This is the first time these agencies have been targeted under the supervisory rule. Under the Dodd-Frank Act, the agency has the authority to oversee organizations that are “larger participants” in the consumer financial product industry. The agency is primarily charged with increasing consumer protection standards, MSNBC reports.
Richard Cordray, the director of the CFPB, said that the industries were chosen because of the impact they have had on the lives of consumers since the 2008 financial collapse. He also said that credit reports now have a larger impact on consumer credit and the ability to get a loan, as well as influence employers’ hiring decisions.
“[The credit industry] is a very important influence on people’s lives,” Cordray said, according to MSNBC. “Often shadowy, often not understood by them, and that is one of the reasons why we wanted to make this one of our first priorities.”
The proposal, released on Thursday, will be available for a 60 day comment period. Primary targets of the proposal are debt collection agencies with more than $10 million in annual revenue and credit agencies that gross more than $7 million annually.
Tim Klein, a spokesman for Equifax, one of the largest industry credit report agencies, said in an emailed statement that the company anticipates a partnership with the CFPB, MSNBC reports.
A spokesman for ACA International, an industry trade group, said that debt collection agencies are reviewing the proposed CFPB rule and will cooperate with the agency in its new regulations and oversight, according to MSNBC.