The CFPB has issued a paper that describes the infrastructure and processes used by Equifax, Experian and TransUnion, the three largest nationwide consumer reporting agencies (NCRAs), to collect, compile and report information about consumers.  The paper is based on research conducted by the CFPB’s Office of Deposits, Cash, Collections and Reporting Markets. 

Among the topics discussed in the paper are the kinds of businesses that furnish information to the NCRAs, the types and causes of inaccuracies in credit files, and how consumer disputes are handled. The paper also emphasizes the importance of information reported by credit card issuers and debt collectors.   

With regard to credit card issuers, the paper indicates that credit card history dominates the information in consumer reports, with information reported by card issuers accounting for nearly 60% of the trade lines in each of the NCRAs’  databases.  Bank card trade lines account for approximately 40% of all trade lines and bank-issued retail card trade lines account for 18%.  

With regard to the debt collection industry, the paper finds that almost 40% of consumer disputes at the NCRAs, on average, have to do with collection items.  It also finds that the number of disputes generated by collection trade lines are four times higher than auto dispute rates and five times higher than mortgage dispute rates.  Among the explanations the paper offers for the high dispute rate associated with collection trade lines are compromised account data and a lack of underlying documentation. 

Given the paper’s focus on credit card and debt collection trade lines, credit card issuers, debt collectors and debt buyers should expect CFPB examiners to take a long hard look at their compliance with the Fair Credit Reporting Act.