The Consumer Financial Protection Bureau (CFPB) has adopted a rule to begin supervising larger consumer reporting agencies – including the “big three” credit reporting companies Equifax, Experian, and TransUnion – for the first time at the federal level, according to a CFPB press release ‘Consumer Financial Protection Bureau to supervise credit reporting.’ The rule outlining the CFPB’s supervision of larger consumer reporting agencies, which will be effective September 30, 2012, is available here: ‘Defining Larger Participants of the Consumer Reporting Market.’  “Credit reporting is at the heart of our lending systems and enables many of us to get credit, afford a home, or get an education,” CFPB Director Richard Cordray stated in the CFPB press release. “Supervising this market will help ensure that it works properly for consumers, lenders, and the wider economy.” The rule states that the CFPB will supervise consumer reporting agencies with more than $7 million in annual receipts, an estimated 30 companies accounting for approximately 94 percent of the market’s annual receipts. The three largest credit reporting companies issue more than 3 billion consumer reports a year on over 200 million Americans used for determining consumer eligibility and rates for credit. While credit reporting companies are already mandated by the federal Fair Credit Reporting Act (FCRA) for accuracy and fairness in credit reporting, no single federal government agency was overseeing the entire credit reporting market. Under the new rule, the CFPB will be authorized to supervise the larger consumer reporting agencies as defined by the rule, write new rules, and enforce the law as needed. Although a small number of large businesses dominate the credit reporting market, there are approximately 400 consumer reporting agencies in the United States. The market includes:

  • The largest credit reporting companies that sell comprehensive consumer reports;
  • Consumer report resellers that buy consumer information from the largest agencies then typically provide further input to the report by, for example, merging files from multiple agencies, to resell them;
  • Specialty consumer reporting companies that primarily collect and provide specific types of information like on payday loans or checking accounts; and
  • Companies that analyze consumer report data.
The CFPB will supervise credit reporting like banks and other nonbanks already subject to CFPB supervision. Larger consumer reporting agencies will be subjected to a review of compliance systems and procedures, on-site examinations, personnel interviews, and production of relevant reports. A factsheet about CFPB supervision of credit reporting is available here: ‘FACT SHEET: CREDIT REPORTING MARKET.’ The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans applying for a mortgage, choosing credit cards, or using other consumer financial products. Questions and answers on credit reporting are available here: ‘Ask CFPB.’ The CFPB Consumer Advisory about credit reports is available here: ‘Check your credit report at least once a year.’ For more information about consumer reporting agencies and background checks, visit Employment Screening Resources (ESR) – ‘The Background Check Authority’ and nationwide background screening provider accredited by The National Association of Professional Background Screeners (NAPBS®) – at, call 415.898.0044, or email [email protected]. Sources: About Employment Screening Resources (ESR): Employment Screening Resources (ESR) – ‘The Background Check AuthoritySM’– provides accurate and actionable information, empowering employers to make informed safe hiring decisions for the benefit for our clients, their employees, and the public. ESR literally wrote the book on background screening with “The Safe Hiring Manual” by Founder and CEO Lester Rosen. ESR is accredited by The National Association of Professional Background Screeners (NAPBS), a distinction held by a small percentage of screening firms. By choosing an accredited screening firm like ESR, employers know they have selected an agency that meets the highest industry standards. For more information about Employment Screening Resources (ESR), visit, call 415.898.0044 or 888.999.4474 (Toll Free), or email [email protected]. About ESR News: The Employment Screening Resources (ESR) News blog – ESR News – provides employment screening information for employers, recruiters, and jobseekers on a variety of topics including credit reports, criminal records, data privacy, discrimination, E-Verify, jobs reports, legal updates, negligent hiring, workplace violence, and use of search engines and social network sites for background checks. For more information about ESR News or to send comments or questions, please email ESR News Editor Thomas Ahearn at [email protected].]]>