Credit unions urge the CFPB to withdraw its proposed rule amending Regulation V, which changes specific definitions of consumer reports and alters provisions of the Fair Credit Reporting Act (FCRA). America’s Credit Unions Head of Regulatory Advocacy James Akin outlined concerns with the proposed rule in a letter to the CFPB, arguing it is “both substantively and procedurally flawed in several key areas.” 

Akin describes the key areas where the rule as currently written is flawed, including:

• Legal deficiencies as the rule seeks to extend the statutory language of the FCRA;
• Data deficiencies as the rule’s cost-benefit analysis lacks the robust data required to substantiate its policy conclusions;
• Contradiction of Congressional intent as the rule extends the FCRA protections to anonymized or aggregate data that does not pertain to a specific individual, which Congress deliberately chose not to include under the FCRA;
• It undermines fraud prevention efforts as credit header data would be reclassified and compromise credit unions access to this data;
• Significant operational and compliance challenges;
• Unnecessarily broad definitions of “consumer report” and “consumer reporting agency” which subject them to new FCRA requirements; and
• It sets a dangerous precedent by rewriting statutory definitions and imposing compliance requirements without sufficient data or clear authority.

Akin urges the CFPB to withdraw the proposed rule and ensure that any future regulation “aligns with the statutory framework of the FCRA, avoids unintended consequences, and does not undermine the ability of financial institutions to combat fraud, comply with existing regulatory requirements, and serve their members effectively.”

Read the full letter here.