The Consumer Financial Protection Bureau (CFPB) was formed in July 2010. Since this time it has been investigating many institutions including banks, consumer credit reporting agencies, credit card issuers, student loan originators, payday lenders, and mortgage lenders. Basically the Consumer Financial Protection Bureau was created to protect the consumer from deceptive practices by both banks and non-banks.
Supervision begins September 30
Effective September 30, 2012, the Consumer Financial Protection Bureau will begin supervising the largest consumer reporting agencies, with more than $7 million in annual reports. This is approximately 94 percent of the industry and about 30 companies. These companies include the three largest – Equifax, Experian, and TransUnion, which issue over 3 billion consumer reports a year on over 200 million U.S. consumers. Under the new rule, the Consumer Financial Protection Bureau will be authorized to supervise the larger consumer reporting agencies, write new rules, and enforce the law as needed. Even though there are 30 being supervised, there are approximately 400 consumer reporting agencies in the United States.
The consumer credit reporting agencies were mandated by the Fair Credit Reporting Act (FCRA) for accuracy and fairness in credit reporting. No single federal government agency was overseeing the entire credit reporting market until now.
“Credit reporting is at the heart of our lending systems and enables many of us to get credit, afford a home, or get an education,” CFPB Director Richard Cordray stated in the CFPB press release. “Supervising this market will help ensure that it works properly for consumers, lenders, and the wider economy.”
Errors happen in any industry. The difference is an error on your credit report can cost you money or a job. Consumers should have some peace of mind that the government will be policing the industry, The Consumer Financial Protection Bureau’s involvement should also signal a wake-up for consumers to be more vigilant. You should check your credit report for errors, by requesting your free credit report at AnnualCreditReport.com or call 1-877-322-8228.
Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here.