Written By ESR News Blog Editor Thomas Ahearn

On December 9, 2021, two U.S. Representatives introduced the “Clarity in Consumer Disclosures Act” that would direct the Consumer Financial Protection Bureau (CFPB) to create clear, plain-language model forms for consumer reports so that employers can fulfill the requirements of the federal Fair Credit Reporting Act (FCRA).

Under the FCRA, employers may only use consumer reports for employment purposes if they follow strict consumer disclosure and certification requirements. However, there is currently no uniform direction for the content or format. The result is confusion for employers and consumers, as well as numerous lawsuits.

“Clear and comprehensible guidance will help employers and employees. This is a commonsense change to ensure that our businesses meet FCRA and State requirements and avoid unnecessary confusion,” said Representative Madeleine Dean (PA-04), who introduced the Act with Representative Trey Hollingsworth (IN-09).

“Applying for jobs should be as simple as possible. The Clarity in Consumer Disclosures Act increases transparency for Hoosier applicants in the hiring process and protects Hoosier businesses by establishing standardized regulations for issuing background checks,” said Representative Hollingsworth.

The “Clarity in Consumer Disclosures Act” is endorsed by the Professional Background Screening Association (PBSA), a non-profit trade group founded in 2003 to represent the interest of companies offering background screening services that currently represents over 880 member companies in the United States.

“The Clarity in Consumer Disclosures Act will have significant benefits for consumers, job seekers, and employers alike. The Professional Background Screening Association applauds Representatives Dean and Hollingsworth for introducing this important, bipartisan legislation,” said a spokesperson from the PBSA.

The FCRA 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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