BACK

Research and Statistics

CFPB reports credit reporting industry doing better

Summary

The CFPB has made strides to protect consumers from credit report mix-ups, but it may not live to finish the job

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

CFPB’s progress on credit reporting industry could stall

The U.S. consumer finance watchdog is fixing flaws in the credit reporting industry, but it may not live to finish the job.

In a March 2 report, the Consumer Financial Protection Bureau (CFPB) touted positive changes it has effected since it began regulating the credit reporting industry in 2012 – fixing credit bureaus’ data accuracy, repairing a “broken” dispute process and cleaning up information that lenders and other data furnishers report to bureaus.

But Director Richard Cordray said in a speech the bureau is far from completing its work of protecting consumers from credit report mix-ups.

“Our oversight work has spurred a great deal of progress by the consumer reporting companies and their data furnishers in the past several years in improving data accuracy and dispute handling,” he said. “Nonetheless, there is more to be done to improve these practices.”

The CFPB may never get a chance to fully transform the credit reporting industry for the better. Republicans in Congress have been on a mission since the November election to wrest control of the bureau away from the Federal Reserve, replace Obama appointee Cordray or scrap the bureau altogether.

Despite its progress regulating the credit reporting industry, the CFPB continues to deal with a torrent of negative consumer feedback about credit bureaus. In early examinations of the credit reporting agencies, the CFPB found the companies lacked good quality control to check consumer records’ accuracy and were not following federal rules about notifying consumers of dispute results.

CREDIT REPORTING COMPLAINTS
BY THE NUMBERS
  • 185,700: Number of consumer credit reporting complaints fielded by the CFPB as of Feb. 1, 2017.
  • 76: Percentage of complaints related to incorrect credit report information.
  • 9 percent: were related to a credit reporting company’s investigation.
  • 3 out of 4: Of the four companies that generated the most complaints filed with the consumer agency, three were big credit bureaus. For the three months ending November 2016, complaints against Equifax, TransUnion and Experian were exceeded only by complaints against Wells Fargo.

Source: Consumer Financial Protection Bureau

However, the bureau said the companies have since fallen in line with its directives, stepping up their efforts to fix and prevent mistakes and investigate and respond to disputes.

While the credit bureaus have cleaned up their act, federal examiners continue to find violations among data furnishers. Last August it penalized Wells Fargo for failing to update and correct inaccurate information reported to credit reporting companies about some student loan borrowers, among other violations. Meanwhile, other furnishers have thrown more resources at handling disputes, communicating with consumers and correcting erroneous information.

Halting the CFPB’s momentum on credit report mistakes could wreak havoc on many Americans’ financial plans. Negative credit report information – correct or not – can prevent consumers from qualifying for credit cards, auto and student loans, mortgages and other types of borrowing.

But the charge to defang or dissolve the CFPB hasn’t slowed in the months since the election. In a February op-ed piece in The Wall Street Journal, House Financial Services Committee Chairman Jeb Hensarling spelled out how Congress would stop the bureau, which the Texas Republican called “unaccountable and unconstitutional.”

Meanwhile, Cordray vowed to press on with holding credit bureaus’ and furnishers’ feet to the fire.

“This is a realistic and responsible standard that accords with the important ways this industry affects people’s financial lives,” he said.

See related: Poll: Few are aware of embattled consumer watchdog, CFPB’s complaint system makes friends and enemies

What’s up next?

In Research and Statistics

Poll: Few aware of embattled consumer watchdog

Consumers would probably miss the federal watchdog agency if Republicans close or disarm it, but only 17 percent are aware of it

Published: March 2, 2017

See more stories
Credit Card Rate Report Updated: June 19th, 2019
Business
15.61%
Airline
17.54%
Cash Back
17.68%
Reward
17.57%
Student
17.79%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.