FCRA

FCRA overview

Congress enacted FCRA (15 U.S.C. §1681 et seq.) in 1970 to ensure the accuracy, fairness, and privacy of consumers' personal information that is assembled and used by consumer reporting agencies. In order to protect the rights of consumers, the law creates special obligations and restrictions for Consumer Reporting Agencies (CRAs), and for furnishers and users of consumers' personal information.

covered transactions

FCRA applies to any transaction that involves the use of credit reports, consumer investigatory reports, and employment background checks

info included in a consumer report

FCRA places certain requirements on information included in consumer reports. The first involves bankruptcy cases. If a consumer report indicates that the consumer has had a bankruptcy, the report should indicate which chapter the bankruptcy was filed under. If a bankruptcy case is withdrawn before completion, the consumer reporting agency must include that fact in the report. The second disclosure requirement involves credit inquiries. If a large number of credit inquiries was a key factor in adversely affecting the consumer's credit score, the consumer reporting agency is required to disclose that fact in its report. If a consumer voluntarily closes a credit account (for example, cancels a credit card), the consumer reporting agency must disclose that fact in its report. The final disclosure requirement involves address discrepancies. If the consumer reporting agency receives a request for a consumer report containing an address for the consumer that differs substantially from the address on file, the consumer reporting agency must notify the person requesting the report of the discrepancy (15 U.S.C. §1681c).

FCRA regulations

In a memorandum of understanding entered between the CFPB and the FTC, the agencies have agreed to give one another a 30-day notice prior to the publication of an advance notice of proposed rulemaking and to "consult promptly" on guidance documents that address unfair, deceptive, or abusive acts or practices under FCRA. The regulations promulgated pursuant to FCRA are known as Regulation V and are found in 12 C.F.R. §1022 et seq. One section of the regulations that is of particular importance is Appendix M, which provides model forms for the notices and disclosures required by FCRA.

investigative consumer report

a consumer report containing information about a consumer's character, general reputation, personal characteristics, and mode of living that is obtained through personal interviews.

fraud alert

a statement in the file of a consumer that notifies all prospective users of a consumer report relating to the consumer that the consumer may be a victim of fraud, including identity theft, and that is presented in a manner that facilitates a clear and conspicuous view of that statement.

file

all the information about a consumer that is recorded and retained by a CRA

consumer reporting agency

any person who regularly engages for fees or on a cooperative nonprofit basis in the practice of assembling or evaluating of consumer credit information in order to provide consumer reports to third parties. The Dodd-Frank Act authorizes the CFPB to supervise "larger participants" in the market for consumer products and services (12 US.C. §5514(a)(1)(B)).

consumer report

the communication of any information from a consumer reporting agency that relates to a consumer's credit worthiness, credit standing, credit capacity, character, personal characteristics, or mode of living which is used or expected to be used in order to determine the consumer's eligibility for credit or insurance to be used for personal, family, or household purposes or to evaluate a consumer for employment.

adverse action

this term is given the same meaning under FCRA as under ECOA, meaning a denial of credit or an extension of credit in a substantially smaller amount, or for terms substantially different, than that requested by the loan applicant. It also means any denial or unfavorable change in insurance coverage, or a denial of employment based on an investigative consumer report.