The federal agency tasked with protecting consumers from deceptive financial practices released new guidelines to ensure that credit reporting bureaus are adhering to government regulations.
The federal Consumer Financial Protection Bureau now has issued new details for how its employees should evaluate companies that issue credit-related documents to consumers, according to its Consumer Reporting Examination Procedures Document. The document is intended to more clearly spell out what is expected of credit reporting agencies when it comes to assuring that information contained on these documents is correct, and all possible protections are provided to consumers.
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One of the most important things the new CFPB guidelines require is that credit bureaus have “reasonable procedures” in place to make sure that the information they handle is as accurate as possible, the document said. This will typically include having metrics to evaluate the quality of data processed internally, and ensure that no duplicate entries exist on a consumer’s profile. Further, they will need to have protocols in place for dealing with disputes and reports related to incorrect data.
Companies are also required to have trained staff on hand that can assist consumers, the document said. Specifically, they must be able to answer questions and give detailed explanations related to data listed on consumers’ credit reports when a recipient requests more information.
However, another major part of the inspection process seems to be making sure companies are complying with rules related to issuing free copies of documents when required. For instance, the guidelines say that companies are supposed to issue free annual credit reports within 15 days of receiving a request, and Americans who receive an adverse action notice will have to get related credit documents within 60 days of doing so, or after being contacted by a debt collection agency.
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These guidelines only have to be followed by the 30 companies the CFPB defines as “larger participants,” out of the 400 total in the industry. However, those relatively few companies alone handle about 94 percent of all credit reporting nationwide, meaning that nearly all data on consumers’ profiles likely goes through them at some point. For this reason, these regulations could be extremely helpful to borrowers.
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