The Federal Trade Commission (FTC) is seeking comments on proposed changes affecting the Fair Credit Reporting Act (FCRA). The purpose of these proposed changes is to bring the FCRA more in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The proposed changes would “clarify that five FCRA rules promulgated by the FTC apply only to motor vehicle dealers.” According to the FTC press release, the following rules would be affected:
- Address Discrepancy Rule, which outlines the obligations of users of consumer reports when they receive a notice of address discrepancy from a nationwide consumer reporting agency (CRA);
- Affiliate Marketing Rule, which gives consumers the right to restrict a person from using certain information obtained from an affiliate to make solicitations to the consumer;
- Furnisher Rule, which requires entities that furnish information to CRAs to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumers provided to a CRA;
- Pre-screen Opt-Out Notice Rule, which outlines requirements for those who use consumer report information to make unsolicited credit or insurance offers to consumers; and
- Risk-Based Pricing Rule, which requires those who use information from a consumer report to offer less favorable terms to consumers to provide them with a notice about the use of such data.
Additionally, the FTC is seeking comments on the effectiveness of the five rules:
- whether there is a continuing need for specific provisions of each rule;
- the benefits each rule has provided to consumers;
- what modifications, if any, should be made to each rule to benefit consumers and businesses; and
- what modifications, if any, should be made to each rule to account for changes in relevant technology or economic conditions.
The public has 75 days to comment from the date the proposed changes are published in the Federal Register.
In 2010, the Dodd-Frank Act transferred rulemaking authority for certain sections of the FCRA to the Consumer Financial Protection Bureau (CFPB), limiting the FTC’s authority to enact rules. While these particular rule changes apply only to motor vehicle dealers, the CFPB is also reviewing and updating its policy guidance for financial service companies and others in light of COVID-19.
The importance of FCRA compliance cannot be overstated. As such, Hire Image continues to provide the most up-to-date information, as it is made available. Please contact us if you have any questions about the FCRA or your own background screening policy.