These are comments of the National Consumer Law Center (on behalf of its low-income clients) and the Consumer Federation of America in response to the CFPB’s advance notice of proposed rulemaking on whether to raise the threshold for defining larger participants in the consumer reporting market from $7 million in receipts from consumer reports to a higher amount, possibly $41 million. We oppose changing the definition of larger participant in a way that would reduce the number of entities that qualify, from potentially around 36 to 6, which would do nothing to achieve the CFPB’s stated goals of reducing compliance burdens or avoiding the diversion of limited CFPB resources.
Reducing oversight in the consumer reporting market is problematic because of the importance of this data to the financial lives of Americans, and the frequency of complaints against consumer reporting agencies (CRAs). Credit reports and specialty consumer reports may determine whether a consumer can access credit, bank accounts, insurance, government benefits, rental housing, or even a job. Yet too often they are full of erroneous, misleading, or incomplete information. Worse yet, the dispute resolution system mandated by the Fair Credit Reporting Act (FCRA) often fails to adequately address these errors because CRAs conduct inadequate, perfunctory investigations.
Increasing the threshold for CRAs from $7 million to $41 million, would potentially leave only six (6) CRAs as larger participants in this market. While we do not know exactly how much each CRA earns from consumer reports, this change would possibly exclude a number of CRAs that can have a huge impact on a consumer’s financial life, such as bank account screening CRAs (e.g., Early Warning Services or ChexSystems), LexisNexis (used by numerous government agencies) or major resellers of reports used for mortgage lending (e.g., CoreLogic). Excluding these companies as smaller businesses is not only unjustified but frankly absurd, as they are all owned by large multinational corporations with a profound impact on millions of consumers and more than adequate resources to take on the expenses of compliance.
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