| Entities | |
| Topics and Issues | Coronavirus Aid Relief and Economic Security Act (CARES Act) (4) |
In October 2023, a coalition of consumer groups led by NCLC, wrote to a long list of federal regulators on disasters and credit reporting. The letter notes that
In light of the recent devastation caused by the wildfires in Maui and by Hurricane Idalia, we once again urge your agencies to help protect the credit reports and scores of consumers impacted by natural disasters. The significant need for credit reporting protections for consumers impacted by natural or declared disaster is discussed in detail in our October 2022 letter advocating for protections for Hurricane Ian and Fiona survivors last year (attached). In summary, we urge your respective agencies to:
1. Encourage the lenders that you regulate or oversee to refrain from reporting negative information to the nationwide consumer reporting agencies (CRAs), i.e. Equifax, Experian and TransUnion, for consumers impacted by the Maui wildfires or Hurricane Idalia. These lenders should be encouraged to refrain from supplying negative information for consumers whose addresses as listed in the lender’s files are within the presidentially declared disaster zone, or if the consumer requests relief or an accommodation due to the aftermath of these disasters. Such encouragement from your agency could include statements that withholding information does not cause an inaccuracy under the Fair Credit Reporting Act.
2. In the alternative, and at a minimum, encourage lenders to follow the credit reporting provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act1 for survivors of the Maui wildfires and Hurricane Idalia. If a consumer is able to obtain an accommodation from a lender, i.e., a forbearance, a payment deferral, a partial payment agreement, or a loan modification, then the lender should report the same status for the account as it stood prior to the accommodation. The federal agencies should encourage lenders to take this action for borrowers in a disaster area who obtain an accommodation or forbearance by clarifying that it does not cause an inaccuracy under the Fair Credit Reporting Act.
This request is similar to the one made in October 2022. when 26 consumer, civil rights, and advocacy groups wrote to federal financial institution regulators on disaster reporting.
The October 2023 letter went to the CFPB, FRB, FDIC, OCC, FHFA, FHA, HUD, FDIC, NCUA, VA, and USDA. The letter was signed by 13 national organizations and some 30 other local organizations. The national organizations signing the letter are the Center for Community Progress, Consumer Action, Consumer Credit and Budget Counseling, Inc., Credit Advisors Foundation, HomeFree-USA, National Affordable Housing Network (NAHN), National CAPACD- National Coalition for Asian Pacific American Community Development, National Consumer Law Center (on behalf of its low-income clients) (NCLC), National Fair Housing Alliance, National Housing Law Project (NHLP), National Housing Resource Center (NHRC), National NeighborWorks Association, and Navicore Solutions.