NEWS, EVENTS, PUBLICATIONS & EMERGING ISSUES

SW&M EMERGING ISSUE
June 4, 2010

FACT ACT POLICY – REMINDER REGARDING JULY 1, 2010 EFFECTIVE DATE

As many of our clients know, on July 1, 2009 the OCC, Federal Reserve Board, FDIC, OTS, NCUA, and FTC (collectively, the “Agencies”) issued final rules to implement the accuracy and integrity and “direct dispute” provisions in Section 312 of the Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”), which amended Section 623 of the Fair Credit Reporting Act (“FCRA”). Briefly, Section 623 of the FCRA describes the responsibilities of persons that furnish information (furnishers) about consumers to consumer reporting agencies (“CRAs”). Section 312 of the FACT Act amended Section 623 by requiring the Agencies to: (1) issue guidelines for use by furnishers regarding the accuracy and integrity of the information about consumers that they furnish to CRAs; (2) prescribe regulations requiring furnishers to establish reasonable policies and procedures for implementing the guidelines; and (3) issue regulations identifying the circumstances under which a furnisher must investigate disputes concerning the accuracy of information contained in a consumer report based on a direct request from a consumer. The Agencies’ final rules are effective on July 1, 2010.

Among other things, the final rules 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 include guidelines that furnishers must consider in developing their policies and procedures, requiring that a furnisher’s policies and procedures be appropriate to the nature, size, complexity, and scope of the furnisher’s activities. The guidelines provide that in developing its policies and procedures, a furnisher should consider, for example:

• The types of business activities in which the furnisher engages;
  
• The nature and frequency of the information the furnisher provides to CRAs; and
  
• The technology used by the furnisher to furnish information to CRAs.

Our office has assisted clients in drafting written policies addressing the above requirements. If your credit union requires such assistance, or has any questions regarding the Agencies’ final rules, please contact Marie Pascua or Raza Ali at our office.

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