PHOENIX, AZ — (Marketwire) — 02/22/12 — As announced in its press release February 16, the Consumer Financial Protection Bureau (CFPB) has proposed that it be given the authority to oversee the activities of and . “Should oversight be granted, this would be good news for consumers,” says Kristy Welsh of .
The proposed new rule would give the CFPB the ability to review the books of (CRAs) having more than $7 million in annual receipts, representing 94 percent of the market. That would include the three major credit reporting agencies — Experian, Transunion and Equifax. The new rule would also give the CFPB the supervisory power over debt collectors with more than $10 million in annual collections, representing 63 percent of the market.
Lenders use credit reports when evaluating applications for credit, including , home mortgage loans and automobile loans. According to the Consumer Data Industry Association, each year there are 36 billion updates to consumer files and three billion reports are issued. The three largest CRAs alone maintain information on 200 million Americans. “Oversight would improve accuracy of the currently error-ridden data. It is estimated that 30 percent of American have errors,” says Welsh.
According to the CFPB, about 30 million Americans have under collection with the average amount $1,400. Abuses by firms include hounding people who do not actually owe debts, abusive language and attempts to collect debts too old to be legally pursued.
Though this would be new territory for the Bureau in terms of credit reporting agencies and debt collectors, the Bureau already has similar regulatory power over big banks, mortgage companies, and lenders of private student loans and payday loans.
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CreditInfocenter.com is a one-stop destination for consumers looking for advice and tips on how to and maintain good credit. CreditInfocenter.com founder Kristy Welsh is also the author of , a tongue-in-cheek guide to managing your credit. Welsh is an advocate of showing readers and viewers everything they need to know to repair their credit themselves. Many positive corrections can be made for the cost of a postage stamp.
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