Proposed CFPB powers may target credit reporters, debt collectors

The debt collection industry may be forced to confront another series of challenges stemming from the regulatory powers of the Consumer Financial Protection Bureau, as the fledgling government agency is seeking authority to oversee activity among credit reporting and debt collection firms. Proposed rules would grant the CFPB the ability to review the books of credit reporting agencies with more than $7 million in annual receipts. Such companies account for roughly 94 percent of the industry,  include the three major credit reporting agencies: Experian, Transunion and Equifax. In regards to debt recovery services, the rules would afford the CFPB power to review firms with more than $10 million in annual collections, which accounts for 63 percent of the market. Kristy Welsh of Creditinfocenter.com explains that the intention of the proposed rules is to curb the amount of errors in credit reports, but industry experts point out that it will do little more than hinder the ability of collectors to recover legitimate debts. "Though this would be new territory for the Bureau in terms of credit reporting agencies and debt collectors, the Bureau already has similar regulatory power over big banks, mortgage companies and lenders of private student loans and short term loans," Creditinfocenter reports in a statement.