Several federal agencies, including the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the Federal Trade Commission, are planning to issue final rules and guidelines implementing Section 312 of the Fair and Accurate Credit Transactions Act of 2003 (FACTA). An advance notice of proposed rulemaking was issued in March 2006 and proposed rules were issued in December 2007. See 71 Fed. Reg. 14419 (Mar. 22, 2006); 72 Fed. Reg. 70944 (Dec. 13, 2007). See also Alerts dated Mar. 22, 2006 and Nov. 30, 2007.

    FACTA Section 312(a) amends the Fair Credit Reporting Act (FCRA) to require the agencies to (i) establish, maintain and update guidelines for use by furnishers regarding the accuracy and integrity of the information furnished to CRAs and (ii) prescribe regulations requiring furnishers to establish reasonable policies and procedures for implementing the guidelines. FACTA § 312(c) amends the FCRA to require the agencies to prescribe regulations identifying circumstances under which a furnisher will be required to reinvestigate a dispute concerning the accuracy of information in a consumer report based on a consumer’s direct request.

    The summary below is based on a draft of the final rules approved by the OCC and released on June 10, 2009. The final rules will become effective 15 months after publication in the Federal Register.

    Accuracy and Integrity Regulations and Guidelines

    The final accuracy and integrity regulations contain definitions of key terms such as “accuracy,” “integrity,” “direct dispute” and “furnisher” and require furnishers to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of consumer information provided to a CRA. The final rules also include guidelines concerning the accuracy and integrity of information furnished to CRAs that furnishers must consider in developing their policies and procedures.

    The final rules differ from the proposed rules in some ways. For instance, the agencies proposed for comment two alternative approaches (the “Regulatory Definition Approach” and the “Guidelines Definition Approach”) to defining the key terms “accuracy” and “integrity.” As the names suggest, the definitions would be in the regulations under one approach and in the guidelines in the other. The agencies decided to use the Regulatory Definition Approach, so the definitions are in the regulations with some modifications based on comments received.

    Direct Dispute Regulations

    The final direct dispute regulations (i) set forth circumstances under which furnishers must reinvestigate, (ii) provide exceptions, (iii) detail notice content requirements, (iv) specify furnishers’ duties after receiving a direct dispute and (v) establish when furnishers may deem disputes to be frivolous or irrelevant.

    “Direct dispute,” as defined in the final rules, means a dispute submitted directly to a furnisher (including a furnisher that is a debt collector) by a consumer concerning the accuracy of any information contained in a consumer report and pertaining to an account or other relationship that the furnisher has or had with the consumer. The parenthetical clause that clarifies that a “furnisher” also includes a debt collector was not in the proposed rules and was added in response to commenters’ requests. The agencies also narrowed and clarified the scope of the direct dispute requirement by, among other things, adding an exception to the direct dispute investigation requirements (i.e., the requirements do not apply to a furnisher if the dispute relates to information provided by another furnisher).

    Additional Proposed Rulemaking

    The agencies plan to concurrently issue an advance notice of proposed rulemaking regarding (i) an addition to one of the guidelines clarifying when a furnisher would be expected to provide an account opening date to a CRA and (ii) whether furnishers should be expected to provide any other types of information to a CRA to promote integrity. The comment deadline will be 60 days after publication in the Federal Register.

    • Elizabeth Anstaett