FCRA Section 605

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Restructure the Credit Reporting System to address our economy now, and for the future.

 FCRA Section 605

 The "U.S." currently has an astronomical financial deficit.  To me that means "US", "We, the People." We are a credit oriented nation and as such have within our grasp the ability to help our economy.  It should not be placed upon future generations to resolve what economical mishaps we have created. Our deficit continues to grow and given all of the unanswered questions as to how and or when the economic growth would take place, it only seems logical that by making changes to the Fair Credit Reporting Act it would provide a good start to the stabilization of our economy.

 More and more individuals and families in the United States are seeing their lives and dreams fade away due to our economic and financial crisis. Situations and circumstances due to job loss, medical emergencies or death in the family resulting in a reduction of income, have negatively affected many and usually on a short notice with no ideal resolution available.  If we continue on our current, beaten path, the worst is possibly yet to come.  Unforeseen circumstances, an emergency or just one bad decision has forced many to seek help either by means of debt management, foreclosure and or bankruptcy filing. A decision made not by choice in many cases, rather by circumstances and limited options.  Each month there is an exponential number of foreclosure listings and a great number of them end up as a repossessed property, ruining the local economy and or community with it. Let’s add to that the numerous debt management and bankruptcy filings all of which could become a loss to the lender themselves.  Even if the situation might not lead to either of these outcomes, the reality is someone’s credit rating will more than likely be affected.  With a slow job market and lack of increased pay many individuals are finding it harder to make ends meet, and consequently may default in one or more of their financial obligations.

 The financial burden (s) many have experienced and many more are unfortunately going to experience is stated by the Consumer Reporting Agencies as Section 605 (1 – 5) of the Fair Credit Reporting Act states as follows;

 (1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.

(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.

(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.

(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.

(5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.

 “https://www.consumer.ftc.gov/articles/pdf-0111-fair-credit-reporting-act.pdf" Actual Page Numbered 22.  There is a six page discrepancy due to cover, Introduction and other related articles of explanation.

 As sourced above, any adverse information (the reporting of a late payment by your Creditor, a collection account, a bankruptcy declaration, a civil judgment, pretty much any negative information furnished to any of the Credit Reporting Agencies) can remain in your credit profile for up to seven (7) years. A chapter 7 will remain for 10. Given the financial crisis this country has experienced over the past few years and is still going through, it might be a bit unfair to impose a seven year period before negative information is removed from an individual’s credit report, particularly if our current economy is taken into account. As a nation, we cannot afford to wait seven to ten years to rebuild our economy, much less, reduce our deficit. Allowing individuals whose circumstances deprived them from their financial goals, dreams or the opportunity to achieve such in a more efficient recovery time frame, will not only help the individual or household, but more importantly, our economy as a whole.

The wave of credit applicants will open doors that would allow individuals the opportunity to seek or pursue their dream of home ownership, start or expand businesses and/or achieve financial independence. With lenders being overstocked with foreclosed properties, this seems like a welcoming idea as it would allow lenders to move their stockpiles, thus possibly turning negative portfolios into cash generating ones.  This change of events would also create additional jobs and revitalize communities.  Banks would be able to convert idle assets to capital. Loans to businesses will be more readily available due to the increase in cash flow and in many cases, the improved credit ratings.  All in all, having or being able to establish credit after having faced financial difficulties is in a great sense, not only an opportunity of redemption but also one to make better financial choices.  As consumers, we should have learned from the past as well and should make every effort not to put ourselves in a position where we owe more than we can repay.

 For these and many other positive financial outcomes that would help uplift our economy, I would like to request that Section 605 of the Fair Credit Reporting Act be revised, and that the seven years be limited to four years and the ten years (chapter 7 reporting) reduced to seven.  Additionally, a dismissed bankruptcy means that either the bankruptcy trustee did not approve the case, or that the individual did not pursue their intent when filing such. Consequently, as with any dismissed civil or criminal case, these should not be reported by any Consumer Reporting Agency, or should be limited to no more than 2 years from the date of filing. Though the filing can and will remain part of public records, it is still a dismissed case and nothing else came from initial filing. Therefore, it should not negatively impact an individual’s creditworthiness for seven years, much less ten years (Equifax).  

Any civil judgment should be based on the initial default date that led to such action, and not the date filed as that could have very well been a few to several years before.  A default had to have happened in order for the matter to have been brought before a judge.  As with a collection account where the Agency as per FCRA Section 623 (5) (A) Duty to Provide Notice of Delinquency of Accounts (page 79), must notify the credit reporting agency of the date of delinquency on the account within 90 days of having furnished the information, same rule should apply given a judgment is another effort to collect on a debt.  

 As for secured notes when a declaration of bankruptcy has been processed, in other words, discharged, there are in essence only two possibilities, either the collateral securing the note is surrendered, or the payments towards the note reaffirmed.  In the event of reaffirmation, the Furnisher of Information should properly report the payment status of the account.  When filing bankruptcy, the individual is required to “Disclose” both “Assets” and “Liabilities” as part of the process.  The fact of the disclosure should not entitle a Furnisher of Information to report the secured note as having been “Included in Bankruptcy”, much less, “Discharged in Bankruptcy” as such discharge of the financial obligation did not happen.  The secured note was disclosed as part of the process and if the Furnisher of Information is still accepting and processing payments, then that is what should be reported, the payments and whether or not they are being made in a timely manner.  When it comes to a secured note, the individual is not typically who the lender pursues, rather the interest of the collateral that secured the note.  In the event a secured account has been reaffirmed, it should not be considered to fall under the permanent injunction of the court order.  Creditors of secured loans still have an obligation to comply with FCRA 623 (1) (A) & (D) Responsibilities of Furnishers of Information to Consumer Reporting Agencies (page 78). 

 As relates to Creditors in general with how they process default payments reported by other Lenders, extreme caution may be necessary.  It should be ruled that if an individual defaults on a payment with a Creditor, others should not take this as a negative action against them and proceed to increase the individual’s interest rate or reduce in any manner the person’s credit limit.  Other Creditors should, if anything address the individual and inquire as to what circumstances led to the default and perhaps attempt to help the individual reduce their monthly financial obligations in order to alleviate the burden, rather than adding to it.  The default could have been a simple mistake by the individual or the Creditor and as such, under no circumstance should be a reason for other Creditors to take a negative approach towards that consumer.  As for payments as well, there is another concern.  If an individual defaults on a payment once and that is the only default payment made, consideration after 24 consecutive on time payments can be granted by that Creditor and the account changed to a “Satisfactory” status as that more properly defines that consumer.  Other Creditors should not take the default payment reported as having been made to them in order to take advantage of that particular consumer.

 It is for these reasons that I ask you the reader, to please sign my petition. We need a positive change and one that would help stabilize our current economy, and help create jobs.  Our National Deficit is at a record high and strengthening our current economy and leaving something worthwhile for future generations should be one of our greatest concerns. It is our obligation, our responsibility and should not, under any circumstance be passed down to them.   There will unfortunately always be individuals, who no matter the length of derogatory reporting time, somehow manage to find a way to default on one or another payment to a Creditor.  A large portion of individuals with derogatory entries on the reports had circumstances impact their lives and a second opportunity may allow them the recovery they are in need of.  Improving credit ratings at a quicker rate will allow for better opportunities, especially even now that an Employer can refuse to employ someone merely because of what is on their reports, without concern that the individual might just be trying to meet their financial obligations. 

 Finally, and this pertains to future generations.  It should not be a question of, rather a mandatory learning tool, that 11th and or 12th graders be taught the impact of the credit rating system and how to make credit based decisions as those will ultimately either impact them individually or society as a whole.

 Thank you for reading.  Please share with those you know will support these views or may benefit from the changes.  Greatly appreciate any and all support!  There are other projects in the near future geared towards helping our economy.  We are among the world’s greatest nations and that is in great part due to our resolve, not because we leave issues unresolved. 


 John Felton





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