The newly formed Consumer Financial Protection Bureau's (CFPB) oversight obligations will include the big three credit reporting Equifax, Experian and Trans Union. But it's still not clear exactly what type of powers they will have over these companies. However, there is some speculation that the CFPB's powers will extend well beyond those of the FTC.
Let's take a look at what changes post-bankruptcy debtors trying to improve their credit can expect:
A Reduction In Errors On Credit Reports
Any debtor attempting to clean up their credit report after bankruptcy can attest to the frequency of errors at all three credit reporting agencies. The errors would not be so maddening for post-bankruptcy debtors if it wasn't for the fact that correcting them can be a real pain. Some would even say that the credit reporting agencies' error reporting and correction process is designed to discourage debtors. Because of this, some industry watchers are hoping that the CFPB will oversee corrections in the credit reporting agencies' processes so that errors are significantly reduced.
Faster Dispute Resolution
It's an unfortunate reality, but many debtors exiting bankruptcy are faced with ghost debts. Ghost debts are debts which were discharged in bankruptcy; but for some reason show up on the debtor's credit report. There is no doubt that the debt cannot be legally collected by the creditor after it has been discharged in bankruptcy; but it's presence on a post-bankruptcy debtor's credit report can be damaging. The good news is that debtors can challenge "ghost debts" after bankruptcy; but the bad news is that dispute resolution is often slow and ineffective. Industry watchers hope that the CFPB will be given the power to oversee and recommend changes in the credit agencies' dispute resolution process so that it's faster and more effective.