ARLINGTON, Va.—Is it OK to remove accurate reporting from a members' credit report even if it has a negative effect on their credit score?
It’s a frequent question from credit unions, but the answer is no, according to NAFCU.
"The NAFCU Regulatory Compliance Team has had a variety of questions in the past several months about removing negative reporting from a member's credit report," said NAFCU Senior Regulatory Compliance Counsel Elizabeth Young LaBerge. "Unfortunately, removing accurately reported negative information isn't up to the credit union."
LaBerge said that the Fair Credit Reporting Act requires any credit union that furnishes information to a consumer reporting agency (CRA) to provide accurate information. "Even if information were only removed to benefit a consumer, another possible consideration is the issue of discrimination and fair lending. If the information is removed for one member, that could theoretically raise issues of discrimination if the credit union does not extend that same good will towards others."
Q&A Available
She added that the Bureau of Consumer Financial Protection details reporting obligations in Compliance Bulletin 2016-01 and has a Q&A on this topic.
"While credit unions hate to disappoint members, it appears that requests for 'goodwill adjustments' do represent a real risk of noncompliance," LaBerge concluded.