We have never taken a stand against the credit reporting system. It is not perfect and there is abuse, which can be frustrating at times, but it could be worse. In fact, given that the dispute process (as mandated by the Fair Credit Reporting Act) is almost entirely self-policing, the credit bureaus do a pretty decent job.
But it Could be Better
Our approach to the three major credit bureaus has been to work with them as they are. Our strength as a credit repair company has been to understand the bureau’s quirks and failings and to make the most of it. Overall, this approach has consistently produced great results for our customers. But it could always be better. In a perfect world every dispute would be adequately considered, there would be no needless resistance, and the frustration factor would be near zero. That may be a long time coming, but we are moving in the right direction.
Introducing the Consumer Financial Protection Bureau
Starting September 30th, 2012 the newly formed Consumer Financial Protection Bureau (CFPB) begins their oversight of the credit reporting industry. This new federal agency means business and they are on your side.
The Creation and Role of the Agency
The CFPB was formed under the umbrella of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was a response to the financial crisis of the late 2000s. The CFPB started operation in July of 2011, and has already begun to flex its muscles. On Wednesday July 18th, 2012 they announced a $210,000,000 fee against Capital One for misleading sales practices involving credit card add-on products. In a pre-CFPB world a class action suit addressing this type of abuse may have gotten traction, but it is as likely that it would drag out for years, get settled, and probably be chalked up as a cost of doing business by the credit card company, even as the abusive practices continued.
An Exciting Future
At the moment it looks like the CFPB will be a significant force for positive change. And they have announced some new targets that we are very excited about, including debt collection and credit reporting, two very powerful industries which play important roles in the financial world and often cause terrible headaches for consumers.
“The Fair Credit Reporting Act sets out an ambitious goal: Credit reporting companies “shall follow reasonable procedures to assure maximum possible accuracy of the information” contained in credit reports. In this context, we are here to correct what is not going well, and we are here to see that this market is made to work better for those who are affected the most. And we will exercise our supervisory authority to make sure that the consumer financial laws are being followed.” – Richard Cordray, Director of the CFPB
Hoping for the Best
Based on our observations of the CFPB thus far, they have the clout, the will, the ability, and the teeth to make a difference. Although credit bureau oversight does not start until September 30th, we would not be surprised to see changes prior. In fact, we believe that the credit bureaus have already gotten busy reviewing their policies and procedures, adding staff, and are getting ready to prove their compliance. Have you been thinking about credit repair? We are thinking it is a great time to act.