Blog LenderLaw Watch September 10, 2020

FTC Seeks Comments on Proposed Changes to Rules Implementing the Fair Credit Reporting Act

On August 24, 2020, the Federal Trade Commission (FTC) issued a press release announcing five Notices of Proposed Rulemaking and requesting public comment on their proposed changes to the rules that implement the Fair Credit Reporting Act (FCRA).  The proposed changes correspond to the changes made to the FCRA by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The FTC proposes changes to the following five, existing rules (“FCRA rules”):

  • The Address Discrepancy Rule, which outlines the information collection requirements for consumer reporting agencies when they receive a notice of address discrepancy. 16 C.F.R. Part 641.
  • The Affiliate Marketing Rule, which provides “consumers the right to restrict a person from using certain information obtained from an affiliate to make solicitations to the consumer.” 16 C.F.R. Part 680.
  • The Furnisher Rule, which requires entities that furnish information to CRAs to establish policies and procedures “regarding the accuracy and integrity of the information relating to consumers provided to a CRA.” 16 C.F.R. Part 660.
  • The Pre-Screen Opt-Out Notice Rule, which outlines “requirements for those who use consumer report information to make unsolicited credit or insurance offers to consumers” 16 C.F.R. Parts 642 and 698.
  • The Risk-Based Pricing Rule, which requires “those who use information from a consumer report to offer less favorable terms to consumers to provide them with a notice about the use of such data.” 16 C.F.R. Part 640.

According to the FTC, the Dodd-Frank Act requires several technical changes to the FCRA.  In its press release, the FTC stated that the Dodd-Frank Act transferred certain of the FTC’s rulemaking authorities to the Consumer Financial Protection Bureau (CFPB).  As such, the FTC proposes limiting the scope of each of these five FCRA Rules solely to motor vehicle dealers.  For instance, as amended, the scope of the Furnisher Rule would be narrowed from all furnishers to those primarily engaged in the sale and servicing of motor vehicles.

In addition, the FTC notes that it also seeks comment on the general effectiveness of the five FCRA Rules including: “(i) whether there is a continuing need for specific provisions of each rule; (ii) the benefits each rule has provided to consumers; (iii) what modifications, if any, should be made to each rule to benefit consumers and businesses; and (iv) what modifications, if any, should be made to each rule to account for changes in relevant technology or economic conditions.”

Comments on the proposed rules will be due 75 days from the date the notices are published in the Federal Register.