Updated FCRA Summary of Rights Issued by the Bureau of Consumer Financial Protection

The Bureau of Consumer Financial Protection (the “Bureau”) issued an interim final rule on September 12, 2018, tied to passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) (‘the Act”). The new law amends the Fair Credit Reporting Act (FCRA) and includes new requirements on credit bureaus related to security freezes and fraud alerts that are relevant to background screeners and employers using a background screening company for pre-employment background checks. Significantly, the interim final rule includes an updated version of the model FCRA summary of rights document. The interim final rule also makes similar revisions to the summary of identity theft victim rights that consumer reporting agencies are required to provide to certain consumers that believe they may be victims of identity theft.

The new law becomes effective on September 21, 2018. A new section added by the law, section 605A(i) of the FCRA, requires that a new notice of rights be included whenever a consumer is required to receive a summary of rights required by FCRA section 609. The notice language contained in the Act explains new consumer rights, including a national credit freeze with the nationwide consumer reporting agencies and the availability of an initial fraud alert for up to one year.

Given the fact that the effective date is next week, it is imperative to assess the possible impact of these new requirements on your business and ensure compliance with the notice requirement under the new law. According to the Bureau, “to mitigate the impact of these changes on users of the existing model forms, the interim final rule also provides that the Bureau will regard the use of the model forms published in Appendices I and K on November 14, 2012, to constitute compliance with the FCRA provisions requiring such forms, so long as a separate page that contains the additional required information is provided in the same transmittal.” The updated form, A Summary of Your Rights under the Fair Credit Reporting Act, is found on pages 28-31 of the interim final rule (“model form”). The new notice language required by the Act relates to security freezes and fraud alerts, advising consumers of their rights around such. It begins with the phrase—“Consumers Have the Right to Obtain a Security Freeze.”

In addition to adding the new required notice under the Act, the revised model FCRA summary of rights document also includes revised language related to the duration period of fraud alerts as well as updated contact information for the listed enforcement agencies.

To reiterate: The interim final rule will be effective on September 21, 2018. The model form must be provided in different circumstances pursuant to the FCRA and specific to employment screening. For instance, the model form must be provided by background screening companies to end-users of reports; as well as by end-users of reports (i.e., employers) to job applicants during the adverse action process. Background screening companies must also provide the model form whenever a consumer requests a file disclosure pursuant to the FCRA.

If you have any questions regarding the model form, please contact one of the authors.

Montserrat Miller and Kevin Coy are Partners and Bradford J. Kelley is an Associate in Arnall Golden Gregory LLP’s Washington, D.C. office. Ms. Miller is co-chair of the firm’s Background Screening Industry team and Mr. Coy and Mr. Kelley are members of the team.