CFPB Updates Summary of Rights Under Fair Credit Reporting Act

October 5, 2018

On Sept. 12, the Consumer Finance Protection Bureau issued an updated model disclosure form, required under the federal Fair Credit Reporting Act (FCRA) as of Sept. 21, 2018. The revised “Summary of Your Rights Under the Fair Credit Reporting Act” is one of several notices employers must provide under the FCRA when using a consumer reporting agency to run background checks. 

The statutory amendment that prompted the CFPB to create this form (part of the Economic Growth, Regulatory Relief, and Consumer Protection Act) is ambiguous as to whether it applies specifically to employers. Given the continuing onslaught of litigation against employers over minor and technical FCRA violations, however, McGuireWoods recommends implementing this new form promptly to minimize the risk associated with the background check process.

The new model disclosure form may be accessed on the CFPB website. Employers must provide a copy of this form before taking an adverse action based in whole or in part on a report run by a consumer reporting agency, including criminal background checks and credit reports. This “pre-adverse action” mailing should also include a copy of the report at issue and any applicable state-specific notices.  In addition, employers who use “investigative consumer reports,” which include information gathered through interviews with an applicant’s contacts (e.g., reference checks performed by a background check vendor), should provide a copy of the CFPB’s summary of rights before requesting those reports. 

For a more thorough overview of the background check process and employers’ associated obligations under the FCRA, visit the Federal Trade Commission website. It explains the timing and substance of what employers need to do before getting a consumer report, before taking adverse action and after taking the action.

If you have any questions about how these changes will affect your organization, please contact the authors of this article or your primary McGuireWoods contact.