CFPB Proposes Changes to FCRA Consumer Reporting
October 3, 2023
The Consumer Financial Protection Bureau (CFPB) recently released the “Outline of Proposals and Alternatives Under Consideration for Consumer Reporting Rulemaking.” This outline provides information on the proposals and alternatives for the Fair Credit Reporting Act’s (FCRA) future rulemaking.
The FCRA took effect in 1970. According to the CFPB, it “promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies.” However, the CFPB will now consider some proposals to change the FCRA. Here are several changes under consideration:
- The CFPB seeks feedback in certain areas, such as for the definitions of “consumer reporting agency” and “consumer report.” In the outline, the CFPB stated it would address “whether and how the FCRA applies to newer actors and practices in the credit reporting marketplace, including questions such as coverage of data brokers and certain consumer reporting agency practices regarding marketing and advertising.”
- Another proposal under consideration would interpret several permissible purposes. The FCRA requires consumer reporting agencies to have permissible purposes before providing a consumer report to third parties. In addition, this proposal would clarify the circumstances of consumer reporting agencies violating the permissible purposes provision due to data breaches.
- The CFPB also includes information on proposals to address two types of disputes: “(1) [T]hose that are classified by a consumer reporting agency or furnisher as involving legal matters and (2) those involving systemic issues at a consumer reporting agency or furnisher.”
- The CFPB is considering proposals that ban creditors from obtaining or using medical debt collection information when deciding a consumer’s credit eligibility. It would also prohibit consumer reporting agencies from including medical debt in consumer credit reports.
- The proposals clarify whether “credit header data” constitutes a consumer report.
- The CFPB would also clarify some activities that consumer reporting agencies engage in. For example, it would address how they help third-party users market their reports to consumers. The agency has found many violate the prohibition of furnishing third-party consumer reports for marketing and advertising purposes.
If adopted, these proposals would make many changes to the FCRA. These changes would impact many employers’ policies, requiring them to review the regulations to stay compliant. One way to comply with the FCRA and related regulations, such as background screening laws, is by partnering with a background-checking provider. The right partner will use their experience to keep companies up-to-date and deliver accurate reports.
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