CFPB Releases Procedures for Examining Nonbank Entities

Sept 10 - Another step in implementing its nonbank supervision program was taken by the Consumer Financial Protection Bureau by releasing the procedures it will use in examining credit bureaus and other consumer reporting companies.

The Examination Procedures for Larger Participants of the Consumer Reporting Marketis available at: http://files.consumerfinance.gov/f/201209_cfpb_Consumer_Reporting_Examination_Procedures.pdf.
Examiners will be looking to verify that consumer reporting companies are complying with requirements of federal consumer financial law, including:

— Assessing whether companies have reasonable procedures in place to ensure accuracy of the information about consumers that appears in their reports. This will include looking at how companies screen information that they receive for accuracy and how companies match incoming information to a particular consumer’s file to make sure it appears on the right consumer’s report.

— Determining if reporting companies conduct reasonable investigations when consumers dispute the accuracy or completeness of their files. Examiners will also evaluate the systems, procedures and policies used by the company for tracking, handling, investigating and resolving consumer inquiries, disputes and complaints.

— Determining whether reporting companies disclose to consumers their file information and credit scores when required to do so, and whether they have trained personnel to explain the information in their disclosures to consumers.

— Looking to see whether these companies are fulfilling the requirements to address identity theft and to protect active duty military consumers, through such means as fraud and active duty alerts, and blocking of reporting of information that stems from identity theft.

Examiners will evaluate the quality of the regulated entity’s compliance management systems, review practices to ensure they comply with federal consumer financial law, and identify risks to consumers throughout the consumer reporting process. The bureau’s authority to supervise these companies takes effect Sept. 30.