Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On September 8, 2021, the Federal Trade Commission (FTC) approved largely technical changes in separate notices published in the Federal Register that would clarify that five Fair Credit Reporting Act (FCRA) rules enforced by the FTC apply only to motor vehicle dealers, according to a press release from the FTC.

Enacted in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act transferred rulemaking authority related to parts of the FCRA to the Consumer Financial Protection Bureau CFPB), narrowing the FTC’s FCRA rulemaking authority to apply only to certain motor vehicle dealers. The final revisions affect these rules:

  • 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.

In addition to technical changes to the five rules, the Pre-Screen Opt-Out Rule added the web address where consumers can opt-out of credit offers to the model notices that motor vehicle dealers can use. The Risk-Based Pricing Rule also was updated to include examples that reflect its narrower scope to just motor vehicle dealers.

The FCRA 15 U.S.C. § 1681 was enacted by Congress in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of Consumer Reporting Agencies (CRAs), and to protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports.

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