The Consumer Financial Protection Bureau (CFPB) is preparing for the expiration of eviction moratoriums and other protections by advising entities such as landlords, property management firms, bill collectors, and credit reporting agencies to follow its rules on reporting rental and eviction information.
Inaccurate and untimely information on a tenant screening or credit report can unfairly block a family from safe and affordable housing -- and the CFPB is promising to do what it can to prevent that, the agency said in its announcement about "Bulletin 2021-03: Consumer Reporting of Rental Information."
CFPB boss says landlords, etc. need to get this right
The much-contested and extended nationwide eviction ban from the Centers for Disease Control (CDC) now expires on July 31. But it's not uniform. For instance, California has extended its own ban through Sept. 30.
Federal law lays out obligations for accurately reporting information about tenants of residential rental properties, and for the credit reporting agencies (CRAs) to conduct timely investigations when consumers dispute reports.
CFPB acting director Dave Uejio said in the announcement: "They need to get this right. The CFPB will closely monitor their compliance, and we will use all the tools at our disposal including enforcement, to protect consumers during this critical time."
Where the focus will lie, and what the agency can do
The CFPB says it intends "to look carefully at whether landlords, property management companies, and debt collectors are furnishing accurate information to CRAs and complying with their dispute-handling obligations under the Fair Credit Reporting Act (FCRA)."
That includes a particular focus on whether the reporting entities are reporting arrearages that include:
- Amounts already paid on behalf of a tenant through a government grant or relief program.
- Fees or penalties prohibited by CARES Act section 4024(b) or other laws.
As to what they can do about it, the announcement says, "In the event the CFPB identifies CRAs or furnishers not meeting their obligations under the FCRA, the CFPB will take appropriate action to address violations and seek all appropriate corrective measures, including remediation of harm to consumers."
Check out this link to see what that "remediation of harm" can mean.
The Millionacres bottom line
Evictions -- and how to do them -- are a fact of life for property owners and managers. During the pandemic, the pain that eviction moratoriums -- when they've been enforced -- has saved tenants has instead been transferred to a lot of small landlords, critics of the protections point out.
Now that they are likely ending, doing due diligence with the paperwork for any evictions that follow sounds like a prudent path for affected real estate investors to follow.
The Biden administration has made multiple declarations that it's taking compliance more seriously, around consumer protections in general and around issues of racial disparity and fair housing in particular. The level of enforcement that follows this CFPB dictum will show how much they mean it.