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Friday, February 28, 2014

CFPB Pressures Banks to Make Credit Scores Available

The CFPB called on credit card issuers to make consumers’ credit scores “freely available” to them. In recent letters to issuers, CFPB Director Richard Cordray noted that “several” card issuers voluntarily disclose consumers’ credit scores. “I strongly encourage you to make the credit scores on which you rely available to your customers regularly and freely, along with educational content to help them make use of this information,” he added. “We will consider this to be a ‘best practice’ in the industry.”

Disclosing credit scores could yield “positive returns” outweighing the cost and effort involved, Cordray said, as consumers “who monitor and manage their credit standing may be less likely to become delinquent or to default.”

“It seems inappropriate for a government agency to endorse one ‘good idea’ as a best practice and seek to impose it on everyone,” noted ABA Chief Counsel Ken Clayton. “A vibrant marketplace stands as a laboratory of good ideas. Attempts to dictate one result once again opens the bureau to criticism that it is picking winners and losers and overreaching in its efforts to micromanage the marketplace.”

The CFPB also released a report showing that credit reporting accounts for 11% of the complaints the CFPB has collected since July 2011, with almost three-quarters of those being about incorrect information on a report. The bureau said that issuers have responded to 91% of complaints forwarded for response, with an additional 7% currently in review.

Read a sample letter to issuers.
Read the report.

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