Like many of us, Congress has realized that COVID-19 is an unprecedented event that has had far-reaching economic damage. Due to this, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act). The CARES Act is typically known for the stimulus checks that it provided to many Americans.
However, another less-known, but just as important, feature of the CARES Act is its limit on the reporting of deferred loans. Specifically, under the CARES Act, furnishers of consumer data (i.e. banks, creditors, etc.) are limited in how they can report the status of loans that the furnisher and consumer have agreed to an accommodation.
This accommodation can include deferring one or more payments; a partial payment; forbearance of any delinquent payments; modification of a loan or contract; or any other assistance or relief granted to a consumer who is affected by the coronavirus disease.
If a consumer was current on his or her loan up and until deferment, then the furnisher is required to continue reporting the account to the credit reporting agency as current, not as being in deferment. On the other hand, if the consumer was delinquent on the account before entering deferment, then the furnisher is allowed to continue reporting the account as being delinquent.
However, if the consumer is able to make the account current during the deferment period, then the furnisher is required to update its reporting to say that the account is current.
If you are having any issues with something like this, feel free to give my office a call and set up a free consultation.
