Credit agencies and debt collectors to get federal scrutiny
The Consumer Financial Protection Bureau is proposing to add the three major credit bureaus and debt colletion companies to the list of businesses the federal agency can now oversee.
Kai Ryssdal: Debt collectors and credit reporting agencies are about to get a serious look from federal regulators. Today the Consumer Financial Protection Bureau announced a plan to keep tabs on agencies that have until now largely escaped goverment supervision. That means Experian, Equifax, TransUnion and nearly 200 debt collection agencies in all.
Marketplace's Jennifer Collins has that story.
Jennifer Collins: The announcement puts the three largest credit reporting agencies and a host of debt collectors on alert. Karen Petrou is with Federal Financial Analytics.
Karen Petrou: These companies have never ever had to open their doors to federal gumshoes.
So then credit reporting agencies and debt collectors may be kind of shaking in their boots today?
Petrou: I think they are!
The Consumer Financial Protection Bureau says the three major credit reporting agencies maintain information on 200 million Americans. Thirty million Americans have debt under collection. And this proposal would scrutinize agencies that control two-thirds of the collections. Kathleen Day of the Center for Responsible Lending says it's about time.
Kathleen Day: There's a lot of shenanigans. People are threatened that they owe stuff that they really don't owe. They're told that bad things will happen when they really won't happen.
But James Angel, a finance professor at Georgetown University, says more regulation is not always the answer.
James Angel: The worst case scenario is that the regulators dump a bunch of bureaucracy on the firms that really does nothing to help the consumer.
The proposal is open for comment for about two months.
I'm Jennifer Collins for Marketplace.