New Fair Credit Reporting Act (FCRA) Form Required

The Bureau of Consumer Financial Protection has just issued a new interim final rule that requires, as of September 21, 2018, employers to use a new model summary of rights notice required by the Fair Credit Reporting Act (“FCRA”).

Background

Employers conducting background checks on job applicants or employees often seek data from third-party consumer reporting agencies. This triggers application of the FCRA, which mandates various notices and protections for the persons whose backgrounds are being investigated.

One such protection is the requirement that before taking adverse action against an applicant or employee based on a consumer report an employer must provide the individual with: (1) a copy of the consumer report relied on, and (2) a notice entitled “A Summary of Your Rights Under the Fair Credit Reporting Act”.

What’s New?

In May 2018, Congress passed the Economic Growth, Regulatory Relief and Consumer Protection Act, which altered the FCRA as follows:

  1. The minimum time that nationwide consumer reporting agencies must include an initial fraud alert in a consumer’s file was extended from 90 days to one year; and
  2. A new section was added which requires nationwide consumer reporting agencies to provide national security freezes free of charge to consumers.

These two new provisions have now been incorporated into the “Summary of Your Rights” notice, and employers must now either:

  1. Provide the new model “Summary of Your Rights Under the Fair Credit Reporting Act” notice before taking an adverse employment action against an applicant or employee based on a consumer report; or
  2. Continue to use the existing model notice but accompany it with a separate page that contains the additional language that was added to the new notice.

Employers wishing to simply adopt the new notice may access it here.

Bottom Line

If you obtain background data from third-party consumer reporting agencies, use the new form or update your existing form as directed above.  If you fail to make this change, you risk violating the FCRA.