CFPB Releases Report on Credit Report Disputes | Ballard Spahr srl
The CFPB recently published a new report, “Consumer credit report disputes. “Using data on auto loans, student loans, general-purpose credit cards and retail card accounts opened between 2012 and 2019, the report examines the demographics of protesters and the results of accounts with indicators of contestation. The report is yet another signal of a likely CFPB focus on potential violations of anti-discrimination laws not only by mortgage repairers, but also by repairers of all types of credit accounts. for consumption.
The main conclusions of the report are as follows:
- Consumers who had one or more accounts opened between 2012 and 2019 and who had a dispute indicator on at least one account of a given type of credit (“protesters”) were generally younger than consumers who had an account opened between 2012 and 2019 but not having the litigation flags (“non-contestants”). The only exception to this trend is for student loans, with student loan protesters more likely to be in the 30-44 age group than the 18-29 age group. The likely explanation offered by the CFPB is that consumers with an open student loan in their 30s are more likely to have refinanced or consolidated a loan and these loans may be more likely to have reporting issues that lead to litigation. .
- For all four types of credit, protesters were much more likely than non-contenders to have low credit scores when opening the disputed account. The CFPB offers several possible explanations. The first is that consumers with deep subprime and subprime credit scores are more likely to experience mistakes. Another is that these consumers are more likely to check their credit reports more frequently than consumers with higher credit scores because they are more likely to be denied a credit application and therefore also more likely to take advantage of the law. get a free credit report disclosed. in a notice of adverse action.
- Protest flags were significantly more common among consumers residing in predominantly black census tracts than consumers residing in predominantly white census tracts. The CFPB suggests that the disparity in census tract dispute reporting rates partly reflects trends in credit scores.
- After the appearance of a litigation indicator, the results vary considerably for different types of credit. For example, a significant portion of auto loans with litigation indicators are eventually closed, a large portion of student loans with disputed indicators are eventually deleted, and a large portion of general purpose credit cards have the dispute indicator removed with the account remaining open. Retail cards are significantly less likely to stay open with the dispute flag removed compared to general purpose credit cards and are rather more likely to be closed or deleted
The CFPB concludes the report by stating that an important topic for further research is whether the trends seen in the report are due to differences between groups and types of credit in the type or frequency of sub-problems. underlying issues that result in a dispute indicator or whether they are guided by supplier practices for reporting dispute flags or responding to disputes.