Fair Credit Reporting; Facially False Data

Publisher currently lists this guidance: Fair Credit Reporting; Facially False Data , 87 FR 64689 (Oct. 26, 2022).

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contains regulatory documents having general
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are keyed to and codified in the Code of
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Rules and Regulations
Federal Register
64689
Vol. 87, No. 206
Wednesday, October 26, 2022
1
85 FR 77987 (Dec. 3, 2020).
2
See 15 U.S.C. 1681a(d) (defining ‘‘consumer
report’’).
3
Fair and Accurate Credit Transactions Act of
2003, Public Law 108–159, sec. 319, 117 Stat. 1952
(2003).
4
See Fed. Trade Comm’n, Report to Congress
Under Section 319 of the Fair and Accurate Credit
Transactions Act of 2003, at 64 (Dec. 2012), 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.
DEPARTMENT OF ENERGY
10 CFR Parts 429 and 431
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Energy Conservation Program: Test
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Correction
In rule document 2022–21891,
appearing on pages 63588 through
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October 19, 2022, make the following
correction:
§ 431.12 [Corrected]
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[FR Doc. C1–2022–21891 Filed 10–25–22; 8:45 am]
BILLING CODE 0099–10–D
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1022
Fair Credit Reporting; Facially False
Data
AGENCY: Bureau of Consumer Financial
Protection.
ACTION: Advisory opinion.
SUMMARY: The Consumer Financial
Protection Bureau (Bureau) is issuing
this advisory opinion to highlight that a
consumer reporting agency that does not
implement reasonable internal controls
to prevent the inclusion of facially false
data, including logically inconsistent
information, in consumer reports it
prepares is not using reasonable
procedures to assure maximum possible
accuracy under section 607(b) of the
Fair Credit Reporting Act (FCRA).
DATES: This advisory opinion is
effective on October 26, 2022.
FOR FURTHER INFORMATION CONTACT:
Ilana Waxman, Senior Counsel, Tyler
Sines or Jason Grimes, Counsels, Office
of Supervision Policy at (202) 435–7700
or https://reginquiries.consumerfinance.
gov/. If you require this document in an
alternative electronic format, please
contact CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION: The
Bureau is issuing this advisory opinion
through the procedures for its Advisory
Opinions Policy.
1
Refer to those
procedures for more information.
I. Advisory Opinion
A. Background
Accuracy in consumer reports is of
vital importance to the consumer
reporting system, particularly as
consumer reports play an increasingly
central role in the lives of American
consumers. Consumer reporting
agencies collect and assemble credit,
public record, and other consumer
information into consumer reports.
2

Creditors, insurers, landlords,
employers, and others use the
information in these reports to make
eligibility determinations and other
decisions that can have a significant
impact on consumers. For example,
creditors use information in consumer
reports to determine whether, and on
what terms, to extend credit to a
particular consumer, while landlords
and employers use background
screening reports in deciding whether to
rent to prospective tenants and hire
employees, respectively.
Inaccurate, derogatory information in
consumer reports can have significant
adverse impacts on consumers. For
example, inaccurate, derogatory
information in consumer reports can
lead to higher interest rates, ineligibility
for promotional offers, or otherwise less
favorable credit terms for affected
consumers. This in turn may cost
consumers hundreds or thousands of
dollars in additional interest. Even
worse, inaccurate, derogatory
information in consumer reports could
lead lenders to deny a consumer credit
entirely, making it difficult or
impossible for that consumer to obtain
a mortgage, auto loan, student loan, or
other credit. Any of these consequences
can be devastating for a consumer’s
financial well-being and life. Inaccurate,
derogatory information in consumer
reports can also harm the businesses
that use such reports by leading them to
make unsupported decisions.
Consumer report accuracy depends on
the various parties to the consumer
reporting system, including: the three
nationwide consumer reporting agencies
(Equifax, Experian, and TransUnion);
other consumer reporting agencies, such
as background screening companies;
entities such as creditors who furnish
information to consumer reporting
agencies (i.e., furnishers); and public
record repositories. While any of these
parties may introduce inaccurate
information into the consumer reporting
process, a consumer reporting agency is
uniquely positioned to identify certain
obvious inaccuracies and implement
policies, procedures, and systems to
keep them off of consumer reports. In
some cases, such as when certain
account or other information fields on
consumer reports are logically
inconsistent with other fields of
information, a consumer reporting
agency can detect the logical
inconsistencies and prevent the
inaccurate information from being
included in consumer reports it
generates, thereby avoiding the
consumer harm to individual consumers
that can result from reporting such
inaccurate information.
Inaccuracy in consumer reports is a
long-standing issue that remains a
problem today. Pursuant to its
obligations under the Fair and Accurate
Credit Transactions (FACT) Act
3
to
conduct a study of consumer report
accuracy and completeness, the Federal
Trade Commission in 2012 published a
report finding, among other things, that
one in five consumers who participated
in the study had an error on at least one
of their three nationwide credit reports.
4

Another more recent study, published
in 2021, found that over 34% of
consumers surveyed were able to
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64690 Federal Register/ Vol. 87, No. 206 / Wednesday, October 26, 2022 / Rules and Regulations
5
See Syed Ejaz, Consumer Reports, A Broken
System: How the Credit Reporting System Fails
Consumers and What to Do About It 4 (June 10,
2021), https://advocacy.consumerreports.org/wp-
content/uploads/2021/06/A-Broken-System-How-
the-Credit-Reporting-System-Fails-Consumers-and-
What-to-Do-About-It.pdf.
6
See Consumer Fin. Prot. Bureau, Consumer
Response Annual Report, at 20 (Mar. 2022), https://
files.consumerfinance.gov/f/documents/cfpb_2021-
consumer-response-annual-report_2022-03.pdf;
Consumer Fin. Prot. Bureau, Consumer Response
Annual Report, at 22 (Mar. 2021), https://
files.consumerfinance.gov/f/documents/cfpb_2020-
consumer-response-annual-report_03-2021.pdf;
Consumer Fin. Prot. Bureau, Consumer Response
Annual Report, at 19 (Mar. 2020), https://
files.consumerfinance.gov/f/documents/cfpb_
consumer-response-annual-report_2019.pdf;
Consumer Fin. Prot. Bureau, Consumer Response
Annual Report, at 19 (Mar. 2019), https://
files.consumerfinance.gov/f/documents/cfpb_
consumer-response-annual-report_2018.pdf;
Consumer Fin. Prot. Bureau, Consumer Response
Annual Report, at 13 (Mar. 2018), https://
files.consumerfinance.gov/f/documents/cfpb_
consumer-response-annual-report_2017.pdf;
Consumer Fin. Prot. Bureau, Consumer Response
Annual Report, at 18 (Mar. 2017), https://
files.consumerfinance.gov/f/documents/201703_
cfpb_Consumer-Response-Annual-Report-
2016.PDF.
7
See Consumer Fin. Prot. Bureau, Consumer
Response Annual Report, at 20 (Mar. 2022), https://
files.consumerfinance.gov/f/documents/cfpb_2021-
consumer-response-annual-report_2022-03.pdf for
more in-depth analyses.
8
See Consumer Fin. Prot. Bureau, Spring 2022
Supervisory Highlights, at 10 (May 2022), https://
files.consumerfinance.gov/f/documents/cfpb_
supervisory-highlights_issue-26_2022-04.pdf.
9
See Consumer Fin. Prot. Bureau, Summer 2021
Supervisory Highlights, at 7 (Jun. 2021), https://
files.consumerfinance.gov/f/documents/cfpb_
supervisory-highlights_issue-24_2021-06.pdf.
10
Consent Order at ¶¶ 8–29, In re Gen. Inf. Svcs.
Inc., 2015–0028 (Oct. 29, 2015), https://
files.consumerfinance.gov/f/201510_cfpb_consent-
order_general-information-service-inc.pdf;
Complaint at ¶¶ 5–11, Consumer Fin. Prot. Bureau
v. Sterling Infosys., Inc., No. 1:19–cv–10824
(S.D.N.Y. Nov. 22, 2019), https://
www.consumerfinance.gov/enforcement/actions/
sterling-infosystems-inc/.
11
Consent Order at ¶ 41, In re Hyundai Capital
Am., 2022–CFPB–0005 (July 26, 2022), https://
files.consumerfinance.gov/f/documents/cfpb_
hyundai-capital-america_consent-order_2022-
07.pdf.
12
See 15 U.S.C. 1681–1681x.
13
15 U.S.C. 1681(b).
14
Guimond v. Trans Union Credit Info., 45 F.3d
1329, 1333 (9th Cir.1995) (citations omitted); see
also S. Rep. No. 91–517, at 1 (1969) (explaining that
the FCRA was intended to ‘‘prevent consumers
from being unjustly damaged because of inaccurate
or arbitrary information in a credit report’’).
15
15 U.S.C. 1681e(b).
16
Stewart v. Credit Bureau, Inc., 734 F.2d 47, 52
(D.C. Cir. 1984).
17
Cf. Consent Order at ¶ 20, In re Santander
Consumer USA Inc., 2022–BCFP–0027 (Dec. 20,
2020) (‘‘Respondent also reported in approximately
250,000 instances that accounts had a current
balance and simultaneously furnished contradictory
identify at least one error in their credit
reports.
5

Consumer complaints submitted to
the Bureau continue to reflect
significant consumer concern about
inaccuracies in consumer reports.
Complaints about ‘‘incorrect
information on your report’’ have
represented the largest share of credit or
consumer reporting complaints
submitted to the Bureau each year for at
least the last six years.
6
In 2021 alone,
companies responded to more than
157,000 such complaints, representing a
majority (53%) of credit or consumer
reporting complaint responses that
year.
7

Moreover, the Bureau continues to see
accuracy issues at furnishers and
consumer reporting agencies through its
supervisory activities. For example, the
Bureau noted in its Spring 2022
Supervisory Highlights that many
furnishers lacked ‘‘reasonable written
policies and procedures regarding the
accuracy and integrity of the
information relating to consumers.’’
8
In
its Summer 2021 Supervisory
Highlights, the Bureau explained that
some consumer reporting agencies
lacked adequate procedures for assuring
maximum possible accuracy of
consumer reports when they ‘‘continued
to include information in consumer
reports that was provided by unreliable
furnishers.’’
9

The Bureau also continues to find
accuracy issues in the consumer
reporting context through its
enforcement activities. For example, the
Bureau has brought enforcement actions
against consumer reporting agencies
whose inadequate ‘‘name-only
matching’’ led to reports with inaccurate
derogatory criminal and public records
information on consumers.
10
The
Bureau also has brought enforcement
actions against furnishers who furnish
information with inherent logical
inconsistencies, such as furnishing an
increasing ‘‘original loan amount’’ over
time, where that field should not
change.
11

The FCRA regulates consumer
reporting.
12
The statute was designed to
ensure that ‘‘consumer reporting
agencies adopt reasonable procedures
for meeting the needs of commerce for
consumer credit, personnel, insurance,
and other information in a manner
which is fair and equitable to the
consumer, with regard to the
confidentiality, accuracy, relevancy, and
proper utilization of such
information.’’
13
In interpreting the
statute, Federal courts likewise
highlight the importance of data
accuracy. The FCRA was enacted ‘‘to
protect consumers from the
transmission of inaccurate information
about them and to establish credit
reporting practices that utilize accurate,
relevant, and current information in a
confidential and responsible
manner.’’
14
Because of the importance
of consumer report accuracy to
businesses and consumers, the structure
of the FCRA creates interrelated legal
standards and requirements to support
the policy goal of accurate credit
reporting. Among these is the
requirement that, when preparing a
consumer report, consumer reporting
agencies ‘‘shall follow reasonable
procedures to assure maximum possible
accuracy of the information concerning
the individual about whom the report
relates.’’
15

Inaccuracies in consumer reports can,
in part, be attributed to consumer
reporting agencies failing to maintain
reasonable procedures, such as business
rules, to prevent the inclusion of facially
false data, including logical
inconsistencies relating to consumer
data and/or the status or other
information associated with consumer
accounts, when preparing consumer
reports. Courts have recognized that in
‘‘certain instances, inaccurate credit
reports by themselves can fairly be read
as evidencing unreasonable
procedures[.]’’
16
The Bureau is issuing
this advisory opinion to highlight that
the legal requirement to follow
reasonable procedures to assure
maximum possible accuracy of the
information concerning the individuals
about whom the reports relate includes,
but is not limited to, procedures to
screen for and eliminate logical
inconsistencies to avoid including
facially false data in consumer reports.
There are many logical
inconsistencies that could result in
inaccurate, facially false data being
included on consumer reports in
violation of section 607(b). The
following is a non-exhaustive list of
examples of some of the types of logical
inconsistencies that reasonable
procedures to assure maximum possible
accuracy would screen for and
eliminate:
Inconsistent Account Information or
Statuses
A consumer reporting agency’s
policies and procedures should be
sufficient to detect tradelines with
account statuses or codes that are
plainly inconsistent with other
information reported for that same
account, such that, if included in a
consumer report, at least one item of
information therein would necessarily
be inaccurate. Such inconsistencies may
include:
•An account whose status is paid in
full, and thus has no balance due but
nevertheless reflects a balance due;
17

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64691 Federal Register/ Vol. 87, No. 206 / Wednesday, October 26, 2022 / Rules and Regulations
information, such as also furnishing information
indicating that the accounts were paid in full.’’),
https://files.consumerfinance.gov/f/documents/
cfpb_santander-consumer-usa-inc_consent-order_
2020-12.pdf. The Santander consent order, along
with other CFPB consent orders cited herein, relate
to furnisher obligations under section 623 of the
FCRA, but the underlying logical inconsistencies
involved, as described herein, are illustrative
examples of the types of inconsistencies that a
credit reporting agency’s reasonable policies and
procedures to assure maximum possible accuracy
should be designed to detect.
18
Cf. Consent Order at ¶ 41, In re Hyundai
Capital Am., 2022–CFPB–0005 (July 26, 2022)
(‘‘After furnishing the correct original loan amount
(a field that should not change), Respondent
furnished increased amounts for the ‘‘original loan
amount,’’ making it appear that a consumer had
taken out a larger loan than they had actually taken
out.’’), https://files.consumerfinance.gov/f/
documents/cfpb_hyundai-capital-america_consent-
order_2022-07.pdf.
19
Bryant v. TRW, Inc., 487 F. Supp. 1234, 1242
(E.D. Mich. 1980) (refusing to set aside a jury
verdict finding that a consumer reporting agency
failed to follow reasonable procedures under FCRA
section 607(b) for failing to detect inconsistencies
between a September report containing derogatory
information and an earlier May report on which
such information did not appear even though at
least one of the derogatory items predated the May
report).
20
The Date of First Delinquency herein refers to
the date furnished to a credit reporting agency by
a furnisher that purportedly reflects the month and
year on which the delinquency being reported in
connection with a consumer’s account commenced.
21
15 U.S.C. 1681c(a).
22
15 U.S.C. 1681c(a)(4), (c).
23
15 U.S.C. 1681s–2(a)(5)(A). Under the FCRA,
furnishers must report a Date of First Delinquency
within 90 days of furnishing information regarding
delinquent accounts being placed for collection,
charged to profit or loss, or subjected to any similar
action. Id.
24
Cf. Consent Order at ¶ 36, In re Hyundai
Capital Am., 2022–CFPB–0005 (July 26, 2022)
(‘‘Respondent furnished account data showing that
the consumer account was current, such as
reporting $0 amount overdue or full payments made
timely each month, but then also furnished a [Date
of First Delinquency], a field that inaccurately
indicated that the account was in an ongoing
delinquency.’’); Consent Order at ¶ 17, In re
Santander Consumer USA Inc., 2020–BCFP–0027
(Dec. 20, 2020) (alleging Santander violated FCRA
§ 623(a)(1)(A) by inaccurately furnishing ‘‘internally
inconsistent’’ data, including reporting ‘‘[Date of
First Delinquencies] for accounts that were current,
paid in full (and not delinquent immediately
beforehand), or previously delinquent but
subsequently became current’’).
25
See, e.g., Sheffer v. Experian Information
Solutions, Inc., 2003 WL 21710573, at *2 (E.D. Pa.
2003) (referencing a consumer report that
‘‘indicated both that Plaintiff was born in 1969 and
that the account was opened in 1965’’ as one of two
‘‘inconsistencies’’ that ‘‘provide[d] a basis from
which a jury could infer that the procedures were
unreasonable’’).
26
Gohman v. Equifax Information Services, LLC,
395 F. Supp. 2d 822, 827 (D. Minn. 2005); see also
Sheffer, 2003 WL 21710573, at *2 (referencing the
fact that only one account of approximately two
dozen on a consumer’s report included the
‘‘deceased’’ notation as one of two
‘‘inconsistencies’’ that ‘‘provide[d] a basis from
which a jury could infer that the procedures were
unreasonable’’).
27
This example is consistent with prior Federal
Trade Commission (FTC)’s 40 Years Report. See
FTC, 40 Years of Experience with the Fair Credit
Reporting Act (July 2011) [hereinafter, the ‘‘FTC 40
Years Report’’], available at https://www.ftc.gov/
sites/default/files/documents/reports/40-years-
experience-fair-credit-reporting-act-ftc-staff-report-
summary-interpretations/110720fcrareport.pdf, at
68, comment 8 (‘‘A [consumer reporting agency]
must maintain procedures to avoid reporting
information with obvious logical inconsistencies,
such as a credit account opened when the consumer
was known to be a minor.’’). FTC staff published
the 40 Years Report, an updated compilation of past
FTC interpretations of the FCRA, to coincide with
the transfer of authority to the Bureau. Effective July
21, 2011, the Dodd-Frank Act transferred
rulemaking authority related to most of the FCRA
to the Bureau, giving the Bureau the primary
regulatory and interpretive roles under the FCRA.
•An account that reflects an
‘‘Original Loan Amount’’ that increases
over time, an impossibility by
definition;
18
and
•Derogatory information being
reported on an account, although that
derogatory information predates an
earlier report that did not include the
derogatory information.
19

A consumer reporting agency’s
policies and procedures should further
identify and prevent illogical reporting
of a Date of First Delinquency in
connection with an account.
20
Section
605(a) of the FCRA identifies categories
of information that cannot be included
in a consumer report after a certain
amount of time.
21
For example, a
consumer reporting agency may not
include on a consumer report accounts
placed for collection or charged to profit
and loss that antedate the report by
more than seven years and 180 days.
22

This provision enables consumers to
move beyond their past and rebuild
their credit following a delinquency.
The Date of First Delinquency provided
by a furnisher must reflect the month
and year on which the delinquency
being reported commenced.
23
When
accurate, that date corresponds with the
start of the time period that, once
elapsed, precludes the delinquency
from remaining on a consumer report
under FCRA section 605(a). A Date of
First Delinquency that is more recent
than the start of a delinquency may lead
a report user to believe a consumer had
financial difficulty more recently than is
the case. Similarly, a Date of First
Delinquency reflected on a report where
a consumer is not in fact delinquent
could cause a user to inaccurately
believe that the consumer is delinquent.
Examples of an illogical Date of First
Delinquency may include:
•A Date of First Delinquency
reported for an account whose records
reflect no delinquency, such as through
activity reflecting a current account
(complete history of timely payments,
$0 amount overdue) or through a
current account status code;
24

•A Date of First Delinquency that
post-dates a charge-off date; and
•A Date of First Delinquency, or date
of last payment, that predates the
account open date (for non-collection
accounts).
Illogical Information Relating to
Consumers
A consumer reporting agency’s
policies and procedures should also
identify logical inconsistencies in
consumer information, such that, if
included in a consumer report, some of
the information therein would
necessarily be inaccurate. Such
inconsistencies may include:
•Impossible information about
consumers—for example, a tradeline
that includes a relevant date, such as a
date of account opening, account
closing, date of last payment, or date of
first delinquency, for an account that is
in the future—an obvious
impossibility—or for an individual
account that either predates that
consumer’s listed date of birth or that is
so far in the past (e.g., January 1, 1800)
that it must predate every living
consumers’ date of birth, as individuals
cannot open an account before they are
born;
25
and
•Information about consumer
accounts that is plainly inconsistent
with other reported information, such
that one piece of information must be
inaccurate—for example, if every other
tradeline is reporting ongoing payment
activity, while one tradeline contains a
‘‘deceased’’ indicator, reasonable
policies and procedures should identify
the inconsistency and the consumer
reporting agency should prevent the
inclusion of the inaccurate information
in consumer reports it generates.
26

A consumer reporting agency’s
policies, procedures and internal
controls should further identify and
prevent reporting of illegitimate credit
transactions for a minor. Minors
generally cannot legally enter into
contracts for credit except in certain
limited circumstances. It is logically
inconsistent when a credit transaction is
reported for a person who lacks capacity
to enter into a contract because they are
a minor, unless there are indicia that the
credit transaction is legitimate, such as
in the context of student loans, credit
card authorized users, or emancipated
minors.
27
The Bureau is aware of
evidence showing that instances of
identity theft are especially prevalent
for minors, suggesting that identity
thieves may target minors due to the
value of unused Social Security
numbers and a belief that there is a
lower probability of discovery of the
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28
See, e.g., Richard Power, Carnegie Mellon
CyLab, Child Identity Theft: New Evidence
Indicates Identity Thieves are Targeting Children
for Unused Social Security Numbers (2011),
available at https://www.cylab.cmu.edu/_files/pdfs/
reports/2011/child-identity-theft.pdf.
29
See Consumer Fin. Prot. Bureau, ‘‘CFPB
Releases Tools to Protect Foster Care Children from
Credit Reporting Problems’’ (May 1, 2014), available
at https://www.consumerfinance.gov/about-us/
newsroom/cfpb-releases-tools-to-protect-foster-care-
children-from-credit-reporting-errors/#:∼:text=To
%20submit%20a%20complaint%2C
%20consumers,1%2D855%2D237%2D2392.
30
15 U.S.C. 1681a(f).
31
15 U.S.C. 1681e(b).
32
See Bryant v. TRW, Inc., 487 F. Supp. at 1242.
See also McKeown v. Sears Roebuck & Co., 335 F.
Supp. 2d 917, 930 (W.D. Wis. 2004) (‘‘[R]eceiving
apparently inconsistent credit reports may trigger
an obligation to investigate on the part of the credit
reporting agency .... [because] allowing credit
reporting agencies to act as nothing more than mere
conduits of information would eviscerate the act’s
emphasis on reasonable compilation procedures.’’)
(citing Bryant, 487 F. Supp. at 1242); Wright v.
Experian Info. Sols., Inc., 805 F.3d 1232, 1239 (10th
Cir. 2015) (‘‘Courts have held [consumer reporting
agencies] must look beyond information furnished
to them when it is inconsistent with the [consumer
reporting agencies’] own records, contains a facial
inaccuracy, or comes from an unreliable source.’’).
33
See Stewart v. Credit Bureau, Inc., 734 F.2d at
52; Sheffer, 2003 WL 21710573, at *2.
34
15 U.S.C. 1681(b); see also Guimond, 45 F.3d
at 1333.
35
FTC 40 Years Report, at 68, comment 8.
36
15 U.S.C. 1681s.
37
15 U.S.C. 1681o (emphasis added).
38
15 U.S.C. 1681n (emphasis added); Safeco Ins.
Co. of Am. v. Burr, 551 U.S. 47, 57–58 (2007)
(construing meaning of ‘‘willful’’).
39
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 70
(2007); Fuges v. Sw. Fin. Servs., Ltd., 707 F.3d 241,
253 (3d Cir. 2012).
40
Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010).
41
12 U.S.C. 5512(b)(1).
42
4 U.S.C. 3501–3521.
43
5 U.S.C. 801 et seq.
fraud.
28
This risk may be even more
acute for minors in the United States
foster care system, who often lack a
permanent address and frequently have
their personal information shared
among numerous adults and agency
databases, making them particularly
susceptible to identity theft and
inaccurate credit history information.
29

This heightened risk faced by minors
underscores the importance for
consumer reporting agencies to
maintain procedures designed to
identify illegitimate credit transactions
reported for minors and prevent
inclusion thereof when preparing
consumer reports.
The Bureau is issuing this advisory
opinion to remind consumer reporting
agencies that the failure to maintain
reasonable procedures to screen for and
eliminate logical inconsistencies, to
prevent the inclusion of facially false
data in consumer reports, is a violation
of their FCRA obligation to ‘‘follow
reasonable procedures to assure
maximum possible accuracy’’ under
section 607(b) of the FCRA.
B. Coverage
This advisory opinion applies to all
consumer reporting agencies as defined
in FCRA section 603(f).
30

C. Legal Analysis
Section 607(b) of the FCRA provides
that ‘‘[w]henever a consumer reporting
agency prepares a consumer report it
shall follow reasonable procedures to
assure maximum possible accuracy of
the information concerning the
individual about whom the report
relates.’’
31
The Bureau has interpreted
this requirement in section 607(b) to
include as an integral component that
consumer reporting agencies implement
and maintain reasonable screening
procedures, such as business rules,
designed to identify and prevent the
inclusion of facially false data, such as
logical inconsistencies relating to
consumer or account information, in the
consumer reports they prepare.
Courts have spoken on this topic. For
example, in Bryant v. TRW, Inc., the
court rejected a consumer reporting
agency’s assertion that it had ‘‘no
obligation’’ to compare facially
inconsistent information contained in
two of plaintiff’s consumer reports from
different months because such an
interpretation would make the
consumer reporting agency ‘‘simply a
conduit and eliminate from the [FCRA]
its emphasis on the reasonableness of
the procedures followed in putting
together a consumer report,’’ contrary to
Congressional intent.
32
Courts have also
indicated that the inclusion of facially
false data inaccuracies on a consumer
report may, in certain circumstances,
evidence the unreasonableness of a
consumer reporting agency’s
procedures.
33

It continues to be the Bureau’s
interpretation as outlined in this
advisory opinion that such procedures
are required, consistent with the core
purpose of the FCRA as described in
FCRA section 602—i.e., to require
consumer reporting agencies to adopt
reasonable procedures for meeting the
needs of commerce for consumer credit,
personnel, insurance, and other
information in a manner that is fair and
equitable to the consumer with regard to
accuracy, among other
responsibilities.
34
This interpretation
also aligns with the Federal Trade
Commission’s 40 Years Report, which
states that pursuant to 607(b), a
consumer reporting agency ‘‘must
maintain procedures to avoid reporting
information with obvious logical
inconsistencies, such as a credit account
opened when the consumer was known
to be a minor.’’
35

In addition to provisions authorizing
Federal and State enforcement,
36
the
FCRA contains two provisions relating
to civil liability to consumers for
noncompliance. Section 617 provides
that ‘‘any person who is negligent in
failing to comply with any requirement
imposed under this title with respect to
any consumer is liable to that consumer
in an amount equal to’’ the consumer’s
actual damages, and costs and
reasonable attorney’s fees.
37
Section 616
provides that ‘‘any person who willfully
fails to comply with any requirement
imposed under this title with respect to
any consumer is liable to that consumer
in an amount equal to’’ actual or
statutory damages of up to $1,000 per
violation, such punitive damages as the
court allows, and costs and reasonable
attorney’s fees.
38
A violation is willful
when it is inconsistent with
‘‘authoritative guidance’’ from a relevant
agency.
39
As with any guidance issued
by the CFPB on the FCRA, or
predecessor agencies that were
responsible for administering the FCRA
prior to the CFPB’s creation, consumer
reporting agencies risk liability under
Section 616 if they violate the FCRA in
a manner described in this Advisory
Opinion, regardless of whether the
consumer reporting agencies were
previously liable for willful violations
prior to its issuance.
II. Regulatory Matters
This advisory opinion is an
interpretive rule issued under the
Bureau’s authority to interpret the
FCRA, including under section
1022(b)(1) of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act,
40
which authorizes guidance as
may be necessary or appropriate to
enable the Bureau to administer and
carry out the purposes and objectives of
Federal consumer financial laws.
41

The Bureau has determined that this
advisory opinion 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.
42

Pursuant to the Congressional Review
Act,
43
the Bureau will submit a report
containing this interpretive rule and
other required information to the United
States Senate, the United States House
of Representatives, and the Comptroller
General of the United States prior to the
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64693 Federal Register/ Vol. 87, No. 206 / Wednesday, October 26, 2022 / Rules and Regulations
rule’s published effective date. The
Office of Information and Regulatory
Affairs has designated this interpretive
rule as not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
Rohit Chopra,
Director, Consumer Financial Protection
Bureau.
[FR Doc. 2022–23264 Filed 10–25–22; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2022–1252; Project
Identifier AD–2022–01163–T; Amendment
39–22204; AD 2022–21–05]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Airplanes
AGENCY: Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule; request for
comments.
SUMMARY: The FAA is adopting a new
airworthiness directive (AD) for certain
The Boeing Company Model 737–300,
–400, and –500 series airplanes. This
AD was prompted by a report that a
spoiler sensor failure may go undetected
by the autothrottle (A/T) computer. This
AD requires repetitive built-in test
equipment (BITE) tests of the A/T
computer to detect a spoiler sensor
failure, and corrective action if
necessary. The FAA is issuing this AD
to address the unsafe condition on these
products.
DATES: This AD is effective November
10, 2022.
The Director of the Federal Register
approved the incorporation by reference
of a certain publication listed in this AD
as of November 10, 2022.
The FAA must receive comments on
this AD by December 12, 2022.
ADDRESSES: You may send comments,
using the procedures found in 14 CFR
11.43 and 11.45, by any of the following
methods:
•Federal eRulemaking Portal: Go to
regulations.gov. Follow the instructions
for submitting comments.
•Fax: 202–493–2251.
•Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
•Hand Delivery: Deliver to Mail
address above between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
AD Docket: You may examine the AD
docket at regulations.gov by searching
for and locating Docket No. FAA–2022–
1252; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this final rule,
any comments received, and other
information. The street address for
Docket Operations is listed above.
Material Incorporated by Reference:
•For service information identified
in this final rule, contact Boeing
Commercial Airplanes, Attention:
Contractual & Data Services (C&DS),
2600 Westminster Blvd., MC 110 SK57,
Seal Beach, CA 90740–5600; telephone
562–797–1717; website
myboeingfleet.com.
•You may view this referenced
service information at the FAA,
Airworthiness Products Section,
Operational Safety Branch, 2200 South
216th St., Des Moines, WA. For
information on the availability of this
material at the FAA, call 206–231–3195.
It is also available at regulations.gov by
searching for and locating Docket No.
FAA–2022–1252.
FOR FURTHER INFORMATION CONTACT: Eric
Igama, Aerospace Engineer, Systems
and Equipment Section, FAA, Los
Angeles ACO Branch, 3960 Paramount
Boulevard, Lakewood, CA 90712–4137;
phone: 562–627–5388; email:
Roderick.igama@faa.gov.
SUPPLEMENTARY INFORMATION:
Background
The FAA has received a report that a
spoiler sensor failure may go undetected
by the A/T computer. A review of the
A/T cruise thrust split monitor logic
terms showed that failure of the spoiler
sensor input, including the wiring into
the monitor logic, cannot be detected
without a maintenance action
performed on the flight control system.
Latent loss of spoiler sensor position
data or erroneous spoiler sensor
position data could result in failure of
the A/T cruise thrust split monitor to
activate, which may result in a
significant throttle split leading to
asymmetric thrust. The subsequent lack
of A/T disengagement could lead to an
uncommanded roll. This condition, if
not addressed, could result in potential
loss of control of the airplane or reduced
ability of the flightcrew to maintain the
safe flight and landing of the airplane.
The FAA is issuing this AD to address
the unsafe condition on these products.
The FAA has confirmed that
accomplishment of the applicable BITE
test in the existing airplane maintenance
manual (AMM) detects the spoiler
sensor failure. This test is currently not
required to be performed repetitively,
leading to a potential latent failure if the
test is not performed regularly, which
will be required by this AD.
FAA’s Determination
The FAA is issuing this AD because
the agency has determined the unsafe
condition described previously is likely
to exist or develop in other products of
the same type design.
Related Service Information Under 1
CFR Part 51
The FAA reviewed Boeing Alert
Requirements Bulletin 737–22A1411
RB, dated August 22, 2022. This service
information specifies procedures for
performing an A/T computer BITE test,
‘‘Autopilot Aileron Actuator Test—
DFCS BITE,’’ and, if the test fails,
performing applicable corrective actions
to repair defects and repeating the test
until the test passes. This service
information is reasonably available
because the interested parties have
access to it through their normal course
of business or by the means identified
in
ADDRESSES.
AD Requirements
This AD requires accomplishing the
actions identified in Boeing Alert
Requirements Bulletin 737–22A1411
RB, dated August 22, 2022, already
described, except as discussed under
‘‘Differences Between this AD and the
Service Information,’’ and except for
any differences identified as exceptions
in the regulatory text of this AD.
For information on the procedures
and compliance times, see this service
information at regulations.gov by
searching for and locating Docket No.
FAA–2022–1252.
Differences Between This AD and the
Service Information
Boeing Alert Requirements Bulletin
737–22A1411 RB, dated August 22,
2022, specifies a compliance time of 250
flight hours for the initial BITE test.
However, this AD requires the initial
BITE test within 250 flight hours or 2
months after the effective date of this
AD, whichever occurs first, to ensure
that airplanes with low utilization rates
are addressed in a timely manner.
Justification for Immediate Adoption
and Determination of the Effective Date
Section 553(b)(3)(B) of the
Administrative Procedure Act (APA) (5
U.S.C. 551 et seq.) authorizes agencies
to dispense with notice and comment
procedures for rules when the agency,
for ‘‘good cause,’’ finds that those
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