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CUNA urges careful FACT Act definitions
WASHINGTON (2/14/08)—The Credit Union National Association (CUNA) supports proposed Fair and Accurate Credit Transactions (FACT) Act rules and guidelines intended to enhance the “integrity” and “accuracy” of information furnished to credit bureaus. CUNA argues, however, that both terms should be defined in guidelines, not within the rules themselves. Under an inter-agency plan proposed last November, consumers would be able to directly dispute inaccuracies about certain information reflected on their consumer reports with the furnishers of that information. The proposal was issued by the National Credit Union Administration (NCUA), the Federal Trade Commission (FTC), and other agencies are required to develop rules under provisions of the Fair and Accurate Credit Transactions (FACT) Act. In comment letter to the NCUA and FTC, CUNA said it is “very concerned” with the proposal’s definition of accuracy, which requires that the information provided to the credit rating agencies (CRAs) be completely “without errors.” CUNA suggested that the phrase be deleted from the definition. CUNA said that it believes the definition of “accuracy” should also apply to the provisions of the proposal that require furnishers of credit information to investigate disputes, based on a direct request from the consumer. Further, CUNA argued that it is unnecessary for the definition to include a requirement that furnishers update the information as necessary to ensure the information is correct. “Credit unions recognize that updating the information is necessary, but are concerned that new regulatory requirements may necessitate significant operational changes. The agencies should clearly indicate that institutions will not be required to undergo arbitrary exercises, but will be expected to keep the information current,” the CUNA letter recommended. .CUNA also urged caution with the definition of “integrity” found in the regulators’ plan and warned that the definition should not dictate the form and manner in which credit information should be reported. CUNA also recommended to the NCUA that its examiners be trained so they understand that many credit unions may not need to develop extensive policies and procedures. Also, the agencies should consider developing model policies and procedures that credit unions may use. Use the resource link below to read CUNA’s complete comment.


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