CFPB Issues Crucial Advisories on Fair Credit Reporting Act

The Consumer Financial Protection Bureau

In recent years, the Consumer Financial Protection Bureau (CFPB) has emerged as a key player in interpreting and enforcing the Fair Credit Reporting Act (FCRA), taking over responsibilities from the Federal Trade Commission in 2011. As we step into 2024, the CFPB has demonstrated its commitment to addressing significant issues related to consumer reports through the issuance of two pivotal advisory opinions.

CFPB Advisory Opinion 1 Background Screening issued on January 11, 2024

The initial advisory focuses on challenges arising in the realm of background screening, particularly when consumer reports are utilized for housing or employment decisions. While consumer reports encompass various types of information, the advisory emphasizes that negative information should not persist on reports for more than seven years. A crucial clarification is provided, stating that the seven-year timeframe commences from the initiation of any proceeding, be it criminal, eviction, or otherwise.

Furthermore, the advisory delves into the accuracy requirements of the FCRA, emphasizing that consumer reporting agencies must implement procedures to prevent the reporting of duplicative information, expunged or sealed records, and ensure the inclusion of disposition information alongside the proceeding. It sheds light on the challenges posed by state laws that restrict the disclosure of criminal history records for non-law enforcement purposes within shorter timeframes than the FCRA’s seven-year requirement.

CFPB Advisory Opinion 2 File Disclosures issued on January 11, 2024

The second advisory underscores the obligation of consumer reporting agencies to furnish consumers with complete and comprehensible information about their own consumer reports. Emphasis is placed on presenting information in a way that an average person can understand, enabling consumers to easily identify inaccuracies and exercise their right to dispute inaccurate information on credit, background and tenant screening reports.

Addressing a persistent issue in the consumer reporting industry, the advisory highlights the proliferation of intermediaries and vendors. It stresses that when consumers identify errors, reporting agencies must disclose both the original source and any intermediary or vendor source responsible for providing the erroneous information.

Implications and Challenges

While the CFPB’s advisories serve as important guidelines for consumer reporting agencies to heed and follow, the credit reporting industry may face challenges in timely implementing policies and procedures that align with these expectations and comply with the Fair Credit Reporting Act (FCRA). The complexities involved in implementing accurate reporting procedures and disclosures may require considerable time and resources that the consumer reporting agencies do not have or choose to ignore the guidance in the name of higher profits.

Conclusion – Reports Should be More Accurate

The CFPB’s recent advisories mark a significant step in addressing longstanding issues within the consumer reporting landscape. As the industry adapts to these guidelines, consumers can anticipate improved transparency and accuracy in the information presented in their reports. However, achieving full compliance may take time, emphasizing the need for ongoing collaboration between regulators and industry stakeholders to ensure the effective implementation of these crucial measures.

We Help Consumers

The Adkins Firm represents consumers who have errors on credit, employment background and tenant screening reports. We help our clients clear their names. Do you have errors on a credit report, background report or tenant screening report due to fraud?  Have you disputed the error and the fraudulent information was verified that it belongs to you? If you answered yes, then you may have a claim under the federal Fair Credit Reporting Act. Please note, there is a statute of limitations that may bar you from recovering for your damages. Don’t wait.  Contact us for a free case review.