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CFPB releases credit bureau exam procedures
WASHINGTON (9/6/12)--The Consumer Financial Protection Bureau (CFPB) on Wednesday detailed the procedures agency staff will follow as they examine credit bureaus and other consumer reporting companies this fall.

The CFPB on Sept. 30 will begin supervision and examination of consumer credit reporting agencies. The agency said its examination authority will cover consumer credit reporting agencies with more than $7 million in annual receipts. This threshold includes about 30 firms that account for 94% of total credit report industry receipts.

The supervision program will make sure credit reporting companies "are playing fairly and by the rules" and ensure that all companies are held to the same standards,  CFPB Director Richard Cordray said in a release.

The agency said its examiners will attempt to verify that consumer reporting companies are:

  • Taking the steps needed to ensure the personal information in credit reports is accurate;
  • Conducting "reasonable investigations" when consumers dispute the accuracy or completeness of any information in their credit report;
  • Disclosing information and credit scores to consumers in a timely fashion, and explaining that information to consumers, as needed;
  • Addressing identity theft issues and protecting active duty military consumers through fraud and active duty alerts; and
  • Blocking the reporting of information that stems from identity theft.
Examiners also will evaluate the systems, procedures and policies used by the company for tracking, handling, investigating and resolving consumer inquiries, disputes and complaints, the CFPB said.

The examination process will be an ongoing process of pre-examination scoping and review of information, data analysis, onsite examinations and regular communication with supervised entities, as well as follow-up monitoring, the CFPB said. Enforcement actions may also be taken as needed, the CFPB added.

There are about 400 firms in the $4 billion consumer credit reporting market, according to CFPB estimates. The three largest credit reporting agencies produce more than three billion consumer credit reports each year, and maintain credit records on more than 200 million Americans, the CFPB has said.

Cordray in a July hearing said dispute resolution and credit report accuracy would be two areas of emphasis for the agency. Inaccurate credit reports deprive lenders of the information needed to properly assess credit risk, and can also cause borrowers to be wrongly denied loans, charged higher interest rates, or passed over for jobs, he noted.

The agency plans to work with credit reporting agencies to improve the accuracy of credit report information.
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