No fines for State Farm over FCRA credit report violations

The federal consumer protection bureau imposed no civil money penalties against the $17 billion-asset State Farm Bank in a consent order filed to resolve previous violations of the Fair Credit Reporting Act (FCRA, Regulation V), according to the consent and stipulation orders filed and announced Thursday evening.

In its release, the Bureau of Consumer Protection (BCFP, formerly known as CFPB) said it found that State Farm Bank, a federal savings association headquartered in Bloomington, Ill., violated the federal fair credit reporting rules by:

  • obtaining consumer reports without a permissible purpose;
  • furnishing to credit-reporting agencies (CRAs) information about consumers’ credit that the bank knew or had reasonable cause to believe was inaccurate;
  • failing to promptly update or correct information furnished to CRAs;
  • furnishing information to CRAs without providing notice that the information was disputed by the consumer; and
  • failing to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information provided to CRAs.

The violations described are numerous and varied. As to the last one noted above, the order says that before September 2016, the bank did not have appropriate policies and procedures in place and provided inadequate training and oversight to agents and team members with respect to FCRA and the permissible use and obtaining of consumer reports.

No penalties are assigned under this action. Instead, the order is set to remain in effect for five years and holds out the prospect of penalties for future violations, which could also take into the account previous violations or patterns of violations.

The BCFP is authorized under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) to assess penalties for any violations of any federal consumer financial law. Based on the type of activity, violations can range from $5,000 to $1 million each day the violation continues.

Consent order

Stipulation and consent to issuance of consent order