The Consumer Financial Protection Bureau (CFPB) is a new regulatory agency that is still evolving. But even now it’s clear that it will have unprecedented powers with a broad reach across industries – including communications. Although there are questions about how the CFPB will operate, there are still steps you can take to prepare.
To help you get ready, let’s review a few of the areas you should expect CFPB to affect your business, followed by three questions you can help your customers answer.
3 Ways the CFPB Will Impact Business:
- Consumer disclosures must be clear and easy to read. The goal is to ensure that financial terms and conditions of services (especially for credit cards and mortgages) are disclosed in clear, easy-to-understand terms that allow consumers to compare offers.
- Consumer products to be examined rather than industries – Regulatory agencies are typically structured around the kinds of businesses they supervise. With the CFPB, we’ll see a regulator with a perspective more focused on consumer financial products and services.
- Transparency on how credit scores affect terms & conditions – Greater transparency about credit scores and how they are used to determine loan rates will also be a priority. Lenders are required to disclose a score they used in all risk-based pricing notices and adverse action notices beginning July 21, 2011.
CFPB Takes Authority on July 21
The CFPB receives full regulatory and enforcement authority on July 21, so it’s important for covered entities to continue complying with current law and striving to follow industry best practices. Companies need to demonstrate that they have taken steps to increase consumer credit education and transparency of credit scores, as these items top the CFPB agenda.
Experian Consumer Education Resources
Experian is addressing the growing need for consumer education by offering Experian Credit EducatorSM, a credit education service in which consumers engage in a one-on-one credit education session with an Experian credit professional agent, together reviewing a copy of their credit report and VantageScore®.
Answers to 3 Consumer Questions:
As part of Experian Credit Educator, consumers learn the answers to three main questions:
- What’s in a credit report?
- What is a score, and what types of information can increase or decrease a score?
- How does credit affect my financial situation?
Experian Credit Educator allows lenders to provide customers a personalized education service, thereby advancing customer engagement while improving customer satisfaction, loyalty, portfolio quality, and cross-sell opportunities.
Do you have questions about the CFPB’s role? Leave a comment or contact your Experian representative if you need assistance in complying with new regulatory requirements.
