The Consumer Financial Protection (CFPB) is expanding its supervisory reach to focus on the 30 largest credit reporting agencies and credit bureaus.
As part of the move, for the first time the CFPB will start supervising credit reporting companies such as Experian, Equifax and TransUnion at the Federal level. Although it is not clear yet what effect the oversight will have, Standard & Poor's analysts think that these actions can increase the accuracy and reliability of ABS credit analysis in the long-term.
Starting this fall, the bureau will begin examining credit reporting companies—paying particular attention to the procedures these entities use to address errors on credit reports identified by consumers, according to CFPB director Richard Cordray.
“There are certainly valid reasons why a credit reporting company must conduct a reasonable investigation when a consumer disputes information, and follow the procedures outlined in the law. But the harm done by errors is borne above all by consumers, and they deserve straightforward, effective and timely mechanisms for addressing disputed items,” Cordray said at a field hearing in Detroit on Monday.
Also on Monday, the CFPB adopted a final rule to begin supervising the largest credit bureaus and credit reporting agencies. This rule goes into effect Sept. 30.
Since opening its doors one year ago, the new bureau has heard many complaints from consumers that their credit reports are not accurate and it is difficult to get them corrected.
“Because of the critical role that credit reports play in consumers’ lives, it is our job to make sure we understand the full extent of these problems and address them effectively,” Cordray said.