According to regulations from the Consumer Financial Protection Board (CFPB), three essential forms mandated by the federal Fair Credit Reporting Act (FCRA) used in the background screening process must be modified by January 1, 2013.
The forms must be changed to reflect that consumers can obtain information about their rights under the FCRA from the CFPB instead of the Federal Trade Commission (FTC). The three forms in use currently indicate that the FTC is the agency consumers can contact with questions.
The three forms at issue are:
- A Summary of Your Rights Under the Fair Credit Reporting Act.
- Notice to Furnishers of Information: Obligations of Furnishers Under The FCRA.
- Notice to Users of Consumer Reports: Obligations of Users Under the FCRA.
Each of the three notices is mandated for use in certain situations under the Fair Credit Reporting Act:
- The “Summary of Consumer Rights under the FCRA” is a notice that a background screening firm must provide to an employer and employers in turn must provide the notice to applicants in different situations.
- The FCRA also mandates that a background screening firm (known as a Consumer Reporting Agency or “CRA”) must provide each user of its services the “Notice to Users of Consumer Reports of their Obligations under the FCRA.”
- The “Notice to Furnishers of Information of their Obligations under the FCRA” is aimed at certain furnishers of information to CRAs and must be provided in prescribed situations such as a re-investigation where the consumer disputes the report or in a situation involving identity theft.
The changes are the result of the creation of the CFPB as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act that was signed into law by President Barack Obama on July 21, 2010. The CFPB has rule making and enforcement powers over the FCRA.
However, the CFPB does not have supervisory power over background screening firms. Congress specifically exempted background screening firms from being supervised by the CFPB since a background check report is not a financial product. The result may be some confusion as the CFPB and FTC determine which agency will perform which tasks.
The current FTC versions of the three forms are published as appendixes to regulations. The primary difference is that instead of listing the FTC contact information, the CFPB contact information is utilized in the form.