The Consumer Financial Protection Bureau (CFPB) has exercised its regulatory authority by making a change to three notices required by the Fair Credit Reporting Act, effective January 1, 2013.

The change directs consumers, furnishers and users of employee background checks to the CFPB instead of the Federal Trade Commission (FTC), and are part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203. H.R. 4173) that was signed into law on July 21, 2010.

While the CFPB does not have supervisory authority over background checks, it does have rule making and enforcement powers over the FCRA.

CFPB has modified the following three forms:

• Summary of Consumer Rights under the FCRA
• Notice to Users of Consumer Reports of their Obligations under the FCRA
• Notice to Furnishers of Information of their Obligations under the FCRA

Each of the three notices is mandated for use in certain situations under the Fair Credit Reporting Act.
The “Summary of Consumer Rights under the FCRA” is a notice that a background screening firm must provide an employer and in turn, the employer must provide the notice to the applicant in specific situations.

The FCRA also mandates that a background screening firm (known as a Consumer Reporting Agency or “CRA”) must provide each user (our clients) of its services the “Notice to Users of Consumer Reports of their Obligations under the FCRA”.

The “Notice to Furnishers of Information of their Obligations under the FCRA” is aimed at certain furnishers of information to CRA’s and must be provided in prescribed situations such as a re-investigation where the consumer disputes the report or in a situation involving identity theft.

The main difference between the old forms and the new forms is informing consumers that they may now obtain information about their rights under the FCRA from CFPB, instead of the FTC. To comply with the new law, employers and CRA’s will need to stop using the old forms/notices by the start of 2013.

The new version of the “Summary of Rights” is uploaded on our secured site. You can locate this form in the Documents tab. Also, as always, Information Resources includes the “Summary of Rights” as part of the background check report when we find any derogatory information.