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THE CARLAWYER ©

The CARLAWYER ©

By Eric Johnson, Partner, Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery®

Here’s our monthly article on selected legal Financial Institution Services and consumers to CRAs, including disputes
developments we think might interest the Systems to provide financial institutions related to identity theft. The Bureau also

auto sales, finance, and leasing world. with examples of effective risk alleged that the debt collector received
This month, the developments involve management principles and practices for disputes of identity theft directly from
the Consumer Financial Protection customers, employees, and third parties consumers and furnished information to
Bureau, the Office of the Comptroller accessing digital banking services CRAs about those consumers’ accounts
of the Currency, the Federal Financial and financial institution information without conducting an investigation of
Institutions Examination Council, the systems. The guidance replaces the the disputes. Finally, the Bureau alleged
Federal Deposit Insurance Corporation, FFIEC-issued Authentication in an that the debt collector represented to
and the Federal Reserve Board. As usual, Internet Banking Environment (2005) and consumers that they owed certain debts
our article features the “Case(s) of the the Supplement to Authentication in an when, in fact, it did not have a reasonable
Month” and our “Compliance Tip.” Note Internet Banking Environment (2011), basis to assert that the consumers owed
that this column does not offer legal which provided risk management practices those debts. Among other things, the
advice. Always check with your lawyer to for financial institutions offering Internet- proposed settlement requires the debt
learn how what we report might apply to based products and services. collector to implement adequate policies
you or if you have questions. and procedures in connection with its
On August 13, the Federal Deposit furnishing of consumer information to
FEDERAL Insurance Corporation issued a request CRAs and to pay an $850,000 civil penalty.
DEVELOPMENTS for information from FDIC-supervised
financial institutions regarding the On August 26, the Consumer Financial
agency’s supervisory approach to Protection Bureau issued its fifth and
On July 30, the Consumer Financial examinations during the COVID-19 final blog post in a series of posts
Protection Bureau announced that two pandemic. Specifically, the FDIC is examining trends in consumer credit
final rules issued under the Fair Debt seeking information on the effectiveness outcomes during the COVID-19
Collection Practices Act will take effect of conducting certain examination pandemic. The current blog post focuses
as planned on November 30, 2021. The activities off-site rather than on-site, the on access to new credit, specifically the
Bureau issued a proposal in April 2021 effectiveness of technology used to conduct share of new credit applications that
that, if finalized, would have extended the off-site examination activities, and the result in new accounts and the amount
effective dates to January 29, 2022. The effectiveness of communication methods of credit that is extended to consumers
Bureau has now determined that such an used to support off-site examination who open new accounts. The report uses
extension is unnecessary and the rules will activities. Comments must be received by data from the Bureau’s Consumer Credit
take effect as planned. October 12, 2021. Panel, a nationally representative sample
of approximately five million de-identified
On August 5, the Office of the On August 17, the Consumer Financial credit records maintained by one of the
Comptroller of the Currency issued Protection Bureau announced that it three nationwide consumer reporting
Bulletin 2021-35 to inform national obtained a proposed settlement with Fair agencies.
banks, federal savings associations, Collections & Outsourcing and its owner,
and federal branches and agencies of resolving allegations that the company’s On August 27, the Federal Deposit
foreign banking organizations of the debt collection practices violated the Insurance Corporation, Federal Reserve
appropriate names and addresses that Consumer Financial Protection Act of Board, and Office of the Comptroller of
should be included in notices required 2010, the Fair Credit Reporting Act, the Currency released a guide intended
by the Community Reinvestment Act Regulation V (the Furnisher Rule), to serve as a resource for community
and the Equal Credit Opportunity Act and the Fair Debt Collection Practices banks when conducting due diligence
and on posters required by the Fair Act. Specifically, the Bureau alleged that on prospective relationships with
Housing Act. the debt collector lacked reasonable financial technology companies. The
policies and procedures regarding the guide covers six key areas of due diligence
On August 11, the Federal Financial accuracy and integrity of the information that community banks can consider
Institutions Examination Council, it furnished to consumer reporting when exploring arrangements with
on behalf of its members (including agencies and failed to conduct reasonable fintech companies: business experience
the CFPB), issued guidance investigations of indirect consumer and qualifications, financial condition,
titled Authentication and Access to disputes, which are disputes submitted by legal and regulatory compliance, risk

6 | MIADA MISSISSIPPI DEALER Q3 2021