The Consumer Financial Protection Bureau (“CFPB”) recently issued two advisory opinions regarding background screening and file disclosure requirements under the Fair Credit Reporting Act (“FCRA”). Effective January 23, 2024, the opinions are issued as interpretive rules under the CFPB’s authority to interpret FCRA, including under section 1022(b)(1) of the Consumer Financial Protection Act of 2010, which authorizes the CFPB “to provide guidance as may be necessary or appropriate” to carry out the purposes and objectives of Federal consumer financial laws. The advisory opinions do not revise existing requirements or add any new requirements.
The CFPB’s background screening opinion affirms that a consumer reporting agency must use reasonable procedures to assure maximum possible accuracy when reporting public record information. Inaccurate information can greatly affect a consumer, such as denial of housing or employment opportunities. Also, consumers may have to spend considerable time and expense to correct inaccurate reports. The CFPB advises that consumer reporting agencies should have procedures in place to (1) prevent information that is duplicative or that has been expunged, sealed, or otherwise legally restricted from being reported to the public; and (2) include any existing disposition information if it reports arrests, criminal charges, eviction proceedings, or other court filings. Additionally, the advisory opinion also highlights that when consumer reporting agencies include adverse information in consumer reports the occurrence of the adverse event starts the running of the seven-year reporting period for adverse items and that the reporting period cannot be restarted or reopened by the occurrence of subsequent events. Consumer reporting agencies may not report adverse information beyond the reporting period allowed under FCRA section 605(a)(5).
In the file disclosure opinion, the CFPB discusses the requirement of consumer reporting agencies to disclose to a consumer clearly and accurately, upon request “all information in the consumer’s file at the time of the request” and “the sources of the information.” FCRA defines a consumer’s “file” as “all of the information on that consumer that is recorded and retained by a consumer reporting agency, regardless of how the information is stored” (see 15 U.S.C. 1681a(g)). The CFPB highlights that a consumer does not have to use specific language, such as asking for a “file” or “complete file” when making a file disclosure request to a consumer reporting agency. Under FCRA, a consumer reporting agency must provide a complete file disclosure upon receipt of a “request” from a consumer who provides proper identification. The statute does not define “request” so the CFBP states that the term’s meaning should be read broadly based on the statute’s remedial purpose of providing consumers’ access to their own information which in turn promotes accuracy, privacy, and fairness in the consumer reporting system. Additionally, the CFPB advises that a file disclosure must be understandable to the average consumer. This requires a consumer reporting agency to provide a consumer with assistance in identifying inaccurate information in their file, exercising their right to dispute any incomplete or inaccurate information, and knowing when they are impacted by adverse information in their file. The file disclosure cannot provide only summarized information and must include all sources of the information, including both the original source and any intermediary or vendor source.
