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Open Recommendations (16 total)

Consumer Reporting Agencies: CFPB Should Define Its Supervisory Expectations

GAO-19-459
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should communicate to CRAs its expectations regarding reasonable investigations of consumer disputes. (Recommendation 2)
Open – Partially Addressed
In November 2022, CFPB Issued a circular on reasonable investigation of consumer reporting disputes. The circular identified certain practices involving the failure to conduct a reasonable investigation of disputes that can violate the Fair Credit Reporting Act. Specifically, the circular stated that consumer reporting agencies and furnishers cannot avoid the obligation to conduct a reasonable investigation of disputes by making consumers satisfy demands beyond what the statute and regulations permit. It also explained that consumer reporting agencies must provide to the furnisher all relevant information regarding the dispute that it received from the consumer. The circular will help inform CRAs of CFPB's expectations regarding the provision of dispute information, but does not communicate CFPB's broader expectations regarding conducting reasonable investigations of consumer disputes.

Private Student Loans: Clarification from CFPB Could Help Ensure More Consistent Opportunities and Treatment for Borrowers

GAO-19-430
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should provide written clarification to nonbank private student loan lenders on their authorities under the Fair Credit Reporting Act to offer private student loan rehabilitation programs that include removing information from credit reports. (Recommendation 1)
Open
As of June 2023, CFBP does not plan to act on this recommendation because the law does not require nonbank private student loan lenders to seek CFPB's approval of student loan rehabilitation programs. CFPB stated that if a financial institution chooses to offer a private student loan rehabilitation program it would be protected under the Fair Credit Reporting Act. Since issuance of our report in May 2019, CFPB was involved in a process led by the Consumer Data Industry Association (CDIA) to revise credit reporting guidelines which included new standards for how lenders should report information on rehabilitated private student loans to credit reporting agencies. In June 2023, some nonbank private student loan lenders told us that, with the development of the new credit reporting guidance, they were comfortable they had authority to offer rehabilitation programs. However, clarification from CFPB could still help resolve any remaining uncertainties among nonbank private student loan lenders.

Consumer Data Protection: Actions Needed to Strengthen Oversight of Consumer Reporting Agencies

GAO-19-196
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should assess whether its process for prioritizing CRA examinations sufficiently incorporates the data security risks CRAs pose to consumers, and take any needed steps identified by the assessment to more sufficiently incorporate these risks. (Recommendation 2)
Open
In July 2020, CFPB staff noted that they were assessing whether, and if so, how and when, to incorporate data security risks into their supervisory prioritization. As part of that evaluation, CFPB is assessing whether those processes should incorporate data security risks CRAs pose to consumers in light of the agency's statutory authorities, supervisory responsibilities, and resources. We have requested additional information from CFPB on their response to this recommendation, but as of September 2023, the agency has not provided us any new information. GAO will continue monitoring CFPB's assessment of prioritization of CRA data security risks.

Financial Technology: Agencies Should Provide Clarification on Lenders' Use of Alternative Data [Reissued with revisions on Mar. 12, 2019.]

GAO-19-111
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of the Bureau of Consumer Financial Protection should, in coordination with the federal banking regulators and with input from relevant stakeholders, communicate in writing to fintech lenders on the appropriate use of alternative data in the underwriting process, including issues to consider when selecting types of alternative data to use. (Recommendation 1)
Open
In December 2019, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (the agencies) issued an interagency statement on the use of alternative data in credit underwriting. The statement broadly highlights some potential benefits and risks of using alternative data and encourages firms to responsibly use alternative data. However, the statement does not provide firms or banks with specific direction on the appropriate use of alternative data. In March 2021, the federal banking regulators and the Consumer Financial Protection Bureau (CFPB) issued a request for information (RFI) on Financial Institutions' Use of Artificial Intelligence, including Machine Learning, and in July 2021, the banking regulators issued proposed third party risk management guidance for comment, both of which discuss alternative data. In June 2023, the banking regulators issued final interagency guidance on third party risk management, but the guidance does not address specific topics, such as alternative data, or specific types of third-party relationships, such as relationships with fintech companies. Further, the banking regulators and CFPB have not issued any documentation related to the RFI as of April 9, 2024. To fully implement this recommendation, CFPB needs to provide, in coordination with the federal banking regulators, finalized written communication that gives banks that engage in third party relationships with fintech lenders specific direction on the appropriate use of alternative data in the underwriting process. Without such direction, banks partnering with financial technology lenders may not effectively manage associated risks, including compliance with fair lending and other consumer protection laws.

Community Banks and Credit Unions: Regulators Could Take Additional Steps to Address Compliance Burdens

GAO-18-213
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should issue public information on its plans for reviewing regulations applicable to banks and credit unions, including information describing the scope of regulations the timing and frequency of the reviews, and the extent to which the reviews will be coordinated with the federal depository institution regulators as part of their periodic EGRPRA reviews. (Recommendation 2)
Open
CFPB staff noted in a letter in April 2018 that CFPB had issued requests for information (RFI) on the regulations their agency had adopted and inherited from other agencies. These requests seek public comment on the need to amend the regulations. Staff noted that they included in their spring and fall 2017 Semiannual Regulatory Agenda descriptions of two initiatives intended to review their regulations to identify opportunities to modernize and streamline provisions. In addition, they noted creation of an internal task force to coordinate and bolster efforts to relieve regulatory burdens. Staff stated that they would continue to publish information on their plans as appropriate. As of May 2020, CFPB's implementation was still in progress. At that time, the agency intended to create a coordinated plan of reviews as a supplement to the assessments of significant rules (Dodd-Frank Act Section 1022(d)) and Regulatory Flexibility Act (RFA) Section 610). In September 2020 and most recently in March 2023, staff advised us that they did not have any update on the implementation of the recommendation.

Private Deposit Insurance: Credit Unions Largely Complied with Disclosure Rules, but Rules Should Be Clarified

GAO-17-259
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau To help state credit union supervisors and privately insured credit unions better interpret Regulation I and inform consumers when an institution is not federally insured, CFPB should issue guidance to clarify whether drive-through windows require disclosures.
Open
CFPB agreed with this recommendation. CFPB said it had explored options for addressing the recommendation and determined it would require notice-and-comment rulemaking. As of September 2023, CFPB had not added this item to its rulemaking program because the issues identified did not appear to CFPB to present significant risk of consumer harm and CFPB had seen no indication of consumer or industry concerns related to this issue.

Private Deposit Insurance: Credit Unions Largely Complied with Disclosure Rules, but Rules Should Be Clarified

GAO-17-259
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2 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau To help state credit union supervisors and privately insured credit unions better interpret Regulation I and inform consumers when an institution is not federally insured, CFPB should issue guidance to describe what constitutes clear and conspicuous disclosure, including minimum signage dimensions and font size for disclosures.
Open
CFPB agreed with this recommendation. CFPB said it had explored options for addressing the recommendation and determined it would require notice-and-comment rulemaking. As of September 2023, CFPB had not added this item to its rulemaking program because the issues identified did not appear to CFPB to present significant risk of consumer harm and CFPB had seen no indication of consumer or industry concerns related to this issue.
Consumer Financial Protection Bureau To help state credit union supervisors and privately insured credit unions better interpret Regulation I and inform consumers when an institution is not federally insured, CFPB should issue guidance to explain and provide examples of which communications are advertising.
Open
CFPB agreed with this recommendation. CFPB said it had explored options for addressing the recommendation and determined it would require notice-and-comment rulemaking. As of September 2023, CFPB had not added this item to its rulemaking program because the issues identified did not appear to CFPB to present significant risk of consumer harm and CFPB had seen no indication of consumer or industry concerns related to this issue.

Consumer Privacy: Better Disclosures Needed on Information Sharing by Banks and Credit Unions

GAO-21-36
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB, in consultation with the other federal financial regulators, should update the model privacy form and, in doing so, consider whether it is feasible to include more comprehensive information about third parties with whom financial institutions share consumer personal information. (Recommendation 1)
Open
CFPB said it is committed to ensuring that financial institutions' disclosures to consumers accomplish their consumer protection and transparency goals and that it will consider GAO's recommendation but has not yet taken any action on it. In May 2021, CFPB noted that any changes to the model privacy form would likely require a joint rulemaking with other agencies including FTC, SEC, and CFTC and such a rulemaking is not currently on its rulemaking agenda. In October 2022, CFPB initiated a rulemaking on personal financial data rights and comments closed in December 2023. While not directly related to the model privacy form, this rulemaking could impact how financial institutions provide information to consumers on data shared with third parties. As of March 2024, CFPB has not taken any actions to change the model privacy form. We will continue to monitor CFPB's rulemaking efforts related to consumer privacy.

Fair Lending: CFPB Needs to Assess the Impact of Recent Changes to Its Fair Lending Activities

GAO-21-393
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should collect and analyze information on the outcomes of its 2018–2019 fair lending reorganization and use that assessment to address any challenges or unintended consequences resulting from the change. (Recommendation 1)
Open
CFPB agreed with this recommendation and has stated its commitment to assessing the effects of the 2019 reorganization. In December 2021, CFPB said it was assessing the impacts of the reorganization and would address challenges or unintended consequences that resulted from that change. In June 2023, a CPFB official said that CFPB was continuing work on this assessment. This recommendation remains open pending further progress from CFPB toward completing this assessment.
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