Statement of Consumer Program Director Ed Mierzwinski
“Last summer over 10,000 PIRG members submitted comments to the Consumer Financial Protection Bureau (CFPB) urging strict regulation of credit bureaus and credit scoring firms. We applaud the CFPB for its proposal today to subject the nation’s largest credit bureaus and credit scoring firms to full scrutiny as “larger participants” (CFPB pdf) in the financial marketplace.”
U.S. PIRG research has documented that up to one-quarter of credit reports contain serious errors. For far too long, the credit bureaus have acted as reckless gatekeepers to financial success – not only making too many mistakes that deny or raise the cost of credit – but making it nearly impossible for consumers to fix them. By subjecting the credit bureaus to full supervisory authority, CFPB examiners will be able to look inside the mysterious black box that credit reports and credit scores come from, fix the problems and help consumers get a fair deal in the marketplace.
In today’s proposal, the CFPB also has proposed full scrutiny of large debt collectors and debt buyers. These too are firms that for too long have held themselves above the law, including by seeking to collect debts that were either never owed (from victims of identity theft) or no longer owed (due to state statutes of limitations). Consumers should certainly pay their justified bills, but bill collectors should comply with the law.
When it completes this larger participants rule, the CFPB will gain tools that the FTC has never had to make both the front and back ends of the credit cycle fairer for consumers.”