What is Metro2?
Metro2 is a standardized format agreed between the major consumer credit reporting agencies for data furnishers to send information electronically. It has some key components that help furnishers comply with the FCRA and ECOA, and to provide for quick and easy updating of credit information. Technically, it is a very specifically formatted, ASCII-encoded text file.
Each Metro2 file includes a header line to provide information about who is sending the data, as well as the reporting period.
Then, each account is represented in separate trade lines in subsequent lines of the file – this includes a base segment with information about payment history, account terms, and the primary borrower. Then additional information for each trade line may be included to provide information on additional borrowers, deferred payments or balloon payments, employer information, and account number changes. If no account requires the information in these, the segments will not be filled in.
The example here shows what a trade line looks like in Metro2, though normally on the file it will all be on one line. The first the account number for this business loan is 12345, and the account was opened January 1, 2010 for $60,000 and the monthly payment of $650 has not been paid since September, so the account is overdue for the October payment of $650. Since there are no co-borrowers for our client, “Credit Builders”, the J2 segment for an associate borrower is filled with blanks or 0s. Same for the K, L, and N segments
Finally, there is a trailer line which provides summary information about the accounts in the file – how many accounts, how many are current, how many are delinquent, how many are closed, how many borrowers are reported, and more.
Where does it come from?
The Consumer Data Insdustry Association (CDIA) is the organization that oversees definitions of Metro2, and writes the Metro2 to English dictionary, also known as the Credit Reporting Resource Guide (CRRG).
What are the most frequent Metro2 questions that CBA reporters ask?
If I’m working with a borrower who is having difficulties, and we lower their payments or waive payments for a period – how can I show this in Metro2? Will it hurt them?
If you have a borrower who is actively working with you, and you’ve set new payment terms (and everyone has signed off on these), you can and should report how they are paying according to these new terms! The most impactful piece is always payment history, and showing that they are current on the agreement in place helps them build positive credit even while dealing with other difficulties.
The important piece to remember is that you need to update the Scheduled Payment Amount, and possibly a Special Comment Code to describe their new agreement. The CRRG provides the definitions of over 50 codes available to lenders to describe the account’s status. If payments are deferred, there is a special segment – the K4 segment – that should provide information about the end of the deferment period.
One of our borrowers is going through bankruptcy, should this be included in our Metro2 report?
Yes! Metro2 provides some specific steps for reporting consumers involved in bankruptcy that are for consumer protection and keeping everyone aware of the consumer’s outstanding obligations. The Consumer Information Indicator is an important piece of this – there are codes specific to each major stage of bankruptcy proceedings and for each chapter of bankruptcy. The CRRG provides the full list along with helpful information about how to report the account’s status and history through each part of the process.
We have had to charge off some of our accounts from our books, how should this information be reported in Metro2?
The most important way to approach reporting charged-off accounts is how the information will show on the borrower’s credit report. While from the accounting perspective, the balance is $0, from a credit reporting perspective, the current balance should reflect the remaining obligation for that borrower. When reporting a charged off account, it should be reported using the Account Status code of 97 (“Unpaid balance reported as a loss – charge-off”) and show the full current balance, past due amount, and the amount of the original charge-off. If the borrower returns and does make payments, that should be reflected in a lower Current Balance and Amount Past Due. If they complete payments, the status would change to an Account Status code of 64 (“Paid/closed – was a charge-off”) with zero balance – if they settled the debt for less than the full amount, then a special comment code should be included to convey that.
What are ECOA codes and how should I use them?
An ECOA code is a code used to describe a borrower’s relationship to the account as described in the Equal Credit Opportunity Act. Borrowers can be the sole individual responsible for the account, joint contractual liability, maker, co-maker or guarantor, or a commercial borrower. The CRRG provides definitions for each, to help you decide which is the most accurate description, or what codes to use to appropriately remove a borrower who was incorrectly reported or was released from a loan.
What is the “Date of First Delinquency”? And why is it important?
The Date of first delinquency is important because it determines when information is required under the FCRA to be removed from a consumer credit report – when it ages off. After 7 years form the date that an account starts to go delinquent, it may no longer be included on a consumer credit report [See §605(a)(4-5) and §605©(1), p. 22-23]. This refers to the first time it goes delinquent leading up to a currently delinquent remark – if the consumer catches up, any previous date will be wiped away. For accounts that are currently delinquent, were delinquent at the time they were closed, or for borrowers who are reported in bankruptcy, a Date of First Delinquency is required for FCRA compliance. The calculation may not be very clear, but the CRRG includes examples to illustrate the process.
We discovered we accidentally reported a borrower incorrectly, how can we fix it?
There are a few ways to do it, and which way will depend on what type of information was incorrect, your software’s capabilities, and how long ago the incorrect information was reported. Some information can be updated by simply sending in the next monthly Metro2 file as you normally do. Some information will require a special type of Metro2 file called a correction file – this has a little more power to update information in payment history, re-opening an account that was incorrectly reported closed, or introduce accounts that need changes to their Portfolio or Account Type, or their Date Opened or High Credit amount. Reporters can also use a form to correct information through eOSCAR, if the consumer hasn’t already disputed the information with the bureaus. Lastly, for errors affecting many accounts, CBA may be able to work directly with the bureaus to make updates.
What causes tradelines (accounts) to duplicate on a consumer’s credit file? How can I avoid these?
There are a few ways in which accounts can duplicate on a consumer’s credit file. One is if identifying information changes – the Account Number, the Portfolio or Account Type, or the Date Opened can all make it look like a new account to the bureau computers. If an account is incorrectly reported as closed, then reported again as an open account, it may appear as a new account to the bureaus. There are ways to prevent these duplications, and may differ depending on your software and the type of change – the CBA Reporter team is happy to help guide you.
Our loans are made out to businesses with a consumer guaranteeing the loan, how can we report on the business and the consumer?With CBA’s partnerships with both consumer credit bureaus and commercial credit bureaus, we can report loans made to businesses and to consumers. There are some important nuances to keep in mind if your software is set to report both consumer and commercial data in the same Metro2 file – there must be a consumer listed first, and the business will be listed in the J2 segment with a W ECOA code to indicate that it is a commercial entity.
How does a borrower’s payment history show in a Metro2 file? How much of the history shows in each file?
Metro2 format can include up to 24 months of past payment history beyond the current reporting period. After the status for the current reporting period, the Payment History Profile shows the status for the account for previous reporting period, then the one before, etc. through to 24 months prior. Not all software systems will include prior history information, and so the bureaus will simply build the history by remembering the account status reported during each reporting period. The CRRG can provide a detailed explanation of the different account history codes to translate the Account Status for each prior month.
How does Metro2 know what kind of account I’m reporting? What are the options that I have to describe this account?
Metro2 uses Portfolio and Account Type codes to describe different types of accounts and provides over 60 different options for data reporters to use to classify their accounts. Portfolio Types help bureaus understand how to process the information like the duration of an account and how to understand monthly payments and balances. The CRRG provides great resources to describe each Portfolio and each Account Type, as well as which Account Types can logically be paired with which Portfolio Types. After all, a Mortgage Portfolio Type doesn’t make sense with a Secured Credit Card Account Type.
There are many questions that come up here and there about other fields, and how they interact, and there is a great deal of nuance to the codes and interactions. If you are interested in knowing more about what a code means, or how it might relate to a situation you have found, refer to your own copy of the CRRG or call or email our team to review your options and best practices.
Have additional questions?
Contact CBA’s Membership team to discuss your questions and concerns in depth.