CDIA Approves New Metro 2 Code for Active Debt Settlement Reporting

The Consumer Data Industry Association (CDIA) has approved a new Metro 2 Special Comment Code designed to give lenders and other credit risk stakeholders earlier insight into consumers who are actively participating in for-profit debt settlement programs.

Known as the DS (Debt Settlement) code, the new reporting designation allows data furnishers to report accounts where a consumer has formally engaged a third-party debt settlement company before the debt is ultimately resolved. According to the CDIA, the addition addresses a long-standing gap in credit reporting by providing visibility during a stage of the debt settlement process that has historically gone unreported.

The organization announced the new code in a June 2026 industry bulletin, explaining that the Metro 2 Task Force developed it following requests from credit reporting stakeholders and credit scoring organizations seeking greater transparency into changing consumer repayment obligations.

Closing a Reporting Gap During Active Debt Settlement

Until now, consumers enrolled in debt settlement programs often remained indistinguishable from other borrowers until their accounts reached a final resolution. In many cases, the impact of debt settlement activity only became visible after an account was reported as settled for less than the full balance owed.

The CDIA said this created a reporting gap during the period between a consumer entering a debt settlement program and the final settlement being reflected on a credit report.

According to the organization, repayment obligations may change significantly during this interim period without existing Metro 2 reporting providing any indication that negotiations are underway.

The new DS Special Comment Code is intended to provide credit grantors, lenders, and risk model developers with additional context during this stage, allowing them to better understand when repayment terms may be subject to ongoing negotiations through a for-profit debt settlement company.

When Data Furnishers Should Report the DS Code

The CDIA’s guidance specifies that the DS code should only be reported after a data furnisher has verified that a consumer has formally retained a for-profit debt settlement company to negotiate with creditors on the consumer’s behalf.

The designation is intended to reflect active participation in a debt settlement program where the engagement is expected to materially alter the consumer’s standard repayment obligations.

If multiple accounts held by the same consumer at a single financial institution are affected by the debt settlement arrangement, the guidance instructs furnishers to apply the DS code consistently across all applicable accounts.

By establishing clear reporting criteria, the CDIA aims to improve consistency among furnishers while giving users of credit information more timely insight into significant changes affecting consumer repayment activity.

Situations Where the New Code Does Not Apply

Alongside the introduction of the new reporting designation, the CDIA also identified several situations where the DS code should not be used.

The organization stated that consumers participating in nonprofit debt management plans or traditional credit counseling programs should not receive the designation. These programs operate under different repayment structures and therefore fall outside the intended scope of the new code.

Similarly, the DS code should not be applied when a consumer has only made preliminary inquiries or engaged in informal conversations about debt settlement. It is also prohibited in situations involving speculative negotiations where there is no verified agreement with a for-profit debt settlement company.

The guidance emphasizes that a formal, confirmed engagement is required before the code can be reported.

In addition, all other Metro 2 reporting fields must continue to comply with the existing requirements outlined in the Credit Reporting Resource Guide (CRRG).

Implementation Expected in 2027

Although the new Special Comment Code has now been approved, the CDIA has not yet announced an official implementation date.

Instead, the organization said it expects data furnishers will be able to begin using the DS designation during the second quarter of 2027, giving financial institutions, credit reporting stakeholders, and technology providers time to prepare their reporting systems.

Once implemented, the code is expected to provide earlier visibility into active debt settlement participation without altering existing Metro 2 reporting standards. The additional reporting field is intended to supplement current credit reporting practices by reporting verified debt settlement activity before an account reaches its final settlement outcome.

The introduction of the DS code reflects ongoing efforts within the credit reporting industry to improve the accuracy, consistency, and transparency of consumer credit data while providing lenders and other market participants with more timely information about material changes affecting repayment obligations.