Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

In September 2021, the U.S. House of Representatives passed H.R.4350 – National Defense Authorization Act (NDAA) for Fiscal Year 2022 (FY22) that included amendments to the Fair Credit Reporting Act (FCRA) dealing with the reporting of adverse information about service members by Consumer Reporting Agencies (CRAs).

“The FY22 NDAA is an excellent piece of legislation that makes transformational policy changes with direct benefits for our service members and their families,” Representative Adam Smith (D-WA), who sponsored H.R.4350, stated in a press release. In October 2021, the legislation was received in the U.S. Senate.

The amendments to the FCRA would add the defined terms “uniformed consumer,” who is a member of the uniformed services such as the Army, Navy, Air Force, and Marine Corps, and “deployed uniformed consumer,” who serves in a combat zone, on a military vessel, or in deployment. They would also impose requirements.

  • CRAs are prohibited from reporting adverse information about a “uniformed consumer” if the event that caused adverse information to be added to the consumer’s file occurred while the consumer was a “deployed uniformed consumer.”
  • If consumers provide CRAs with proof that they were a “deployed uniformed consumer” at the time of the event that caused adverse information to be added to the consumer’s file occurred, CRAs must “promptly delete the item of adverse information from the file and notify the consumer and the furnisher of the information of the deletion.”
  • CRAs receiving adverse information about consumers who have provided proof they are a “uniformed consumer” must promptly notify consumers that the CRA has received adverse information, provide a description of the adverse information, and provide the method by which the consumer can dispute the information’s validity.
  • If consumers who have provided proof to CRAs that they are a “uniformed consumer” give the CRA separate contact information to be used, CRAs must use that contact information for all communications while the consumer is a uniformed consumer.

The amendments also stated that “any person making use of a consumer report containing an item of adverse information should, if the action or inaction that gave rise to the item occurred while the consumer was a uniformed consumer, take such fact into account when evaluating the creditworthiness of the consumer.”

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 CRAs, and to protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports. A copy of the FCRA is available here.

Employment Screening Resources® (ESR) – a global background check provider ranked the #1 screening firm by HRO Today – offers FCRA compliant background checks and white papers on ways employees sue employers under the FCRA and ways CRAs are sued under the FCRA. To learn more about ESR, visit www.esrcheck.com.

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