The Consumer Financial Protection Bureau today proposed new regulation to oversee credit bureaus and the largest debt collection agencies in the U.S. This would be the first time such agencies would come under federal supervision.
The proposal would mean that the CFPB would have the authority to examine the books of some 200 debt collectors as well as companies that produce credit reports.
Consumers Union, the advocacy arm of Consumer Reports, has supported the CFPB since its inception. Pamela Banks, senior counsel for Consumers Union, the advocacy arm of Consumer Reports, said that greater oversight would help protect consumers and shine a light on predatory practices.
There is a long history of debt collectors taking advantage of the elderly, students, military personnel and others—some of our most vulnerable populations. For the first time, there would be protections for people who have been targeted and ripped off by these shady firms for years.Consumers Union has been working to educate consumers about credit bureaus and the need to review your credit report for errors. “We hear a lot of complaints from consumers about credit bureaus dragging their feet to correct credit report mistakes," said Banks. "Consumers need and deserve a better system for fixing errors that can cost them in the long run. With this oversight, the CFPB can effectively bring credit bureaus and debt collectors in line.”
This past summer, President Obama chose Richard Cordray, former Ohio Attorney General, to head the financial watchdog. When Senate Republicans blocked a vote on Cordray's appointment, the President made a recess appointment in January. It was the Dodd-Frank Act of 2010 that first established the CFPB.
In a press release Cordray stated "Our proposed rule would mean that those debt collectors and credit reporting agencies that qualify as larger participants are subject to the same supervision process that we apply to the banks. This oversight would help restore confidence that the federal government is standing beside the American consumer."