Consumer Agency Proposes Rule to Regulate Credit Reporting Agencies, Debt Collectors

NEW YORK (MainStreet) — The Consumer Financial Protection Bureau is looking to add debt collectors and consumer reporting agencies to its jurisdiction.

The bureau proposed a rule on Thursday that would put debt collectors with more than $10 million in annual receipts and consumer reporting agencies with more than $7 million in annual receipts under its supervision.

The CFPB estimates that these parameters would cover approximately 175 debt collection firms and 30 consumer credit reporting agencies, and says the 30 credit reporting agencies affected by the rule hold about 94% of the annual receipts from consumer reporting.

“Consumer financial products and services have become more complex over the years and they have expanded well beyond traditional banks,” said CFPB Director Richard Cordray in a written statement. “Our proposed rule would mean that those debt collectors and credit reporting agencies that qualify as larger participants are subject to the same supervision process that we apply to the banks. “

Cordray said the added oversight  “would help restore confidence that the federal government is standing beside the American consumer.”

The rule was made possible by a stipulation in the Dodd-Frank Wall Street Reform and Consumer Protection Act that gives the CFPB authorization to supervise “large participants” in other nonbank markets for consumer financial products or services. The CFPB has until July 21, 2012, to define who these larger participants are, and the proposed rule is the first step in doing so. The bureau has already been hard at work expanding its regulatory powers to include overseas money transfers and non-bank lenders.

The rule applying to debt collectors and credit reporting agencies has been posted online in the Federal Register, where it will be able for public comment during the next 60 days.