The federal Consumer Financial Protection Bureau, or CFPB, is stepping up its efforts to protect consumers from certain financial companies' shady practices.
In separate statements, the agency recently announced it has begun supervision of larger consumer debt collection companies and start to accept and process consumers' complaints about credit reporting companies. Both activities are new at the federal level, though states also have authority and regulations in these areas.
The new supervision of debt collectors will give the federal agency oversight of larger companies that aren't banks but are involved in consumer debt collection activities. This authority will extend to about 175 debt collectors, which account for more than 60 percent of the industry's annual receipts in the consumer debt collection market, the CFPB said.
CFPB Director Richard Cordray said in the statement that millions of consumers are affected by debt collection.
"We want to make sure they're treated fairly," Cordray said. "We want all companies to realize that the better business choice is to follow the law -- not break it."
Examiners will assess potential risks to consumers and review whether debt collectors are complying with federal law. Issues such as proper disclosure, data accuracy, complaint resolution and harassment of consumers will be included, the CFPB said.
The new complaints system will collect and handle grievances involving major credit reporting bureaus, consumer credit report resellers and specialty consumer reporting companies that collect data about payday loans, checking accounts and the like.
The CFPB system already handles complaints about credit cards, mortgages, bank accounts, consumer loans and private student loans.
Debt collection and credit reporting are interconnected since debt collectors often report the status of consumers' collection accounts to credit reporting bureaus, the CFPB said. If the debt collector's information is wrong, the consumer might be denied a mortgage, car loan or other type of financial product due to an erroneous credit report.
Have you ever been denied a loan because of inaccurate information?
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