The Consumer Financial Protection Bureau (CFPB) has released new regulations requiring employers to update forms mandated by the Fair Credit Reporting Act (FCRA) by January 1, 2013. The changes consist primarily of substituting the CFPB for the Federal Trade Commission (FTC) as the point of contact for questions regarding consumers' rights under the Act. The CFPB assumed enforcement and rulemaking authority from the FTC under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The FCRA imposes procedural requirements on employers that gather and use "consumer reports" to hire, fire, promote, demote, or reassign current or prospective employees. Consumer reports are defined broadly in the regulations to include background checks for employment purposes.
Among the mandated procedures are those that require employers to inform applicants or employees in advance of the intent to obtain both a consumer report and their express written consent; to give an individual a copy of the consumer report and advance notice of intent to take adverse action based on the report; and to notify an affected individual in writing if adverse action is taken based on information in the report.
Under the revised regulations, the CFPB issued a revised Summary of Consumer Rights, which employers are required to furnish to individuals before taking adverse employment action. In addition, the CFPB revised the Notice of Furnisher Responsibilities, which details the obligations imposed upon furnishers of consumer reports under the FCRA, and the Notice to Users of Consumer Reports of Their Obligations Under the FCRA, which summarizes the duties of employers as consumer report users.