a violation of 1681s-2[a] and the automatic stay [pre-discharge] and potentially discharge order [look at section 362 of the BK Code, etc.]. You need to identfy the correct Metro Tape data fields to mark the accounts properly.

David Szwak, Esq.
http://www.MyFairCredit.com
http://www.MyFairDebt.com

I might also offer the Bankruptcy Reporting folder.

http://www.myfaircredit.com/forum/viewforum.php?f=6

David Szwak, Esq.
http://www.MyFairCredit.com
http://www.MyFairDebt.com

He needs to contest it as a "paid charge off" and it must be updated to zero out the balance and show it as paid albeit after charge off apparently. I assume the charge off status conformed with general accounting practices and credit reporting standards [ex., cannot charge off 30 days after delinquency].

Once he contests it to the national CRAs, that triggers his private rights under 1681s-2[b] and 1681i[a]. FACTA deceptively suggested that a consumer can dispute directly to a furnisher but that does not protect the consumer's private rights.

David Szwak, Esq.
http://www.MyFairCredit.com
http://www.MyFairDebt.com