During an exam of one of our affliates, the FDIC had 3 questions dealing with FCRA and the way disputes were handled,mostly if the consumer notified the bank directly or if the consumer reporting agency notified the bank to investigage a dispute. We were written up for not maintaining a centralized file of disputes. After reading more, it appears we also have to code as a dispute any dispute the consumer continues to dispute. How do you code it on info. to the Credit Bureau?

Not a good answer per se, but I think you need to ask the bureaus you report to and have an established interface with how this should be done. They have to be able to accept and properly read your files.

The following is from 611 of the FCRA. I see more burden here on the consumer and the CRA than the bank. But you may have responsibilities with the CRA in your contract to denote disputed accounts.

(b) Statement of dispute. If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute.

(c) Notification of consumer dispute in subsequent consumer reports. Whenever a statement of a dispute is filed, unless there is reasonable grounds to believe that it is frivolous or irrelevant, the consumer reporting agency shall, in any subsequent consumer report containing the information in question, clearly note that it is disputed by the consumer and provide either the consumer's statement or a clear and accurate codification or summary thereof.


What cite did they use for not maintaining a centralized file of disputed accounts? I am not familiar with this.

The reason why the FDIC wants to know whether the consumer notified you directly or whether you were notified by the CRA is that the liability rules differ depending on which is the case. A consumer can sue you for not responding to a request from the CRA, so can the CRA. A consumer can't sue you for failing to respond to his/her complaint, however, the FDIC can take action against you for failing to respond to consumer complaints. Only regulators can enforce Section 623(a) of the FCRA -Duty of furnishers of information.

During our last exam, there was no cite listed but the report just said that the bank did not maintain a log or a centralized file of consumer credit report disputes. If there is a difference, what is the time frame if a consumer notifies you of a dispute with what you have filed with the Credit Report? (Notice of Dispute from Consumer). Is there a timeframe? The other (Notice of Dispute from Consumer Reporting Agency) seems to say we have to respond immediately so the CRA can resolve it in 30 days. Can the CRA sue us if it is not done within 30 days or does it have to be in the contract for this to happen?

I would want to know what requirement you violated. They didn't cite one and I don't know of one. Was this a comment, or a violation of law they were referring to? In the case of the latter, there should be a cite to a requirement.

I would guess that it was a comment by the examiners to draw attention to a way to avoid violations of Section 623. If you don't have a way to track whether the disputes were received directly from the consumer or from a CRA you may not be able to take the appropriate action that is required under 623 thereby potentially exposing yourself to unintended consequences.

To Kbaebel: I think it was a recommendation but it was on the first page of our report. Do you know if there is a retention period in the reg. for how long to keep the consumer disputes? Or just from one exam to the next?
Also I am somewhat confused as to "if the consumer contacts the bank, what is the time period to resolve" and if the CRA contacts us, do we have to do before 30 days?

Anon: My reading of Section 623 doesn't seem to require any specific record retention period. I think it is meant to place an ongoing requirement on reporters of information so record management and retention will vary from institution to institution. With respect to the requirements of Section 611 as mentioned in Section 623, the CRA has 30 days (calendar) to respond to the consumer. The CRA has 5 business days from receipt to provide notice to the person from whom it received the information being disputed requesting that it be researched, etc. The person receiving the notice then must comply with the requirements of Section 623(b)in all respects and respond to the CRA with the results of its investigation before the initial 30 day period from when the dispute was received by CRA ends. Failure to comply could lead to civil liability under Sections 616 and 617. FCRA is one of those Acts where there are no implementing regulations as yet. The federal banking agencies have been working on developing some for the past several years but they haven't finalized them for further public comment as yet. Maybe later this year.

Bumping this back up.

A question here was never fully answered and I’m researching the same one.

There does not appear to be any timing guideline for situations in which a customer walks into the bank and disputes the information, rather than contacting the credit bureau directly. Obviously we need to document the dispute, investigate, and not report if the information turns out to be inaccurate. Should we follow the 30 day guideline for CRAs? Does anyone have a reporting procedure that is different?

We were told by the examiner's that there are no time requirements for resolving disputes received directly from the consumer; however, it would be good business practice to do so as quickly as possible following the investigation.

I don't think you could go wrong using the 30 day guidance. You could likely go over that if the time exceeded is reasonable to the dispute. But don't forget that you would need to show it as disputed and willful blindness would mean reporting incorrect data. You can't do that so it behooves you to investigate and resolve any issues as quickly as possible.

Instead of starting another thread I thought I'd tack on to this one. We have a customer who wants to dispute information that we provided to the CRA. We have told the customer that they should submit the dispute to the CRA so they can send us a dispute form. The customer does not like that and wants us to correct the information, which by the way, is already correct. Do we have to respond to her dispute directly or can we refer her to the CRA?

I need an answer to what I should do now, not what the new FACT Act rules, which are not final, say.

I may be going out on a limb here, but I think you may still refer the customer to the credit bureau. One of the changes in FACTA is that we must start accepting disputes directly from consumers, but the compliance date for that portion of the Act (312) has been specifically delayed until final rules are issued (in a letter from the regulatory agencies - see the FACTA forum).

Since section 312 is not yet effective, I believe we can still refer direct disputes to the credit reporting agencies. It may not be the most customer friendly position and even prior to FACTA I had read an article (on BOL) by Andy Z that recommended resolving direct disputes. But I can tell you that thanks to the delay of section 312 of FACTA we are not yet accepting disputes directly from consumers and instead refer them to the credit reproting agencies.

Thank you, that's what I thought. Normally we probably would do this ourselves but in this situation the customer has gotten a little demanding and I would rather go through the proper channels.

We were told they can come directly to us and we have to respond at a seminar by Trans Union last week. Maybe that is after the 312 but they told us that that was immediate?? Maybe that was a recommendation but I know through e-oscar you can do it now.

We have someone who wants us to "correct" our reporting so instead of showing the high balance on her HELOC each month we show the average daily balance. Wants us to go back 5 years!!!!! I don't think we need to send this on to the CRA. Anyone ever hear of this before?

No you do not have to do this - her average balance is not the high balance - therefore there is no reporting error.