The Consumer Financial Protection Bureau released procedures on Wednesday that it plans to use in examining and supervising credit reporting agencies and other consumer reporting firms.
“Consumer reporting, and especially credit reporting, plays a significant role in a consumer’s life,” Richard Cordray, the director of the CFPB, said. “It can dictate whether or not a consumer is able to get a credit card, a mortgage or a student loan. Our supervision program will benefit hundreds of millions of consumers by making sure these companies are playing fairly and by the rules, and our field guide will ensure that all companies are held to the same standards.”
The 2010 Dodd-Frank Act authorized the CFPB to supervise “large participants” in the consumer financial markets, which include consumer credit reporting bureaus. The CFPB’s authority will extend to the supervision of 30 companies that account for 94 percent of the market’s annual receipts.
Examiners will verify that the firms have established “reasonable procedures” to ensure the accuracy of information contained in customer credit reports, determine if the companies “conduct reasonable investigations” in regards to consumer disputes about the accuracy of the reports, determine whether the firms disclose to consumers their information and credit score as required, and verify whether the firms have sufficient identity theft protection standards in place.
The procedures are an extension of the agency’s general Supervisory and Examination Manual. The examination process will be ongoing, and examiners will, as necessary, coordinate with CFPB enforcement staff, who may take enforcement action against any actions deemed harmful to U.S. consumers.
The CFPB will begin supervising consumer credit reporting firms beginning Sept. 30.