Are financial institutions required to be considered as a consumer reporting agency under the FACT Act?

• A. True
• B. False
• C. Only if they maintain consumer reporting files
• D. Only if they report to a federal agency

Answer: (B)

Whether a financial institution is a consumer reporting agency depends on what they do, not their existence as a bank or lender. A consumer reporting agency is defined by regularly assembling or evaluating consumer information for the purpose of furnishing consumer reports to third parties. Financial institutions typically collect and maintain customer data for their own business purposes and usually act as furnishers of information to CRAs rather than as CRAs themselves. They are not automatically considered CRAs just because they hold consumer files; they become CRAs only if they regularly compile and provide consumer reports to third parties. Therefore, the statement that they must be treated as a consumer reporting agency under the FACT Act is false.