104 lines
5.5 KiB
Markdown
104 lines
5.5 KiB
Markdown
# Credit Bureau Reporting for DRE — Quick Reference
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## Authority: FCRA (15 U.S.C. §§ 1681–1681x) + Texas Fin. Code Ch. 392
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## Can DRE Report to Consumer Credit Bureaus?
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| Debt Type | Report to Equifax/Experian/TransUnion? | Rules |
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|-----------|---------------------------------------|-------|
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| **Consumer debt** (individual, personal/family/household) | ✅ Yes | FCRA furnisher duties + FDCPA pre-reporting contact + TX Ch. 392 |
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| **Corporate B2B debt** | ❌ No | "Consumer" = individual (§ 1681a(c)); no consumer file for business entities |
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| **Sole proprietor debt** | ✅ Yes | Individual = consumer. Report against individual's personal file |
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| **Personal guarantor** | ✅ Yes | FTC Tatelbaum (2001): personal guarantor = consumer with permissible purpose |
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| **B2B + personal guarantee** | ✅ Yes on guarantor, ❌ on entity | Report against guarantor individually; use business bureaus for the entity |
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## FCRA Furnisher Duties (§ 1681s-2)
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### § 1681s-2(a) — Duty of Accuracy (Gov't enforcement only — NO private right of action)
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- Don't furnish info you know or have reason to believe is inaccurate
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- Upon consumer's written notice of error, stop furnishing until confirmation
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- Notify CRAs of corrections
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- Note dispute status during investigation
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### § 1681s-2(b) — Duty to Investigate (Private right of action EXISTS)
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Triggered when a CRA notifies DRE of a consumer dispute:
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1. Investigate within **30 days** (45 if free annual report dispute)
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2. Review all relevant info from CRA
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3. Report results to CRA
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4. If inaccurate → correct with ALL nationwide CRAs
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5. Don't re-report inaccurate info
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**Liability:** Actual damages, statutory ($100–$1,000), punitive, attorney's fees.
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## Pre-Reporting Steps (FDCPA + CFPB Debt Collection Rule)
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Before reporting a consumer debt to a CRA, DRE must:
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1. **Contact the consumer** — in person, by phone, mail (~14 day wait), or electronic (~14 day wait)
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2. **Send validation notice** — amount, creditor, 30-day dispute right. Sending this satisfies the contact requirement
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3. **Wait through the 30-day dispute window** — if consumer disputes in writing within 30 days of validation notice, DRE cannot report until obtaining verification
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## Texas Finance Code Requirements
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### Scope: Consumer Debts Only
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- § 392.001: "Consumer" = individual with consumer debt; "consumer debt" = primarily personal/family/household
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- **Not applicable to B2B debts** (corporate debtors)
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### § 392.101 — Surety Bond
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- $10,000 bond on file with Texas SOS **before** engaging in debt collection
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- Verify at: https://texas-sos.appianportalsgov.com/tpdc-public-search-portal
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### § 392.202 — Dispute & Correction
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When an individual disputes an item in DRE's files:
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| Trigger | DRE's Obligation |
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|---------|-----------------|
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| Dispute received, DRE does NOT report to CRA | Cease collection until investigation done |
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| Dispute received, DRE DOES report to CRA | Investigate + cease collection until investigation done |
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**Response deadline:** Within 30 days → deny, admit, or request more time
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**If more time needed:** Provisionally correct the file + send corrected reports + cease collection
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**If admitting inaccuracy:** Correct within 5 business days + cease collection + notify prior recipients
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### Penalties
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| Violation | Penalty |
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|-----------|---------|
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| Ch. 392 violation | Misdemeanor ($100–$500); actual damages + $100 minimum per viol. + attorney's fees |
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| Ch. 392 violation = DTPA violation | Treble damages available under TX Bus. & Com. Code § 17 |
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| No surety bond | Criminal offense (§ 392.402) + bond claim from consumer |
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## Business Credit Bureaus (for B2B debts)
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| Bureau | Key Product | How to Submit |
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|--------|------------|--------------|
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| **Dun & Bradstreet** | PAYDEX® Score (1–100) | Global Trade Exchange — free to join, requires D-U-N-S Number |
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| **Experian Business** | Intelliscore Plus (1–100) | Data Furnisher Agreement |
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| **Equifax Business** | Business Credit Risk Score | Data Furnisher Agreement |
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**Benefits:** No FCRA/FDCPA restrictions, no 7-year limit, industry standard for B2B.
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## Key Risk Areas
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1. **Pre-reporting contact failure** — FDCPA violation (consumer debts only)
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2. **Reporting before dispute resolved** — FDCPA "cease collection" includes credit reporting (CFPB interpretation)
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3. **Inaccurate data without investigation** — FCRA § 1681s-2(b) private right of action
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4. **Dispute investigation timeout** — 30 days from CRA notice; failure to investigate = lawsuit
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5. **Texas Ch. 392 mismatch** — must follow both FCRA AND Texas parallel procedures. Texas has shorter timelines for correction (5 business days vs. 30 days under FCRA)
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6. **Personal guarantee not documented** — no written guarantee = no permissible purpose to report against individual
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7. **B2B debt reported to consumer CRA** — violates CRA contract + possible FCRA claim if individual's PII is attached without basis
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## Citations
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- 15 U.S.C. § 1681a(c) — "consumer" defined as individual
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- 15 U.S.C. § 1681a(d) — "consumer report" defined
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- 15 U.S.C. § 1681s-2 — Furnisher responsibilities
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- 15 U.S.C. § 1692g — FDCPA validation notice
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- 12 CFR Part 1006 — CFPB Debt Collection Rule
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- Tex. Fin. Code § 392.001 — Definitions
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- Tex. Fin. Code § 392.101 — Surety bond
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- Tex. Fin. Code § 392.202 — File correction
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- Tex. Fin. Code § 392.403 — Civil remedies
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- Tex. Fin. Code § 392.404 — DTPA remedy
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- FTC Advisory Opinion to Tatelbaum (2001) — Personal guarantor = permissible purpose
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**Full report:** `/root/.hermes/references/dre-credit-reporting.md` (25.7KB, 10 sections)
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