On May 20, 2015, 31 states’ attorneys general settled with three major credit reporting agencies (CRAs) for six million dollars and commitments to make a number of changes to their business practices. With the exception of the relatively small monetary payments, the settlement largely mirrors the March 2015 agreement between the CRAs and the New York Attorney General. Collectively, these agreements require CRAs to comply with the Fair Credit Reporting Act (FCRA), and create a few new FCRA compliance procedures and substantive requirements. The new settlement requires, for example, CRAs to enhance their review of certain consumer disputes, increase consumer education on the dispute process, and stop reporting certain debts on credit reports. Reflecting increasing regulator skepticism about credit monitoring products, the settlement imposes new limits on CRAs’ marketing of those products. And, expanding the reach of the AGs beyond CRAs, the agreements (1) require CRAs to collect data and report on data furnishers and (2) attempt to manage debt collectors by preventing the CRAs from reporting certain data.

REFRESHER: THE NEW YORK AG SETTLEMENT -

The new 31-state AG settlement largely duplicates the CRAs’ agreement with the New York Attorney General. The New York settlement introduced significant changes to CRAs’ business practices. In summary, these changes are as follows.