CFPB Settles with Auto Lender for $19 Million to Resolve Alleged FCRA Violations

​On July 26, 2022, the Consumer Financial Protection Bureau (CFPB) announced that it settled with a California-based auto lender who purchases and services retail installment contracts and vehicle leases for an affiliated automaker.  The settlement resolves alleged violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq., and its implementing Regulation V, 12 C.F.R. pt. 1022 (known as the Furnisher Rule) and the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531(a), 5536(a).

Specifically, the CFPB ​alleged that the lender used deficient manuals and outdated systems, processes, and procedures to furnish credit reporting information, which in turn led to widespread inaccuracies that resulted in negative inaccurate information being placed on consumers’ credit reports.  Thereafter, the lender allegedly failed to promptly correct inaccurate information on consumer accounts.

The consent order requires the auto lender to pay $13.2 million in consumer redress and a $6 million civil money penalty.  Additionally, the auto lender must take steps to correct all inaccurate account information and implement proper policies and procedures for identifying and correcting inaccurate information.