“It’s unconscionable that 40 million American have errors in their credit reports, and that 10 million have errors grave enough to cause them to be denied or charged more for credit or insurance or even be denied a job,” noted Chi Chi Wu, staff attorney at the National Consumer Law Center (NCLC). “There needs to be serious and wholesale reform of the credit reporting industry.”
Although the FTC study was mandated by Congress in the Fair and Accurate Credit Transactions Act of 2003, the power to do something about the problem rests largely with the Consumer Financial Protection Bureau. For that reason, the study reinforces the importance of Senate action to confirm a full-time CFPB director, eliminating any uncertainty over the agency’s supervisory authority. “These findings of widespread and damaging errors in credit reports underscore once again how important the Consumer Bureau is, and how important it is for the Senate to confirm Richard Cordray as Director, so it can get on with the business of making credit markets fairer and safer,” AFR Executive Director Lisa Donner said.
The Dodd-Frank Act, which created the CFPB, recognized the need for heightened oversight of credit bureaus, and gave the CFPB rule-writing, supervisory, and enforcement authority well beyond any that the FTC had possessed in relation to credit reports. But the Senate’s failure to confirm CFPB director Richard Cordray (who was given a recess appointment last year) to a full-term creates a degree of uncertainty about its authority. Recently, 43 Republican Senators sent the President a letter saying that they would block Cordray’s (or anyone else’s) nomination unless and until the bureau is seriously weakened.