Updated Federal Credit Reporting Act (FCRA) Notices

By January 1, 2013, businesses, including employers, and consumer reporting agencies must update the Fair Credit Reporting Act (“FCRA”) notices mandated by the federal government to reflect that the Consumer Financial Protection Bureau (“CFPB”) has taken over enforcement of the FCRA from the Federal Trade Commission (“FTC”).  Changes to the notices are generally stylistic and substitute CPFB references for FTC references.

FCRA sets forth the procedural requirements applicable to employers conducting background checks through CRA’s for employment purposes. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), effective July, 2011, the CFPB has rulemaking authority for most of the provisions of the FCRA. The CFPB, as the new regulatory body, has published an interim rule, establishing a new regulation (Regulation V) for implementing the provisions of the FCRA.

There are no substantive changes to the notices imposed by the interim rule, merely the replacement of FTC references with CPFB references.  Further, the interim rule does not require any modification to current consent form, pre-adverse and adverse action notices.  The following three model forms have been updated and are required to be implemented by January 1, 2013. Contact Ann Plunkett for the revised forms.

• Summary of Consumer Rights:  This form, as a best practice, should be provided to individuals who may be subject to an investigative consumer report, but is required to be provided if requested by a subject of an investigative consumer report, and in all instances as part of the pre-adverse action process.  Consumer reporting agencies (“CRAs”) are also required to give this form to employers.
• Notice to Users of Consumer Reports of their Obligations: CRAs are required to provide a copy of this notice to each user of their services, including employers.
• Notice to Furnishers of Information of their Obligations:  CRAs are required to issue this notice to certain furnishers of information in specific situations.