Mon Jul 16, 2012, 12:56 AM

MindMover (5,008 posts)

Credit bureaus to get federal oversight for first time

Source: MSNBC

America’s credit bureaus are about to get some new scrutiny. The Consumer Financial Protection Bureau adopted a rule on Monday that will allow it to keep an eye on the nation’s credit reporting industry.

Starting September 30th, the agency will monitor the country’s big credit bureaus and conduct on-site examinations to see if these companies are complying with the law. It’s similar to what the CFPB already does with the nation’s big banks.

This is the first time the federal government will be take an active role in trying to clean up an industry that has a reputation for sloppiness and arrogance, consumer advocates say. Until now, no single federal government agency could access all the information necessary to generate a complete picture of what’s happening inside these companies. The CFPB will enforce the laws already on the books and write new rules as needed.

“Supervising this market will help ensure that it works properly for consumers, lenders, and the wider economy,” CFPB director Richard Cordray says in a prepared statement. “There is much at stake in making sure it is both fair and effective.”

Read more: http://bottomline.msnbc.msn.com/_news/2012/07/16/12758288-credit-bureaus-to-get-federal-oversight-for-first-time?lite?ocid=twitter

Throw the rabble some crumbs .... this should have been done when credit started ....

It has been obvious to anyone with indebtedness or the need to get credit that this is one of the most corrupt aspects of doing business with bankers ....

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13 replies	Author	Time	Post
Credit bureaus to get federal oversight for first time (Original post)	MindMover	Jul 2012	OP
I think collection agencies are run by criminals.	Lint Head	Jul 2012	#1
Crumbs is correct.	limpyhobbler	Jul 2012	#2
Your over the topness .... really is sarcasm and could be reported to my local	MindMover	Jul 2012	#3
I'm just saying we should use all legal means to control the credit bureaus and end them.	limpyhobbler	Jul 2012	#4
Anything is legal if you have enough money ....	MindMover	Jul 2012	#5
beats me, but here are some ideas	limpyhobbler	Jul 2012	#8
Bump. n/t	Tx4obama	Jul 2012	#6
'About 30 such companies	elleng	Jul 2012	#7
Once upon a time...	neeksgeek	Jul 2012	#9
It's about time... Power corrupts; Absolute power corrupts absolutely.	justice1	Jul 2012	#10
But Obama is so much like Romney, it's hard to tell the difference...	Comrade_McKenzie	Jul 2012	#11
Supervising the Market????	rms013	Jul 2012	#12
good	Liberal_in_LA	Jul 2012	#13

Response to MindMover (Original post)

Mon Jul 16, 2012, 01:32 AM

Lint Head (13,916 posts)

1. I think collection agencies are run by criminals.

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Response to MindMover (Original post)

Mon Jul 16, 2012, 01:32 AM

limpyhobbler (8,244 posts)

2. Crumbs is correct.

The credit bureaus are worthless pieces of crap. They shouldn't be allowed to exist at all. Too much unaccountable power. Too much concentration of power and conflict of interest. This is way to little too late. Can you believe these criminal syndicates are actually allowed to operate as for profit entities and give money to politicians?

In the United States, 90% of credit reports provided by credit bureaus contain inaccuracies.[5] ... According to Avery, Calem, and Canner in Credit Report Accuracy and Access to Credit, "the parties that bear the costs of correcting errors or providing more timely and complete information [data furnishers and credit bureaus] may not receive much benefit from the improvement in accuracy."[8]

http://en.wikipedia.org/wiki/Credit_bureau

Goldman Sachs Buys TransUnion. What’s In It For You?
One of the major companies responsible for the nation’s credit meltdown will now control your personal credit history. Goldman Sachs Capital Partners, the private equity wing of the financial firm, has partnered with another private equity company to buy the credit reporting firm TransUnion. Collecting and reselling personal information about your borrowing and bill-paying behavior is apparently worth more than $3 billion.

For those at the top, it’s a sweet deal: one former TransUnion owner will see a 50 percent increase in return on its investment in the company after owning it for less than two years. Private equity funds selling to other private equity funds is a lucrative business.

But for consumers, the deal promises few benefits. Consider the problem of credit reporting errors: private equity companies buy firms for their potential to generate profit, and credit reporting companies like TransUnion earn the lion’s share of their profits from creditors rather than consumers— thus they have little financial incentive to conduct meaningful investigations when consumers find an error in their credit report. Instead, they rely on cheap automated dispute-resolution processes to resolve them. Nothing changes there, unless private equity pressures to keep costs down squeeze the dispute resolution process at TransUnion still more.

And the sale makes TransUnion no more likely to respond to a petition urging it to cease selling credit reports to employers on the grounds that they are unreliable and discriminatory in an employment context. Since when has Goldman Sachs listened to the Lawyers' Committee for Civil Rights or the National Council of La Raza?
...

http://www.policyshop.net/home/2012/2/22/goldman-sachs-buys-transunion-whats-in-it-for-you.html
(bold text added)

These gangster credit cartels have no business operating in America. We need to send in the FBI, SEC, and the US Marshalls and seize all documents and equipment and lock the CEOs and Boards of Directors in Guantanamo and waterboard them until they admit their crimes against the American people.

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Response to limpyhobbler (Reply #2)

Mon Jul 16, 2012, 01:40 AM

MindMover (5,008 posts)

3. Your over the topness .... really is sarcasm and could be reported to my local

homeland security dude.....

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Response to MindMover (Reply #3)

Mon Jul 16, 2012, 01:50 AM

limpyhobbler (8,244 posts)

4. I'm just saying we should use all legal means to control the credit bureaus and end them.

I was just kidding about throwing them in Guantanamo. Unless that's legal now.

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Response to limpyhobbler (Reply #4)

Mon Jul 16, 2012, 01:56 AM

MindMover (5,008 posts)

5. Anything is legal if you have enough money ....

ending credit bureaus.... how would bankers decide risk level .... ?

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Response to MindMover (Reply #5)

Mon Jul 16, 2012, 03:13 AM

limpyhobbler (8,244 posts)

8. beats me, but here are some ideas

I won't even pretend to understand banking and finance. Much more interested in justice and protecting people from abuse.

As far as consumer credit goes, I think a much smaller not-for-profit credit reporting system would be better. It may not be as precise at determining risk levels. But then America does not exist to minimize risk for banks.

The idea is that we should err on the side of protecting people, instead of protecting banks. Banks don't have any natural right to collect information about people they aren't even doing business with and use it to potentially ruin their lives. But people do have a right to be free of slander, bullying, and abuse by banks. If credit bureaus are abusive it is within the legitimate realms of conversation to talk about ending them, and replacing them with something that is designed from the outset with consumer protection in mind.

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Response to MindMover (Original post)

Mon Jul 16, 2012, 02:12 AM

Tx4obama (36,974 posts)

6. Bump. n/t

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Response to MindMover (Original post)

Mon Jul 16, 2012, 02:28 AM

elleng (79,269 posts)

7. 'About 30 such companies

that take in more than $7 million each year will be subject to federal supervision under the CFPB's new rule. . .

It was the agency's first proposed rule under its authority to regulate "larger participants" in consumer financial markets.

Cordray said at the time that those industries were chosen because of the increased role they are playing in consumers' lives after the 2007-2009 financial crisis.

The CFPB said there are about 400 consumer reporting agencies in the United States, but the 30 companies it plans to oversee take in about 94 percent of the sector's annual revenue. The largest companies in the industry are Equifax, Experian and TransUnion.

The companies will face reviews of compliance systems and procedures and on-site examinations, and they will have to produce reports for regulators, the CFPB said.

The agency said consumer reporting to date has been subject only to law enforcement authority at the federal level, with several agencies sharing responsibilities for writing rules.

This meant no single federal agency could fully see how the companies operated. The three largest issue more than 3 billion reports each year and keep files on more than 200 million Americans, according to the CFPB.

The watchdog also will post questions and answers about credit reporting on its website (http://www.consumerfinance.gov/)to help consumers determine what to look for in credit reports and how to dispute errors.'

http://www.nytimes.com/reuters/2012/07/16/business/16reuters-financial-regulation-cfpb.html?hp

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Response to MindMover (Original post)

Mon Jul 16, 2012, 09:07 AM

neeksgeek (1,012 posts)

9. Once upon a time...

You knew your banker. In person. When you needed a loan you put on a nice suit and went to see your banker! Imagine that. He or she decided risk level by speaking with you, reviewing your personal history with the bank, examining your financial situation (income and expenses), and maybe checking some local references.

I'm only 41 and I even knew my bank's loan officer when I was a young adult in the mid-1990s. Of course by that time they were using credit scores. But now the only financial people I know personally are the ones who work at my credit union. All the other financial entities I have to do business with exist only as webpages, telephone numbers, and monthly pieces of mail (yes, I prefer to get the paper statement).

In 1978, the classic American TV show The Rockford Files starring Jim Garner, ran an episode entitled "The House on Willis Avenue." It was a bit over the top, but the plot revolved around the growing trend of computer data files being used against people. In 1978! At the end of the episode there was a short PSA telling people that there really are companies gathering data on computers and that the average citizen had no rights to know the contents of these secret files. It's worth seeing if you can find it.

It's nice that somebody in the Federal government will have some regulatory authority over these guys now. (Full disclosure: I *used* to work for one of the big three credit bureaus. I'm still trying to wash off the smell).

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Response to MindMover (Original post)

Mon Jul 16, 2012, 01:22 PM

justice1 (795 posts)

10. It's about time... Power corrupts; Absolute power corrupts absolutely.

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Response to MindMover (Original post)

Mon Jul 16, 2012, 01:39 PM

Comrade_McKenzie (2,526 posts)

11. But Obama is so much like Romney, it's hard to tell the difference...

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Response to MindMover (Original post)

Mon Jul 16, 2012, 03:42 PM

rms013 (118 posts)

12. Supervising the Market????

Toothless legislation. Another example (we shall see) giving the impression of regulators standing up for the rights of citizens, just like the banking regulators, the SEC, the energy department and the justice department.
When I see people going to jail then I will see regulation of corporations just like we the people are regulated.

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Response to MindMover (Original post)

Mon Jul 16, 2012, 10:11 PM

Liberal_in_LA (44,397 posts)

13. good

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