State Farm Bank, FSB, Bloomington, Ill., has settled with the Consumer Financial Protection Bureau for consumer financial protection and credit reporting violations.
The bureau found that the bank violated the Fair Credit Reporting Act, Regulation V, and the Consumer Financial Protection Act of 2010 over the way it accessed credit reports and reported information to credit agencies.
The bank allegedly obtained consumer reports without a permissible purpose. It furnished information to credit-reporting agencies about consumers’ credit that it knew or had reasonable cause to believe was inaccurate, the bureau said. It then failed to promptly update or correct that information and furnished information without providing notice that the information was disputed by the consumer.
Finally, the bank failed to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information provided to credit-reporting agencies, according to the consent order.
Under the terms of the consent order, State Farm Bank must not violate the Fair Credit Reporting Act or Regulation V and must implement and maintain reasonable written policies, procedures, and processes to address the practices at issue in the consent order and prevent future violations. No fine was levied.
The $17 billion State Farm Bank doesn’t have any retail branches, but operates through a network of bank-certified agents of State Farm Mutual Automobile Insurance Company, who are independent contractors, and bank-certified agent team members, who are employed by agents.