The Consumer Financial Protection Bureau (CFPB) posted guidance on its blog on January 27, 2016 reminding consumers of their right to obtain a free copy of their consumer report. The blog posting includes a link to an updated list of consumer reporting companies. This list includes the company name and contact information for the three largest nationwide consumer reporting companies and for several specialty reporting companies sorted by specialty (e.g., employment, tenant, bank, subprime, insurance, medical). It also includes other helpful information for consumers, such as tips on which specialty reports consumers should review depending on their specific situation and which companies also provide free credit scores.
The CFPB’s consumer-friendly blog posting then veers off-course with the following comments:
In prior years, this list has referred to consumer reporting businesses as “agencies” or “bureaus.” These terms can be confusing because they make it sound as if these businesses might be part of the government. But they are not. They are private-sector companies which are overwhelmingly for-profit. In our list, we call them “companies” for greater clarity.
Confusing? The term “consumer reporting agency” is defined in the Fair Credit Reporting Act (FCRA). This term is used throughout the FCRA and has been in use since the FCRA was enacted in 1970. The term “consumer reporting agency” is also used in Regulation V, as published by the CFPB.
It is unclear why the CFPB elected to announce its new position on the use of this terminology in a blog posting. The CFPB’s subtle attack on for-profit businesses is not unexpected. However, the terms “consumer reporting agency” and “credit bureau” are so entrenched in the industry and with consumers that it is difficult to understand why the CFPB now finds these terms to be so problematic.
The “agency” and “bureau” terminology comments were made by an employee in the CFPB’s Office of Consumer Response on a consumer facing blog posting. Consumer financial services companies with term “agency” or “bureau” in their name should review the CFPB guidance. The guidance does not order companies to change their names, but the comments are troubling and may signal future actions by the CFPB in this area. For-profit “agencies” or “bureaus” in the private sector may want to consider whether they should, from a risk management perspective, change their name.