The Consumer Financial Protection Bureau yesterday released a pair of advisory opinions related to the Fair Credit Reporting Act — one addressing inaccurate background check reports and the other reminding credit reporting agencies that consumers have a right to their entire credit file any time it is requested.
Background Checks: More and more, credit reports are being included as part of background checks, whether they are done by landlords, potential employers, insurance companies, and others.
- Consumer reporting companies are required under the FCRA to maintain reasonable procedures to avoid producing reports with false or misleading information, the CFPB warned in its report. Specifically, credit bureaus should:
- Prevent the reporting of public record information that has been expunged, sealed, or otherwise legally restricted from public access.
- Ensure disposition information is reported for any arrests, criminal charges, eviction proceedings, or other court filings that are included in background check reports.
- Prevent the reporting of duplicative information.
- Outdated negative information must also be purged from consumers’ credit reports and its up to credit reporting agencies to only report negative items for as long as they are legally required to do so.
Credit File Disclosures: Getting access to their full credit file can be a critical component of a consumer’s right to dispute false or misleading information, the CFPB noted. This includes all source of information contained in their file, including the originating sources and any intermediary or vendor sources, so any misinformation can be corrected.
What This Means: Advisory opinions don’t officially carry the full force and effect as a formal rulemaking, they are usually treated as gospel by companies in the financial services industry. Generally, the CFPB doesn’t issue an advisory opinion unless it has seen something, usually across a number of furnishers in this case.
