The agencies will face federal oversight for the first time, as many consumers have complained that the process of updating and correcting credit report errors is much too difficult. Consumers say that the lack of oversight means that the credit reporting agencies are not accountable for their practices, according to GoBankingRates.com.
The CFPB announced that it plans subject the agencies to the same examination process that banks undergo, including reviewing accounting and record-keeping practices, as well as meeting with top company executives.
In addition to the nation’s three largest credit reporting agencies, the same CFPB oversight will extend to the approximately 175 debt collection agencies with more than $10 million in annual collection receipts, GoBankingRates.com reports.
CFPB Director Richard Cordray said that increased oversight “would help restore confidence that the federal government is standing beside the American consumer,” according to GoBankingRates.com.
Federal consumer lawsuits against credit collection agencies reached a record 11,811 last year, the Federal Trade Commission reports, with the average complaint being illegal contact, aggressive collectors and mistaken identities of debtors.
The CFPB proposal will be available for a 60 day comment period to allow for industry participants to evaluate the measure’s effect on their company and to ensure that the guidelines are not overly cumbersome.