Rule2021-14459
Bulletin 2021-03: Consumer Reporting of Rental Information
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 7, 2021
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Bureau of Consumer Financial Protection (Bureau) is issuing this Enforcement compliance bulletin and policy guidance (Bulletin) regarding consumer reporting of rental information in light of upcoming heightened risks to renters associated with inaccurate consumer reporting information. As pandemic-related government interventions aimed at protecting renters begin to expire over the coming months, the Bureau will be paying particular attention to consumer reporting agencies' (CRAs') and furnishers' compliance with their accuracy and dispute obligations under the Fair Credit Reporting Act (FCRA) and Regulation V with respect to rental information. The Bureau will hold CRAs and furnishers accountable for failing to comply with the FCRA and Regulation V. The economic recovery of renters and their ability to secure new rental housing should not be impeded by noncompliance with the law.
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<title>Federal Register, Volume 86 Issue 127 (Wednesday, July 7, 2021)</title>
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[Federal Register Volume 86, Number 127 (Wednesday, July 7, 2021)]
[Rules and Regulations]
[Pages 35595-35599]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14459]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Rules
and Regulations
[[Page 35595]]
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1022
Bulletin 2021-03: Consumer Reporting of Rental Information
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Enforcement compliance bulletin and policy guidance.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
issuing this Enforcement compliance bulletin and policy guidance
(Bulletin) regarding consumer reporting of rental information in light
of upcoming heightened risks to renters associated with inaccurate
consumer reporting information. As pandemic-related government
interventions aimed at protecting renters begin to expire over the
coming months, the Bureau will be paying particular attention to
consumer reporting agencies' (CRAs') and furnishers' compliance with
their accuracy and dispute obligations under the Fair Credit Reporting
Act (FCRA) and Regulation V with respect to rental information. The
Bureau will hold CRAs and furnishers accountable for failing to comply
with the FCRA and Regulation V. The economic recovery of renters and
their ability to secure new rental housing should not be impeded by
noncompliance with the law.
DATES: This bulletin is applicable on July 7, 2021.
FOR FURTHER INFORMATION CONTACT: Susan Stocks, Assistant Deputy
Enforcement Director for Policy and Strategy, Office of Enforcement;
Amanda Quester, Pavneet Singh, Laura Stack, or Priscilla Walton-Fein,
Senior Counsels, Office of Regulations, at 202-435-7700. If you require
this document in an alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#7f3c392f3d203e1c1c1a0c0c161d1613160b063f1c190f1d51181009"><span class="__cf_email__" data-cfemail="296a6f796b76684a4a4c5a5a404b4045405d50694a4f594b074e465f">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
Rental information in consumer reports plays a critical role in
consumers' access to rental housing, credit, and other
opportunities.\1\ As the eviction moratoria and other government
interventions aimed at alleviating the economic and public health
impacts of the 2019 novel coronavirus (COVID-19) pandemic begin to
expire, the Bureau anticipates that many renters will face eviction
from their homes, rental arrearages, and collection attempts to recover
unpaid rent.\2\ Consumers have complained to the Bureau about the
financial impacts of the pandemic on their ability to stay current on
rental payments and about negative rental information related to the
pandemic in consumer reports.\3\ An increase in negative rental
information in the consumer reporting system, combined with an increase
in the number of consumers seeking rental housing, may create new risks
that inaccurate negative rental information will be included in tenant-
screening reports and that such inaccuracies will affect increased
numbers of consumers. Inaccurate rental information in tenant-screening
reports can have devastating impacts on consumers, including impairing
the ability of renters negatively impacted by the pandemic to secure
new rental housing and otherwise recover from the pandemic's economic
effects. An increase in housing instability caused by inaccurate rental
information could undermine the nation's efforts to recover from the
pandemic.
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\1\ The term ``rental information'' in this Bulletin is used to
refer to consumer reporting information about a rental relationship,
including eviction information and information about unpaid rent.
Other types of information, including criminal background
information and credit information, have important impacts on the
ability of renters to secure housing and access other opportunities,
but are not the focus of this Bulletin. Rental information is
included in consumer reports issued by tenant-screening companies
and other CRAs. Sources of rental information include public records
and information provided by furnishers, including debt collectors
and landlords. Consumer reports issued by tenant-screening companies
may include automated scores or recommendations provided to users as
well as rental payment, eviction, and other information.
\2\ See generally Eviction Lab, Princeton Univ., <a href="https://evictionlab.org/eviction-tracking/">https://evictionlab.org/eviction-tracking/</a> (last visited June 21, 2021).
\3\ Bureau of Consumer Fin. Prot., Complaint Bulletin: COVID-19
issues described in consumer complaints (July 2021), <a href="https://files.consumerfinance.gov/f/documents/cfpb_covid-19-issues-described-consumer-complaints_complaint-bulletin_2021-07.pdf">https://files.consumerfinance.gov/f/documents/cfpb_covid-19-issues-described-consumer-complaints_complaint-bulletin_2021-07.pdf</a> (CFPB
Complaint Bulletin).
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On January 31, 2020, the Department of Health and Human Services
declared a public health emergency for the entire United States to aid
the nation's healthcare community in responding to the COVID-19
pandemic.\4\ On March 13, 2020, then-President Trump declared a
national emergency concerning the COVID-19 pandemic, citing the strain
on the healthcare system and the need for additional measures to
contain and combat the spread of COVID-19.\5\ Income shocks resulting
from the pandemic, such as a job loss, reduced work hours, or the death
or illness of a family member, contributed to an increase in housing
and financial insecurity for many households.\6\ The financial impact
of the pandemic was especially pronounced for renters.\7\ Survey data
indicate that about half of all renters saw their incomes fall during
the pandemic due to lost employment or reductions in hours worked.\8\
In August 2020, some estimates projected that up to 30 to 40 million
individuals in 13 to 17 million renter households were at risk of
eviction over the course of the
[[Page 35596]]
pandemic.\9\ In comparison, approximately 900,000 renter households are
evicted in a typical year.\10\
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\4\ Press Release, U.S. Dep't of Health & Human Servs.,
Secretary Azar Declares Public Health Emergency for United States
for 2019 Novel Coronavirus (Jan. 31, 2020), <a href="https://www.hhs.gov/about/news/2020/01/31/secretary4azar-declares-public-health-emergency-us-2019-novel-coronavirus.html">https://www.hhs.gov/about/news/2020/01/31/secretary4azar-declares-public-health-emergency-us-2019-novel-coronavirus.html</a>. By the end of August 2020,
there were over 5,500,000 COVID-19 cases identified in the United
States and over 174,000 deaths related to the disease. See 85 FR
55292, 55292 (Sept. 4, 2020). As of June 27, 2021, the Centers for
Disease Control and Prevention (CDC) estimates a total of 601,221
deaths related to COVID-19 in the United States. Ctrs. for Disease
Control & Prevention, United States COVID-19 Cases, Deaths, and
Laboratory Testing (NAATs) by State, Territory, and Jurisdiction,
<a href="https://covid.cdc.gov/covid-data-tracker/#cases_totaldeaths">https://covid.cdc.gov/covid-data-tracker/#cases_totaldeaths</a> (last
visited June 27, 2021).
\5\ 85 FR 15337 (Mar. 18, 2020). The national emergency was
continued on February 24, 2021. 86 FR 11599 (Feb. 26, 2021).
\6\ See Bureau of Consumer Fin. Prot., Housing Insecurity and
the COVID-19 Pandemic, at 5 (Mar. 1, 2021), <a href="https://files.consumerfinance.gov/f/documents/cfpb_Housing_insecurity_and_the_COVID-19_pandemic.pdf">https://files.consumerfinance.gov/f/documents/cfpb_Housing_insecurity_and_the_COVID-19_pandemic.pdf</a> (CFPB Housing
Insecurity Report).
\7\ See id. at 6.
\8\ See, e.g., Joint Ctr. for Hous. Studies, Harvard Univ.,
Renters' Responses to Financial Stress During the Pandemic 1, 14-15,
19-20 (Apr. 2021), <a href="https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_renter_responses_covid_airgood-obrycki_etal_2021.pdf">https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_renter_responses_covid_airgood-obrycki_etal_2021.pdf</a>.
\9\ CFPB Housing Insecurity Report, supra note 6, at 15 (citing
Aspen Inst., The COVID-19 Eviction Crisis: An Estimated 30-40
Million People in America Are at Risk (Aug. 7, 2020), <a href="https://www.aspeninstitute.org/blog-posts/the-covid-19-eviction-crisis-an-estimated-30-40-million-people-in-america-are-at-risk/">https://www.aspeninstitute.org/blog-posts/the-covid-19-eviction-crisis-an-estimated-30-40-million-people-in-america-are-at-risk/</a>).
\10\ Id. (citing Eviction Lab, Princeton Univ., <a href="https://evictionlab.org/national-estimates/">https://evictionlab.org/national-estimates/</a> (May 11, 2018)).
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On September 4, 2020, the Centers for Disease Control and
Prevention (CDC) published an agency order entitled ``Temporary Halt in
Residential Evictions To Prevent the Further Spread of COVID-19'' (CDC
Order).\11\ Citing the historic threat to public health posed by the
COVID-19 pandemic, the CDC Order established an eviction moratorium
that generally limits the circumstances in which certain persons may be
evicted from residential property.\12\ The CDC Order initially was set
to expire on December 31, 2020.\13\ The CDC Order has been extended
four times and currently is set to expire on July 31, 2021.\14\
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\11\ 85 FR 55292 (Sept. 4, 2020).
\12\ See id.; see also 42 U.S.C. 264 and its implementing
regulation 42 CFR 70.2.
\13\ 85 FR 55292, 55297 (Sept. 4, 2020).
\14\ Section 502 of title V, Division N of the Consolidated
Appropriations Act, 2021, Public Law 116-260, 134 Stat. 1182, 2078
(2020), extended the original CDC Order until January 31, 2021. On
January 29, 2021, following an assessment of the ongoing pandemic,
the CDC Director renewed the CDC Order until March 31, 2021. 86 FR
8020 (Feb. 3, 2021). On March 29, 2021, the CDC Director extended
the CDC Order until June 30, 2021. 86 FR 16731 (Mar. 31, 2021). On
June 24, 2021, the CDC Director extended the CDC Order until July
31, 2021. 86 FR 34010 (June 28, 2021).
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In addition to the CDC's eviction moratorium, Federal, State, and
local governments have taken a variety of other actions to alleviate
the rental housing-related impacts of the COVID-19 pandemic, including
establishing other eviction moratoria and rental assistance programs.
For instance, section 4024 of the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) \15\ provided a temporary moratorium on
eviction filings \16\ as well as other protections for tenants in
certain rental properties with Federal assistance or federally related
financing.\17\ In addition, as discussed in more detail below, the
Federal Emergency Rental Assistance (ERA) programs established by the
U.S. Department of the Treasury (Treasury) have made billions of
dollars available to eligible households by funding rental assistance
programs administered by State and local governments.\18\ State and
local governments have also implemented temporary eviction moratoria,
rent freezes, and additional rental assistance programs.\19\
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\15\ CARES Act section 4024, Public Law 116-136, 134 Stat. 281,
492 (2020).
\16\ The temporary eviction moratorium under the CARES Act
expired in July 2020. Id.
\17\ These protections included a prohibition on charging fees,
penalties, or other charges to the tenant related to the nonpayment
of rent while the temporary moratorium was in place. CARES Act
section 4024(b)(2), 134 Stat. 494.
\18\ See infra note 31.
\19\ See, e.g., Eviction Lab, COVID-19 HOUSING POLICY SCORECARD,
<a href="https://evictionlab.org/covid-policy-scorecard/">https://evictionlab.org/covid-policy-scorecard/</a> (last visited June
17, 2021); Perkins Coie LLP, COVID-19 Related Eviction and
Foreclosure Orders/Guidance 50-State Tracker (June 17, 2021),
<a href="https://www.perkinscoie.com/en/news-insights/covid-19-related-eviction-and-foreclosure-ordersguidance-50-state-tracker.html">https://www.perkinscoie.com/en/news-insights/covid-19-related-eviction-and-foreclosure-ordersguidance-50-state-tracker.html</a>.
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These governmental actions have reduced evictions so far.\20\
However, the Bureau is aware of concerns that some landlords may have
evicted tenants in violation of applicable eviction moratoria and that
other tenants may have preemptively moved out of rental housing to
avoid an eviction filing or been subject to other types of informal
evictions outside the judicial eviction process.\21\ The Bureau's
analysis of recent consumer complaints indicates that renters have
expressed concerns about debt collection activities following
evictions, including attempts to collect questionable charges and
fees.\22\ These reports and complaints are an area of concern for the
Bureau, and Bureau staff will be monitoring and investigating eviction
practices to ensure that they are complying with the law. Evicting
tenants in violation of the CDC Order, State, or local moratoria, or
evicting or threatening to evict them without apprising them of their
legal rights under such moratoria, may violate prohibitions against
deceptive and unfair practices under the Fair Debt Collection Practices
Act and the Federal Trade Commission Act.\23\
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\20\ CFPB Housing Insecurity Report, supra note 6, at 3.
\21\ See, e.g., 86 FR 21163, 21166-67 (Apr. 22, 2021); see also
Ashley Balcerzak, NJ renters still being locked out by landlords
despite COVID eviction freeze (Mar. 11, 2021), <a href="https://www.northjersey.com/story/news/2021/03/11/njrental-assistance-covid-eviction-freeze-ignoredsome-landlords/6892203002/">https://www.northjersey.com/story/news/2021/03/11/njrental-assistance-covid-eviction-freeze-ignoredsome-landlords/6892203002/</a>; Annie Nova, The
CDC banned evictions. Tens of thousands have still occurred, CNBC
(Jan. 14, 2021), <a href="https://www.cnbc.com/2020/12/05/why-home-evictions-are-still-happeningdespite-cdc-ban.html">https://www.cnbc.com/2020/12/05/why-home-evictions-are-still-happeningdespite-cdc-ban.html</a>; Jeff Ernsthausen et al.,
Despite Federal Ban, Landlords Are Still Moving to Evict People
During the Pandemic, ProPublica (Apr. 16, 2020), <a href="https://www.propublica.org/article/despite-federal-ban-landlords-are-still-moving-to-evict-people-during-the-pandemic">https://www.propublica.org/article/despite-federal-ban-landlords-are-still-moving-to-evict-people-during-the-pandemic</a>.
\22\ CFPB Complaint Bulletin, supra note 3.
\23\ 86 FR 21163, 21163-64 (Apr. 22, 2021); see also, e.g.,
Press Release, Bureau of Consumer Fin. Prot., CFPB Acting Director
Uejio & FTC Acting Chairwoman Slaughter Issue Joint Statement on
Preventing Illegal Evictions (Mar. 29, 2021), <a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-acting-director-uejio-and-ftc-acting-chairwoman-slaughter-issue-joint-statement-on-preventing-illegal-evictions/">https://www.consumerfinance.gov/about-us/newsroom/cfpb-acting-director-uejio-and-ftc-acting-chairwoman-slaughter-issue-joint-statement-on-preventing-illegal-evictions/</a>.
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Moreover, as the CDC Order and other measures begin to expire, many
households will face difficulties navigating significant rental payment
arrearages.\24\ Low-income and minority renters have been
disproportionately affected by the economic effects of the COVID-19
pandemic, including job losses.\25\ Although economic conditions have
improved in recent months,\26\ 13 percent of adult renters were behind
on rent in May 2021.\27\ Renters in low-income households were more
likely to report they were behind on rental payments than those in
higher-income households. As of May 2021, more than one in six renters
with household incomes under $25,000 reported that they were behind on
their rent.\28\ An estimated 19 percent of renters with children report
being not caught up on rent, compared to 10 percent not living with
anyone under 18.\29\ Minority renters were more likely to report that
their household was not caught up on rent: 21 percent of Black renters,
17 percent of Hispanic renters, and 17 percent of Asian renters said
they were not caught up on rent, compared to 9 percent of white
renters.\30\ Accordingly,
[[Page 35597]]
low-income and minority renters are more likely to be affected by the
expiration of the CDC's eviction moratorium and other temporary
measures aimed at reducing evictions and supporting renters unable to
make their rental payments.
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\24\ See generally Eviction Lab, Princeton Univ., <a href="https://evictionlab.org/eviction-tracking/">https://evictionlab.org/eviction-tracking/</a> (last visited June 21, 2021). For
many households, a return to pre-pandemic levels of income may allow
them to make rental payments going forward, but may not permit them
to pay back rent owed. According to one report, almost half of all
renter households were rental cost-burdened at the time the pandemic
hit, based on 2018 numbers. See Emily Benfer et al., The COVID-19
Eviction Crisis: An Estimated 30-40 Million People in America Are at
Risk, Aspen Inst. (Aug. 7, 2020), <a href="https://www.aspeninstitute.org/blog-posts/the-covid-19-eviction-crisis-an-estimated-30-40-million-people-in-america-are-at-risk/">https://www.aspeninstitute.org/blog-posts/the-covid-19-eviction-crisis-an-estimated-30-40-million-people-in-america-are-at-risk/</a> (citing <a href="https://www.jchs.harvard.edu/sites/default/files/Harvard_JCHS_Americas_Rental_Housing_2020.pdf">https://www.jchs.harvard.edu/sites/default/files/Harvard_JCHS_Americas_Rental_Housing_2020.pdf</a>).
Rental cost burden is defined as households that pay over 30 percent
of their income towards rent. Id. Also in 2018, 10.9 million renter
households (25 percent of all renter households) were spending over
50 percent of their income on rent each month. Id.
\25\ See CFPB Housing Insecurity Report, supra note 6, at 8, 18;
see also Pew Research Ctr., Economic Fallout From COVID-19 Continues
To Hit Lower-Income Americans the Hardest (Sept. 24, 2020), <a href="https://www.pewresearch.org/social-trends/2020/09/24/economic-fallout-from-covid-19-continues-to-hit-lower-income-americans-the-hardest/">https://www.pewresearch.org/social-trends/2020/09/24/economic-fallout-from-covid-19-continues-to-hit-lower-income-americans-the-hardest/</a>.
\26\ See, e.g., Press Release, Board of Governors of the Fed.
Reserve Sys., Federal Reserve Issues FOMC Statement (June 16, 2021),
<a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20210616a.htm">https://www.federalreserve.gov/newsevents/pressreleases/monetary20210616a.htm</a>.
\27\ CFPB analysis of U.S. Census Bureau, Census Household Pulse
Survey, Week 30 (May 12-May 24, 2021), <a href="https://www2.census.gov/programs-surveys/demo/tables/hhp/2021/wk30/housing1b_week30.xlsx">https://www2.census.gov/programs-surveys/demo/tables/hhp/2021/wk30/housing1b_week30.xlsx</a>.
\28\ Id.
\29\ Id.
\30\ Id.
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The Federal ERA programs were established to address the concerns
about rental arrearages.\31\ ERA funds may be used to provide
assistance to eligible households and their landlords to pay rent,
utilities, and certain other housing costs, including arrearages for
rent and utility payments.\32\ Grantees of ERA funds have been working
to ramp up their deployment of funds.\33\ As the CDC has noted, though
there are indications that emergency rental assistance has started to
reach increasing numbers of households over recent months, there are
likely hundreds of thousands of applications for assistance that
currently remain outstanding as programs accelerate their activity.\34\
The Bureau is concerned that renters may be evicted for nonpayment of
rent even as they are attempting to access these funds. The Bureau
encourages landlords and renters to consider their options under these
programs. In addition to the extensive information about rental
assistance programs under the ERA available on Treasury's website,\35\
information about rental assistance programs under the ERA is also
available on the Bureau's website.\36\
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\31\ Eligible grantees of ERA funds include States (including
the District of Columbia), U.S. territories, local governments with
more than 200,000 residents, the Department of Hawaiian Home Lands,
and Indian tribes or the tribally designated housing entity of an
Indian tribe, as applicable. See U.S. Dep't of the Treasury,
Emergency Rental Assistance Program, <a href="https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program">https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program</a> (last visited June
25, 2021). Treasury has established two separate ERA programs: ERA1,
which provides up to $25 billion in rental assistance under the
Consolidated Appropriations Act, 2021, Public Law 116-260, 134 Stat.
1182 (2020), and ERA2, which provides up to $21.55 billion in rental
assistance under the American Rescue Plan Act of 2021, Public Law
117-2, 135 Stat. 4 (2021). Id. At the same time that funds were
allocated for rental assistance under ERA2, the Federal government
also implemented additional guidance to increase access to funds by
renters most in need of assistance to avoid evictions. For example,
Treasury guidance now makes clear that emergency rental assistance
provided under ERA2 must be offered directly to renters when
landlords do not accept payment. The new guidance also allows rental
assistance programs under ERA2 to offer assistance directly to
renters before reaching out to landlords. See U.S. Dep't of the
Treasury, Emergency Rental Assistance Fact Sheet (May 7, 2021),
<a href="https://home.treasury.gov/system/files/136/FACT_SHEET-Emergency-Rental-Assistance-Program_May2021.pdf">https://home.treasury.gov/system/files/136/FACT_SHEET-Emergency-Rental-Assistance-Program_May2021.pdf</a>. The Treasury guidance was
updated again on June 24, 2021 to further support the deployment of
ERA funds. See U.S. Dep't of the Treasury, Emergency Rental
Assistance Fact Sheet (June 24, 2021), <a href="https://home.treasury.gov/system/files/136/Treasury_Fact_Sheet_6-24-21.pdf">https://home.treasury.gov/system/files/136/Treasury_Fact_Sheet_6-24-21.pdf</a>. Treasury has
published frequently asked questions (FAQs) related to the ERA
programs, which are available at: <a href="https://home.treasury.gov/system/files/136/ERA_FAQs_6-24-21.pdf">https://home.treasury.gov/system/files/136/ERA_FAQs_6-24-21.pdf</a>.
\32\ See U.S. Dep't of the Treasury, Emergency Rental Assistance
Program, <a href="https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program">https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program</a> (last visited June 25, 2021).
\33\ See U.S. Dep't of the Treasury, Emergency Rental Assistance
Fact Sheet (June 24, 2021), <a href="https://home.treasury.gov/system/files/136/Treasury_Fact_Sheet_6-24-21.pdf">https://home.treasury.gov/system/files/136/Treasury_Fact_Sheet_6-24-21.pdf</a>.
\34\ 86 FR 34010, 34013 (June 28, 2021).
\35\ U.S. Dep't of the Treasury, Emergency Rental Assistance
Program, <a href="https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program">https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program</a> (last visited June 28, 2021).
\36\ See Bureau of Consumer Fin. Prot., Federal Help With Paying
Your Rent, <a href="https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/renter-protections/emergency-rental-assistance-for-renters/">https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/renter-protections/emergency-rental-assistance-for-renters/</a> (last visited June 25, 2021).
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The Bureau anticipates that many tenants who face eviction or have
experienced economic shocks during the pandemic will seek alternative
housing in the rental market. In addition to current renters seeking
new housing, the Bureau also anticipates a likely rise in consumers who
are currently homeowners seeking rental housing as pandemic-related
mortgage forbearance programs and foreclosure moratoria come to an
end.\37\
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\37\ Under the CARES Act, if a homeowner attests to a hardship
related directly or indirectly to the COVID-19 pandemic, homeowners
with mortgages backed by the government-sponsored enterprises (GSEs)
and federally backed mortgages have the right to request and obtain
a forbearance for up to 180 days, and an extension for another 180
days. CARES Act section 4022(b), 134 Stat. 490. Guidance from the
GSEs and Federal agencies allow up to 18 months of forbearance. Many
servicers and investors of privately owned mortgages not covered by
the CARES Act offer similar protections. Further, the CARES Act and
guidance from the GSEs and Federal agencies have prohibited lenders
and servicers of GSE and federally backed loans from beginning
foreclosures through July 2021. When forbearance periods and the
foreclosure moratoria end, some homeowners who are significantly
behind on their mortgage payments may have limited options to avoid
foreclosure if they do not reach agreement with their servicers on a
workout option. See CFPB Housing Insecurity Report, supra note 6, at
11-13. To the extent these homeowners enter foreclosure and lose
their homes, many are likely to seek housing options in the rental
market.
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The Bureau is concerned that information concerning evictions and
rental payment arrearages related to the pandemic's effects may not be
a reliable predictor of a consumer's future performance given the
extent of the economic dislocation caused by the pandemic. The use of
pre-pandemic relationships and scoring models on pandemic data may lead
to unreliable conclusions regarding a consumer's future performance and
may hinder public policy efforts to protect consumers during the
pandemic and promote an equitable recovery from the pandemic. Some
States and local governments have taken steps to prevent the reporting
or use of information related to evictions and rental arrearages
arising during the pandemic.\38\ For example, some States have taken or
are considering taking steps to make it easier to seal or expunge
eviction records.\39\
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\38\ See, e.g., 2021 Or. Laws Ch. 39 (S.B. 282) (preventing
landlords from reporting to a CRA nonpayment of rent, charges, and
fees accrued on or after April 1, 2020, and before July 1, 2021, and
from considering, when evaluating a rental applicant, an action to
recover possession if entered on claims that arose on or after April
1, 2020, and before March 1, 2022, or an applicant's unpaid rent,
including rent reflected in judgments or referrals of debt to a
collection agency, that accrued on or after April 1, 2020, and
before March 1, 2022).
\39\ See, e.g., 735 Ill. Comp. Stat. 5/9-122 (providing that the
court file shall be sealed upon the commencement of any residential
eviction action during the period beginning March 9, 2020, and
ending March 31, 2022).
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In the upcoming transition period during which the Bureau
anticipates both an increase in negative rental information in the
consumer reporting system and an increase in consumers seeking rental
housing, the Bureau is concerned that existing problems with the
accuracy of tenant-screening and other consumer reports will be
exacerbated. According to a 2019 report by the National Consumer Law
Center (NCLC), the vast majority of landlords use tenant-screening
reports to screen rental-housing applicants.\40\ These reports, which
are obtained from one of the nation's many tenant-screening
companies,\41\ may include traditional credit report data, criminal
background history, and rental information. Inaccuracies in negative
rental information included in consumer reports can have significant
damaging consequences for tenants' future access to rental housing,
credit, and other opportunities. For example, an applicant whose
tenant-screening report shows past litigation or a poor rental payment
history may find it difficult or more expensive to rent property, and
many landlords will not rent to an applicant if their screening report
shows
[[Page 35598]]
an eviction filing.\42\ Concerns about lack of access to rental housing
are further heightened during the continuing pandemic. For example, a
basis for the CDC's eviction moratorium is the concern that individuals
moving into close quarters in congregate or shared living settings,
such as homeless shelters, puts individuals at higher risk of
contracting COVID-19.\43\ CRAs and debt collectors and landlords that
furnish information for inclusion in consumer reports have important
obligations under the FCRA and Regulation V relating to the accuracy of
information included in consumer reports,\44\ and the Bureau urges CRAs
and furnishers to ensure they are complying with these obligations.
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\40\ The NCLC report states that 90 percent of landlords run
background checks on prospective tenants. Nat'l Consumer Law Ctr.,
Broken Records Redux: How Errors by Criminal Background Check
Companies Continue to Harm Consumers Seeking Jobs and Housing 3
(Dec. 2019), <a href="https://www.nclc.org/images/pdf/criminal-justice/report-broken-records-redux.pdf">https://www.nclc.org/images/pdf/criminal-justice/report-broken-records-redux.pdf</a>.
\41\ See, e.g., Tex Pasley et al., Shriver Ctr. on Poverty Law,
Screened Out: How Tenant Screening Reports Undermine Fair Housing
Laws and Deprive Tenants of Equal Access to Housing in Illinois
(Jan. 2021), <a href="https://www.povertylaw.org/report/tenant-screening-report/">https://www.povertylaw.org/report/tenant-screening-report/</a>.
\42\ See, e.g., CFPB Complaint Bulletin, supra note 3 (noting
that, in their complaints to the Bureau, consumers have expressed
concerns that an eviction would have detrimental effects on their
ability to secure future housing and have reported facing
homelessness because an eviction had negatively affected their
credit, making it more difficult to secure housing); Kaveh Waddell,
How Tenant Screening Reports Make It Hard for People to Bounce Back
from Tough Times, Consumer Reports (Mar. 11, 2021), <a href="https://www.consumerreports.org/algorithmic-bias/tenant-screening-reports-make-it-hard-to-bounce-back-from-tough-times/">https://www.consumerreports.org/algorithmic-bias/tenant-screening-reports-make-it-hard-to-bounce-back-from-tough-times/</a>.
\43\ 86 FR 16731, 16733-34 (Mar. 31, 2021). See also 86 FR
34010, 34013 (June 28, 2021) (noting that ``[e]victed renters must
move, which leads to multiple outcomes that increase the risk of
COVID-19 spread'').
\44\ See, e.g., 15 U.S.C. 1681e(b), 1681i, 1681s-2; 12 CFR pt.
1022.
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Concerns about the accuracy of information included in consumer
reports are long-standing,\45\ and the Bureau is especially concerned
about the effects of these accuracy problems in light of the economic
and public health impacts of COVID-19. The Bureau has received consumer
complaints alleging that inaccuracies in tenant-screening reports have
caused landlords to deny some consumers rental housing and charge
others higher security deposits than they would have otherwise.\46\ The
Bureau is particularly concerned that the procedures that some tenant-
screening companies use to match public records and other rental
information to specific consumers may create a high risk that
inaccurate data will be included in tenant-screening reports,\47\ a
risk that may be further heightened by increased volumes of negative
rental information resulting from the pandemic. The risk of mismatching
may be greater among Hispanic, Black, and Asian individuals because
there is less surname diversity than among the white population.\48\
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\45\ See, e.g., Fed. Trade Comm'n, Report to Congress Under
Section 319 of the Fair and Accurate Credit Transactions Act of 2003
(Dec. 2012), <a href="https://www.ftc.gov/sites/default/files/documents/reports/section-319-fair-and-accurate-credit-transactions-act-2003-fifth-interim-federal-trade-commission/130211factareport.pdf">https://www.ftc.gov/sites/default/files/documents/reports/section-319-fair-and-accurate-credit-transactions-act-2003-fifth-interim-federal-trade-commission/130211factareport.pdf</a>
(finding that one in five consumers had an error on at least one of
their three nationwide credit reports). More recently, the Bureau
and the Federal Trade Commission hosted a full-day public workshop
to discuss issues affecting the accuracy of both traditional credit
reports and employment and tenant background screening reports. Fed.
Trade Comm'n, Accuracy in Consumer Reporting Workshop (Dec. 10,
2019), <a href="https://www.ftc.gov/news-events/events-calendar/accuracy-consumer-reporting-workshop">https://www.ftc.gov/news-events/events-calendar/accuracy-consumer-reporting-workshop</a>.
\46\ See, e.g., CFPB Complaint Bulletin, supra note 3.
\47\ See, e.g., Lauren Kirchner & Matthew Goldstein, How
Automated Background Checks Freeze Out Renters, N.Y. Times (May 28,
2020), <a href="https://www.nytimes.com/2020/05/28/business/renters-background-checks.html">https://www.nytimes.com/2020/05/28/business/renters-background-checks.html</a>; Complaint, United States v. Appfolio, Inc.,
No. 1:20-cv-03563 (D.D.C. Dec. 8, 2020), <a href="https://www.ftc.gov/system/files/documents/cases/ecf_1_-_us_v_appfolio_complaint.pdf">https://www.ftc.gov/system/files/documents/cases/ecf_1_-_us_v_appfolio_complaint.pdf</a> (alleging
failure to follow reasonable procedures relating to the use of
identifiers to match criminal and eviction records to consumers for
purposes of preparing tenant-screening reports); Complaint, FTC v.
RealPage, Inc., No. 3:18-cv-02737-N (N.D. Tex. Oct. 16, 2018),
<a href="https://www.ftc.gov/system/files/documents/cases/152_3059_realpage_inc_complaint_10-16-18.pdf">https://www.ftc.gov/system/files/documents/cases/152_3059_realpage_inc_complaint_10-16-18.pdf</a> (alleging failure to
follow reasonable procedures relating to the matching criteria used
to match criminal records to consumers for purposes of preparing
tenant-screening reports).
\48\ Joshua Comenetz, U.S. Census Bureau, Hispanic Surnames Rise
in Popularity (Aug. 9, 2017), <a href="https://www.census.gov/library/stories/2017/08/what-is-in-a-name.html">https://www.census.gov/library/stories/2017/08/what-is-in-a-name.html</a> (``Twenty-six surnames cover
a quarter of the Hispanic population and 16 percent of Hispanic
people reported one of the top 10 Hispanic names. The pattern is
similar for Asians and blacks.'').
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In addition, the Bureau is concerned that tenant-screening
companies may report information, such as information about an eviction
filing, in a consumer report without having reasonable procedures to
report information about the disposition of the eviction filing or to
prevent the inclusion of multiple entries for the same eviction action
in the same consumer report.\49\ The Bureau is also concerned that
tenant-screening companies may lack reasonable procedures to exclude
from consumer reports eviction information that has been sealed or
expunged.\50\
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\49\ See, e.g., Complaint, United States v. Appfolio, Inc.,
supra note 47 (alleging failure to follow reasonable procedures to
assure that the eviction and criminal record information included in
tenant-screening reports accurately reflected the disposition,
offense name, and offense type and to prevent the inclusion of
multiple entries for the same criminal or eviction action in the
same report).
\50\ See, e.g., Consent Order, In re Gen. Info. Servs., Inc.,
2015-CFPB-0028 (Oct. 29, 2015), <a href="https://files.consumerfinance.gov/f/201510_cfpb_consent-order_general-information-service-inc.pdf">https://files.consumerfinance.gov/f/201510_cfpb_consent-order_general-information-service-inc.pdf</a>
(alleging that an employment background screening company violated
FCRA section 607(b) by, among other things, failing to use
reasonable procedures to prevent the inclusion of expunged criminal
records in consumer reports).
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CRAs frequently include rental information, such as eviction
records, that comes from public records; landlords and debt collectors
also furnish information about rental housing payments and debts to
CRAs. The FCRA and Regulation V set forth important requirements for
furnishers concerning both the accuracy of information furnished and
the handling of consumer disputes related to the accuracy of
information included in consumer reports.\51\ The Bureau is concerned
that existing accuracy problems related to the furnishing of rental
information may be exacerbated by the anticipated increase in the
amount of negative rental information furnished.
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\51\ See, e.g., 15 U.S.C. 1681s-2; 12 CFR 1022.40-.43.
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For example, furnishers may fail to account for COVID-19-related
aid or protections when reporting overdue rent amounts. In addition to
providing a temporary moratorium on eviction filings for tenants in
certain rental properties with Federal assistance or federally related
financing, the CARES Act prohibited landlords of these rental
properties from charging fees, penalties, or other charges related to
the nonpayment of rent during the Act's eviction moratorium.\52\ State
and local laws may also in some cases prohibit landlords from charging
certain late fees or penalties to renters. The Bureau is concerned that
furnishers may include prohibited penalties or fees when reporting
rental arrearages. In addition, under many rental assistance programs,
funds to make rental payments may be provided to landlords to pay the
rent of specific tenants who are eligible for the program. If
furnishers providing rental information do not appropriately account
for funds received pursuant to these programs and fail to offset
overdue rent amounts, this could lead to inaccuracies in consumer
reports.
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\52\ CARES Act section 4024, 134 Stat. 492-94.
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Finally, the dispute-resolution obligations the FCRA and Regulation
V impose on CRAs and furnishers are also critical to ensuring that
consumer reports are accurate. CRAs and furnishers must conduct
reasonable and timely investigations of consumer disputes to verify the
accuracy of the information furnished.\53\ An increase in the amount of
negative rental information in public records and furnished to CRAs is
likely to lead to a corresponding increase in dispute volumes. A
reasonable and timely investigation of a consumer dispute is critical
to mitigating the harmful impact that inaccurate negative information
in a consumer report may have on the
[[Page 35599]]
consumer. Moreover, proper handling of disputes not only ensures that
inaccuracies in the disputing consumer's report are resolved, it also
facilitates CRA and furnisher identification of systemic problems
related to their consumer reporting and furnishing practices.\54\
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\53\ 15 U.S.C. 1681i, 1681s-2; 12 CFR 1022.43.
\54\ See, e.g., Fed. Trade Comm'n, 40 Years of Experience with
the Fair Credit Reporting Act: An FTC Staff Report with Summary of
Interpretations 67 (July 2011), <a href="https://www.ftc.gov/sites/default/files/documents/reports/40-years-experience-fair-credit-reporting-act-ftc-staff-report-summary-interpretations/110720fcrareport.pdf">https://www.ftc.gov/sites/default/files/documents/reports/40-years-experience-fair-credit-reporting-act-ftc-staff-report-summary-interpretations/110720fcrareport.pdf</a>
(noting that ``when a CRA learns or should reasonably be aware of
errors in its reports that may indicate systematic problems (by
virtue of information from consumers, report users, from periodic
review of its reporting system, or otherwise), it must review its
procedures for assuring accuracy and take any necessary steps to
avoid future problems'').
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II. Compliance Guidance
As pandemic-related government interventions aimed at protecting
renters begin to expire, the Bureau will continue to look carefully at
consumer reporting agencies' and furnishers' compliance with their FCRA
accuracy obligations with respect to rental information. CRAs and
furnishers should take immediate steps to ensure they are fulfilling
their obligations under the law. If the Bureau determines that a CRA or
furnisher has engaged in any acts or practices that violate the FCRA,
Regulation V, or other Federal consumer financial laws, the Bureau will
take appropriate enforcement action to address violations and seek all
appropriate corrective measures, including remediation of harm to
consumers.
The Bureau plans to pay particular attention to the areas outlined
below.
For CRAs Reporting Rental Information
1. Whether CRAs are reporting accurate rental information.
2. Whether CRAs are using a sufficient number of identifiers to
match consumer report information to the consumer who is the subject of
the report, including whether CRAs are using name-matching procedures
or limited identifiers likely to heighten the risk of inaccurate
matching.
3. Whether CRAs are reporting eviction information that is
inaccurate, incomplete, or misleading (such as may result from a
failure to have reasonable procedures to report information about the
disposition of an eviction filing, to prevent the inclusion of multiple
entries for the same eviction action in the same consumer report, or to
prevent the inclusion of eviction information that has been sealed or
expunged).
4. Whether CRAs are complying with their obligations to investigate
disputed information in a consumer report, including whether they are
conducting timely and reasonable investigations.
For Furnishers Providing Rental Information
1. Whether furnishers are providing accurate rental information to
CRAs.
2. Whether furnishers are providing information about rental
arrearages that include amounts that were already paid on behalf of a
tenant through a government grant or relief program, such as the
Emergency Rental Assistance programs.
3. Whether furnishers are providing information about rental
arrearages that include fees or penalties that CARES Act section
4024(b) or other laws prohibit charging.
4. Whether furnishers are complying with their obligations to
investigate disputed information in a consumer report, including
whether they are conducting timely and reasonable investigations.
III. Conclusion
The Bureau issues this Bulletin to highlight that the Bureau will
hold CRAs and furnishers accountable if they do not comply with their
accuracy and dispute obligations under the FCRA and Regulation V with
respect to rental information.
IV. Regulatory Requirements
This Bulletin constitutes a general statement of policy exempt from
the notice and comment rulemaking requirements of the Administrative
Procedure Act.\55\ It summarizes existing legal requirements and
articulates considerations relevant to the Bureau's exercise of its
enforcement discretion for institutions under its jurisdiction. It does
not impose any legal requirements on external parties, nor does it
create or confer any substantive rights on external parties that could
be enforceable in any administrative or civil proceeding. Because no
notice of proposed rulemaking is required in issuing this Bulletin, the
Regulatory Flexibility Act also does not require an initial or final
regulatory flexibility analysis.\56\ The Bureau has also determined
that the issuance of this Bulletin does not impose any new or revise
any existing recordkeeping, reporting, or disclosure requirements on
covered entities or members of the public that would be collections of
information requiring approval by the Office of Management and Budget
under the Paperwork Reduction Act of 1995.\57\
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\55\ 5 U.S.C. 553(b).
\56\ 5 U.S.C. 603(a), 604(a).
\57\ 44 U.S.C. 3501 et seq.
Dated: July 1, 2021.
David Uejio,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2021-14459 Filed 7-6-21; 8:45 am]
BILLING CODE 4810-AM-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.