|March 4, 2014|
Previously published on March 3, 2014
On February 27th, Director Richard Cordray spoke at the CFPB’s Consumer Advisory Board meeting in Washington, D.C.1 The Consumer Advisory Board, which is composed of experts in consumer protection, financial services, community development, fair lending, civil rights, and consumer financial products or services, was created by the Dodd-Frank Act in order to provide advice to CFPB leadership on a broad range of consumer financial issues and emerging market trends.
Director Cordray’s remarks focused on the credit reporting industry. Based on its review of consumer credit reporting complaints received over the past two years,2 the CFPB’s top three concerns with the industry are:
Incorrect information on a credit report. Almost 75% of the credit reporting complaints the CFPB has received relate to consumers believing that their credit reports contain incorrect information.
Frustration with the credit reporting company’s investigation. About 11% of complainants were frustrated with how the company handled a dispute they filed regarding possible errors in their credit report. Director Cordray stated in his remarks that the current system the largest nationwide credit reporting agencies use to resolve such consumer disputes is “completely unacceptable.”
Difficulty obtaining a credit report or score. About 9% of complaints concerned consumers who were unable to obtain their free annual credit report or another copy of their credit report or score.
To address these issues, and to encourage consumers to check their credit report and correct errors, Director Cordray recently sent letters to the nation’s top credit card companies urging them to provide consumers with monthly free credit scores.3 Current law only entitles consumers to one free credit report per year and some issuers already offer their customers free credit scores, but the CFPB now considers providing free credit scores a “best practice in the industry.”
In conjunction with these actions, the CFPB also published a supervisory bulletin warning furnishers (companies that provide information to credit reporting agencies) not to avoid investigating consumer disputes.4 The CFPB is concerned that furnishers are not diligently addressing consumer disputes.
1 See the Director’s prepared remarks http://www.consumerfinance.gov/newsroom/prepared-remarks-of-cfpb-director-richard-cordray-at-the-consumer-advisory-board-meeting/.
2 See the report on complaints http://www.consumerfinance.gov/f/201402_cfpb_snapshot_credit-reporting-complaints.pdf.
3 See a copy of the letter http://www.consumerfinance.gov/f/201402_cfpb_letters_credit-scores.pdf.
4 See the servisory bulletin http://www.consumerfinance.gov/f/201402_cfpb_bulletin_fair-credit-reporting-act.pdf.