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Consumer Financial Protection Bureau (CFPB)

What Is the Consumer Financial Protection Bureau? 

The Consumer Financial Protection Bureau (CFPB) is a United States government agency responsible for ensuring American consumers are treated fairly by financial institutions like banks, credit unions, and debt collectors. 

The CFPB was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 in response to the financial crisis of 2007-08. 

The primary role of the CFPB is to protect consumers from unfair, abusive, or deceptive practices by financial institutions, supervise companies, and enforce federal consumer financial laws. The CFPB also receives consumer complaints, keeps an eye on financial markets for new risks to consumers, and provides consumer education. 

Third-party definition

An independent bureau of the United States Federal Reserve intended to oversee and regulate the financial industry. The CFPB was created by the Dodd-Frank Act. – Progress

CFPB and the Fair Credit Reporting Act 

The Fair Credit Reporting Act (FCRA) is a federal United States law that regulates who can access consumer credit information and why. The FCRA is enforced by the Consumer Financial Protection Bureau, the U.S. Federal Trade Commission, and private litigants.

Under the FCRA, consumers have the right to:

  • Know when the information in their file was used against them, i.e., if someone uses your consumer report to deny you employment, credit, etc., they must tell you, along with where they got that information. 
  • Know what’s in their file. Consumers can ask each nationwide credit bureau/specialty consumer reporting agency for a free report every 12 months and a free disclosure if they meet certain conditions, like if someone has taken an adverse action against them due to their report. 
  • Ask for their credit score. Consumers can request this score from a consumer reporting agency, though there is usually a fee involved. 
  • Dispute inaccurate/incomplete information, and the agency will have to investigate it unless the dispute is clearly frivolous. 
  • Have inaccurate/incomplete/unverifiable information deleted. The agency can keep the information it has verified as accurate. 
  • Have outdated negative information deleted. Generally, reporting agencies shouldn’t report negative information that’s more than 7 years old or bankruptcy information that’s more than 10 years old (with some exceptions). 
  • Only have their report shared with people with a valid need for access. These people with a valid need for access are specified in the FCRA.
  • Give their consent before sharing their report with an employer/prospective employer. You must give your employer/prospective employer consent before a consumer reporting agency gives them information about you.
  • Limit unsolicited “prescreened” credit and insurance offers you receive based on your credit report. All such offers must have a toll-free number you can call to remove yourself from these lists. 

How to submit a complaint to the CFPB for FCRA violations

As the Consumer Financial Protection Bureau writes in a blog post, hundreds of thousands of consumers have had consumer reporting agencies ignore their requests to correct inaccurate information. 

If you’ve had a problem with a consumer or credit reporting agency, you can file a complaint with the CFPB through their website or by calling (855) 411-CFPB (2372) and explaining your situation. The CFPB uses consumer complaints to hold companies accountable for breaking the law. 

CFPB, FCRA, and Data Brokers 

Data brokers are companies that collect people’s personal information from a wide variety of sources, compile this data into profiles, and then sell these profiles for (usually) non-FCRA purposes, like marketing and fraud prevention. 

As such, most data brokers don’t typically fall under the FCRA, though there have been cases where enforcers fined brokers like Spokeo for violating the FCRA for selling consumer data to employers and recruiters. 

However, this might soon change. 

Concerned about how data broker practices might be harming consumers, the CFPB wants to impose new rules on data brokers, like:

  • Treating data brokers selling personal data like income or criminal records as consumer reporting agencies because this data is often used for employment, credit, and other determinations. This would mean that data brokers would be subject to FCRA and would have to ensure the accuracy of the information and prohibit its misuse. 
  • Clarifying whether “credit header data,” like name, date of birth, and Social Security number is consumer report data. According to the CFPB director, the data broker market is largely run on this kind of data taken from credit reports. This proposal would mean that it would only be possible to sell this kind of data for a “permissible purpose,” for example, credit underwriting, and reduce credit reporting agencies’ ability to disclose sensitive contact details that could be used to identify vulnerable individuals. 

The CFPB goes into further detail about these and other proposals relating to data brokers in its September 2023 report.