Consumer Agency Wants Oversight of Debt Collectors, Credit Bureaus
The Consumer Financial Protection Bureau on Thursday sought to bring debt collectors and credit bureaus under its purview, marking the first time the often controversial industries would be subject to federal supervision.
Under its proposed rule, the CFPB would oversee the nation’s largest debt collectors, the primary credit reporting agencies such as Experian, Equifax and TransUnion, and other lesser-known consumer reporting agencies. It is the first attempt by the watchdog agency to define which businesses in the vast swath of nontraditional financial institutions will be subject to the same examination process as banks.
Director of the Consumer Financial Protection Bureau Richard Cordray spoke at the Brookings Institution on Thursday, his first public speech since being named director. (Jan. 5)
“This oversight would help restore confidence that the federal government is standing beside the American consumer,” CFPB Director Richard Cordray said in a statement.
Cordray said a reason why they are targeting these firms is because they have expanded their reach into consumers’ lives during the recession. More people are now being pursued by debt collectors and have watched their credit scores slip.
Those scores have become crucial in the aftermath of the financial crisis. Some employers are even looking at credit scores as criteria for jobs. A car, a home, a college education are all financed by lenders that rely on the score to determine who gets credit and how much they pay for it.