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CFPB to Monitor Credit Reporting Agencies

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I don’t know what’s more surprising – the fact that the Consumer Financial Protection Bureau will now be supervising any credit reporting agencies that has more than $7 million annual receipts… or that this is the first time those bureaus will be subject to federal oversight. While they have been subject to some regulation, the Fair Credit Reporting Act required that they give you access to your credit report every single year, no one monitored their behavior. What makes it even more interesting is that credit reporting agencies don’t service consumers like you and me, they service lenders, creditors, landlords, and other people who want to know your credit worthiness.

What will the CFPB be doing? Starting September, the bureau will begin watching about thirty bureaus that make up 94% of the industry, including the big three – Experian, Equifax, and TransUnion. The bureaus will be filing reports and be subject to on-site exams into their business practices with three goals – checking whether the information reported to the bureaus is accurate, whether the information is being processed and recorded accurately, and whether the dispute resolution process is working.

I’m glad to see more oversight, especially in this area, because for far too long the bureaus were too haphazard in how they collected and validated data. I had two Social Security Numbers because the credit bureau just stored whatever was reported, even incorrect data. You can’t have two Social Security Numbers!

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9 Responses to “CFPB to Monitor Credit Reporting Agencies”

  1. William @ Drop Dead Money says:

    I agree – it’s one of those headslap moments: why did it take them so long? Anybody who’s been on the wrong of side of one of their errors has experienced the pain they can inflict.

    Because they get their money from companies, not individuals, and companies have no way of knowing when they mess up, they just have no incentive to do it right.

    It’s gotten better in recent years, but it’s nice to see someone with more clout than you and I will be looking over their shoulder.

    Good pickup! :)

    • NateUVM says:

      “Why did it take so long?”

      Not the entire story, but with many Republicans having blocked the creation, staffing and funding of the CFPB for so long, political will has been, as it usually is, a key issue.

  2. “…credit reporting agencies don’t service consumers like you and me, they service lenders, creditors, landlords, and other people who want to know your credit worthiness”. Bingo! This is why consumers really need to review their credit reports to be sure they’re accurate. If you don’t do it, no one will!

  3. Karl says:

    Unfortunately for the majority of the people that have fallen victim to the mis reporting of The Big Three it is not as easy for you to undo THEIR mistakes that destroyed your credit as it was for them to mis report. It is a proven fact that they would rather pay the fines levied on them than to correct their business practices. It is about time that someone is monitoring them ” But is still going to be up to you to correct the mess.”

  4. I find it amazing that some private companies are in charge of our credit score and reports in the first place?! What gives..

    • NateUVM says:

      Because credit scores aren’t a public service? They are a way for financial companies to evaluate individuals’ past financial dealings in an effort to determine how to price their products in their next interaction…?

      The credit monitoring co’s pool the data from all those companies that participate (most, if not all) and distribute the information to those that are intereted(most, if not all). They then charge a fee for providing that service.

      It may feel like a LOT of power in the hands of a few, but there is no “right to receive credit” enumerated in the Constitution. On the flip side, the credit market is not one that you “have” to participate in, either.

      • Cash says:

        Yeah but this is a capitalist country that is all about the marketplace and the only way to get anything in the marketplace is with credit and these companies “own” you essentially with the information they have. I tried calling one of the companies (one of the big’s that start with an E) and every time I call I’m talking to an Indian call center…INDIA!!! Asking me my SSN! No way! You’re in India, I’m not giving you that info! Thats when I realized I was just better off cutting back on things that required any kind of credit. Sad…needs to be a lot more federal regulation.

  5. Eddie says:

    We don’t “have” to participate in the credit market?
    The last numbers I saw said around 60% of employers run a CBR as standard. It’s not a figure I expect to get any smaller in the future.
    Working in banks and credit unions all my life, I’ve seen the size of credit score importance increase each year- with an absence of any corresponding growth in transparency, coherence, or logic in how that number comes about.
    I’ve had what can only be described as mixed reactions to the CFPB so far, but this I have some hope for.

  6. Charles says:

    Considering the first candidate to head the CFPB was “1/32nd Cherokee” with a very checkered background regarding her resume, no wonder folks were hesitant in starting yet another government administration.

  7. Charles says:

    The Consumer Protection Agency and FTC wasn’t enough?


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