CFPB Issues Advisory Opinions on FCRA Background Screening, File Disclosure

The CFPB recently issued advisory opinions on FCRA’s background screening and file disclosure requirements, effective January 23, 2024.  The opinions clarify certain kinds of criminal and other adverse consumer information that a consumer reporting agency must include in or exclude from consumer reports, as well as consumer reporting agency obligations for certain disclosures to consumers.

In its background screening opinion, the CFPB addressed the requirement that consumer reporting agencies follow reasonable procedures to assure maximum possible accuracy of consumer report information.  Specifically, the CFPB advised that consumer reporting agencies must have reasonable procedures in place to (1) prevent duplicative information from being reported; (2) check for any available disposition information for arrests, criminal charges, eviction proceedings, and other court filings and to ensure such information is included; and (3) prevent the inclusion of reports of information that has been expunged, sealed, or otherwise legally restricted from public access in a manner that would prevent the user from obtaining it directly from the government entity that maintains the record.  The CFPB also advised that, with regard to adverse items, the seven-year reporting period begins when the adverse item occurs, which cannot be restarted or reopened by the occurrence of a subsequent event.  The CFPB clarified that a disposition does not start its own reporting period, as it could reveal an adverse event that antedates the report by more than seven years.

In its file disclosure opinion, the CFPB addressed the requirement that consumer reporting agencies, upon request, generally must clearly and accurately disclose all information in the consumer’s file at the time of request and the sources of the information.  Specifically, the CFPB advised that FCRA does not require consumers to use any specific language to request a file disclosure from a consumer reporting agency, only that consumers make a “request” and provide proper identification.  The CFPB also advised that a file disclosure must be understandable to the average consumer.  Additionally, a file disclosure may not consist of only a summary of the file because, e.g., it must assist consumers in identifying inaccuracies in the file, exercising their rights to dispute incomplete or inaccurate information, and knowing when they are impacted by adverse information in their file.  Moreover, the CFPB advised that the file disclosure must provide all sources of the information, including both the original source and any intermediary or vendor sources.