AAI letter to newly-formed Consumer Financial Protection Bureau on Regulation of Larger Non-Depository Financial Institutions

The AAI filed a letter this week in response to a Notice published by the newly-formed Consumer Financial Protection Bureau (CFPB) seeking comments on the classification and regulation of larger non-depository financial institutions. The AAI urged the CFPB to consider any consumer credit data repository that maintains credit data on consumers on a nationwide basis to be a “larger market participant” subject to CFPB oversight. The AAI letter noted the anticompetitive effect of mortgage underwriting requirements that require mortgages to be based on credit information from all of the three national consumer credit data repositories (Experian, Equifax, and TransUnion) (the “tri-merge rule”), the disincentives of private data repositories to to correct errors in consumers’ credit files, the weakness of the consumer protection provisions of the Fair Credit Reporting Act, and the negative effects of the near elimination of resellers in the credit reporting industry. The mission of the CFPB is to protect consumers from fraud or abuse in financial transactions.