FCRA Data Furnishing & Accuracy Requirements 3 — Questions and Answers
Question 1: A bank furnishes account data to the three major CRAs. After the bank merges with another institution, the acquired accounts contain errors. Under the FCRA, who bears the furnisher compliance obligation for those accounts?
- The original bank only, for 90 days post-merger
- The acquiring institution, as the new furnisher of record (Correct answer)
- The CRAs, who must independently verify all transferred data
- The CFPB, which assumes liability during a merger transition
Correct answer: The acquiring institution, as the new furnisher of record
The entity that furnishes information to CRAs bears the compliance obligation; after an acquisition the acquiring institution becomes the responsible furnisher.
Question 2: Under Metro 2 furnishing standards, a 'Special Comment Code' of 'AH' signifies:
- Account closed by consumer
- Affected by natural or declared disaster (Correct answer)
- Account in forbearance
- Account transferred to collections
Correct answer: Affected by natural or declared disaster
Metro 2 Special Comment Code AH indicates the account has been affected by a natural or declared disaster.
Question 3: A furnisher reports an account as 'delinquent' after a consumer entered a payment arrangement that the furnisher did not honor. Which FCRA principle does this most likely violate?
- The permissible purpose rule
- The duty to report with maximum possible accuracy (Correct answer)
- The adverse action notification requirement
- The 7-year re-aging prohibition only
Correct answer: The duty to report with maximum possible accuracy
Reporting delinquency that resulted from the furnisher's own breach of an arrangement violates the duty to ensure reported information is accurate and complete.
Question 4: The FCRA's 'reasonable procedures' standard for furnishers requires policies that address which operational area FIRST?
- Employee background checks
- Data integrity at the point of origination and submission to CRAs (Correct answer)
- Consumer marketing communications
- Third-party vendor IT security
Correct answer: Data integrity at the point of origination and submission to CRAs
Reasonable procedures must start with data integrity controls at the point where information is created and before it is transmitted to CRAs.
Question 5: When a furnisher receives an ACDV (Automated Consumer Dispute Verification) from a CRA, the furnisher must respond within:
- 10 business days
- 20 days
- 30 days (Correct answer)
- 45 days
Correct answer: 30 days
Furnishers must complete their investigation and respond to an ACDV within 30 days (or 45 days with consumer-provided additional information).
Question 6: A furnisher determines after investigation that a CRA-dispute is 'frivolous or irrelevant.' What must the furnisher do within 5 business days of making this determination?
- Notify the consumer in writing with reasons and evidence needed (Correct answer)
- Report the finding to the CFPB
- Block the consumer from filing future disputes
- Delete the tradeline as a precautionary measure
Correct answer: Notify the consumer in writing with reasons and evidence needed
If a furnisher determines a direct dispute is frivolous, it must notify the consumer in writing within 5 business days, stating reasons and what information is needed.
Question 7: Under the FCRA, a furnisher's obligation to investigate a direct dispute does NOT apply if the dispute relates to:
- The current balance on an open account
- Information derived from a public record obtained by the furnisher (Correct answer)
- The identity of the furnisher
- The consumer's date of birth as reported
Correct answer: Information derived from a public record obtained by the furnisher
The Furnisher Rule excludes from direct dispute obligations any information that was derived from public records or obtained from a third party, not from the furnisher's own records.
FCRA Data Furnishing & Accuracy Requirements 3
A bank furnishes account data to the three major CRAs.
After the bank merges with another institution, the acquired accounts contain errors.
Under the FCRA, who bears the furnisher compliance obligation for those accounts?