Legal Alert

The CARES Act and Credit Reporting

by the Consumer Financial Services Group
March 27, 2020

Section 4021 (Credit Protection During COVID-2019) of the CARES Act amends the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) to impose new Coronavirus-related reporting requirements on furnishers of information to consumer reporting agencies. 

Under Section 4021, if a furnisher (e.g. a financial institution that lends money to consumers) makes an accommodation with respect to one or more payments on a credit obligation or consumer account, the furnisher should continue to report the account as current if the consumer fulfills the terms of the accommodation.

However, for accounts that were already delinquent before the accommodation was made, the furnisher is permitted to continue reporting the account as delinquent unless the consumer brings the account current. This new reporting requirement does not apply to consumer accounts that have been charged off. These furnisher responsibilities will apply to reporting on accommodations made to consumer accounts between January 31, 2020 to until 120 days after the end of the COVID-19 national emergency.

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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