Updated Fair Credit Reporting Act Disclosures

In September, 2018, the Consumer Financial Protection Bureau (“CFPB”) issued an interim final rule updating two model disclosures to reflect changes made to the Fair Credit Reporting Act (“FCRA”) by recent legislation. The update is the result of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which Congress passed in May 2018.

The new law was passed in response to the increase in data breaches and requires credit reporting bureaus, under certain circumstances, to provide consumers fraud alerts and unlimited, free national security freezes and freeze releases. The “national security freeze” restricts prospective lenders from obtaining access to a consumer’s credit report, which makes it harder for identity thieves to open accounts in a consumer’s name. The new law mandates that whenever an employer or background check company is required to provide a copy of the “A Summary of Your Rights Under the Fair Credit Reporting Act” or the “Summary of Consumer Identity Theft Rights” disclosure form, they also must provide a notice regarding these new security freeze rights.

The new legislation also amends the FCRA to exclude from consumer reporting information certain medical debts incurred by veterans and establishes a new dispute process with respect to same.

Employers and background check companies must be sure that their forms are updated to ensure compliance.