FRCA Rules Russel Samson Dickinson Law Des Moines

Posted on 10/05/2018 at 03:49 PM by Russell Samson

On September 18, 2018, the Consumer Financial Protection Bureau published in an “interim final rule” which, among other changes, contained a new “Summary of Consumer Rights” under the Fair Credit Reporting Act.   The new Summary is available in English in Spanish here.

Most certainly not coincidentally, Friday, September 21, 2018, was the effective date for a provision of the “Economic Growth, Regulatory Relief, and Consumer Protection Act,”  mandating a change in the information that must be included in a “summary of rights” that a consumer is required to receive under the Fair Credit Reporting Act.

Employers will no doubt recall that the term “consumer reports” includes background information on applicants or employees obtained through a third party which is in the business of compiling that information – a credit reporting agency, or CRA.  If an employer uses those “consumer reports” to make, even in part, employment decisions, it must comply with the relevant provisions of the Fair Credit Reporting Act.  One of those requirements is that prior to making a final “adverse action” decision, the employer must give the applicant or employee notice in advance, including a copy of the “consumer report” and a written description of consumer rights. 15 U.S.C. § 1681b(b)(3)(A)(ii). The statute contemplates that the CRA will provide an employer with a copy of the summary at the same time it provides the report to the employer.  The statue has an exception:  The CRA need not provide a copy with each report if it “has previously provided” the summary to the employer. My guess would be that most CRAs are relying on the “we did it previously” provision.  My guess would be that most CRAs sent each of their clients one copy of the new Summary form sometime between September 18 and September 21, 2018.

An employer subject to the FCRA requirements regarding third-party background check information would be well advised to go to download the new form in Word format or PDF (which would not be subject to inadvertent changes) format and print off a supply of the new forms, and make certain that there are no “outdated” forms saved anywhere.  Most critically, the employer should make certain that if it is providing the Summary in conjunction with an employment action – even in a situation where the law does not require the Summary to be provided -- it is providing the correct, most current version.  It is the “person intending to take such adverse action” – the employer – that has the obligation to provide the consumer with the summary.  Moreover, it is the employer that will be sued if there is even a hint of noncompliance.

This may also be a good time for an employer to review all aspects of FCRA compliance (especially if it is not aware that the FCRA applies to employment decisions).  


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