CFPB files brief in suit against TransUnion, seeks to expand consumer protection
The Consumer Financial Protection Bureau (CFPB) has filed a joint brief with the Federal Trade Commission (FTC) in a case against credit reporting agency TransUnion. The legal move seeks to expand consumer protection in the credit reporting industry. Specifically, the brief argues that reporting agencies - including TransUnion, Experian, and Equifax - have a legal obligation under the Fair Credit Reporting Act (FCRA) to address inaccuracies in consumer credit reports.
In a blog post on the subject, the CFPB notes that errors in credit reports can have devastating consequences for consumers.
Even a seemingly minor inaccuracy in a credit report can lead to a consumer being denied a loan, housing, or job. However, credit reporting companies’ customers are usually the lenders, landlords, and employers who purchase credit reports, not the consumers whose financial lives are affected by them. This raises a real concern that credit reporting companies won’t pay enough attention to disputes or other issues that consumers raise about their reports.
The brief by the CFPB and FTC urges the court to find in favor of a consumer suing TransUnion and notes that:
The brief filed by the CFPB and FTC points out that the FCRA does not contain an exception for “legal” inaccuracies. Rather, the law commands credit reporting companies to follow “reasonable procedures to assure maximum possible accuracy.”
If the court agrees with the CFPB and FTC, consumers will have another layer of protection in their negotiations with credit bureaus and those bureaus will have a legal incentive to take action to make corrections in credit reports.