Richard Cordray’s short status as director of the Consumer Financial Protection Bureau (CFPB) has already started to deliver results. In an article for Politico, Richard Cordray explains the reasons behind CFPB’s decision to monitor credit bureaus closely.
What American citizen should take from CFPB’s decision to watch closely credit bureaus is that this is a premiere in regulating the industry. Debt collectors, credit bureaus and primary credit reporting agencies such as Experian, Equifax and TransUnion are going to be put under federal supervision.
Basically, under the proposal, all debt collectors holding more than $10 million in annual receipts from debt collection will be supervised. All in all, we are talking about a rule that will allow authorities to take a closer look at over 30 consumer reporting agencies that handle about 94 percent of the consumer reporting market.
In fact, the proposed new regulation would allow the CFPB to have a tighter control over 200 firms. The measure is part of the 2010 Dodd – Frank financial overhaul meant to look at potential deceptive financial practices and areas of the marketplace that are suspected of unlawful activities that managed to escape federal control.
CFPB’s pursuit will place credit bureaus and the like on the same scrutiny level as banks. As CFPB Director Richard Cordray stated, “the oversight would help restore confidence that the federal government is standing beside the American consumer”.
The Consumer Financial Protection Bureau added that the current day market is monopolized by three kinds of firms. Those that collect debt owned by another company for a fee, the firms that buy debt and collect the proceeds for themselves, and finally that debt collection attorneys and the array of law firms that use litigation practices.
The area the CFPB tries to gain federal control has been under a lot of scrutiny over the past few years. And we are talking about a market so huge it easily becomes controversial Over the past decade, the number of Americans followed by debt collection agencies reached 30 million. For instance, according to the Consumer Data Industry Association, three of the largest consumer reporting agencies in the country carry information about 200 million American consumers