The Consumer Financial Protection Bureau (CFPB) will start supervising the 30 largest firms that make up 94 percent of the industry. That includes the three big credit reporting firms: Equifax Inc., Experian and TransUnion. Richard Cordray, the government agency’s director, stated in a recent speech that the CFPB oversight may include on-sight examinations, and that it may require credit bureaus to file reports. Since credit bureaus play such large roles in American’s financial lives, it requires scrutiny!
Gerry Tschopp, a spokesman for Experian, said the government already oversees the industry, because the Federal Trade Commission has been responsible for enforcing the Fair Credit Reporting Act since it became law in 1970. “We’re not a stranger to regulation,” he said. “We’ve been regulated for four-plus decades.”
Source: Investor’s Business Daily
BIIA Comment: It is not only the major credit bureaus who are coming under increased scrutiny, the CFPB is also honing in on major debt collection agencies.
CFPB’s move against credit bureaus is a regulatory overreach. Cordray claims that ‘inaccurate’ credit reports and credit scores are unfairly blocking people from access to credit. To the contrary, US credit reports are highly accurate according to a study conducted by PERC (Policy and Economic Research Council). A 2004 Federal Reserve study found the chance of serious errors finding their way into credit reports appears to be small.
With so much regulating who will regulate the regulators?