As most Alabama readers know, credit card debt, bankruptcy and other aspects of a person's financial history can have a large impact on their credit score. Credit reporting agencies gather information about an individual's debt and payment history and compile the information in reports that sum up financial history. These reports can affect everything from your ability to get credit, to afford a home, and to get an education.
Because the reports are such an integral part of the financial system and influence consumer's financial lives, it has been decided that the system needs to be closely monitored to ensure that it works properly for consumers, lenders and the wider economy. The Consumer Financial Protection Bureau announced on Monday that the agency will begin to supervise credit reporting companies beginning in September.
There are around 400 consumer reporting agencies in the U.S., the largest being Equifax, Experian and TransUnion. It is estimated that 30 of these companies have more than $7 million in annual receipts. These agencies will enter the CFPB's nonbank supervision program starting in September. The bureau says it plans to conduct exams following that but will publish more examination guidance.
A spokesperson for the CFPB said that the agency will review compliance systems and procedures, on-site examinations, and discussions with relevant personnel. The process will be similar to the ways in which the CFPB has supervised banks and nonbanks currently under its oversight. The agency will also provide strict federal supervision of debt collection companies.
Source: Collections&CreditRisk, "Large Credit Reporting Agencies Soon Under CFPB Authority," July 16, 2012