Agency Eyes Consumer Data Accuracy in Credit Bureau Files

The Consumer Financial Protection Bureau today released procedures it will use in examining the three credit bureaus and other consumer-reporting companies.
These procedures are a “field guide” for CFPB examiners looking to check that these companies are following the law, particularly in providing accurate credit-reporting information on consumers.
“Consumer reporting, and especially credit reporting, plays a significant role in a consumer’s life. It can dictate whether or not a consumer is able to get a credit card, a mortgage, or a student loan,” said CFPB Director Richard Cordray.
The examination procedures for the larger consumer-reporting entities, including Experian, Equifax and TransUnion, can be found here.
A consumer report may contain such information as a consumer’s credit history and other financial-transaction details.
Lenders use credit reports to evaluate a borrower who is applying for credit cards, mortgages, automobile loans, and other types of credit.
Consumer reports also serve other purposes, such as determining eligibility and pricing for other types of products and services and informing decisions about other relationships.
For example, consumer reports may be used to set premiums for auto and homeowners insurance or to make employment decisions.
The Dodd-Frank Wall Street reform laws gave the CFPB authority to supervise “larger participants” in the consumer financial markets.
The CFPB’s authority will cover an estimated 30 companies that account for about 94 percent of the market’s annual receipts.
Altogether, the three largest credit reporting companies issue more than 3 billion consumer reports a year and maintain files on more than 200 million Americans.
Examiners will be looking to verify that consumer reporting companies are complying with requirements of federal consumer financial law, including:
•    Using and Providing Accurate Information: Examiners will assess whether companies have reasonable procedures in place to ensure accuracy of the information about consumers that appears in their reports. This will include looking at how companies screen information that they receive for accuracy and how companies match incoming information to a particular consumer’s file to make sure it appears on the right consumer’s report.
•    Handling Consumer Disputes: Examiners will determine if reporting companies conduct reasonable investigations when consumers dispute the accuracy or completeness of their files. Examiners will also evaluate the systems, procedures, and policies used by the company for tracking, handling, investigating, and resolving consumer inquiries, disputes, and complaints.
•    Making Disclosures Available: Examiners will determine whether reporting companies disclose to consumers their file information and credit scores when required to do so, and whether they have trained personnel to explain the information in their disclosures to consumers.
•    Preventing Fraud and Identity Theft: Examiners will look to see whether these companies are fulfilling the requirements to address identity theft and to protect active duty military consumers, through such means as fraud and active duty alerts, and blocking of reporting of information that stems from identity theft.

Leave a Reply

Your email address will not be published. Required fields are marked *