The Consumer Financial Protection Bureau announced Monday that it would begin supervising the leading credit bureaus, the companies that collect financial details of everyone's life.
The bureau will oversee and make rules covering about 30 credit reporting companies, representing 94 percent of the $4 billion credit reporting market. The rules will apply to the three big credit reporting firms - Equifax, Experian and TransUnion - and others with more than $7 million in annual revenue.
The credit reporting companies already must abide by the Fair Credit Reporting Act and they have also been subject to congressional oversight, but they lacked a single federal overseer, said the bureau's director, Richard Cordray.
"The fact that this industry has never before been subject to any federal supervision means there's a lot we don't know about it," Cordray said.
Credit reports have increasing importance in consumers' lives because they are used in many kinds of lending, by landlords in renting a property and even as a way to screen job applicants. And various reports have found that up to 25 percent of credit reports contain errors that could hurt consumers' ability to borrow.
The credit bureaus join mortgage brokers, payday lenders and credit card companies among the institutions beyond banks that the bureau regulates. The agency itself was a creation of the sweeping Dodd-Frank financial reform law in 2010. This move is the first in a series of rule-makings to define "larger participants" among consumer financial companies, the bureau said. The supervision of credit reporting agencies will start Sept. 30, and the bureau will begin on-site examinations after that. The bureau already is supervising loan originators, mortgage servicing companies and payday lenders.