Consumer Financial Protection Bureau (CFPB)

Written By ESR News Blog Editor Thomas Ahearn             

In November of 2019, the Consumer Financial Protection Bureau (CFPB) issued a final rule in the Federal Register to establish the maximum allowable charge for disclosures by a consumer reporting agency (CRA) under Section 609 of the federal Fair Credit Reporting Act (FCRA) for the 2020 calendar year.

Each year, the CFPB – the agency protecting consumers in the financial sector – must calculate the dollar amount of the maximum allowable charge for disclosures by a CRA under the FCRA. The final rule stated that the maximum allowable charge would remain at $12.50 for 2020, which is unchanged from 2019.

For 2019, the CFPB announced the ceiling on allowable charges for FCRA disclosures would increase to $12.50 from $12.00 in 2018. The maximum allowable disclosure charge by CRAs had increased to $12.00 in 2015, up from $11.50, which had been the maximum allowable disclosure charge since 2012.

Under section 609 of the FCRA, a CRA must disclose – upon a consumer’s request – information in the consumer’s file to a consumer. FCRA section 612(a) gives consumers the right to a free file disclosure upon request once every 12 months from the nationwide CRAs and nationwide specialty CRAs.

Section 612 of the FCRA also gives consumers the right to a free file disclosure under certain specified circumstances. When the consumer is not entitled to a free file disclosure, section 612(f)(1)(A) of the FCRA provides that a CRA may impose a reasonable charge on a consumer for making a file disclosure.

Section 612(f)(1)(A) of the FCRA provides that the charge for such a disclosure shall not exceed $8.00 and shall be indicated to the consumer before making the file disclosure. Section 612(f)(2) of the FCRA also states that the $8.00 maximum amount shall increase on January 1st of each year.

The increase is based proportionally on changes in the Consumer Price Index (CPI), with fractional changes rounded to the nearest fifty cents. Such increases are based on the CPI for All Urban Consumers (CPI-U), which is the most general Consumer Price Index and covers all urban consumers and all items.

The CFPB is amending appendix O for Regulation V – which implements the FCRA – to establish the maximum allowable charge for disclosures by a CRA to a consumer for 2020. The final rule is available at www.federalregister.gov/documents/2019/11/27/2019-25695/fair-credit-reporting-act-disclosures.

The CFPB was established by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and opened in 2011. In September of 2018, the CFPB updated two model FCRA disclosures to reflect changes made when Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The Act mandated that a notice regarding “national security freezes” free of charge must be included when the FCRA requires that a consumer receive a Summary of Consumer Rights Under the FCRA to obtain and dispute information in consumer reports or a Summary of Consumer Identity Theft Rights.

Employment Screening Resources® (ESR) – a leading global background check firm – offers blogs about the CFPB, which took over the administering of FCRA mandated notices for background checks from the Federal Trade Commission (FTC) in 2013. To learn more about ESR, visit www.esrcheck.com.

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