McGlinchey in the News

CFPB Proposes $2.7B Settlement Against Credit Repair Providers

September 6, 2023

Member Gregg Stevens (Dallas) was quoted by Auto Finance News in “CFPB Proposes $2.7B Settlement Against Credit Repair Providers,” where he discusses the ongoing litigation surrounding credit repair providers. The article published September 6, 2023.

The litigation could cut down on credit repair companies’ efforts to inundate lenders with consumer disputes in an effort to help consumers remove trade lines from their credit history and boost their scores, Gregg Stevens, member at McGlinchey, told Auto Finance News. Credit furnishers are required by law to investigate disputes, he said.  

“What may happen with the settlement, if [credit repair providers] are not able to use telemarketing based on the injunction, [dispute volume] may go down,” Stevens said. Credit repair companies “count on a lender not doing an investigation properly.” 

The Fair Credit Reporting Act does not require lenders to investigate direct disputes deemed frivolous or irrelevant as defined by law. However, they must still make that determination and ensure that the dispute meets the requirements to be considered irrelevant, McGlinchey’s Stevens said.  

“They need to look at each dispute carefully,” he said. The CFPB proposed settlement could “cut the number of mass disputes. That may make [lenders’] jobs more manageable and limit the number of disputes that are coming through.” 

The August settlement highlights the CFPB’s effort to go after companies engaged in what the bureau deems are unfair practices against consumers, Stevens said.  

“It aligns with their stated mission to protect consumers against fraud and unscrupulous operators, whether that’s on the credit repair side or the lending side,” he said.  

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