The U.S. consumer watchdog agency said on Monday it will start closely supervising credit reporting companies in September, bringing the industry under strict federal supervision for the first time.
The Consumer Financial Protection Bureau, in adopting a rule to oversee the companies, said the industry has a tremendous influence over Americans’ financial well-being.
“Credit reporting is at the heart of our lending systems and enables many of us to get credit, afford a home, or get an education,” CFPB Director Richard Cordray said in a statement.
“Supervising this market will help ensure that it works properly for consumers, lenders, and the wider economy,” he said.
About 30 such companies that take in more than $7 million each year will be subject to federal supervision under the CFPB’s new rule.
The consumer watchdog agency said it was given the authority to oversee larger businesses in this market by the Dodd-Frank financial oversight law Congress passed in 2010. The law also created the CFPB, which officially opened in July 2011, and gave it authority over consumer products such as credit cards.
The agency first proposed in February to supervise credit reporting agencies and debt collection companies. It was the agency’s first proposed rule under its authority to regulate “larger participants” in consumer financial markets.