FTC Approves 5 FCRA Rule Changes | Holland & Knight LLP

The Federal Trade Commission (FTC) issued a last rulemaking on Sept. 8, 2021, clarifying that 5 Fair Credit Reporting Act (FCRA) guidelines for which it retains rulemaking authority will apply solely to motorized vehicle sellers.


In 2010, the FTC’s rulemaking authority for the FCRA was assigned to the Consumer Financial Protection Bureau (CFPB) by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which considerably modified the authorized and supervisory framework for suppliers of client monetary providers services and products. In 2012, the FTC rescinded some guidelines it promulgated underneath the FCRA and people guidelines have been substituted by guidelines issued by the CFPB. However, pursuant to Section 1029(a) of the Dodd-Frank Act, the FTC retained rulemaking authority with respect to sure motorized vehicle sellers. Predominantly, these guidelines apply to motorized vehicle sellers engaged within the sale, servicing and leasing of motor autos.

One of the FTC’s retained guidelines now making use of solely to motorized vehicle sellers is the Furnisher Rule (mentioned additional beneath), whereas the CFPB’s Furnisher Rule applies to all different entities. Importantly, the Dodd-Frank Act restricted solely the FTC’s rulemaking authority, nevertheless it didn’t have an effect on the FTC’s authority to implement the CFPB’s Furnisher Rule. For occasion, as lately as 2020, the FTC filed a criticism alleging violations of the CFPB’s model of the rule. The FTC agreed with the one remark it acquired, which said that the Furnisher Rule assisted hundreds of thousands of shoppers to find inaccuracies in client stories and pressured the necessity for enforcement of the Furnisher Rule.

Rules Affected

The FTC’s Sept. 8, 2021, rulemaking impacts the next FCRA rules.

Address (*5*) Rule: Provides obligations of client report customers when a discover of an handle discrepancy is acquired from a client reporting company (CRA).
Affiliate Marketing Rule: Affords shoppers the flexibility to limit people from utilizing data acquired from an affiliate for the needs of soliciting the patron.
Furnisher Rule: Requires furnishers to determine and implement cheap written insurance policies and procedures concerning the accuracy and integrity of client data supplied to CRAs.
Pre-Screen Opt-Out Notice Rule: Establishes necessities for customers of client stories to make unsolicited credit score or insurance coverage presents to shoppers. The Pre-Screen Opt-Out Rule additionally features a net handle for which shoppers can choose out of credit score presents to the mannequin notices utilized by motorized vehicle sellers.
Risk-Based Pricing Rule: Requires customers of client stories to supply discover to shoppers about using such information when providing much less favorable phrases. The Risk-Based Pricing Rule was revised so as to add examples detailing its restricted scope to motorized vehicle sellers.

Conclusion and Considerations

While the substance of the FTC’s latest rulemaking will not be inherently groundbreaking, it ought to function a reminder to the patron monetary providers business of federal companies’ give attention to FCRA compliance and enforcement. The FCRA is probably preeminent amongst all federal client monetary providers legal guidelines (with the doable exception of the Equal Credit Opportunity Act) in its function as an filter for entry to client credit score. Because conducting a evaluate of 1’s client report is mostly an indispensable step within the creditworthiness analysis, making certain that such stories are correct and never misused is prime to making sure the suitable allocation of client credit score. Unrectified errors in a client report can deny credit score to an eligible applicant.

The FTC’s latest rulemaking ought to function a reminder for all suppliers of client monetary providers and customers of client stories to evaluate the way in which that they entry client stories, deal with client report data and reply to alleged discrepancies.



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