Alert January 10, 2013

CFPB Releases Report on the Management of Consumer Data by Largest CRAs

The CFPB has released its report on the findings of its first major study on credit reporting practices, Key Dimensions and Processes in the U.S. Credit Reporting System: A Review of How the Nation’s Largest Credit Bureaus Manage Consumer Data.  According to CFPB Director, Richard Cordray, the report provides “baseline knowledge” about the industry. The CFPB is the first federal government agency with a mandate to oversee both credit reporting agencies and those institutions that provide credit reporting agencies with consumer data (see July 24, 2012 and September 5, 2012 Alerts). As detailed in the CFPB’s report, financial institutions, in particular a small number of the nation’s largest banks, provide a significant amount of this consumer data to CRAs. According to the report, the ten largest providers of consumer credit data account for 57% of the information sources CRAs use to compile consumer credit reports. These information sources, known as “trade lines,” include a number of products frequently originated and serviced by financial institutions, such as car loans, home mortgage loans, and credit card accounts.