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Mon July 16, 2012
Federal consumer watchdog agency will scrutinize credit reporting industry
The Consumer Financial Protection Bureau will start keeping close tabs on credit reporting companies, the Bureau's President announced Monday.
Richard Cordray told a field hearing in Detroit that CFPB—a relatively new federal agency created in the wake of the 2007-8 financial crisis--will start monitoring the largest credit reporting companies “just like we examine big banks” in September.
He says there’s still a lot we don’t know about the credit reporting industry, because no federal agency has had access to all the relevant information.
“It affords an opportunity to gain a more thorough understanding of their business models and business practices, to work with them to correct any problems we find, and to find ways to resolve matters that may be causing harm to consumers," Cordray said.
Cordray noted such oversight is critical because credit scores now play a bigger role than ever in Americans’ lives.
He notes credit scores aren’t just used to determine loan eligibility anymore. They’re also used by landlords, insurance companies, and even some employers.
“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.
Cordray added that one of the Bureau’s biggest goals is to make sure there’s a “dispute-resolution process” for consumers to correct errors on their credit reports.