CFPB Issues Updated FCRA Model Disclosures

Due Diligence

Written By ESR News Blog Editor Thomas Ahearn

On September 12, 2018, the Consumer Financial Protection Bureau (CFPB) – also known as the Bureau of Consumer Financial Protection (BCFP) and the United States government agency responsible for consumer protection in the financial sector – issued an interim final rule updating two model disclosures to reflect changes made by recent legislation to the federal Fair Credit Reporting Act (FCRA).

In May 2018, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act which requires nationwide consumer reporting agencies to provide “national security freezes” free of charge to consumers that restricts prospective lenders from obtaining access to a consumer’s credit report and makes it harder for identity thieves to open accounts in the consumer’s name.

The Act mandates that when the FCRA requires a consumer to receive the Summary of Consumer Rights – a summary of rights to obtain and dispute information in consumer reports and to obtain credit scores – or the Summary of Consumer Identity Theft Rights – a summary of rights of identity theft victims – a notice regarding the new security freeze right also must be included. Here are links to download the new forms:

The Act also extends from 90 days to one year the minimum time that nationwide consumer reporting agencies must include an initial fraud alert in a consumer’s file to inform a prospective lender that a consumer may be a victim of identity theft. Congress set an effective date of September 21, 2018, for the security freeze right, the notice requirement, and the change in duration for initial fraud alerts.

To help businesses comply with the new law, the interim final rule issued updates the CFPB’s model forms, incorporating the new required notice and the change to the minimum duration of initial fraud alerts. The interim final rule also takes steps to mitigate the impact of these changes on users of the model forms published by the Bureau in November 2012 by permitting various compliance alternatives.

The FCRA requires the CFPB to write model forms of the documents. Consumer reporting agencies and other entities can use the Bureau’s model forms or their own substantially similar forms. The interim final rule invites comment on these and any other aspects of the Bureau’s model forms to inform any possible further rulemaking. The interim final rule issued by the CFPB is available here.

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