WASHINGTON — The Consumer Financial Protection Bureau offered new details Wednesday about how the agency will examine large credit-reporting firms.
In July, consumer-reporting companies became the first sector subject to special CFPB powers to supervise nonbanks that fall outside the direct lending sphere. The bureau said that starting Sept. 30 it would examine credit reporting agencies with more than $7 million in annual receipts. Companies over that threshold represent 94% of the industry.
Under the Dodd-Frank Act, the bureau is authorized to examine both large banks and nonbank lenders, but it can also designate for its supervision program certain "larger participants" in other nonbank sectors that are more indirectly tied to the exchange of credit.
On Wednesday, the bureau released a 55-page guide explaining examination procedures for "Consumer Reporting Larger Participants." Under the procedures, examiners will have to determine if credit reporting companies have taken steps to verify the accuracy of information appearing in reports. Examiners also will look into whether reporting companies have sufficiently investigated customer disputes about 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," bureau said.
The guide called on examiners to assess the companies' compliance with requirements to disclose credit scores and other information about a file to a consumer. They will also evaluate steps by the firms to help prevent fraud and identity theft.
"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," CFPB Director Richard Cordray said in a press release. "Our supervision program will benefit hundreds of millions of consumers by making sure these companies are playing fairly and by the rules, and our field guide will ensure that all companies are held to the same standards."