CFPB reports on trends in commercial and consumer credit

Federal Issues CFPB Credit Report

On June 30, the CFPB released a report highlighting relationships and trends in commercial and consumer credit for small businesses. The report analyzes the frequency and types of commercial credit commonly found on consumer credit reports and the inconsistencies in reporting practices and strategies. The report uses a longitudinal sample of about 5 million de-identified credit records maintained by one of the three nationwide credit reporting companies. According to the report, “over 2.8 million consumers have an active commercial credit tradeline on their consumer credit report.” The report also notes that about 1,300 entities furnished information on commercial credit products in an average quarter. In comparing the number of bank furnishers with the known number of banks with commercial credit on their balance sheet, the report finds that at least 89 percent of banks are not furnishing information on commercial loans to consumer bureaus. Further, furnishers who do report their commercial accounts may not report all of their business accounts and products to consumer bureaus. According to the CFPB, “[t]his research is among some of the first to explore the relationship between commercial and consumer credit reporting,” and can be utilized as a “base understanding” for future research on commercial credit, including alterations in reporting due to the Covid-19 pandemic.