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Consumer protection agency proposes oversight of debt collection, credit ratings

In its first year of operation, the new U.S. Consumer Financial Protection Bureau is steadily expanding the scope of its responsibility. The new agency proposed a new rule in February that would give it oversight authority of debt collectors and consumer reporting agencies, according to Bloomberg.

The Washington-based CFPB hopes to bring credit bureaus under its purview.

The Washington-based CFPB hopes to bring credit bureaus under its purview.

Specifically, the new rules would allow the CFPB to apply the same review processes used on banks to rate credit bureaus such as Experian, Equifax and TransUnion, as well as several related businesses such as debt collectors.

The agency would review information from these companies for regulatory compliance with the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. In both cases this would represent the first federal regulation of the industry.

“This is a very important influence on people’s lives,” said CFPD Director Richard Cordray, according to Reuters. “Often shadowy, often not understood by them, and that is one of the reasons why we wanted to make this one of our first priorities.”

Cordray was hopeful that the new regulations could prove effective, as well, given that the ratings his agency would hand out could prove important for publicly traded companies.

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