CFPB Issues Guidance Addressing FCRA Obligations for Consumer Reporting Agencies

The Consumer Financial Protection Bureau (CFPB) – a United States government agency that enforces the federal Fair Credit Reporting Act (FCRA) – issued guidance in the form of two advisory opinions to consumer reporting agencies (CRAs) that address background check reports and credit file sharing practices, according to a CFPB press release dated January 11, 2024. The first advisory opinion on background check reports highlights that reports must be complete, accurate, and free of information that is duplicative, outdated, expunged, sealed, or otherwise restricted from public access. The second advisory opinion on file disclosure highlights that people are entitled to receive information in their consumer files upon request.

• Final Rule: Fair Credit Reporting; Background Screening – The Consumer Financial Protection Bureau is issuing this advisory opinion to affirm that, when preparing consumer reports, a consumer reporting agency that reports public record information is not using reasonable procedures to assure maximum possible accuracy under section 607(b) of the Fair Credit Reporting Act (FCRA) if it does not have procedures in place that: (1) prevent reporting information that is duplicative or that has been expunged, sealed, or otherwise legally restricted from public access; and (2) include any existing disposition information if it reports arrests, criminal charges, eviction proceedings, or other court filings. This advisory opinion also highlights that, when consumer reporting agencies include adverse information in consumer reports: (1) the occurrence of the adverse event starts the running of the reporting period for adverse items under FCRA section 605(a)(5); (2) that period is not restarted or reopened by the occurrence of subsequent events; and (3) a non-conviction disposition of a criminal charge cannot be reported beyond the seven-year period that begins to run at the time of the charge. Consumer reporting agencies thus must ensure that they do not report adverse information beyond the reporting period in FCRA section 605(a)(5) and must at all times have reasonable procedures in place to prevent reporting of information that is duplicative or legally restricted from public access and to ensure that any existing disposition information is included if court filings are reported. View Final Rule
• Final Rule: Fair Credit Reporting; File Disclosure – The Consumer Financial Protection Bureau is issuing this advisory opinion to address certain obligations that consumer reporting agencies have under section 609(a) of the Fair Credit Reporting Act (FCRA). This advisory opinion underscores that, to trigger a consumer reporting agency’s file disclosure requirement under FCRA section 609(a), a consumer does not need to use specific language, such as “complete file” or “file.” This advisory opinion also highlights the requirements regarding the information that must be disclosed to a consumer under FCRA section 609(a). In addition, this advisory opinion affirms that consumer reporting agencies must disclose to a consumer both the original source and any intermediary or vendor source (or sources) that provide the item of information to the consumer reporting agency under FCRA section 609(a). View Final Rule

“Background check and other consumer reporting companies do not get to create flawed reputational dossiers that are then hidden from consumer view,” CFPB Director Rohit Chopra stated in the CFPB press release. “Background check reports, and all other consumer reports, must be accurate, up to date, and available to the people that the reports are about.” The FCRA 15 U.S.C. § 1681 – which was enacted by the United States Congress in 1970 – protects information collected by CRAs for consumer reports. Information in a consumer report cannot be provided to anyone who does not have a purpose specified in the FCRA. Furnishers who provide information to CRAs also have legal obligations under the FCRA. ClearStar is a leading global Human Resources technology company that specializes in background checks, drug testing, and occupational health screening. ClearStar is a CRA with numerous accreditations and certifications that help to ensure FCRA compliance for employers during the background check process. For more information, contact ClearStar. © 2024 ClearStar. All rights reserved. – Making copies of or using any part of the ClearStar website for any purpose is prohibited unless written authorization is first obtained from ClearStar. ClearStar does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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