CFPB Revises Notices That CRAs and Employers Must Provide to Consumers, Furnishers of Data, and Users of Consumer Reports
The Consumer Financial Protection Bureau (CFPB) recently issued regulations that require revisions of three critical forms required by the Fair Credit Reporting Act (FCRA), which are often used in the background screening process. The CFPB updated three notices, which the FCRA requires employers and consumer reporting agencies (CRAs) to send to consumers, furnishers of data to CRAs, and users of consumer reports. Under the regulations, employers and CRAs must begin using the updated forms by January 1, 2013.
As we discussed here and here, the CFPB now has rulemaking authority under the FCRA. Also, in July 2012, the CFPB adopted a regulatory rule providing for CFPB supervision of CRAs that have more than $7 million in annual receipts, as we told you about previously. To reflect these changes, the CFPB is updating these notices to make clear that the CFPB is the point of contact for consumers’ inquiries regarding their rights under the FCRA, rather than the Federal Trade Commission (FTC).
In keeping with the mandate of its recently released regulations, the CFPB has updated the following three notices:
-
Summary of Consumer Rights (available here, Appendix K to 12 CFR part 1022)
Both employers and CRAs must use this standard notice. The CRAs must provide this form to employers. Employers who use consumer reports to make employment decisions - such as whether to hire or terminate employees - are required to provide this summary to applicants or employees before taking any adverse employment action. -
Notice of Furnisher Responsibilities (available here, Appendix M to 12 CFR part 1022)
CRAs are required to provide this notice to those who furnish data to a CRA in particular situations. The notice details FCRA obligations imposed upon data furnishers. -
Notice of User Responsibilities (available here, Appendix N to 12 CFR part 1022)
CRAs must provide this notice to users of consumer reports, including their employer clients. The notice specifies users’ obligations under the FCRA.
What Does This Mean
The primary difference in the new forms is that they tell consumers from whom they can obtain information about their rights under the FCRA, namely, the CFPB and not the FTC.
In addition to revising these forms, the CFPB announced on October 22, 2012, that it will now accept direct consumer complaints about credit reporting. This marks the first time that consumers can obtain federal level assistance for their complaints. This announcement is a sure sign of the CFPB will continue its aggressive investigative and enforcement activities in its supervision of the credit reporting industry.
Troutman Sanders’ Financial Services Litigation and CFPB Team
Troutman Sanders is an accomplished and experienced leader in providing litigation and regulatory advice to a broad spectrum of financial services institutions. Troutman Sanders’ CFPB Team monitors the development and activities of the CFPB on its blog and also advises clients on CFPB and Dodd-Frank issues. Additionally, Troutman Sanders’ Financial Services Litigation Group has successfully litigated a wide range of individual and class action claims involving the FCRA, FDCPA, TCPA, and other federal and state consumer protection laws.
© TROUTMAN SANDERS LLP. ADVERTISING MATERIAL. These materials are to inform you of developments that may affect your business and are not to be considered legal advice, nor do they create a lawyer-client relationship. Information on previous case results does not guarantee a similar future result. Follow Troutman Sanders on Twitter.