During the CFPB’s field hearing today in Detroit, Michigan, Director Cordray was clear in his opening remarks about what the Bureau sees as its supervisory priorities once it begins examining credit reporting agencies (CRAs) starting in September. Cordray outlined three priorities:
1) Ensuring the accuracy of information received by CRAs. Although Cordray acknowledged that accuracy is first and foremost a responsibility of the furnisher of information, he indicated that CRAs should share some of the responsibility. Cordray stated that he wanted the Bureau “to see what the [CRAs] can be doing to test and screen for the quality of information they receive.” This is an important development and could require CRAs to implement additional controls.
2) Ensuring the accuracy of consumer information as CRAs assemble and maintain the information. Cordray highlighted several times in his remarks that the Bureau has received numerous consumer complaints about the inaccuracy of their credit reports. By discussing these complaints in the context of CRA roles in assembling consumer information, Cordray seems to imply that some of the inaccuracies are due to CRA processes for assembling consumer information into a credit report.
3) Ensuring a fair and transparent dispute resolution process. Cordray stated that dispute resolution processes can sometimes be “unreasonably laborious.” He allowed that there are valid reasons for a CRA to conduct an investigation when a consumer disputes a report, but consumers sometimes do not receive clear and timely communication from the CRA about the dispute resolution process or its results.
Although these three supervisory priorities are the Bureau’s initial concern, Cordray left the door open to “adapt and adjust” and take on additional supervisory priorities once the Bureau begins supervising CRAs.
The field hearing today was timed in conjunction with the Bureau issuing its final rule extending its supervisory authority over CRAs who meet the “larger participant” threshold, defined in the Rule as more than $7 million in annual receipts. The Bureau states in its press release that an estimated 30 companies that account for 94 percent of the market will now be subject to the Bureau’s supervisory authority.