Fair Credit Reporting; Background Screening, 4171-4176 [2024-00788]
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Federal Register / Vol. 89, No. 15 / Tuesday, January 23, 2024 / Rules and Regulations
damaged because of inaccurate or
arbitrary information in a credit
report.’’ 39 The FCRA achieves this by,
among other things, providing
consumers the right to obtain, upon
request, all information in their file and
the sources of that information and the
right to dispute any incomplete or
inaccurate information. The statutory
right provided by FCRA section
609(a)(2) enables consumers to
understand the true sources of any
incomplete or inaccurate information in
their file and helps them to address
such errors more effectively.40 For
example, many consumer reporting
agencies, including background
screening companies, obtain public
records information from vendors.
Vendors often provide only distilled
versions of these records that do not
contain all the information housed by
the jurisdiction from which the records
originated and sometimes contain
mistakes or fail to include the most upto-date status of the public records. If a
consumer reporting agency discloses to
a consumer only the original
jurisdiction as the source of the
information and does not also disclose
the vendor, or conversely, if the
consumer reporting agency discloses to
a consumer only the vendor and does
not also disclose the original source of
the information, the consumer may not
be able to correct any erroneous public
records information that could be
included in their files at all of the
consumer reporting agencies that
receive data from the vendor.41
Interpreting FCRA section 609(a)(2) to
allow a consumer reporting agency to
disclose to a consumer only a single
source of the information, and not all
sources of the information, would
undermine the FCRA’s purposes by
limiting consumers’ ability to
understand the sources of the often
39 S.
Rep. No. 91–517, at 1 (1969).
have recognized the importance of the
disclosure of all sources for consumers to dispute
inaccuracies and prevent the reoccurrence of
inaccuracies. See, e.g., Clark v. Trans Union LLC,
No. 3:15cv391, 2016 WL 7197391, at *11 (E.D. Va.
Dec. 9, 2016) (stating that ‘‘the omission of
LexisNexis as a source deprived Clark of her
congressionally-mandated right to correct the
mistake with LexisNexis, or with anyone else to
whom LexisNexis also may have disclosed the
inaccurate information. Moreover, the failure to
include LexisNexis in the report creates a material
risk that LexisNexis could continue to report
inaccurate information to others in the future.’’);
Leo v. AppFolio, Inc., No. 17–5771 RJB, 2018 WL
623647, at *8 (W.D. Wash. Jan. 30, 2018) (noting
that AppFolio’s failure to properly identify the
vendor who provided the data would make it
harder for the plaintiff to correct the misreporting).
41 See, e.g., Clark v. Trans Union LLC, No.
3:15cv391, 2016 WL 7197391, at *11 (E.D. Va. Dec.
9, 2016); Leo v. AppFolio, Inc., No. 17–5771 RJB,
2018 WL 623647, at *8 (W.D. Wash. Jan. 30, 2018).
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highly sensitive information in their file
and to address and prevent further
dissemination of incomplete or
inaccurate data.
In addition to provisions authorizing
Federal and State enforcement,42 the
FCRA contains two provisions relating
to civil liability to consumers for
noncompliance. Section 617 provides
that ‘‘any person who is negligent in
failing to comply with any requirement
imposed under this title with respect to
any consumer is liable to that consumer
in an amount equal to’’ the consumer’s
actual damages, and costs and
reasonable attorney’s fees.43 Section 616
provides that ‘‘any person who willfully
fails to comply with any requirement
imposed under this title with respect to
any consumer is liable to that consumer
in an amount equal to’’ actual or
statutory damages of up to $1,000 per
violation, such punitive damages as the
court allows, and costs and reasonable
attorney’s fees.44 A violation is willful
when it is inconsistent with
‘‘authoritative guidance’’ from a relevant
agency.45 As with any guidance issued
by the CFPB on the FCRA, or
predecessor agencies that were
responsible for administering the FCRA
prior to the CFPB’s creation, consumer
reporting agencies risk liability under
section 616 if they violate the FCRA in
a manner described in this advisory
opinion, regardless of whether the
consumer reporting agencies were
previously liable for willful violations
prior to its issuance.
II. Regulatory Matters
This advisory opinion is an
interpretive rule issued under the
Bureau’s authority to interpret the
FCRA, including under section
1022(b)(1) of the Consumer Financial
Protection Act of 2010,46 which
authorizes guidance as may be
necessary or appropriate to enable the
Bureau to administer and carry out the
purposes and objectives of Federal
consumer financial laws.47
The Bureau has determined that this
advisory opinion does not impose any
new or revise any existing
recordkeeping, reporting, or disclosure
requirements on covered entities or
members of the public that would be
collections of information requiring
42 15
U.S.C. 1681s.
U.S.C. 1681o (emphasis added).
44 15 U.S.C. 1681n (emphasis added); Safeco Ins.
Co. of Am. v. Burr, 551 U.S. 47, 57–58 (2007)
(construing meaning of ‘‘willful’’).
45 Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 70
(2007); Fuges v. Sw. Fin. Servs., Ltd., 707 F.3d 241,
253 (3d Cir. 2012).
46 Pub. L. 111–203, 124 Stat. 1376 (2010).
47 12 U.S.C. 5512(b)(1).
43 15
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4171
approval by the Office of Management
and Budget under the Paperwork
Reduction Act.48
Pursuant to the Congressional Review
Act,49 the Bureau will submit a report
containing this interpretive rule and
other required information to the United
States Senate, the United States House
of Representatives, and the Comptroller
General of the United States prior to the
rule’s published effective date. The
Office of Information and Regulatory
Affairs has designated this interpretive
rule as not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
Rohit Chopra,
Director, Consumer Financial Protection
Bureau.
[FR Doc. 2024–00786 Filed 1–22–24; 8:45 am]
BILLING CODE 4810–AM–P
CONSUMER FINANCIAL PROTECTION
BUREAU
12 CFR Part 1022
Fair Credit Reporting; Background
Screening
Consumer Financial Protection
Bureau.
ACTION: Advisory opinion.
AGENCY:
The Consumer Financial
Protection Bureau (CFPB or Bureau) is
issuing this advisory opinion to affirm
that, when preparing consumer reports,
a consumer reporting agency that
reports public record information is not
using reasonable procedures to assure
maximum possible accuracy under
section 607(b) of the Fair Credit
Reporting Act (FCRA) if it does not have
certain procedures in place. For
example, it must have procedures that
prevent reporting of information that is
duplicative or that has been expunged,
sealed, or otherwise legally restricted
from public access. This advisory
opinion also highlights certain aspects
of the reporting period for adverse items
under FCRA section 605(a)(5).
DATES: This advisory opinion is
effective on January 23, 2024.
FOR FURTHER INFORMATION CONTACT: Seth
Caffrey, Amanda Quester, or Ruth Van
Veldhuizen, Senior Counsels, Office of
Regulations at (202) 435–7700 or
https://reginquiries. consumer
finance.gov/. If you require this
document in an alternative electronic
format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION: The
Bureau is issuing this advisory opinion
SUMMARY:
48 44
49 5
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Federal Register / Vol. 89, No. 15 / Tuesday, January 23, 2024 / Rules and Regulations
through the procedures for its Advisory
Opinions Policy.1 Refer to those
procedures for more information.
I. Advisory Opinion
A. Background
The majority of landlords and
employers conduct background checks
before renting property or hiring
employees.2 Landlords and employers
typically conduct background checks by
obtaining consumer reports from
consumer reporting agencies.3
Consumer reporting agencies that
prepare consumer reports for these
purposes are commonly known as
background screening companies, and
the reports that they prepare are
commonly known as background
screening reports.4
Background screening companies vary
in size, the users they serve, the services
they provide, and the geographic
regions they cover.5 The reports they
provide sometimes include information
about a consumer’s credit history, rental
history, employment, salary,
professional licenses, criminal arrests
and convictions, and driving records.6
Background screening companies also
vary in how they obtain information and
prepare reports. Different companies use
different identifying information to
conduct searches; search different
databases, external and internal, to
access information; apply different
criteria to determine whether a record in
a database matches an individual; and
employ different procedures for
updating information.7
In many instances, background
screening reports contain inaccurate
information about consumers.8 For
1 85
FR 77987 (Dec. 3, 2020).
Bulletin 2021–03: Consumer Reporting of
Rental Information (July 1, 2021), https://files.
consumerfinance.gov/f/documents/cfpb_consumerreporting-rental-information_bulletin-2021-03_
2021-07.pdf; CFPB, Market Snapshot: Background
Screening Reports, at 3–4 (Oct. 2019), https://files.
consumerfinance.gov/f/documents/201909_cfpb_
market-snapshot-background-screening_report.pdf.
3 See 15 U.S.C. 1681a(d) (defining ‘‘consumer
report’’); 1681a(f) (defining ‘‘consumer reporting
agency’’).
4 See generally CFPB, Market Snapshot:
Background Screening Reports (Oct. 2019), https://
files.consumerfinance.gov/f/documents/201909_
cfpb_market-snapshot-background-screening_
report.pdf.
5 See id. at 5.
6 See id. at 2.
7 See id. at 8.
8 See generally Nat’l Consumer Law Ctr., Broken
Records Redux: How Errors by Criminal
Background Check Companies Continue to Harm
Consumers Seeking Jobs and Housing, at 3 (Dec.
2019), https://www.nclc.org/images/pdf/criminaljustice/report-broken-records-redux.pdf; Sarah E.
Lageson & Robert Stewart, Faulty Background
Checks Are Violating Privacy and Ruining Lives,
The Hill (Sept. 28, 2023), https://thehill.com/
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example, some background screening
reports contain information about the
wrong consumer, such as when a report
shows an eviction record or criminal
conviction that belongs to someone
else.9 Some also contain duplicative
information, such as when a report
shows the same eviction or criminal
conviction twice, giving the impression
that the consumer’s eviction or criminal
history is more extensive than it really
is.10 In addition, some background
screening reports omit existing
disposition information, such as when
an eviction action or criminal charges
have been dismissed, giving a
misleading picture of a consumer’s
rental or criminal history.11
Some background screening reports
also include arrests, convictions, or
other court records that should not be
included because they have been
expunged or sealed or otherwise legally
restricted from public access.12 Some
States and localities have taken steps to
make it easier to seal or expunge certain
records, including eviction records.13
opinion/technology/4227081-faulty-backgroundchecks-are-violating-privacy-and-ruining-lives/
(describing study that concluded that 74 percent of
total criminal charges reported on 101 participants’
reports did not have matches in official state reports
and that a background report erroneously attributed
50 charges to a participant who in fact had only two
drug convictions).
9 In November 2021, the Bureau issued an
advisory opinion highlighting that a consumer
reporting agency that prepares consumer reports
using name-only matching (i.e., matching
information to the particular consumer who is the
subject of a consumer report based solely on
whether the consumer’s first and last names are
identical or similar to the names associated with the
information) does not use reasonable procedures to
assure maximum possible accuracy under FCRA
section 607(b). Fair Credit Reporting: Name-Only
Matching Procedures, 86 FR 62468 (Nov. 10, 2021).
10 See Nat’l Consumer Law Ctr., Digital Denials:
How Abuse, Bias, and Lack of Transparency in
Tenant Screening Harm Renters, at 37 (Sept. 2023),
https://www.nclc.org/wp-content/uploads/2023/09/
202309_Report_Digital-Denials.pdf.
11 See id. at 38.
12 See, e.g., id. at 5, 31, 35; Consent Order, In re
Gen. Info. Servs., Inc., 2015–CFPB–0028 (Oct. 29,
2015), https://files.consumerfinance.gov/f/201510_
cfpb_consent-order_general-information-serviceinc.pdf; CFPB, Press Release, CFPB Takes Action
Against Two of the Largest Employment
Background Screening Report Providers for Serious
Inaccuracies (Oct. 29, 2015), https://www.consumer
finance.gov/about-us/newsroom/cfpb-takes-actionagainst-two-of-the-largest-employment-backgroundscreening-report-providers-for-serious-inaccuracies/
; Consent Order, United States v. HireRight Sols.,
Inc., 1:12-cv-01313 (D.D.C. Aug. 8, 2012), https://
www.ftc.gov/sites/default/files/documents/cases/
2012/08/120808hirerightstip.pdf.
13 See, e.g., Or. Rev. Stat. sec. 105.163 (allowing
sealing of eviction records in certain circumstances,
such as when there is a judgment or judgment of
dismissal entered in the consumer’s favor); DC Code
sec. 42–3505.09 (requiring that eviction records be
sealed in certain circumstances, such as (1) after 30
days have passed from final resolution if the
eviction proceeding does not result in a judgment
for possession in favor of the housing provider or
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Additionally, public access to certain
criminal records maintained by
government entities that reflect a
disposition other than conviction or that
have reached a specified age without
active prosecution is legally restricted in
certain circumstances.14 As explained
in part C.1 below, the CFPB interprets
the FCRA to prohibit background
screening companies from including in
consumer reports information that
would not be publicly available to the
user due to these restrictions.
Background screening companies
sometimes also include obsolete
criminal record information in
background screening reports.15 For
example, the CFPB is aware that, when
some consumer reporting agencies
report criminal cases that have been
dismissed, they have used the
disposition date to start the seven-year
reporting period for records of arrests
and other non-conviction criminal
record information, rather than the
‘‘date of entry’’ for records of arrest or
the date of the criminal charge for other
non-conviction criminal record
information.16 As a result, these
(2) three years after the final resolution of the
eviction proceeding if the eviction proceeding
results in a judgment for possession in favor of the
housing provider); Cal. Civ. Proc. Code sec. 1161.2
(requiring certain eviction records to be sealed at
filing, and limiting access to those records to a
small list of exceptions, unless judgment is entered
for the landlord within 60 days of the complaint
being filed); see also Margaret C. Love, Collateral
Consequences Res. Ctr., 50-State Comparison:
Expungement, Sealing & Other Record Relief (Oct.
2021), https://ccresourcecenter.org/staterestoration-profiles/50-state-comparisonjudicialexpungement-sealing-and-set-aside/.
14 See, e.g., 28 CFR 20.21(b); 18 Pa. Cons. Stat.
sec. 9121(b)(2) (generally restricting State and local
police departments from disseminating information
regarding the initiation of criminal proceedings to
individuals or noncriminal justice agencies when
three years have elapsed from the date of arrest, no
disposition is indicated in the record, and nothing
in the record indicates that proceedings seeking
conviction remain pending); 6 Va. Admin. Code 20–
120–50.A.1 (generally prohibiting dissemination of
criminal history records to noncriminal justice
agencies or individuals when one year has elapsed
from the date of arrest, no disposition of the charge
has been recorded, and no active prosecution of the
charge is pending); see also SEARCH, The Nat’l
Consortium for Justice Info. and Statistics, Report
of the National Task Force on the Commercial Sale
of Criminal Justice Record Information, at 41 (2005),
https://www.search.org/files/pdf/RNTFCSCJRI.pdf
(‘‘In most States, authorized noncriminal justice
requestors receive less than the full record; most
often they are provided conviction-only
information.’’).
15 The FCRA limits the length of time that certain
items of information may appear in a consumer
report. 15 U.S.C. 1681c. For example, the FCRA
generally prohibits the reporting of ‘‘[a]ny . . .
adverse item of information . . . which antedates
the report by more than seven years.’’ 15 U.S.C.
1681c(a)(5). This advisory opinion uses the term
‘‘obsolete’’ to refer to information that is older than
the applicable FCRA time limit.
16 See, e.g., Moran v. The Screening Pros, LLC, 25
F.4th 722, 724–25 (9th Cir. 2022); Moran v. The
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consumer reporting agencies have
included adverse information in
consumer reports longer than FCRA
section 605(a) permits.
When these types of information
appear in background screening reports,
the consequences for consumers can be
grave. Consumers’ rental housing
applications may be denied, or they may
end up paying more for such housing or
be limited to locations or types of rental
housing that they would not otherwise
have selected, all of which is
particularly challenging for consumers
in a market characterized by high
rents.17 Consumers’ employment
applications may be rejected, they may
be passed over for promotions or denied
security clearances, and they may lose
their jobs. Even if none of these things
happen, a consumer may spend
considerable time and energy, and incur
considerable expense, attempting to
correct inaccuracies. Consumers often
do not see their reports, if at all, until
after they are denied, and efforts to
correct information with one company
may not carry over to the hundreds of
other background screening companies
or those that sell data to them.
In 1970, Congress enacted the Fair
Credit Reporting Act (FCRA) to protect
against these types of harms. The FCRA
regulates consumer reporting and
imposes obligations on consumer
reporting agencies, the entities that
furnish information to them, and the
users of consumer reports.18 In passing
the FCRA, Congress recognized ‘‘a need
to insure that consumer reporting
agencies exercise their grave
responsibilities with fairness,
impartiality, and a respect for the
consumer’s privacy.’’ 19 Accordingly,
Congress designed the FCRA ‘‘to
prevent consumers from being unjustly
damaged because of inaccurate or
arbitrary information’’ and ‘‘to prevent
an undue invasion of the individual’s
right of privacy in the collection and
Screening Pros, LLC, 943 F.3d 1175, 1182 (9th Cir.
2019); Complaint at ¶¶ 19–20, Bureau of Consumer
Fin. Prot. v. Sterling Infosys., Inc., No. 1:19–cv–
10824 (S.D.N.Y. Nov. 22, 2019), https://files.
consumerfinance.gov/f/documents/cfpb_sterlinginfosystems-inc_complaint_2019-11.pdf.
17 See Joint Ctr. for Hous. Studies of Harvard
Univ., The State of the Nation’s Housing, at 1–2, 22
(2023), https://www.jchs.harvard.edu/sites/default/
files/reports/files/Harvard_JCHS_The_State_of_the_
Nations_Housing_2023.pdf (noting that ‘‘renter cost
burdens have risen to their highest recorded level,
underscoring the worsening affordability challenges
facing many renters with lower incomes’’); CFPB,
Tenant Background Checks Market at 5 (Nov. 2022),
https://files.consumerfinance.gov/f/documents/
cfpb_tenant-background-checks-market_report_
2022-11.pdf.
18 15 U.S.C. 1681–1681x.
19 15 U.S.C. 1681(a)(4).
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dissemination of credit information.’’ 20
A primary purpose of the FCRA is ‘‘to
protect consumers from the
transmission of inaccurate information
about them, and to establish credit
reporting practices that utilize accurate,
relevant, and current information in a
confidential and responsible
manner.’’ 21 The statute is meant to
ensure, among other things, that
consumer reporting agencies provide
information ‘‘in a manner which is fair
and equitable to the consumer, with
regard to the confidentiality, accuracy,
relevancy, and proper utilization of
such information.’’ 22
Because of the importance of
consumer report accuracy to businesses
and consumers, the structure of the
FCRA creates interrelated legal
standards and requirements to support
the goal of accurate credit reporting.
Among these is the requirement that,
when preparing a consumer report,
consumer reporting agencies ‘‘shall
follow reasonable procedures to assure
maximum possible accuracy of the
information concerning the individual
about whom the report relates.’’ 23 This
requirement remains as important today
as it was when the statute was enacted
in 1970, and concerns about the
accuracy of information included in
consumer reports are long standing.
The CFPB is issuing this advisory
opinion to underscore certain
obligations that the FCRA imposes
when background screening reports are
provided and used. First, this advisory
opinion highlights that consumer
reporting agencies must comply with
their FCRA obligation to ‘‘follow
reasonable procedures to assure
maximum possible accuracy’’ under
section 607(b). In particular, a consumer
reporting agency that reports public
record information is not using
reasonable procedures to assure
maximum possible accuracy if it does
not have reasonable procedures in place
to ensure that (1) it does not report
information that is duplicative or 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 entities that maintain the
records and (2) it includes any existing
20 S.
Rep. No. 91–517, at 1 (1969).
v. Trans Union Credit Info., 45 F.3d
1329, 1333 (9th Cir. 1995) (citations omitted); see
also Porter v. Talbot Perkins Children’s Servs., 355
F. Supp. 174, 176 (S.D.N.Y. 1973) (noting that the
FCRA was intended ‘‘to protect an individual from
inaccurate or arbitrary information about himself in
a consumer report that is being used as a factor in
determining the individual’s eligibility for credit,
insurance or employment’’).
22 15 U.S.C. 1681(b).
23 15 U.S.C. 1681e(b).
21 Guimond
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disposition information if it reports
arrests, criminal charges, eviction
proceedings, or other court filings.
Second, consistent with prior cases
and guidance discussed below, this
advisory opinion highlights that, when
consumer reporting agencies include
adverse information in consumer
reports, the occurrence of the adverse
event starts the running of the reporting
period for adverse items under FCRA
section 605(a)(5), which is not restarted
or reopened by the occurrence of
subsequent events. Moreover, a nonconviction disposition 24 of a criminal
charge cannot be reported beyond the
seven-year period that begins to run at
the time of the charge. Consumer
reporting agencies thus must ensure that
they do not report adverse information
beyond the reporting period in FCRA
section 605(a)(5) and must at all times
have reasonable procedures in place to
prevent reporting of information that is
duplicative or legally restricted from
public access and to ensure that any
existing disposition information is
included if court filings are reported.
B. Coverage
This advisory opinion applies to all
‘‘consumer reporting agencies,’’ as that
term is defined in FCRA section 603(f).
C. Legal Analysis
1. Reasonable Procedures To Assure
Maximum Possible Accuracy When
Preparing Background Screening
Reports
FCRA section 607(b) provides that
‘‘[w]henever a consumer reporting
agency prepares a consumer report it
shall follow reasonable procedures to
assure maximum possible accuracy of
the information concerning the
individual about whom the report
relates.’’ 25 The Bureau has previously
indicated that it is not a reasonable
procedure to use name-only matching to
match information to the consumer who
is the subject of the report when
preparing a consumer report.26 This
advisory opinion highlights the
Bureau’s interpretation of three other
24 As used in this advisory opinion, nonconviction disposition refers to a dismissal or a
similar disposition of criminal charges such as
dropped charges or an acquittal.
25 15 U.S.C. 1681e(b).
26 See, e.g., Fair Credit Reporting: Name-Only
Matching Procedures, 86 FR 62468 (Nov. 10, 2021);
Consent Order at ¶¶ 4–13, In re Gen. Info. Servs.,
Inc., 2015–CFPB–0028 (Oct. 29, 2015), https://files.
consumerfinance.gov/f/201510_cfpb_consentorder_general-information-service-inc.pdf;
Complaint at ¶¶ 5–11, 13–14, Bureau of Consumer
Fin. Prot. v. Sterling Infosys., Inc., No. 1:19–cv–
10824 (S.D.N.Y. Nov. 22, 2019), https://files.
consumerfinance.gov/f/documents/cfpb_sterlinginfosystems-inc_complaint_2019-11.pdf.
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aspects of section 607(b)’s ‘‘reasonable
procedures to assure maximum possible
accuracy’’ requirement that relate to
background screening information used
in consumer reports: (1) preventing
duplication of information; (2)
including any existing disposition
information if arrests, criminal charges,
eviction proceedings, or other court
filings are reported; and (3) ensuring
that information that has been
expunged, sealed, or otherwise legally
restricted from public access in a
manner that would prevent users from
obtaining it directly from the
government entity that maintains the
records is not included in consumer
reports.
To comply with section 607(b) of the
FCRA, consumer reporting agencies
must have reasonable procedures in
place to prevent duplicative information
from being reported on consumer
reports in order to ensure that reports do
not inaccurately suggest that a single
event occurred more than once. For
example, inclusion of multiple entries
for the same criminal conviction or the
same eviction can wrongly suggest that
a consumer was convicted or evicted
more than once. Consumer reporting
agencies that obtain information from
multiple sources, or from a single source
that in turn collects information from
multiple sources, must take particular
care to identify information that is
duplicative to ensure that information is
accurately presented in consumer
reports. Similarly, when a consumer
reporting agency reports multiple stages
of the same court proceeding, it must
have procedures in place to ensure that
information regarding the stages of these
court proceedings (such as an arrest
followed by a conviction) is presented
in a way that makes clear the stages all
relate to the same proceeding or case
and does not inaccurately suggest that
multiple proceedings or cases have
occurred. For example, at a minimum,
such procedures should require that all
information about one court case should
be collated and presented together in
manner that makes it clear it is a single
case.
When arrests, criminal charges,
eviction proceedings, or other court
filings are reported, consumer reporting
agencies must also have reasonable
procedures in place to check for any
available disposition information and to
ensure that such information is
included.27 For example, in situations
27 See, e.g., Complaint at ¶ 22, United States v.
AppFolio, Inc., No. 1:20–cv–03563 (D.D.C. Dec. 8,
2020), https://www.ftc.gov/system/files/documents/
cases/ecf_1_-_us_v_appfolio_complaint.pdf
(alleging that a tenant screening company failed to
follow reasonable procedures to assure that the
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where charges have been dismissed, it is
misleading and inaccurate to report that
an individual has been arrested for the
charges without also reporting that the
charges have been dismissed.28
Similarly, if a bankruptcy has been
discharged, it would be misleading and
inaccurate to report the bankruptcy
filing without also reporting the result.
Highlighting the importance of the
accuracy requirements in the statute, the
CFPB and FTC recently agreed to a
stipulated order with TransUnion
Rental Screening Solutions, Inc.
(TURSS) that requires TURSS to follow
written procedures reasonably designed
to prevent reporting of court filings (in
that case eviction proceeding records)
without a final disposition after TURSS
repeatedly provided tenant screening
reports with eviction proceeding records
that did not include available
disposition information.29
Similar considerations apply with
respect to expunged records, sealed
records, and public records that are
otherwise legally restricted from public
access. Background screening
companies are responsible for
maintaining procedures that ensure that
any inclusion of charges or arrest
records in a consumer report complies
with the law in the relevant jurisdiction
from which the record originates. To
‘‘expunge’’ means to remove from a
record or to erase or destroy.30
Expungement removes arrests,
convictions, or other matters from a
person’s public record entirely, as if
they had never occurred. Sealing
removes items in public records from
eviction and criminal record information included
in tenant-screening reports accurately reflected the
disposition). Even when disposition information is
included, court filings can of course only be
reported if doing so complies with the FCRA. As
discussed below, consumer reporting agencies
must, for example, have procedures in place to
ensure that court filings are not reported if the
information 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 records.
28 The Bureau notes that such disposition
information appears to be available, in the majority
of cases, within five years. For example, a 2018
survey of State criminal history information
systems showed that in 48 States and the District
of Columbia, an average of 64 percent of arrests in
State databases in the past five years had final case
dispositions reported. Becki R. Goggins & Dennis A.
DeBacco, SEARCH, The Nat’l Consortium for Justice
Info. and Statistics, Survey of State Criminal History
Information Systems, 2018 (Nov. 5, 2020), https://
www.ojp.gov/pdffiles1/bjs/grants/255651.pdf.
29 CFPB, Press Release, CFPB and FTC Take
Actions Against TransUnion for Illegal Rental
Background Check and Credit Reporting Practices
(Oct. 12, 2023), https://www.consumerfinance.gov/
about-us/newsroom/cfpb-ftc-take-actions-againsttransunion-illegal-rental-background-check-andcredit-reporting-practices/.
30 Black’s Law Dictionary (11th ed. 2019).
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public view. Similarly, applicable law
restricts public access to certain
criminal records maintained by
government entities that reflect a
disposition other than conviction or that
have reached a specified age without
active prosecution when certain
conditions are met.31 Once a conviction
or other matter of public record has
been sealed, expunged, 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
records, it is misleading and inaccurate
to include it as part of the individual’s
background in a consumer report
because there is no longer any public
record of the matter.
Consumer reporting agencies that
report public record information are not
using reasonable procedures to assure
maximum possible accuracy if they do
not have reasonable procedures in place
to prevent the inclusion in consumer
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
records. These procedures could
include, for example, reporting only
newly-gathered information or crosschecking existing data against updated
sources so that matters that have been
sealed or expunged can be identified
and removed. In some instances,
consumer reporting agencies may also
be able to request lists of expunged
matters from the original source and
then remove those matters from their
databases.32 In addition, under FCRA
section 611(a)(5)(C), consumer reporting
agencies must maintain reasonable
procedures to ensure that information
that is deleted from a consumer’s file
under FCRA section 611(a)(5)(A)
because it is inaccurate or incomplete or
cannot be verified does not reappear,
except in the limited circumstances
31 See, e.g., 28 CFR 20.21(b); 18 Pa. Cons. Stat.
sec. 9121; 6 Va. Admin. Code 20–120–50.A.1; see
also SEARCH, The Nat’l Consortium for Justice Info.
and Statistics, Report of the National Task Force on
the Commercial Sale of Criminal Justice Record
Information, at 41 (2005), https://www.search.org/
files/pdf/RNTFCSCJRI.pdf (‘‘In most States,
authorized noncriminal justice requestors receive
less than the full record; most often they are
provided conviction-only information.’’).
32 Nat’l Consumer Law Ctr., Broken Records
Redux: How Errors by Criminal Background Check
Companies Continue to Harm Consumers Seeking
Jobs and Housing, at 35–36 (Dec. 2019), https://
www.nclc.org/images/pdf/criminal-justice/reportbroken-records-redux.pdf. The Administrative
Office of Pennsylvania Courts regularly produces
lists of expunged cases for entities that subscribe to
its bulk distribution of criminal case data and
contractually requires those entities to use the
information to remove expunged cases. Id. at 23.
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specified in FCRA section 611(a)(5)(B).
This would include ensuring
information does not reappear in
situations in which a third-party vendor
resupplies information that the
consumer reporting agency has already
removed.33
The CFPB and the Federal Trade
Commission (FTC) have brought several
cases illustrating the aspects of section
607(b) discussed in this advisory
opinion.34 For example, the CFPB
alleged in one action that an
employment background screening
company, General Information Services,
violated FCRA section 607(b) by, among
other things, failing to use reasonable
procedures to prevent the inclusion of
expunged criminal records in consumer
reports.35 Similarly, the FTC alleged
that another employment background
screening company, HireRight
Solutions, failed to take reasonable steps
to ensure that the information in its
consumer reports was current and
reflected updates, such as the
expungement of criminal records.36
Because of this, the FTC charged,
employers sometimes received
information that incorrectly listed
criminal convictions on individuals’
records. In addition, according to the
FTC’s complaint, HireRight Solutions
failed to follow reasonable procedures
to prevent the same criminal offense
information from being included in a
consumer report multiple times.37 In
another action, the FTC alleged that a
tenant screening company, AppFolio,
failed to follow reasonable procedures
33 15
U.S.C. 1681i(a)(5)(C).
Bureau and the FTC have also previously
issued guidance on these aspects of section 607(b).
See, e.g., CFPB, Bulletin 2021–03: Consumer
Reporting of Rental Information (July 1, 2021),
https://files.consumerfinance.gov/f/documents/
cfpb_consumer-reporting-rental-information_
bulletin-2021-03_2021-07.pdf; Fed. Trade Comm’n,
What Tenant Background Screening Companies
Need to Know About the Fair Credit Reporting Act
(Oct. 2016), https://www.ftc.gov/business-guidance/
resources/what-tenant-background-screeningcompanies-need-know-about-fair-credit-reportingact.
35 See Consent Order, In re Gen. Info. Servs., Inc.,
2015–CFPB–0028 (Oct. 29, 2015), https://files.
consumerfinance.gov/f/201510_cfpb_consentorder_general-information-service-inc.pdf; CFPB,
Press Release, CFPB Takes Action Against Two of
the Largest Employment Background Screening
Report Providers for Serious Inaccuracies (Oct. 29,
2015), https://www.consumerfinance.gov/about-us/
newsroom/cfpb-takes-action-against-two-of-thelargest-employment-background-screening-reportproviders-for-serious-inaccuracies/.
36 Consent Order, United States v. HireRight Sols.,
Inc., 1:12–cv–01313 (D.D.C. Aug. 8, 2012), https://
www.ftc.gov/sites/default/files/documents/cases/
2012/08/120808hirerightstip.pdf.
37 Complaint at ¶¶ 13–14, United States v.
HireRight Sols., Inc., 1:12–cv–01313 (D.D.C. Aug. 8,
2012), https://www.ftc.gov/sites/default/files/
documents/cases/2012/08/120808hireright
cmpt.pdf.
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to assure that the eviction and criminal
record information included in tenantscreening reports accurately reflected
the disposition, offense name, and
offense type, and to prevent the
inclusion of multiple entries for the
same criminal or eviction action in the
same report.38
Additionally, the CFPB and the FTC
alleged in a recent action that a rental
screening company, TURSS, violated
the FCRA by failing to follow reasonable
procedures to assure maximum possible
accuracy of information in background
screening reports relied on by landlords
and others.39 Specifically, the agencies
alleged that TURSS knowingly and
recklessly failed to follow reasonable
procedures to: (1) prevent the inclusion
of multiple entries for the same eviction
case in eviction proceeding records, (2)
accurately report the case disposition in
eviction proceeding records, (3)
accurately label data fields in eviction
proceeding records, and (4) prevent the
inclusion of sealed eviction proceeding
records.40
2. Seven-Year Period for Reporting
Adverse Information
The FCRA restricts a consumer
reporting agency from including
obsolete information in a consumer
report.41 FCRA section 605(a)(5)
generally prohibits the reporting of
‘‘[a]ny . . . adverse item of information
. . . which antedates the report by more
than seven years.’’ 42
As the plain language of section
605(a)(5) makes clear, each adverse item
of information is subject to its own
seven-year reporting period, the timing
of which depends on the date of the
‘‘adverse item’’ itself.43 Thus, the
reporting period applicable to one
adverse item cannot be restarted or
reopened by the occurrence of a
subsequent event. Once the period
applicable to a particular item expires,
38 Complaint at ¶ 22, United States v. AppFolio,
Inc., No. 1:20–cv–03563 (D.D.C. Dec. 8, 2020),
https://www.ftc.gov/system/files/documents/cases/
ecf_1_-_us_v_appfolio_complaint.pdf.
39 Complaint at ¶ 3, FTC v. TransUnion Rental
Screening Solutions, Inc., No. 1:23–cv–2659 (D.
Colo. Oct. 12, 2023), https://files.consumerfinance.
gov/f/documents/cfpb_transunion-rental-screeningsolutions-inc-trans-union-llc_complaint_202310.pdf.
40 Id. at ¶¶ 24–53.
41 15 U.S.C. 1681c.
42 15 U.S.C. 1681c(a)(5). FCRA section 605(a)(5)
excludes from this prohibition records of
convictions of crimes. Id. In addition, FCRA section
605(b) provides that this prohibition is not
applicable in the case of any consumer credit report
to be used in connection with certain specified
transactions. 15 U.S.C. 1681c(b).
43 Moran v. The Screening Pros, LLC, 943 F.3d
1175, 1184 (9th Cir. 2019) (‘‘The statute’s use of
‘antedates’ connects the seven-year window directly
to the adverse event itself.’’).
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4175
that item can no longer be reported. For
example, an arrest is subject to a
reporting period that ends seven years
after the arrest’s date of entry, and
subsequent events do not restart or
reopen the reporting period applicable
to the arrest.44
Moreover, in the case of a nonconviction disposition of criminal
charges, the disposition does not start
its own seven-year reporting period.45
This interpretation follows from a
longstanding principle in the
application of section 605(a): a
consumer reporting agency ‘‘may not
furnish a consumer report referencing
the existence of adverse information
that predates the times set forth’’ in
section 605(a).46 In other words, a
consumer reporting agency generally
cannot provide a consumer report
containing information that reveals the
existence of an adverse event that
antedates the report by more than seven
years. Otherwise the FCRA’s clear
limitations on the reporting of obsolete
information would be vulnerable to easy
evasion. Because it necessarily would
reveal the existence of the charge, a
dismissal of a criminal charge or similar
disposition such as dropped charges or
acquittal generally could not be reported
after the seven-year period that begins
when the charge occurred.47
This interpretation also follows from
the structure of section 605(a) and a
1998 amendment to that provision. The
contrast between section 605(a)(5) and
several other paragraphs of section
605(a), in which Congress prescribed a
different rule for specific categories of
information, is instructive. For paid tax
liens, the reporting period ends seven
years ‘‘from date of payment’’; 48 for
44 While records of conviction of a crime are not
subject to the time limits set forth in section
605(a)(5), an arrest underlying a conviction is
subject to the reporting period that ends seven years
after the arrest’s date of entry.
45 Moran, 943 F.3d at 1184 (‘‘A dismissal
indicates that the consumer no longer faces an
indictment, an overall positive—but at least
neutral—development. A dismissal is only adverse
insofar as it discloses the previous adverse event,
i.e., the charge.’’).
46 Fed. Trade Comm’n, 40 Years of Experience
With the Fair Credit Reporting Act: An FTC Staff
Report With Summary of Interpretations, at 55
(2011); cf. Moran, 943 F.3d at 1184 (‘‘Even though
non-adverse information is typically not subject to
reporting windows, a dismissal is different. A
dismissal necessarily references the existence of the
adverse event, to which the reporting window still
applies.’’).
47 Moran, 943 F.3d at 1184 (‘‘A related later event
should not trigger or reopen the window, as the
adverse event already occurred. To hold otherwise,
thereby allowing this information to be reported
through disclosure of a dismissal, would
circumvent Congress’s intent to confine adverse
criminal information to a seven-year window.’’).
48 15 U.S.C. 1681c(a)(3).
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Federal Register / Vol. 89, No. 15 / Tuesday, January 23, 2024 / Rules and Regulations
bankruptcy cases, the reporting period
ends 10 years ‘‘from the date of entry of
the order for relief or the date of
adjudication.’’ 49 Unlike these
provisions, section 605(a)(5) contains no
indication that Congress intended to tie
the end of the reporting period to
something other than the occurrence of
the adverse item. The pre-1998 version
of section 605(a) explicitly made
‘‘disposition’’ of a ‘‘record[ ] . . . of
indictment’’ the trigger for the sevenyear reporting period; however, a 1998
amendment deleted that provision.50
This amendment ‘‘significantly altered
[the] statute,’’ indicating clearly that the
end of the reporting period under
section 605(a)(5) depends on the date of
the adverse item itself—not on the date
of disposition.51
In addition to provisions authorizing
Federal and State enforcement,52 the
FCRA contains two provisions relating
to civil liability to consumers for
noncompliance. Section 617 provides
that ‘‘any person who is negligent in
failing to comply with any requirement
imposed under this title with respect to
any consumer is liable to that consumer
in an amount equal to’’ the consumer’s
actual damages, and costs and
reasonable attorney’s fees.53 Section 616
provides that ‘‘any person who willfully
fails to comply with any requirement
imposed under this title with respect to
any consumer is liable to that consumer
in an amount equal to’’ actual or
statutory damages of up to $1,000 per
violation, such punitive damages as the
court allows, and costs and reasonable
attorney’s fees.54 A violation is willful
when it is inconsistent with
‘‘authoritative guidance’’ from a relevant
49 15
U.S.C. 1681c(a)(1).
the original FCRA, ‘‘[r]ecords of arrest,
indictment, or conviction of crime’’ were reportable
for seven years, starting at the ‘‘date of disposition,
release, or parole.’’ 15 U.S.C. 1681c(a)(5) (1996).
The 1998 amendment to the FCRA deleted this
paragraph. Consumer Reporting Employment
Clarification Act, Public Law 105–347, sec. 5(2),
112 Stat. 3211. The amendment moved ‘‘records of
arrest’’ to pre-existing paragraph (a)(2), which now
requires the reporting of ‘‘[c]ivil suits, civil
judgment, and records of arrest’’ to end seven years
after ‘‘date of entry,’’ 15 U.S.C. 1681c(a)(2). See
Public Law 105–347, sec. 5(1), 112 Stat. 3211.
(Information of this type can be reported ‘‘until the
governing statute of limitations has expired,’’ if that
period is longer. 15 U.S.C. 1681c(a)(2).) The 1998
amendment also removed criminal convictions
altogether from the restriction on reporting obsolete
information. Id., sec. 5(3), codified at 15 U.S.C.
1681c(a)(5) (prohibiting reporting, past seven years,
of ‘‘any other adverse item of information, other
than records of convictions of crimes’’).
51 Moran, 943 F.3d at 1185.
52 15 U.S.C. 1681s.
53 15 U.S.C. 1681o (emphasis added).
54 15 U.S.C. 1681n (emphasis added); Safeco Ins.
Co. of Am. v. Burr, 551 U.S. 47, 57–58 (2007)
(construing meaning of ‘‘willful’’).
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agency.55 As with any guidance issued
by the CFPB on the FCRA, or
predecessor agencies that were
responsible for administering the FCRA
prior to the CFPB’s creation, consumer
reporting agencies risk liability under
section 616 if they violate the FCRA in
a manner described in this advisory
opinion, regardless of whether the
consumer reporting agencies were
previously liable for willful violations
prior to its issuance.
DEPARTMENT OF TRANSPORTATION
II. Regulatory Matters
AGENCY:
This advisory opinion is an
interpretive rule issued under the
Bureau’s authority to interpret the
FCRA, including under section
1022(b)(1) of the Consumer Financial
Protection Act of 2010,56 which
authorizes guidance as may be
necessary or appropriate to enable the
Bureau to administer and carry out the
purposes and objectives of Federal
consumer financial laws.57
The Bureau has determined that this
advisory opinion does not impose any
new or revise any existing
recordkeeping, reporting, or disclosure
requirements on covered entities or
members of the public that would be
collections of information requiring
approval by the Office of Management
and Budget under the Paperwork
Reduction Act.58
Pursuant to the Congressional Review
Act,59 the Bureau will submit a report
containing this interpretive rule and
other required information to the United
States Senate, the United States House
of Representatives, and the Comptroller
General of the United States prior to the
rule’s published effective date. The
Office of Information and Regulatory
Affairs has designated this interpretive
rule as not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
Rohit Chopra,
Director, Consumer Financial Protection
Bureau.
[FR Doc. 2024–00788 Filed 1–22–24; 8:45 am]
BILLING CODE 4810–AM–P
55 Safeco Ins., 551 U.S. at 70; Fuges v. Sw. Fin.
Servs., Ltd., 707 F.3d 241, 253 (3d Cir. 2012).
56 Public Law 111–203, 124 Stat. 1376 (2010).
57 12 U.S.C. 5512(b)(1).
58 44 U.S.C. 3501–3521.
59 5 U.S.C. 801 et seq.
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Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2023–1498; Project
Identifier MCAI–2023–00459–T; Amendment
39–22643; AD 2023–25–16]
RIN 2120–AA64
Airworthiness Directives; Airbus SAS
Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
The FAA is adopting a new
airworthiness directive (AD) for certain
Airbus SAS Model A330–200, A330–
200 Freighter, A330–300, A330–800,
and A330–900 series airplanes. This AD
was prompted by a determination that
part of a certain production ground test
procedure used to confirm inner fuel
tank integrity was not accomplished
properly on certain airplanes. This AD
requires a fuel tank leak test and,
depending on findings, accomplishment
of applicable corrective action, as
specified in a European Union Aviation
Safety Agency (EASA) AD, which is
incorporated by reference. The FAA is
issuing this AD to address the unsafe
condition on these products.
DATES: This AD is effective February 27,
2024.
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in this AD
as of February 27, 2024.
ADDRESSES:
AD Docket: You may examine the AD
docket at regulations.gov under Docket
No. FAA–2023–1498; or in person at
Docket Operations between 9 a.m. and
5 p.m., Monday through Friday, except
Federal holidays. The AD docket
contains this final rule, the mandatory
continuing airworthiness information
(MCAI), any comments received, and
other information. The address for
Docket Operations is U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
Material Incorporated by Reference:
• For EASA material incorporated by
reference in this AD, contact EASA,
Konrad-Adenauer-Ufer 3, 50668
Cologne, Germany; telephone +49 221
8999 000; email ADs@easa.europa.eu;
website easa.europa.eu. You may find
this material on the EASA website at
ad.easa.europa.eu.
• For Airbus SAS service information
identified in this AD, contact Airbus
SUMMARY:
E:\FR\FM\23JAR1.SGM
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]]>Agencies
- CONSUMER FINANCIAL PROTECTION BUREAU
[Federal Register Volume 89, Number 15 (Tuesday, January 23, 2024)]
[Rules and Regulations]
[Pages 4171-4176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00788]
-----------------------------------------------------------------------
CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1022
Fair Credit Reporting; Background Screening
AGENCY: Consumer Financial Protection Bureau.
ACTION: Advisory opinion.
-----------------------------------------------------------------------
SUMMARY: The Consumer Financial Protection Bureau (CFPB or Bureau) is
issuing this advisory opinion to affirm that, when preparing consumer
reports, a consumer reporting agency that reports public record
information is not using reasonable procedures to assure maximum
possible accuracy under section 607(b) of the Fair Credit Reporting Act
(FCRA) if it does not have certain procedures in place. For example, it
must have procedures that prevent reporting of information that is
duplicative or that has been expunged, sealed, or otherwise legally
restricted from public access. This advisory opinion also highlights
certain aspects of the reporting period for adverse items under FCRA
section 605(a)(5).
DATES: This advisory opinion is effective on January 23, 2024.
FOR FURTHER INFORMATION CONTACT: Seth Caffrey, Amanda Quester, or Ruth
Van Veldhuizen, Senior Counsels, Office of Regulations at (202) 435-
7700 or https://reginquiries. consumerfinance.gov/. If you require this
document in an alternative electronic format, please contact
[email protected].
SUPPLEMENTARY INFORMATION: The Bureau is issuing this advisory opinion
[[Page 4172]]
through the procedures for its Advisory Opinions Policy.\1\ Refer to
those procedures for more information.
---------------------------------------------------------------------------
\1\ 85 FR 77987 (Dec. 3, 2020).
---------------------------------------------------------------------------
I. Advisory Opinion
A. Background
The majority of landlords and employers conduct background checks
before renting property or hiring employees.\2\ Landlords and employers
typically conduct background checks by obtaining consumer reports from
consumer reporting agencies.\3\ Consumer reporting agencies that
prepare consumer reports for these purposes are commonly known as
background screening companies, and the reports that they prepare are
commonly known as background screening reports.\4\
---------------------------------------------------------------------------
\2\ CFPB, Bulletin 2021-03: Consumer Reporting of Rental
Information (July 1, 2021), https://files.consumerfinance.gov/f/documents/cfpb_consumer-reporting-rental-information_bulletin-2021-03_2021-07.pdf; CFPB, Market Snapshot: Background Screening Reports,
at 3-4 (Oct. 2019), https://files.consumerfinance.gov/f/documents/201909_cfpb_market-snapshot-background-screening_report.pdf.
\3\ See 15 U.S.C. 1681a(d) (defining ``consumer report'');
1681a(f) (defining ``consumer reporting agency'').
\4\ See generally CFPB, Market Snapshot: Background Screening
Reports (Oct. 2019), https://files.consumerfinance.gov/f/documents/201909_cfpb_market-snapshot-background-screening_report.pdf.
---------------------------------------------------------------------------
Background screening companies vary in size, the users they serve,
the services they provide, and the geographic regions they cover.\5\
The reports they provide sometimes include information about a
consumer's credit history, rental history, employment, salary,
professional licenses, criminal arrests and convictions, and driving
records.\6\ Background screening companies also vary in how they obtain
information and prepare reports. Different companies use different
identifying information to conduct searches; search different
databases, external and internal, to access information; apply
different criteria to determine whether a record in a database matches
an individual; and employ different procedures for updating
information.\7\
---------------------------------------------------------------------------
\5\ See id. at 5.
\6\ See id. at 2.
\7\ See id. at 8.
---------------------------------------------------------------------------
In many instances, background screening reports contain inaccurate
information about consumers.\8\ For example, some background screening
reports contain information about the wrong consumer, such as when a
report shows an eviction record or criminal conviction that belongs to
someone else.\9\ Some also contain duplicative information, such as
when a report shows the same eviction or criminal conviction twice,
giving the impression that the consumer's eviction or criminal history
is more extensive than it really is.\10\ In addition, some background
screening reports omit existing disposition information, such as when
an eviction action or criminal charges have been dismissed, giving a
misleading picture of a consumer's rental or criminal history.\11\
---------------------------------------------------------------------------
\8\ See generally Nat'l Consumer Law Ctr., Broken Records Redux:
How Errors by Criminal Background Check Companies Continue to Harm
Consumers Seeking Jobs and Housing, at 3 (Dec. 2019), https://www.nclc.org/images/pdf/criminal-justice/report-broken-records-redux.pdf; Sarah E. Lageson & Robert Stewart, Faulty Background
Checks Are Violating Privacy and Ruining Lives, The Hill (Sept. 28,
2023), https://thehill.com/opinion/technology/4227081-faulty-background-checks-are-violating-privacy-and-ruining-lives/
(describing study that concluded that 74 percent of total criminal
charges reported on 101 participants' reports did not have matches
in official state reports and that a background report erroneously
attributed 50 charges to a participant who in fact had only two drug
convictions).
\9\ In November 2021, the Bureau issued an advisory opinion
highlighting that a consumer reporting agency that prepares consumer
reports using name-only matching (i.e., matching information to the
particular consumer who is the subject of a consumer report based
solely on whether the consumer's first and last names are identical
or similar to the names associated with the information) does not
use reasonable procedures to assure maximum possible accuracy under
FCRA section 607(b). Fair Credit Reporting: Name-Only Matching
Procedures, 86 FR 62468 (Nov. 10, 2021).
\10\ See Nat'l Consumer Law Ctr., Digital Denials: How Abuse,
Bias, and Lack of Transparency in Tenant Screening Harm Renters, at
37 (Sept. 2023), https://www.nclc.org/wp-content/uploads/2023/09/202309_Report_Digital-Denials.pdf.
\11\ See id. at 38.
---------------------------------------------------------------------------
Some background screening reports also include arrests,
convictions, or other court records that should not be included because
they have been expunged or sealed or otherwise legally restricted from
public access.\12\ Some States and localities have taken steps to make
it easier to seal or expunge certain records, including eviction
records.\13\ Additionally, public access to certain criminal records
maintained by government entities that reflect a disposition other than
conviction or that have reached a specified age without active
prosecution is legally restricted in certain circumstances.\14\ As
explained in part C.1 below, the CFPB interprets the FCRA to prohibit
background screening companies from including in consumer reports
information that would not be publicly available to the user due to
these restrictions.
---------------------------------------------------------------------------
\12\ See, e.g., id. at 5, 31, 35; Consent Order, In re Gen.
Info. Servs., Inc., 2015-CFPB-0028 (Oct. 29, 2015), https://files.consumerfinance.gov/f/201510_cfpb_consent-order_general-information-service-inc.pdf; CFPB, Press Release, CFPB Takes Action
Against Two of the Largest Employment Background Screening Report
Providers for Serious Inaccuracies (Oct. 29, 2015), https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-two-of-the-largest-employment-background-screening-report-providers-for-serious-inaccuracies/; Consent Order, United States v. HireRight
Sols., Inc., 1:12-cv-01313 (D.D.C. Aug. 8, 2012), https://www.ftc.gov/sites/default/files/documents/cases/2012/08/120808hirerightstip.pdf.
\13\ See, e.g., Or. Rev. Stat. sec. 105.163 (allowing sealing of
eviction records in certain circumstances, such as when there is a
judgment or judgment of dismissal entered in the consumer's favor);
DC Code sec. 42-3505.09 (requiring that eviction records be sealed
in certain circumstances, such as (1) after 30 days have passed from
final resolution if the eviction proceeding does not result in a
judgment for possession in favor of the housing provider or (2)
three years after the final resolution of the eviction proceeding if
the eviction proceeding results in a judgment for possession in
favor of the housing provider); Cal. Civ. Proc. Code sec. 1161.2
(requiring certain eviction records to be sealed at filing, and
limiting access to those records to a small list of exceptions,
unless judgment is entered for the landlord within 60 days of the
complaint being filed); see also Margaret C. Love, Collateral
Consequences Res. Ctr., 50-State Comparison: Expungement, Sealing &
Other Record Relief (Oct. 2021), https://ccresourcecenter.org/state-restoration-profiles/50-state-comparisonjudicial-expungement-sealing-and-set-aside/.
\14\ See, e.g., 28 CFR 20.21(b); 18 Pa. Cons. Stat. sec.
9121(b)(2) (generally restricting State and local police departments
from disseminating information regarding the initiation of criminal
proceedings to individuals or noncriminal justice agencies when
three years have elapsed from the date of arrest, no disposition is
indicated in the record, and nothing in the record indicates that
proceedings seeking conviction remain pending); 6 Va. Admin. Code
20-120-50.A.1 (generally prohibiting dissemination of criminal
history records to noncriminal justice agencies or individuals when
one year has elapsed from the date of arrest, no disposition of the
charge has been recorded, and no active prosecution of the charge is
pending); see also SEARCH, The Nat'l Consortium for Justice Info.
and Statistics, Report of the National Task Force on the Commercial
Sale of Criminal Justice Record Information, at 41 (2005), https://www.search.org/files/pdf/RNTFCSCJRI.pdf (``In most States,
authorized noncriminal justice requestors receive less than the full
record; most often they are provided conviction-only
information.'').
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Background screening companies sometimes also include obsolete
criminal record information in background screening reports.\15\ For
example, the CFPB is aware that, when some consumer reporting agencies
report criminal cases that have been dismissed, they have used the
disposition date to start the seven-year reporting period for records
of arrests and other non-conviction criminal record information, rather
than the ``date of entry'' for records of arrest or the date of the
criminal charge for other non-conviction criminal record
information.\16\ As a result, these
[[Page 4173]]
consumer reporting agencies have included adverse information in
consumer reports longer than FCRA section 605(a) permits.
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\15\ The FCRA limits the length of time that certain items of
information may appear in a consumer report. 15 U.S.C. 1681c. For
example, the FCRA generally prohibits the reporting of ``[a]ny . . .
adverse item of information . . . which antedates the report by more
than seven years.'' 15 U.S.C. 1681c(a)(5). This advisory opinion
uses the term ``obsolete'' to refer to information that is older
than the applicable FCRA time limit.
\16\ See, e.g., Moran v. The Screening Pros, LLC, 25 F.4th 722,
724-25 (9th Cir. 2022); Moran v. The Screening Pros, LLC, 943 F.3d
1175, 1182 (9th Cir. 2019); Complaint at ]] 19-20, Bureau of
Consumer Fin. Prot. v. Sterling Infosys., Inc., No. 1:19-cv-10824
(S.D.N.Y. Nov. 22, 2019), https://files.consumerfinance.gov/f/documents/cfpb_sterling-infosystems-inc_complaint_2019-11.pdf.
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When these types of information appear in background screening
reports, the consequences for consumers can be grave. Consumers' rental
housing applications may be denied, or they may end up paying more for
such housing or be limited to locations or types of rental housing that
they would not otherwise have selected, all of which is particularly
challenging for consumers in a market characterized by high rents.\17\
Consumers' employment applications may be rejected, they may be passed
over for promotions or denied security clearances, and they may lose
their jobs. Even if none of these things happen, a consumer may spend
considerable time and energy, and incur considerable expense,
attempting to correct inaccuracies. Consumers often do not see their
reports, if at all, until after they are denied, and efforts to correct
information with one company may not carry over to the hundreds of
other background screening companies or those that sell data to them.
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\17\ See Joint Ctr. for Hous. Studies of Harvard Univ., The
State of the Nation's Housing, at 1-2, 22 (2023), https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_The_State_of_the_Nations_Housing_2023.pdf (noting that
``renter cost burdens have risen to their highest recorded level,
underscoring the worsening affordability challenges facing many
renters with lower incomes''); CFPB, Tenant Background Checks Market
at 5 (Nov. 2022), https://files.consumerfinance.gov/f/documents/cfpb_tenant-background-checks-market_report_2022-11.pdf.
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In 1970, Congress enacted the Fair Credit Reporting Act (FCRA) to
protect against these types of harms. The FCRA regulates consumer
reporting and imposes obligations on consumer reporting agencies, the
entities that furnish information to them, and the users of consumer
reports.\18\ In passing the FCRA, Congress recognized ``a need to
insure that consumer reporting agencies exercise their grave
responsibilities with fairness, impartiality, and a respect for the
consumer's privacy.'' \19\ Accordingly, Congress designed the FCRA ``to
prevent consumers from being unjustly damaged because of inaccurate or
arbitrary information'' and ``to prevent an undue invasion of the
individual's right of privacy in the collection and dissemination of
credit information.'' \20\ A primary purpose of the FCRA is ``to
protect consumers from the transmission of inaccurate information about
them, and to establish credit reporting practices that utilize
accurate, relevant, and current information in a confidential and
responsible manner.'' \21\ The statute is meant to ensure, among other
things, that consumer reporting agencies provide information ``in a
manner which is fair and equitable to the consumer, with regard to the
confidentiality, accuracy, relevancy, and proper utilization of such
information.'' \22\
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\18\ 15 U.S.C. 1681-1681x.
\19\ 15 U.S.C. 1681(a)(4).
\20\ S. Rep. No. 91-517, at 1 (1969).
\21\ Guimond v. Trans Union Credit Info., 45 F.3d 1329, 1333
(9th Cir. 1995) (citations omitted); see also Porter v. Talbot
Perkins Children's Servs., 355 F. Supp. 174, 176 (S.D.N.Y. 1973)
(noting that the FCRA was intended ``to protect an individual from
inaccurate or arbitrary information about himself in a consumer
report that is being used as a factor in determining the
individual's eligibility for credit, insurance or employment'').
\22\ 15 U.S.C. 1681(b).
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Because of the importance of consumer report accuracy to businesses
and consumers, the structure of the FCRA creates interrelated legal
standards and requirements to support the goal of accurate credit
reporting. Among these is the requirement that, when preparing a
consumer report, consumer reporting agencies ``shall follow reasonable
procedures to assure maximum possible accuracy of the information
concerning the individual about whom the report relates.'' \23\ This
requirement remains as important today as it was when the statute was
enacted in 1970, and concerns about the accuracy of information
included in consumer reports are long standing.
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\23\ 15 U.S.C. 1681e(b).
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The CFPB is issuing this advisory opinion to underscore certain
obligations that the FCRA imposes when background screening reports are
provided and used. First, this advisory opinion highlights that
consumer reporting agencies must comply with their FCRA obligation to
``follow reasonable procedures to assure maximum possible accuracy''
under section 607(b). In particular, a consumer reporting agency that
reports public record information is not using reasonable procedures to
assure maximum possible accuracy if it does not have reasonable
procedures in place to ensure that (1) it does not report information
that is duplicative or 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 entities that
maintain the records and (2) it includes any existing disposition
information if it reports arrests, criminal charges, eviction
proceedings, or other court filings.
Second, consistent with prior cases and guidance discussed below,
this advisory opinion highlights that, when consumer reporting agencies
include adverse information in consumer reports, the occurrence of the
adverse event starts the running of the reporting period for adverse
items under FCRA section 605(a)(5), which is not restarted or reopened
by the occurrence of subsequent events. Moreover, a non-conviction
disposition \24\ of a criminal charge cannot be reported beyond the
seven-year period that begins to run at the time of the charge.
Consumer reporting agencies thus must ensure that they do not report
adverse information beyond the reporting period in FCRA section
605(a)(5) and must at all times have reasonable procedures in place to
prevent reporting of information that is duplicative or legally
restricted from public access and to ensure that any existing
disposition information is included if court filings are reported.
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\24\ As used in this advisory opinion, non-conviction
disposition refers to a dismissal or a similar disposition of
criminal charges such as dropped charges or an acquittal.
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B. Coverage
This advisory opinion applies to all ``consumer reporting
agencies,'' as that term is defined in FCRA section 603(f).
C. Legal Analysis
1. Reasonable Procedures To Assure Maximum Possible Accuracy When
Preparing Background Screening Reports
FCRA section 607(b) provides that ``[w]henever a consumer reporting
agency prepares a consumer report it shall follow reasonable procedures
to assure maximum possible accuracy of the information concerning the
individual about whom the report relates.'' \25\ The Bureau has
previously indicated that it is not a reasonable procedure to use name-
only matching to match information to the consumer who is the subject
of the report when preparing a consumer report.\26\ This advisory
opinion highlights the Bureau's interpretation of three other
[[Page 4174]]
aspects of section 607(b)'s ``reasonable procedures to assure maximum
possible accuracy'' requirement that relate to background screening
information used in consumer reports: (1) preventing duplication of
information; (2) including any existing disposition information if
arrests, criminal charges, eviction proceedings, or other court filings
are reported; and (3) ensuring that information that has been expunged,
sealed, or otherwise legally restricted from public access in a manner
that would prevent users from obtaining it directly from the government
entity that maintains the records is not included in consumer reports.
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\25\ 15 U.S.C. 1681e(b).
\26\ See, e.g., Fair Credit Reporting: Name-Only Matching
Procedures, 86 FR 62468 (Nov. 10, 2021); Consent Order at ]] 4-13,
In re Gen. Info. Servs., Inc., 2015-CFPB-0028 (Oct. 29, 2015),
https://files.consumerfinance.gov/f/201510_cfpb_consent-order_general-information-service-inc.pdf; Complaint at ]] 5-11, 13-
14, Bureau of Consumer Fin. Prot. v. Sterling Infosys., Inc., No.
1:19-cv-10824 (S.D.N.Y. Nov. 22, 2019), https://files.consumerfinance.gov/f/documents/cfpb_sterling-infosystems-inc_complaint_2019-11.pdf.
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To comply with section 607(b) of the FCRA, consumer reporting
agencies must have reasonable procedures in place to prevent
duplicative information from being reported on consumer reports in
order to ensure that reports do not inaccurately suggest that a single
event occurred more than once. For example, inclusion of multiple
entries for the same criminal conviction or the same eviction can
wrongly suggest that a consumer was convicted or evicted more than
once. Consumer reporting agencies that obtain information from multiple
sources, or from a single source that in turn collects information from
multiple sources, must take particular care to identify information
that is duplicative to ensure that information is accurately presented
in consumer reports. Similarly, when a consumer reporting agency
reports multiple stages of the same court proceeding, it must have
procedures in place to ensure that information regarding the stages of
these court proceedings (such as an arrest followed by a conviction) is
presented in a way that makes clear the stages all relate to the same
proceeding or case and does not inaccurately suggest that multiple
proceedings or cases have occurred. For example, at a minimum, such
procedures should require that all information about one court case
should be collated and presented together in manner that makes it clear
it is a single case.
When arrests, criminal charges, eviction proceedings, or other
court filings are reported, consumer reporting agencies must also have
reasonable procedures in place to check for any available disposition
information and to ensure that such information is included.\27\ For
example, in situations where charges have been dismissed, it is
misleading and inaccurate to report that an individual has been
arrested for the charges without also reporting that the charges have
been dismissed.\28\ Similarly, if a bankruptcy has been discharged, it
would be misleading and inaccurate to report the bankruptcy filing
without also reporting the result. Highlighting the importance of the
accuracy requirements in the statute, the CFPB and FTC recently agreed
to a stipulated order with TransUnion Rental Screening Solutions, Inc.
(TURSS) that requires TURSS to follow written procedures reasonably
designed to prevent reporting of court filings (in that case eviction
proceeding records) without a final disposition after TURSS repeatedly
provided tenant screening reports with eviction proceeding records that
did not include available disposition information.\29\
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\27\ See, e.g., Complaint at ] 22, United States v. AppFolio,
Inc., No. 1:20-cv-03563 (D.D.C. Dec. 8, 2020), https://www.ftc.gov/system/files/documents/cases/ecf_1_-_us_v_appfolio_complaint.pdf
(alleging that a tenant screening company failed to follow
reasonable procedures to assure that the eviction and criminal
record information included in tenant-screening reports accurately
reflected the disposition). Even when disposition information is
included, court filings can of course only be reported if doing so
complies with the FCRA. As discussed below, consumer reporting
agencies must, for example, have procedures in place to ensure that
court filings are not reported if the information 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 records.
\28\ The Bureau notes that such disposition information appears
to be available, in the majority of cases, within five years. For
example, a 2018 survey of State criminal history information systems
showed that in 48 States and the District of Columbia, an average of
64 percent of arrests in State databases in the past five years had
final case dispositions reported. Becki R. Goggins & Dennis A.
DeBacco, SEARCH, The Nat'l Consortium for Justice Info. and
Statistics, Survey of State Criminal History Information Systems,
2018 (Nov. 5, 2020), https://www.ojp.gov/pdffiles1/bjs/grants/255651.pdf.
\29\ CFPB, Press Release, CFPB and FTC Take Actions Against
TransUnion for Illegal Rental Background Check and Credit Reporting
Practices (Oct. 12, 2023), https://www.consumerfinance.gov/about-us/newsroom/cfpb-ftc-take-actions-against-transunion-illegal-rental-background-check-and-credit-reporting-practices/.
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Similar considerations apply with respect to expunged records,
sealed records, and public records that are otherwise legally
restricted from public access. Background screening companies are
responsible for maintaining procedures that ensure that any inclusion
of charges or arrest records in a consumer report complies with the law
in the relevant jurisdiction from which the record originates. To
``expunge'' means to remove from a record or to erase or destroy.\30\
Expungement removes arrests, convictions, or other matters from a
person's public record entirely, as if they had never occurred. Sealing
removes items in public records from public view. Similarly, applicable
law restricts public access to certain criminal records maintained by
government entities that reflect a disposition other than conviction or
that have reached a specified age without active prosecution when
certain conditions are met.\31\ Once a conviction or other matter of
public record has been sealed, expunged, 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 records, it is misleading and inaccurate to include it as part of
the individual's background in a consumer report because there is no
longer any public record of the matter.
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\30\ Black's Law Dictionary (11th ed. 2019).
\31\ See, e.g., 28 CFR 20.21(b); 18 Pa. Cons. Stat. sec. 9121; 6
Va. Admin. Code 20-120-50.A.1; see also SEARCH, The Nat'l Consortium
for Justice Info. and Statistics, Report of the National Task Force
on the Commercial Sale of Criminal Justice Record Information, at 41
(2005), https://www.search.org/files/pdf/RNTFCSCJRI.pdf (``In most
States, authorized noncriminal justice requestors receive less than
the full record; most often they are provided conviction-only
information.'').
---------------------------------------------------------------------------
Consumer reporting agencies that report public record information
are not using reasonable procedures to assure maximum possible accuracy
if they do not have reasonable procedures in place to prevent the
inclusion in consumer 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 records. These procedures could
include, for example, reporting only newly-gathered information or
cross-checking existing data against updated sources so that matters
that have been sealed or expunged can be identified and removed. In
some instances, consumer reporting agencies may also be able to request
lists of expunged matters from the original source and then remove
those matters from their databases.\32\ In addition, under FCRA section
611(a)(5)(C), consumer reporting agencies must maintain reasonable
procedures to ensure that information that is deleted from a consumer's
file under FCRA section 611(a)(5)(A) because it is inaccurate or
incomplete or cannot be verified does not reappear, except in the
limited circumstances
[[Page 4175]]
specified in FCRA section 611(a)(5)(B). This would include ensuring
information does not reappear in situations in which a third-party
vendor resupplies information that the consumer reporting agency has
already removed.\33\
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\32\ Nat'l Consumer Law Ctr., Broken Records Redux: How Errors
by Criminal Background Check Companies Continue to Harm Consumers
Seeking Jobs and Housing, at 35-36 (Dec. 2019), https://www.nclc.org/images/pdf/criminal-justice/report-broken-records-redux.pdf. The Administrative Office of Pennsylvania Courts
regularly produces lists of expunged cases for entities that
subscribe to its bulk distribution of criminal case data and
contractually requires those entities to use the information to
remove expunged cases. Id. at 23.
\33\ 15 U.S.C. 1681i(a)(5)(C).
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The CFPB and the Federal Trade Commission (FTC) have brought
several cases illustrating the aspects of section 607(b) discussed in
this advisory opinion.\34\ For example, the CFPB alleged in one action
that an employment background screening company, General Information
Services, violated FCRA section 607(b) by, among other things, failing
to use reasonable procedures to prevent the inclusion of expunged
criminal records in consumer reports.\35\ Similarly, the FTC alleged
that another employment background screening company, HireRight
Solutions, failed to take reasonable steps to ensure that the
information in its consumer reports was current and reflected updates,
such as the expungement of criminal records.\36\ Because of this, the
FTC charged, employers sometimes received information that incorrectly
listed criminal convictions on individuals' records. In addition,
according to the FTC's complaint, HireRight Solutions failed to follow
reasonable procedures to prevent the same criminal offense information
from being included in a consumer report multiple times.\37\ In another
action, the FTC alleged that a tenant screening company, AppFolio,
failed to follow reasonable procedures to assure that the eviction and
criminal record information included in tenant-screening reports
accurately reflected the disposition, offense name, and offense type,
and to prevent the inclusion of multiple entries for the same criminal
or eviction action in the same report.\38\
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\34\ The Bureau and the FTC have also previously issued guidance
on these aspects of section 607(b). See, e.g., CFPB, Bulletin 2021-
03: Consumer Reporting of Rental Information (July 1, 2021), https://files.consumerfinance.gov/f/documents/cfpb_consumer-reporting-rental-information_bulletin-2021-03_2021-07.pdf; Fed. Trade Comm'n,
What Tenant Background Screening Companies Need to Know About the
Fair Credit Reporting Act (Oct. 2016), https://www.ftc.gov/business-guidance/resources/what-tenant-background-screening-companies-need-know-about-fair-credit-reporting-act.
\35\ See Consent Order, In re Gen. Info. Servs., Inc., 2015-
CFPB-0028 (Oct. 29, 2015), https://files.consumerfinance.gov/f/201510_cfpb_consent-order_general-information-service-inc.pdf; CFPB,
Press Release, CFPB Takes Action Against Two of the Largest
Employment Background Screening Report Providers for Serious
Inaccuracies (Oct. 29, 2015), https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-two-of-the-largest-employment-background-screening-report-providers-for-serious-inaccuracies/.
\36\ Consent Order, United States v. HireRight Sols., Inc.,
1:12-cv-01313 (D.D.C. Aug. 8, 2012), https://www.ftc.gov/sites/default/files/documents/cases/2012/08/120808hirerightstip.pdf.
\37\ Complaint at ]] 13-14, United States v. HireRight Sols.,
Inc., 1:12-cv-01313 (D.D.C. Aug. 8, 2012), https://www.ftc.gov/sites/default/files/documents/cases/2012/08/120808hirerightcmpt.pdf.
\38\ Complaint at ] 22, United States v. AppFolio, Inc., No.
1:20-cv-03563 (D.D.C. Dec. 8, 2020), https://www.ftc.gov/system/files/documents/cases/ecf_1_-_us_v_appfolio_complaint.pdf.
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Additionally, the CFPB and the FTC alleged in a recent action that
a rental screening company, TURSS, violated the FCRA by failing to
follow reasonable procedures to assure maximum possible accuracy of
information in background screening reports relied on by landlords and
others.\39\ Specifically, the agencies alleged that TURSS knowingly and
recklessly failed to follow reasonable procedures to: (1) prevent the
inclusion of multiple entries for the same eviction case in eviction
proceeding records, (2) accurately report the case disposition in
eviction proceeding records, (3) accurately label data fields in
eviction proceeding records, and (4) prevent the inclusion of sealed
eviction proceeding records.\40\
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\39\ Complaint at ] 3, FTC v. TransUnion Rental Screening
Solutions, Inc., No. 1:23-cv-2659 (D. Colo. Oct. 12, 2023), https://files.consumerfinance.gov/f/documents/cfpb_transunion-rental-screening-solutions-inc-trans-union-llc_complaint_2023-10.pdf.
\40\ Id. at ]] 24-53.
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2. Seven-Year Period for Reporting Adverse Information
The FCRA restricts a consumer reporting agency from including
obsolete information in a consumer report.\41\ FCRA section 605(a)(5)
generally prohibits the reporting of ``[a]ny . . . adverse item of
information . . . which antedates the report by more than seven
years.'' \42\
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\41\ 15 U.S.C. 1681c.
\42\ 15 U.S.C. 1681c(a)(5). FCRA section 605(a)(5) excludes from
this prohibition records of convictions of crimes. Id. In addition,
FCRA section 605(b) provides that this prohibition is not applicable
in the case of any consumer credit report to be used in connection
with certain specified transactions. 15 U.S.C. 1681c(b).
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As the plain language of section 605(a)(5) makes clear, each
adverse item of information is subject to its own seven-year reporting
period, the timing of which depends on the date of the ``adverse item''
itself.\43\ Thus, the reporting period applicable to one adverse item
cannot be restarted or reopened by the occurrence of a subsequent
event. Once the period applicable to a particular item expires, that
item can no longer be reported. For example, an arrest is subject to a
reporting period that ends seven years after the arrest's date of
entry, and subsequent events do not restart or reopen the reporting
period applicable to the arrest.\44\
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\43\ Moran v. The Screening Pros, LLC, 943 F.3d 1175, 1184 (9th
Cir. 2019) (``The statute's use of `antedates' connects the seven-
year window directly to the adverse event itself.'').
\44\ While records of conviction of a crime are not subject to
the time limits set forth in section 605(a)(5), an arrest underlying
a conviction is subject to the reporting period that ends seven
years after the arrest's date of entry.
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Moreover, in the case of a non-conviction disposition of criminal
charges, the disposition does not start its own seven-year reporting
period.\45\ This interpretation follows from a longstanding principle
in the application of section 605(a): a consumer reporting agency ``may
not furnish a consumer report referencing the existence of adverse
information that predates the times set forth'' in section 605(a).\46\
In other words, a consumer reporting agency generally cannot provide a
consumer report containing information that reveals the existence of an
adverse event that antedates the report by more than seven years.
Otherwise the FCRA's clear limitations on the reporting of obsolete
information would be vulnerable to easy evasion. Because it necessarily
would reveal the existence of the charge, a dismissal of a criminal
charge or similar disposition such as dropped charges or acquittal
generally could not be reported after the seven-year period that begins
when the charge occurred.\47\
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\45\ Moran, 943 F.3d at 1184 (``A dismissal indicates that the
consumer no longer faces an indictment, an overall positive--but at
least neutral--development. A dismissal is only adverse insofar as
it discloses the previous adverse event, i.e., the charge.'').
\46\ Fed. Trade Comm'n, 40 Years of Experience With the Fair
Credit Reporting Act: An FTC Staff Report With Summary of
Interpretations, at 55 (2011); cf. Moran, 943 F.3d at 1184 (``Even
though non-adverse information is typically not subject to reporting
windows, a dismissal is different. A dismissal necessarily
references the existence of the adverse event, to which the
reporting window still applies.'').
\47\ Moran, 943 F.3d at 1184 (``A related later event should not
trigger or reopen the window, as the adverse event already occurred.
To hold otherwise, thereby allowing this information to be reported
through disclosure of a dismissal, would circumvent Congress's
intent to confine adverse criminal information to a seven-year
window.'').
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This interpretation also follows from the structure of section
605(a) and a 1998 amendment to that provision. The contrast between
section 605(a)(5) and several other paragraphs of section 605(a), in
which Congress prescribed a different rule for specific categories of
information, is instructive. For paid tax liens, the reporting period
ends seven years ``from date of payment''; \48\ for
[[Page 4176]]
bankruptcy cases, the reporting period ends 10 years ``from the date of
entry of the order for relief or the date of adjudication.'' \49\
Unlike these provisions, section 605(a)(5) contains no indication that
Congress intended to tie the end of the reporting period to something
other than the occurrence of the adverse item. The pre-1998 version of
section 605(a) explicitly made ``disposition'' of a ``record[ ] . . .
of indictment'' the trigger for the seven-year reporting period;
however, a 1998 amendment deleted that provision.\50\ This amendment
``significantly altered [the] statute,'' indicating clearly that the
end of the reporting period under section 605(a)(5) depends on the date
of the adverse item itself--not on the date of disposition.\51\
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\48\ 15 U.S.C. 1681c(a)(3).
\49\ 15 U.S.C. 1681c(a)(1).
\50\ In the original FCRA, ``[r]ecords of arrest, indictment, or
conviction of crime'' were reportable for seven years, starting at
the ``date of disposition, release, or parole.'' 15 U.S.C.
1681c(a)(5) (1996). The 1998 amendment to the FCRA deleted this
paragraph. Consumer Reporting Employment Clarification Act, Public
Law 105-347, sec. 5(2), 112 Stat. 3211. The amendment moved
``records of arrest'' to pre-existing paragraph (a)(2), which now
requires the reporting of ``[c]ivil suits, civil judgment, and
records of arrest'' to end seven years after ``date of entry,'' 15
U.S.C. 1681c(a)(2). See Public Law 105-347, sec. 5(1), 112 Stat.
3211. (Information of this type can be reported ``until the
governing statute of limitations has expired,'' if that period is
longer. 15 U.S.C. 1681c(a)(2).) The 1998 amendment also removed
criminal convictions altogether from the restriction on reporting
obsolete information. Id., sec. 5(3), codified at 15 U.S.C.
1681c(a)(5) (prohibiting reporting, past seven years, of ``any other
adverse item of information, other than records of convictions of
crimes'').
\51\ Moran, 943 F.3d at 1185.
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In addition to provisions authorizing Federal and State
enforcement,\52\ the FCRA contains two provisions relating to civil
liability to consumers for noncompliance. Section 617 provides that
``any person who is negligent in failing to comply with any requirement
imposed under this title with respect to any consumer is liable to that
consumer in an amount equal to'' the consumer's actual damages, and
costs and reasonable attorney's fees.\53\ Section 616 provides that
``any person who willfully fails to comply with any requirement imposed
under this title with respect to any consumer is liable to that
consumer in an amount equal to'' actual or statutory damages of up to
$1,000 per violation, such punitive damages as the court allows, and
costs and reasonable attorney's fees.\54\ A violation is willful when
it is inconsistent with ``authoritative guidance'' from a relevant
agency.\55\ As with any guidance issued by the CFPB on the FCRA, or
predecessor agencies that were responsible for administering the FCRA
prior to the CFPB's creation, consumer reporting agencies risk
liability under section 616 if they violate the FCRA in a manner
described in this advisory opinion, regardless of whether the consumer
reporting agencies were previously liable for willful violations prior
to its issuance.
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\52\ 15 U.S.C. 1681s.
\53\ 15 U.S.C. 1681o (emphasis added).
\54\ 15 U.S.C. 1681n (emphasis added); Safeco Ins. Co. of Am. v.
Burr, 551 U.S. 47, 57-58 (2007) (construing meaning of ``willful'').
\55\ Safeco Ins., 551 U.S. at 70; Fuges v. Sw. Fin. Servs.,
Ltd., 707 F.3d 241, 253 (3d Cir. 2012).
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II. Regulatory Matters
This advisory opinion is an interpretive rule issued under the
Bureau's authority to interpret the FCRA, including under section
1022(b)(1) of the Consumer Financial Protection Act of 2010,\56\ which
authorizes guidance as may be necessary or appropriate to enable the
Bureau to administer and carry out the purposes and objectives of
Federal consumer financial laws.\57\
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\56\ Public Law 111-203, 124 Stat. 1376 (2010).
\57\ 12 U.S.C. 5512(b)(1).
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The Bureau has determined that this advisory opinion does not
impose any new or revise any existing recordkeeping, reporting, or
disclosure requirements on covered entities or members of the public
that would be collections of information requiring approval by the
Office of Management and Budget under the Paperwork Reduction Act.\58\
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\58\ 44 U.S.C. 3501-3521.
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Pursuant to the Congressional Review Act,\59\ the Bureau will
submit a report containing this interpretive rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to the rule's published effective date. The Office of Information and
Regulatory Affairs has designated this interpretive rule as not a
``major rule'' as defined by 5 U.S.C. 804(2).
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\59\ 5 U.S.C. 801 et seq.
Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2024-00788 Filed 1-22-24; 8:45 am]
BILLING CODE 4810-AM-P
