PUBLICATIONS

Legal Alert: Employers Must Be Prepared to Use Revised FCRA Forms Beginning January 1, 2013

Date   Dec 21, 2012

Beginning January 1, 2013, employers must use the revised forms issued by the Consumer Financial Protection Bureau (CFPB) in November 2012 to conduct background checks under the Fair Credit Reporting Act (FCRA).   

 

 

Executive Summary:  Beginning January 1, 2013, employers must use the revised forms issued by the Consumer Financial Protection Bureau (CFPB) in November 2012 to conduct background checks under the Fair Credit Reporting Act (FCRA).   

The FCRA imposes certain requirements on employers who use third party consumer reporting agencies (CRAs) to obtain consumer reports and investigative consumer reports on employees and applicants.  A consumer report includes a written or oral summary of a person's credit-worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. An investigative consumer report is a consumer report containing information about a person's character, general reputation, personal characteristics, or mode of living that was obtained through personal interviews with neighbors, friends, associates, or others who have knowledge of such information about the consumer. 

Previously, the Federal Trade Commission (FTC) was solely responsible for interpreting and enforcing the FCRA.  In July 2011 the responsibility for interpreting the FCRA was transferred to the CFPB and the FTC began to share responsibility for enforcement with the CFPB.  In November 2012 the CFPB issued revised forms that employers are to use when complying with the FCRA's background check requirements.  The revisions to the forms include instructing employees to contact the CFPB or visit its web site to learn more about their rights under the FCRA instead of contacting the FTC.  The new forms do not impose additional substantive requirements on employers. 

The forms that the CFPB has revised are:

  • A Summary of Your Rights Under the Fair Credit Reporting Act (Revised Appendix K to Part 1022).  CRAs provide this to employers.  Employers must provide this form to an employee prior to taking an adverse employment action based on a consumer report.  You can access a copy of this form by clicking here.
  • Notice to Furnishers of Information: Obligations of Furnishers Under the FCRA (Revised Appendix M to Part 1022 – Notice of Furnisher Responsibilities).  You can access a copy of this form by clicking here.
  • Notice to Users of Consumer Reports: Obligations of Users Under the FCRA (Revised Appendix N to Part 1022 – Notice of User Responsibilities).  You can access a copy of this form by clicking here.

These forms are also available at: https://www.federalregister.gov/articles/2012/11/14/2012-27581/fair-credit-reporting-regulation-v-correction#h-14.

The Bottom Line:

Employers should be prepared to use the new forms beginning on January 1, 2013.  FordHarrison attorneys can assist you in complying with the requirements of the FCRA.  If you have any questions regarding this Alert or other FCRA requirements, please contact the FordHarrison attorney with whom you usually work or Rick Warren, rwarren@fordharrison.com, a partner in our Atlanta office.