On February 19, 2015, the CFPB released its credit report study, entitled “Consumer voices on credit reports and scores.”  After conducting focus groups with 308 consumers in four major metropolitan areas, the study concludes that while many consumers do access their credit scores and credit reports in various ways, confusion about both still persists.

In determining that credit confusion exists, the CFPB classified the consumers involved in the focus groups into three categories, based upon their familiarity with their own credit reports and scores: active checkers, former checkers, and noncheckers. The CFPB also remarked on perceived common characteristics and motivations influencing consumer behavior in each category. The CFPB did note that the focus groups did not represent a statistically valid sample of American consumers. Thereafter, the CFPB relied upon the observations of the focus groups to conclude that additional consumer outreach and education relating to credit is necessary.

But what is not clear is how the CFPB intends to do accomplish this objective, or how this objective may differ in its implementation across the various consumer groups identified in the study. Will education and outreach be achieved through initiatives put forth by the CFPB, the financial services industry, or both? Or will it be accomplished through enforcement? The CFPB is giving conflicting messages about how it would like to proceed down this path.

For one, in his prepared remarks relating to the study’s release, Director Cordray suggested that the CFPB intends to leverage its enforcement authority to more closely regulate the credit reporting industry: “Using our supervision and enforcement authorities,” “we are already bringing significant new improvements to the credit reporting system − and we are only getting started.” But this may not be the approach the CFPB actually intends to take, nor, in our opinion, is it the correct one.

Case in point: notwithstanding Cordray’s enforcement-related comments, in releasing the study, the CFPB also touted the fact that by working with financial services companies, over 50 million consumers now have free and regular access to their credit scores through monthly credit card statements or online. Indeed, the CFPB said that it believes the growing number of companies providing this information to consumers provides an opportunity to engage consumers and educate them about their credit.

But nothing from the CFPB yet suggests practical ways by which the CFPB would like the industry to achieve this desired “consumer engagement and education.” Instead, the study offers only a series of vague suggestions about potential messages to consumers about their credit. But when coupled with Cordray’s comments about expanding enforcement in the credit reporting arena, some companies may be hesitant to roll out new outreach initiatives without any idea how those initiatives will be received by the CFPB.

Our impression is that many in the consumer financial services industry would welcome an opportunity to engage with the CFPB on this issue. As one of the CFPB’s mandates under Dodd-Frank is to educate consumers about financial products, it makes sense for the CFPB to attempt to do this in conjunction with the industry, rather than through adversarial action. This is a perfect opportunity for productive dialogue between the CFPB and the industry – let’s hope the CFPB takes advantage of it.