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Three ways the Consumer Financial Protection Bureau impacts your business
As the Consumer Financial Protection Bureau (CFPB) continues to evolve, it is clear that the new regulatory agency will have unprecedented powers and a broad reach across industries. While questions still remain about how the CFPB will operate, there are a few ways companies should expect the CFPB to impact their business.

  • Clearer, easier-to-read consumer disclosures – The CFPB’s first priority will be to ensure that the terms and conditions of financial services and products, especially for credit cards and mortgages, are disclosed in clear, easy-to-understand language and in a manner that will enable consumers to compare products and services across competing offers.   
  • Examination of consumer products rather than industries – Regulatory agencies typically are structured around the types of businesses they supervise. With the CFPB, we’ll see a regulator with a different perspective that examines the types of financial products used by consumers.
  • Transparency regarding how credit scores affect loan terms and conditions – Greater transparency about credit scores and how they are used will be a top priority of CFPB. Lenders will be required to disclose a score they used in all risk-based pricing notices and adverse action notices beginning on July 21, 2011.     

Although we are uncertain what regulatory actions the CFPB will take until it receives full regulatory and enforcement authority on July 21, it is important for covered entities to continue to comply with current law and to strive to follow industry best practices. In addition, it is critical for companies to demonstrate that they have taken steps to increase consumer credit education and the transparency of credit scores, as the CFPB has signaled that this will be at the top of its agenda.

In response to our clients’ need for increased consumer education, we would like to introduce Experian Credit EducatorSM, a consumer credit education service where consumers are able to talk to an Experian credit professional agent and review a copy of their credit report along with their VantageScore®. Consumers will learn the answers to the following questions: What’s in a credit report? How does credit affect my financial situation? How do I manage my credit to positively impact my financial situation?

  • Through Experian’s Credit Educator program, lenders can now offer their customers a personalized consumer education service to advance and support their overall customer engagement strategy –while also benefitting in areas such as: increased customer loyalty, improved portfolio quality, and expansion of cross-sell opportunities.  

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