CFPB’s Most Recent Changes to FCRA Forms May Foreshadow Active Oversight of Employers

by Ballard Spahr LLP
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[authors: Paul Apicella, Brian D. Pedrow]

The Consumer Financial Protection Bureau (CFPB) has issued another reminder that, effective January 1, 2013, it will assume responsibility for enforcing the Fair Credit Reporting Act (FCRA). Earlier this year, the CFPB revised various FCRA model forms and mandated that they be implemented by this date.

The CFPB released another round of edits on November 14, 2012, to correct “typographical and other technical errors” in four of these forms: the Summary of Consumer Identity Theft Rights (Appendix I); the Summary of Consumer Rights (Appendix K); the Notice of Furnisher Responsibilities (Appendix M); and the Notice of User Responsibilities (Appendix N). The new forms and a brief explanation of their changes can be found here.

Of these forms, the Summary of Consumer Rights and the Notice of User Responsibilities are of primary interest to employers that use results of background checks in making employment decisions. The FCRA requires employers to provide individuals with the Summary of Consumer Rights before taking adverse employment action based on such results. The Notice of User Responsibilities summarizes the duties of employers as users of consumer reports under the FCRA.

Employers already using the previously published model forms may continue to do so for now. The CFPB has stated that it intends to restate the entire regulation in 2013, and once that occurs, all employers must use the new forms to comply with the FCRA.

While the latest changes are technical, they may foreshadow that the CFPB is gearing up to undertake an active supervisory and enforcement role under the FCRA. Employers should be particularly aware of these developments as they occur, and they should review their policies and procedures to ensure continued compliance with the Act.

Ballard Spahr’s Labor and Employment Group routinely assists employers in complying with federal and state laws governing the hiring process and other employment actions. If you have questions regarding FCRA compliance or other issues related to employment background checks, please contact Brian D. Pedrow at 215.864.8108 or pedrow@ballardspahr.com, Paul Apicella at 215.864.8872 or apicellap@ballardspahr.com, or the member of the Labor and Employment Group with whom you work.

Consumer financial services providers should also be aware that the CFPB will be examining institutions it regulates for compliance with FCRA provisions that govern the use of credit reports in the employment context, as well as for FCRA compliance in all other contexts. If you have questions regarding FCRA compliance in other contexts, please contact John L. Culhane, Jr., at 215.864.8535 or culhane@ballardspahr.com, or any members of the Consumer Financial Services Group with whom you work.

The Consumer Financial Services Group also produces CFPB Monitor, a blog that focuses exclusively on important CFPB developments. To subscribe, use the link provided to the right.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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