FTC Seeking Comments on Proposed Changes to Five FCRA Rules

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On August 24, 2020, the Federal Trade Commission (FTC) announced that it is seeking comments on proposed changes that would bring several rules implementing parts of the Fair Credit Reporting Act (FCRA) in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act, according to a press release from the FTC.

In separate Notices of Proposed Rule Making (NPRMs) – 16 CFR Part 640, 16 CFR Part 641, 16 CFR Parts 642 and 698, 16 CFR Part 660, and 16 CFR Part 680 – that will be published in the Federal Register, the FTC proposed changes that would clarify that five FCRA rules promulgated by the FTC apply only to motor vehicle dealers.

  • 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.

Enacted in 2010, the Dodd-Frank Act transferred rulemaking authority related to parts of the FCRA to the Consumer Financial Protection Bureau (CFPB), narrowing the FTC’s rulemaking authority. As part of its periodic review of its rules and guides, the FTC is seeking comments on the effectiveness of the five rules including:

  • Whether there is a continuing need for specific provisions of each rule;
  • The benefits each rule has provided to consumers;
  • What modifications, if any, should be made to each rule to benefit consumers and businesses; and
  • What modifications, if any, should be made to each rule to account for changes in relevant technology or economic conditions.

Those people seeking to comment on these issues and others will have 75 days from the date the notices are published in the Federal Register to submit comments. Instructions on how to file comments will be included in the notices published in the Federal Register and the comments will be posted to Regulations.gov.

Enacted by Congress in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs, protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulates the collection, dissemination, and use of consumer data.

Employment Screening Resources® (ESR) – a leading global background check provider – offers FCRA-compliant background screening solutions and white papers on how employers may avoid FCRA lawsuits and how CRAs may avoid FCRA lawsuits. To learn more about ESR, visit www.esrcheck.com.

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