The Consumer Financial Protection Bureau (CFPB) recently released an updated “Summary of Your Rights Under the Fair Credit Reporting Act” notice for consumer reporting agencies and background check users to incorporate into their screening processes. Employers and consumer reporting agencies (CRAs) must provide the notice to applicants and employees to comply with the federal statute, the Fair Credit Reporting Act (FCRA). While the Final Rule is set to take effect on April 19, the CFPB provided a grace period for mandatory compliance until March 20, 2024. Despite this grace period, employers should start using the updated notice now.
Background of the CFPB and “Summary of Your Rights Under the Fair Credit Reporting Act”
The CFPB is responsible for consumer protection in the financial sector. The CFPB is also responsible for overseeing procedures used in background screening processes. To assist in that responsibility, the CFPB maintains a standardized summary of consumer rights notice titled, “A Summary of Your Rights Under the Fair Credit Reporting Act,” which employers may utilize to comply with FCRA requirements. For example, before employers may take an adverse employment action on information in a background check report, the FCRA requires employers to follow a pre-adverse/adverse action process. This process includes such steps such as providing individuals with: 1) a copy of their background check report, 2) a summary of their rights under the FCRA, and 3) other FCRA information.
The changes to the “Summary of Your Rights Under the Fair Credit Reporting Act” pertain to formatting or new contact information, and not substantive legal changes. By way of reference, the revised form contains new contact information for the CFPB and other federal agencies. The CFPB also revised the document to remove obsolete business types such as “Federal Land Banks.” The English and Spanish versions of the Summary and are now available on the CFPB’s website.
What Should Employers Do Now?
Despite the March 20, 2024 compliance deadline, employers should begin utilizing the updated notice now. We note that when the updated notice was initially published by the CFPB on March 17, it omitted a phone number for applicants and workers to use when seeking to limit “prescreened” offers of credit and insurance based on their report. The CFPB has since corrected the notice, inserting the appropriate contact information: 1-888-567-8688. Employers should be certain to utilize this most current version of the notice going forward.
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