CFPB Report Analyzes Credit Reporting Complaints

The Consumer Financial Protection Bureau is looking at instituting new rules regulating credit reporting agencies, based on the volume of consumer complaints that it has received related to consumers’ credit reports. The Bureau yesterday released a report that analyzed the complaints filed by consumers against Equifax, Experian, and TransUnion, spotlighting the changes that the companies have made in responding to complaints filed by consumers.

A copy of the report can be accessed by clicking here.

The report is a requirement under the Fair Credit Reporting Act and looked at nearly 500,000 complaints filed during the 2022 fiscal year, which ended September 30, 2022.

The credit reporting agencies are doing a more substantive job of responding to consumer complaints than they did in years past, and the responses that are being filed are more tailored to the specific complaints that are being filed by consumers. Interestingly enough, despite a marked increase in the total number of complaints the credit reporting agencies have received in recent years, the CRAs are reducing their staffing levels in the departments that handle and respond to complaints, largely to due increased automation.

The most common complaint filed by consumers is incorrect information on their credit reports, accounting for about 40% of all complaints that were filed with the Bureau.

The volume of complaints filed by credit repair organizations is discussed in the report, with the credit reporting agencies blaming third parties submitting “bogus” complaints as the reason why the number of complaints against CRAs has skyrocketed in recent years. The use of third-party screening services in years past — the CRAs have reduced their use of the product — “deprived many consumers” of a response to their complaint, according to the CFPB.

The CFPB did not say what kind of rule it was considering, or provide a timeline for when it might be released. But the CRAs have been a frequent target of the CFPB since Rohit Chopra took over as Director, and that target does not appear to be going anywhere anytime soon.

“Consumers, credit reporting agencies, banks and regulators continue to share a common goal when it comes to credit reports: they should be as accurate and reliable as possible,” the Consumer Data Industry Association, a trade group representing credit reporting agencies said in a statement. “The nationwide credit reporting agencies (NCRAs) play an important role in the financial lives of consumers and we take that responsibility seriously.”

Consumer advocates were excited to hear about the new rule.

“We are excited by Director Chopra’s announcement that the CFPB will be exploring new rules to govern the Big Three, which is an opportunity to adopt deeply needed and long overdue reforms,” said Chi Chi Wu, staff attorney at National Consumer Law Center, in a statement.

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