Connect with us

News

CFPB Guidance for FCRA in Coronavirus Outbreak

Published

on

Fair Credit Reporting Act

Written By ESR News Blog Editor Thomas Ahearn

On April 1, 2020, the Consumer Financial Protection Bureau (CFPB) – which helps businesses comply with federal consumer financial law – issued guidance to help data furnishers and consumer reporting agencies (CRAs) comply with the Fair Credit Reporting Act (FCRA) in response to the passing of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to lessen the economic impact of the Coronavirus (COVID-19) pandemic.

On March 27, 2020, President Donald Trump signed the CARES Act, which provides emergency assistance to consumers and businesses affected by Coronavirus (COVID-19) and includes provisions addressing consumer reporting requirements. Less than a week later, the CFPB issued its Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act.

“Consumer report information is critical to consumers and industry in determining who obtains credit, insurance, and housing, and at what price, and who obtains employment in many cases. Consumer reporting has enormous reach, as evidenced by the over 200 million consumers in the United States who have credit files and trade lines furnished by over 10,000 providers,” the CFPB guidance stated.

The CFPB guidance highlights the responsibilities of data furnishers under the CARES Act and informs CRAs and furnishers of the CFPB’s flexible supervisory and enforcement approach during this pandemic regarding compliance with the FCRA and Regulation V, regulations that protect consumer information. Below are examples of the flexibility the CFPB (“The Bureau”) intends to provide in the consumer reporting system:

  • Furnishing Consumer Information Impacted by COVID-19: The Bureau reiterates its prior guidance encouraging financial institutions to work constructively with borrowers and other customers affected by COVID-19 to meet their financial needs. While companies generally are not legally obligated to furnish information to consumer reporting agencies, the Bureau encourages them to continue furnishing information despite the current crisis. Furnishers’ providing accurate information to consumer reporting agencies produces substantial benefits for consumers, users of consumer reports, and the economy as a whole. The CARES Act, a section of which amends the FCRA, generally requires furnishers to report as current certain credit obligations for which furnishers make payment accommodations to consumers affected by COVID-19 who have sought such accommodations from their lenders. The Bureau expects furnishers to comply with the CARES Act and will work with furnishers as needed to help them do so. Many furnishers are or will be offering consumers affected by COVID-19 various forms of payment flexibility, including allowing consumers to defer or skip payments, as required by the CARES Act or voluntarily. Such payment accommodations will avoid the reporting of delinquencies resulting from the effects of COVID-19. The Bureau supports furnishers’ voluntary efforts to provide payment relief, and it does not intend to cite in examinations or take enforcement actions against those who furnish information to consumer reporting agencies that accurately reflects the payment relief measures they are employing.
  • Disputes: The FCRA generally requires that consumer reporting agencies and furnishers investigate disputes within 30 days of receipt of the consumer’s dispute. The 30-day period may be extended to 45 days if the consumer provides additional information that is relevant to the investigation during the 30-day period. The Bureau is aware that some consumer reporting agencies and furnishers may face significant operational disruptions that pose challenges for them in investigating consumer disputes. For example, some consumer reporting agencies and furnishers may experience significant reductions in staff, difficulty intaking disputes, or lack of access to necessary information, rendering them unable to investigate consumer reporting disputes within the timeframes the FCRA requires. Furnishers include a wide variety of businesses that vary in size and sophistication and can range from small retailers to very large financial services firms, each of which will face unique challenges due to the COVID-19 pandemic. In evaluating compliance with the FCRA as a result of the pandemic, the Bureau will consider a consumer reporting agency’s or furnisher’s individual circumstances and does not intend to cite in an examination or bring an enforcement action against a consumer reporting agency or furnisher making good faith efforts to investigate disputes as quickly as possible, even if dispute investigations take longer than the statutory timeframe. The Bureau reminds furnishers and consumer reporting agencies that they may take advantage of statutory and regulatory provisions that eliminate the obligation to investigate disputes submitted by credit repair organizations and disputes they reasonably determine to be frivolous or irrelevant. The Bureau will consider the significant current constraints on furnisher and consumer reporting agency time, information, and other resources in assessing if such a determination is reasonable.

The CFPB believes that this flexibility will help furnishers and CRAs
“to manage the challenges the current crisis poses. It also will enable consumers, as well as lenders, insurers, employers, and other consumer report users, to maintain confidence in the consumer reporting system.” Resources for consumers facing the impacts of the COVID-19 pandemic are available on the CFPB website at www.consumerfinance.gov/coronavirus/.

On March 13, 2020, the CFPB offered information to consumers (en Español) on how to protect themselves financially from the impact of the Coronavirus (COVID-19). Federal, state, and local governments are working to respond to the growing public health threat of the Coronavirus. As the country deals with an increase in reported cases, many areas may be impacted by the closure of businesses, schools, public facilities, or events.

These actions – while necessary to help reduce exposures – may bring financial uncertainty for people who could experience a loss of income due to illness or workplace closures. The CFPB is offering information to help consumers in these situations. Consumers with a problem with a financial product or service should try reaching out to the company first. Consumers with complaints can call the CFPB at (855) 411-2372 or submit a complaint.

Coronavirus (COVID-19) is a respiratory illness that can spread from person to person with symptoms of fever, coughing, and shortness of breath. As of April 7, 2020, there more than 1.4 million total confirmed global cases of Coronavirus and the United States leads the world with more than 386,000 confirmed cases, according to research from the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU).

Employment Screening Resources® (ESR) – a leading global provider of background checks – is using best practices for background check processing during the Coronavirus crisis while following the impact of the COVID-19 pandemic on employers and businesses by posting blogs on the ESR News Blog about the subject that are tagged “Coronavirus.” To learn more about ESR, visit www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or
offer legal services or legal advice of any kind or nature. Any information on
this website is for educational purposes only.

© 2020 Employment Screening Resources® (ESR) – Making copies of or
using any part of the ESR News Blog or ESR website for any purpose other than
your own personal use is prohibited unless written authorization is first
obtained from ESR.

Source link

Continue Reading

News

Are Sallie Mae Student Loans Federal or Private?

Published

on

When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

Learn more:

Source link

Continue Reading

News

Tips to do some fall cleaning on your finances

Published

on

Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

Source link

Continue Reading

News

How to Get a Loan Even with Bad Credit

Published

on

Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

Source link

Continue Reading

Trending