Deirdre Cummings
Legislative Director, MASSPIRG
617-747-4319
[email protected]
Legislative Director, MASSPIRG
617-747-4319
[email protected]
MASSPIRG
Boston, MA – A leading consumer group warned that special interest attacks designed to weaken the Consumer Financial Protection Bureau (CFPB) would also jeopardize its efforts to rein in the Big Three credit bureaus, which make mistakes that deny financial or employment opportunity to millions. The group added that since 2011 the successful CFPB has returned nearly $12 billion to 29 million consumers harmed by Wall Street banks, debt collectors, payday lenders, credit bureaus, and other financial players.
The CFPB has used its strong tools, including supervisory, or examination, authority to investigate and improve compliance with the 1970 Fair Credit Reporting Act by large credit bureaus, especially the so-called Big Three – Experian, TransUnion and Equifax. Recent news reports that the credit bureaus are removing liens and judgments that may be inaccurate info suggest strongly that the CFPB oversight is helping consumers.
“Congress passed legislation in 1970 to hold the credit bureaus accountable, but it never gave the Federal Trade Commission (FTC) the tools it needed to enforce the law or protect consumers,” said Deirdre Cummings, Legislative Program Director for MASSPIRG. “Yet, we are now seeing strong evidence that CFPB oversight is working to clean up inaccurate info. Taking away the CFPB would let the reckless credit bureaus run amok again, allowing their mistakes and abject refusal to fix them to deny financial opportunity again, just as it did for forty years.”
Highlights of recent CFPB actions include:
According to an in-depth analysis of that CFPB “Supervisory Highlights Report” by Chi Chi Wu of the National Consumer Law Center, “The report confirms the long-standing and extensive criticisms that attorneys and advocates have had of the Big Three CRCs [Consumer Reporting Companies] over the decades. As CFPB Director Richard Cordray characterized it, “Standards on the accuracy of information in consumer credit files were distinctly sub-par.”
“Both NCLC and PIRG have conducted numerous studies of the credit bureaus and the two groups’ many reports have documented that the bureaus not only make serious mistakes in credit reports, they fail to reinvestigate them as required by law. Consequently, 5% of consumers have mistakes significant enough to be denied employment or financial opportunity or force them to pay too much for the credit they deserve, according to a 2013 FTC report,” said Ed Mierzwinski, Consumer Program Director, USPIRG added.
“The credit bureaus have for too long functioned as gatekeepers to financial and employment opportunity without adequate oversight,” added Cummings. “Their mistakes mean you won’t get a fairly priced loan, a bank account, a place to live or even a job.”
“You can choose your bank and you can vote with your feet if you don’t like it. You’re stuck, however, with the credit bureaus,” concluded Cummings. “We need to protect a strong CFPB because it’s making a difference for consumers in all financial markets, including credit reporting.”
-30-
MASSPIRG is a non-profit, non-partisan public interest advocacy organization that stand up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. U.S. PIRG is the federation of state Public Interest Research Group. wwwmasspirg.org