On November 6, 2023, the National Association of Federally-Insured Credit Unions (NAFCU) and the Credit Union National Association (CUNA) called the Consumer Financial Protection Bureau’s (CFPB) proposals for the Fair Credit Reporting Act (FCRA) an “unwarranted and vast expansion” of the FCRA in a letter sent by the NAFCU and CUNA to the CFPB.
On September 15, 2023, the CFPB – a U.S. government agency that enforces the FCRA which regulates consumer reporting agencies (CRAs) that assemble information about Americans into “consumer reports” – released an “Outline of Proposals and Alternatives Under Consideration for Consumer Reporting Rulemaking” to assist in FCRA Rulemaking.
“This Outline describes proposals that have the potential to dramatically increase the scope of the FCRA to establish new responsibilities for credit unions that do not align with Congress’s intent in passing the statute and would create massive litigation risk, operational burdens, and other challenges,” the letter to the CFPB read, which also covered the following topics:
- Timeline Considerations
- The FCRA Only Requires Factual Issues to be Resolved in Disputes
- The Definition of Data Broker Should be Narrow and Recognize Credit Unions’ Existing Regulatory Obligations
- Creditors Should be Permitted to Continue Using Medical Debt Information as Appropriate
- The CFPB Should Provide Covered Data Providers with Ample Time to Implement a Future Proposal
“Fair and accurate credit reporting and the protection of consumers’ privacy rights is an important function of our financial system. However, the Bureau’s proposals in this Outline represent an unwarranted and vast expansion of the intent and scope of the FCRA to impose additional requirements on credit unions,” the letter to the CFPB concluded.
The CFPB Outline explained that “consumer reporting agencies collect and assemble or evaluate information about, among other things, the credit, criminal, employment, and rental histories of hundreds of millions of Americans.” The CFPB described the proposals and alternatives under consideration and sought representative feedback in these areas of FCRA Rulemaking:
- Definitions of Consumer Report and Consumer Reporting Agency
- Permissible Purposes
- Disputes
- Medical Debt Collection Information
- Implementation Period
The FCRA has been amended from time to time since the statute’s enactment by Congress in 1970 and imposes obligations on consumer reporting agencies, entities that provide information to consumer reporting agencies (i.e., furnishers), and users of consumer reports. The CFPB has rulemaking, enforcement, and supervisory authority to administer the FCRA.
ClearStar is a consumer reporting agency (CRA) as defined by the FCRA that specializes in background checks, drug testing, and occupational health screening. ClearStar offers employers and job candidates “better, easier, faster, and safer” workforce screening solutions that include a full understanding of the FCRA. To learn more about ClearStar, contact us.
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Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources (HR) technology company specializing in background checks, drug testing, and occupational health screening. He writes about a variety of topics in the background screening industry including Artificial Intelligence (AI), "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), Form I-9, identity theft, privacy, social media screening, and workplace violence.
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