[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Rules and Regulations]
[Pages 47027-47042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20184]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / 
Rules and Regulations  

[[Page 47027]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1022

[Docket No. CFPB-2018-0025]
RIN 3170-AA82


Summaries of Rights Under the Fair Credit Reporting Act 
(Regulation V)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Interim final rule with request for public comment.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing an interim final rule to update the Bureau's model forms for 
the Summary of Consumer Identity Theft Rights and the Summary of 
Consumer Rights to incorporate a notice of rights required by a new 
provision of the Fair Credit Reporting Act, added by the Economic 
Growth, Regulatory Relief, and Consumer Protection Act.

DATES: This interim final rule is effective on September 21, 2018. 
Comments must be received on or before November 19, 2018.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2018-
0025 or RIN 3170-AA82, by any of the following methods:
     Email: [email protected]. Include Docket 
No. CFPB-2018-0025 or RIN 3170-AA82 in the subject line of the email.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Comment Intake, Bureau of Consumer Financial 
Protection, 1700 G Street NW, Washington, DC 20552.
     Hand Delivery/Courier: Comment Intake, Bureau of Consumer 
Financial Protection, 1700 G Street NW, Washington, DC 20552.
    Instructions: All submissions should include the agency name and 
docket number or Regulatory Information Number (RIN) for this 
rulemaking. Because paper mail in the Washington, DC area and at the 
Bureau is subject to delay, commenters are encouraged to submit 
comments electronically. In general, all comments received will be 
posted without change to http://www.regulations.gov. In addition, 
comments will be available for public inspection and copying at 1700 G 
Street NW, Washington, DC 20552, on official business days between the 
hours of 10:00 a.m. and 5:00 p.m. Eastern Time. You can make an 
appointment to inspect the documents by telephoning 202-435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or Social 
Security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Seth Caffrey, David Hixson, Amanda 
Quester, or Pavneet Singh, 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: 

I. Summary of the Interim Final Rule

    Effective September 21, 2018, new section 605A(i)(5) of the Fair 
Credit Reporting Act (FCRA), added by the Economic Growth, Regulatory 
Relief, and Consumer Protection Act (the Act), requires that a new 
notice of rights be included whenever a consumer is required to receive 
a summary of rights required by FCRA section 609. This new notice of 
rights does not appear in the model forms currently in Appendices I and 
K, which were published on November 14, 2012. The interim final rule 
amends the model forms to incorporate the new required notice of 
rights, amends the model form in Appendix I to reflect a statutory 
change to the minimum duration of initial fraud alerts, and makes 
adjustments to update contact information for certain FCRA enforcement 
agencies in the model form in Appendix K. To mitigate the impact of 
these changes on users of the existing model forms, the interim final 
rule also provides that the Bureau will regard the use of the model 
forms published in Appendices I and K on November 14, 2012, to 
constitute compliance with the FCRA provisions requiring such forms, so 
long as a separate page that contains the additional required 
information is provided in the same transmittal. The Bureau is 
soliciting comment on the interim final rule's amendments to Appendices 
I and K to inform possible further revisions to the model forms that 
the Bureau may consider in the future.

II. Background

A. Summaries of Rights Required by the FCRA

    Section 609 of the FCRA requires the Bureau to prepare two consumer 
disclosures: A model summary of rights to obtain and dispute 
information in consumer reports and to obtain credit scores (Summary of 
Consumer Rights); and a model summary of rights of identity theft 
victims (Summary of Consumer Identity Theft Rights).\1\ The Bureau's 
model forms for the Summary of Consumer Identity Theft Rights and the 
Summary of Consumer Rights are found in Appendices I and K to 
Regulation V, respectively.
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    \1\ 15 U.S.C. 1681g(c)(1)(A), (d)(1).
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    The Summary of Consumer Rights explains certain major consumer 
rights under the FCRA, including the right to obtain a copy of a 
consumer report, the frequency and circumstances under which a consumer 
is entitled to receive a free consumer report, the right to dispute 
information in a consumer's file, and the right to obtain a credit 
score. A consumer reporting agency must provide a Summary of Consumer 
Rights whenever it makes a written disclosure of information from a 
consumer's file or a credit score to the consumer.\2\ The FCRA also 
requires certain other persons to provide a Summary of Consumer Rights 
to consumers under specified circumstances.\3\
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    \2\ 15 U.S.C. 1681g(c)(2)(A) (requirement to provide a Summary 
of Consumer Rights with any written file disclosure). A consumer 
reporting agency must also provide an employer with a Summary of 
Consumer Rights before furnishing a consumer report for employment 
purposes. 15 U.S.C. 1681b(b)(1)(B) (requirement to provide a Summary 
of Consumer Rights with a report for employment purposes if the 
Summary of Consumer Rights has not been provided previously).
    \3\ See, e.g., 15 U.S.C. 1681b(b)(3) (generally requiring 
persons using a consumer report for employment purposes to provide 
the consumer with a Summary of Consumer Rights before taking any 
adverse action based on the report). The Bureau must also actively 
publicize the availability of the Summary of Consumer Rights, 
conspicuously post its availability on the Bureau's internet 
website, and promptly make it available to consumers, on request. 15 
U.S.C. 1681g(c)(1)(C).

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[[Page 47028]]

    The Summary of Consumer Identity Theft Rights explains the rights 
consumers have under the FCRA when they seek to remedy the effects of 
fraud or identity theft, including the right to place a fraud alert and 
block certain information from appearing in a consumer report. A 
consumer reporting agency must provide a Summary of Consumer Identity 
Theft Rights that contains all of the information required by the 
Bureau if a consumer contacts the consumer reporting agency and 
expresses a belief that the consumer is a victim of fraud or identity 
theft involving credit, an electronic fund transfer, or an account or 
transaction at or with a financial institution or other creditor.\4\
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    \4\ 15 U.S.C. 1681g(d)(2).
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    Regulation V provides that use or distribution of the Bureau's 
model forms and disclosures in Appendices I and K, or substantially 
similar forms and disclosures, will constitute compliance with any FCRA 
section or subsection requiring that such forms and disclosures be used 
by or supplied to any person.\5\ Substantially similar means that all 
information in the Bureau's prescribed model is included in the 
document that is distributed, and that the document distributed is 
formatted in a way consistent with the format prescribed by the 
Bureau.\6\ The document that is distributed cannot include anything 
that interferes with, detracts from, or otherwise undermines the 
information contained in the Bureau's prescribed model.\7\
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    \5\ 12 CFR 1022.1(c)(1).
    \6\ 12 CFR 1022.1(c)(2).
    \7\ Id.
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B. Economic Growth, Regulatory Relief, and Consumer Protection Act

    On May 24, 2018, the President signed the Act into law.\8\ Section 
301(a)(1) of the Act amends the FCRA to extend from 90 days to one year 
the minimum time that nationwide consumer reporting agencies must 
include an initial fraud alert in a consumer's file under FCRA section 
605A(a)(1)(A). Section 301(a)(2) of the Act adds new FCRA section 
605A(i), which requires nationwide consumer reporting agencies to 
provide national security freezes free of charge to consumers. At any 
time a consumer is required to receive a summary of rights required 
under FCRA section 609, new FCRA section 605A(i)(5) requires inclusion 
of a notice of rights regarding the right to obtain a security freeze. 
Section 301(c) of the Act provides that the amendments made by section 
301 of the Act take effect 120 days after the date of enactment, which 
is September 21, 2018.
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    \8\ Public Law 115-174, 132 Stat. 1296 (2018).
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III. Legal Authority

    The Bureau is issuing this interim final rule pursuant to its 
authority under the FCRA and the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (Dodd-Frank Act).\9\ Effective July 21, 2011, 
section 1061 of the Dodd-Frank Act \10\ transferred to the Bureau the 
rulemaking and certain other authorities of the Federal Trade 
Commission (FTC) and the prudential regulators relating to the 
enumerated consumer laws, including most rulemaking authority under the 
FCRA.\11\ Likewise, section 1088 of the Dodd-Frank Act made conforming 
amendments to the FCRA transferring rulemaking authority under much of 
the FCRA to the Bureau,\12\ except those regulations applicable to 
certain motor vehicle dealers.\13\ As amended by the Dodd-Frank Act, 
the FCRA generally authorizes the Bureau to issue regulations ``as may 
be necessary or appropriate to administer and carry out the purposes 
and objectives of [the FCRA], and to prevent evasions thereof or to 
facilitate compliance therewith.'' \14\
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    \9\ Public Law 111-203, 124 Stat. 1376 (2010).
    \10\ 12 U.S.C. 5581.
    \11\ Section 1002(12)(F) of the Dodd-Frank Act designates most 
of the FCRA as an ``enumerated consumer law.''
    \12\ The Dodd-Frank Act did not, however, transfer to the Bureau 
rulemaking authority for FCRA sections 615(e) (``Red Flag Guidelines 
and Regulations Required'') and 628 (``Disposal of Records'').
    \13\ Dodd-Frank Act section 1029.
    \14\ Dodd-Frank Act section 1088(a)(10)(E) (codified at 15 
U.S.C. 1681s(e)).
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IV. Administrative Procedure Act

    Under the Administrative Procedure Act, notice and opportunity for 
public comment are not required if the Bureau for good cause finds that 
notice and public comment are impracticable, unnecessary, or contrary 
to the public interest.\15\ Similarly, publication of this interim 
final rule at least 30 days before its effective date is not required 
if provided for by the Bureau for good cause found.\16\
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    \15\ 5 U.S.C. 553(b)(B).
    \16\ 5 U.S.C. 553(d)(3).
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    The Bureau finds that prior notice and public comment are 
unnecessary because the revisions involve technical changes necessary 
for the regulation to contain model forms that comply with section 301 
of the Act. The revisions merely incorporate a new notice of rights 
required by the Act into the model forms, update the description of 
initial fraud alerts in the Summary of Consumer Identity Theft Rights 
to reflect the new minimum duration of initial fraud alerts specified 
in the Act, and make adjustments to update contact information for 
certain FCRA enforcement agencies in the Summary of Consumer Rights. 
The revisions also include in both model forms optional language 
clarifying that the security freeze right applies only to nationwide 
consumer reporting agencies. Entities that do not wish to use the new 
model forms may use substantially similar forms. They may also continue 
using the existing model forms (or substantially similar forms) to 
comply with the provisions in the FCRA that require such forms if they 
provide the notice of rights required by new FCRA section 605A(i)(5) on 
a separate page in the same transmittal and, for the Summary of 
Consumer Identity Theft Rights, a short explanation of the changed 
minimum duration of initial fraud alerts.
    The Bureau also finds that prior notice and public comment are 
impractical because notice and comment would afford insufficient time 
to finalize the revisions to the model forms necessary for them to 
comply with section 301 of the Act before the effective date of that 
section. If revisions to the model forms were not finalized prior to 
the effective date of the statutory changes, legal uncertainty and risk 
could arise as to how entities could comply with both the regulation 
and section 301 of the Act at the same time.
    The Bureau also finds that there is good cause for this interim 
final rule to be effective less than 30 days after publication to 
ensure that these necessary technical revisions to the model forms are 
in effect by the effective date of section 301 of the Act to avoid the 
legal uncertainty and risk that could arise as to how entities could 
comply with both the regulation and section 301 of the Act at the same 
time.
    For these reasons, the Bureau has determined that publishing a 
notice of proposed rulemaking and providing opportunity for prior 
public comment are unnecessary and impractical and that there is good 
cause for this interim final rule to be effective less than 30 days 
after publication.

[[Page 47029]]

V. Section-by-Section Analysis

Appendix I to Part 1022--Summary of Consumer Identity Theft Rights

    Effective September 21, 2018, FCRA section 605A(i)(5) requires that 
whenever a consumer is required to receive a summary of rights required 
under FCRA section 609, a notice of rights regarding the new security 
freeze right must be included. This notice of rights does not appear in 
the model form for the Summary of Consumer Identity Theft Rights 
currently in Appendix I. To conform to this statutory change, the 
Bureau is amending the model form in Appendix I to include the new 
required notice of rights.
    Under section 301 of the Act, a security freeze prohibits consumer 
reporting agencies that are described in FCRA section 603(p) 
(nationwide consumer reporting agencies) from releasing information 
subject to various exceptions. To clarify the scope of the new security 
freeze right under the FCRA, the Bureau has added a sentence before the 
new notice of rights in the model form in Appendix I stating that the 
following FCRA right applies with respect to nationwide consumer 
reporting agencies. The Bureau will regard the model form in Appendix I 
without this sentence as substantially similar to the model form in 
Appendix I and will regard use of the model form without this sentence 
to constitute compliance with the FCRA provisions requiring such forms.
    The model form for the Summary of Consumer Identity Theft Rights 
currently in Appendix I provides that ``[a]n initial fraud alert stays 
in your file for at least 90 days'' (emphasis in original). Effective 
September 21, 2018, section 301(a)(1) of the Act amends the FCRA to 
extend the minimum time from 90 days to one year that nationwide 
consumer reporting agencies must include fraud alerts in a consumer's 
file under FCRA section 605A(a)(1)(A). To conform to this statutory 
change, the Bureau is amending the model form in Appendix I to provide 
that ``[a]n initial fraud alert stays in your file for at least one 
year.''
    The Bureau recognizes that some entities may have already begun 
preparing to implement the Act and may be preparing Summaries of 
Consumer Identity Theft Rights that include the notice of rights 
required by FCRA section 605A(i)(5) in a different location on the form 
than shown on the new model form published today. The Bureau will 
regard use of forms that are the same as the model form published today 
but that include the notice of rights required by FCRA section 
605A(i)(5) in a different location on the form to constitute compliance 
with the FCRA provisions requiring the Summary of Consumer Identity 
Theft Rights and will regard such forms as substantially similar to the 
model form for the Summary of Consumer Identity Theft Rights published 
today.\17\
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    \17\ The Bureau will also regard use of forms that deviate in 
other ways from the model form published today but that are still 
substantially similar to the model form published today to 
constitute compliance with the FCRA provisions requiring the Summary 
of Consumer Identity Theft Rights.
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    The Bureau recognizes that some entities may find it less 
burdensome to include the notice of rights required by FCRA section 
605A(i)(5) on a separate page in the same transmittal with the Summary 
of Consumer Identity Theft Rights published on November 14, 2012, and 
to clarify in the separate page that the Act changed the minimum 
duration of initial fraud alerts from 90 days to one year. To mitigate 
the impact of the model form changes on users of the existing model 
forms, the Bureau will regard the use of the model form for the Summary 
of Consumer Identity Theft Rights published on November 14, 2012 (or a 
substantially similar form), with a separate page provided in the same 
transmittal that includes the notice of rights required by FCRA section 
605A(i)(5) and that states on the separate page, before or after the 
notice of rights required by FCRA section 605A(i)(5), that ``The 
minimum duration of initial fraud alerts changed from 90 days to one 
year effective September 21, 2018,'' to constitute compliance with the 
FCRA provisions requiring the Summary of Consumer Identity Theft 
Rights.\18\ The Bureau will regard the model form for the Summary of 
Consumer Identity Theft Rights published on November 14, 2012 (or a 
substantially similar form), provided with such a separate page, as 
substantially similar to the model form for the Summary of Consumer 
Identity Theft Rights published in this document.\19\
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    \18\ An entity using this approach need not include the sentence 
about the minimum duration of initial fraud alerts on the separate 
page if it changes ``90 days'' to ``one year'' in the model form for 
the Summary of Consumer Identity Theft Rights published on November 
14, 2012. Entities may also, at their option, add the following 
statement on the separate page before the notice of rights required 
by FCRA section 605A(i)(5): ``The following FCRA right applies with 
respect to nationwide consumer reporting agencies.''
    \19\ The use of the versions of the model forms in Appendices I, 
K, M, and N as published on December 21, 2011, should be 
discontinued no later than September 21, 2018. See 76 FR 79308 (Dec. 
21, 2011); 77 FR 67744 (Nov. 14, 2012); 81 FR 25323 (Apr. 28, 2016).
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Appendix K to Part 1022--Summary of Consumer Rights

    Effective September 21, 2018, FCRA section 605A(i)(5) requires that 
whenever a consumer is required to receive a summary of rights required 
under FCRA section 609, a notice of rights regarding the new security 
freeze right must be included. This notice does not appear in the model 
form for the Summary of Consumer Rights currently in Appendix K. To 
conform to this statutory change, the Bureau is amending the model form 
in Appendix K to include the new required notice of rights.
    Under section 301 of the Act, a security freeze prohibits consumer 
reporting agencies that are described in FCRA section 603(p) 
(nationwide consumer reporting agencies) from releasing information 
subject to various exceptions. To clarify the scope of the new security 
freeze right under the FCRA, the Bureau has added a sentence before the 
new notice of rights in the model form in Appendix K stating that the 
following FCRA right applies with respect to nationwide consumer 
reporting agencies. The Bureau will regard the model form in Appendix K 
without this sentence as substantially similar to the model form in 
Appendix K and will regard use of the model form without this sentence 
to constitute compliance with the FCRA provisions requiring such forms.
    The Bureau has also amended the model form in Appendix K to update 
contact information provided for certain FCRA enforcement agencies.
    The Bureau recognizes that some entities may have already begun 
preparing to implement the Act and may be preparing Summaries of 
Consumer Rights that include the notice of rights required by FCRA 
section 605A(i)(5) in a different location on the form than shown on 
the new model form published today. The Bureau will regard use of forms 
that are the same as the model form published today but that include 
the notice of rights required by FCRA section 605A(i)(5) in a different 
location on the form to constitute compliance with the FCRA provisions 
requiring the Summary of Consumer Rights and will regard such forms as 
substantially similar to the model form for the Summary of Consumer 
Rights published today.\20\
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    \20\ The Bureau will also regard use of forms that deviate in 
other ways from the model form published today but that are still 
substantially similar to the model form published today to 
constitute compliance with the FCRA provisions requiring the Summary 
of Consumer Rights.
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    The Bureau recognizes that some entities may find it less 
burdensome to

[[Page 47030]]

include the notice of rights required by FCRA section 605A(i)(5) on a 
separate page in the same transmittal with the Summary of Consumer 
Rights published on November 14, 2012. To mitigate the impact of these 
changes on users of the existing model forms, the Bureau will regard 
the use of the model form for the Summary of Consumer Rights published 
on November 14, 2012 (or a substantially similar form), with a separate 
page provided in the same transmittal that includes the notice of 
rights required by FCRA section 605A(i)(5), to constitute compliance 
with the FCRA provisions requiring the Summary of Consumer Rights.\21\ 
The Bureau will regard the model form for the Summary of Consumer 
Rights published on November 14, 2012 (or a substantially similar 
form), provided with such a separate page as substantially similar to 
the model form for the Summary of Consumer Rights published in this 
document.\22\
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    \21\ Entities may also, at their option, add the following 
statement on the separate page before the notice of rights required 
by FCRA section 605A(i)(5): ``The following FCRA right applies with 
respect to nationwide consumer reporting agencies.''
    \22\ See supra note 18.
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VI. Request for Comment

    The Bureau may consider possible further revisions to the model 
forms in Appendices I and K to Regulation V in the future. Although 
notice-and-comment rulemaking procedures are not required for the 
revisions made in this interim final rule, the Bureau invites comment 
on this interim final rule, implementation of the Act in the model 
forms, and any other changes that may be necessary or appropriate to 
the model forms in Appendices I and K to Regulation V.\23\
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    \23\ We note that, in 2010, the FTC proposed revisions to these 
and other model forms, but the rulemaking was not finalized. See 
Summary of Rights and Notices of Duties under the Fair Credit 
Reporting Act, 75 FR 52655 (Aug. 27, 2010).
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VII. Effective Date

    This interim final rule is effective on September 21, 2018.

VIII. Dodd-Frank Act Section 1022(b) Analysis

A. Overview

    In developing the interim final rule, the Bureau has considered the 
potential benefits, costs, and impacts required by section 1022(b)(2) 
of the Dodd-Frank Act. Specifically, section 1022(b)(2) calls for the 
Bureau to consider the potential benefits and costs of a regulation to 
consumers and covered persons, including the potential reduction of 
access by consumers to consumer financial products or services, the 
impact on depository institutions and credit unions with $10 billion or 
less in total assets as described in section 1026 of the Dodd-Frank 
Act, and the impact on consumers in rural areas. In addition, section 
1022(b)(2)(B) directs the Bureau to consult, before and during the 
rulemaking, with appropriate prudential regulators or other Federal 
agencies, regarding consistency with objectives those agencies 
administer. The Bureau has consulted, or offered to consult, with the 
prudential regulators and the FTC regarding consistency with any 
prudential, market, or systemic objectives administered by those 
agencies.
    In considering the relevant potential benefits, costs, and impacts, 
the Bureau consulted the available data and applied its knowledge and 
expertise concerning consumer financial markets. Where available, the 
Bureau used the economic analyses that it regards as most reliable and 
helpful to consider the relevant potential benefits, costs, and impacts 
of the interim final rule. However, the Bureau notes that, in some 
instances, there are limited data available to inform the 
quantification of the potential benefits, costs, and impacts. Where 
possible, the Bureau makes quantitative estimates based on economic 
principles as well as available data. However, where data are limited, 
the Bureau generally provides a qualitative discussion of the interim 
final rule's potential benefits, costs, and impacts.
    The Bureau is using a post-statute baseline to assess the impact of 
this interim final rule. Using a post-statute baseline, the analysis 
evaluates the benefits, costs, and impacts of the interim final rule as 
compared to enactment of the statute alone. A post-statute baseline 
focuses the consideration of the benefits, costs, and impacts on the 
amendments in this interim final rule, which are technical and do not 
impose any new substantive obligations on regulated entities.\24\
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    \24\ The Bureau has discretion in future rulemakings to choose 
the relevant provisions to discuss and the most appropriate baseline 
for that particular rulemaking. The Bureau also considers the 
benefits, costs, and impacts of certain other requirements in new 
FCRA section 605A(i) related to the new disclosure requirements 
where doing so provides a more complete understanding of the impacts 
of these requirements on consumers and covered persons.
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    As discussed above, the interim final rule amends Regulation V, 
which implements the FCRA, to reflect new FCRA section 605A(i), added 
by the Act. Under the interim final rule, the Bureau is amending two 
model forms in Regulation V to conform to new FCRA section 605A(i)(5). 
The amended model form in Regulation V, Appendix K, the Summary of 
Consumer Rights, reflects two changes relative to the current model 
form: The addition of a notice of rights that details the consumer's 
right to a security freeze; and an update to the contact information 
listed for certain FCRA enforcement agencies. The amended model form in 
Regulation V, Appendix I, the Summary of Consumer Identity Theft 
Rights, reflects two changes relative to the current model form: The 
addition of the same notice of rights detailing the consumer's right to 
a security freeze that has been added to the Summary of Consumer 
Rights; and an update to the disclosed minimum amount of time that an 
initial fraud alert stays in a consumer's file. The rule also includes 
in both model forms optional language clarifying that the security 
freeze right applies only to nationwide consumer reporting agencies.
    Rather than requiring entities subject to the interim final rule to 
use the new model forms, the interim final rule allows entities to 
comply in a variety of ways. These include, for example: (1) Allowing 
entities to continue to use the current forms while also including a 
separate page that includes the new statutorily prescribed notice of 
rights and, with respect to the disclosure in Appendix I, either 
highlighting in the separate page the change from 90 days to one year 
for the minimum duration of initial fraud alerts or updating the 
current forms to include the change in the minimum duration of initial 
fraud alerts; or (2) allowing entities flexibility as to the placement 
of the new notice of rights on the forms. For the purpose of this 
analysis, the Bureau does not differentiate between which of these 
methods of compliance an entity chooses, and these methods are 
collectively referred to as the ``alternative approach.''
    Regarding baseline behavior and practices, the Bureau assumes that 
if the interim final rule were not adopted, entities subject to the 
rule would comply with both new FCRA section 605A(i)(5) and current 
Regulation V. For the purpose of this analysis, the Bureau assumes that 
if the interim final rule were not adopted, to convey the information 
required by new FCRA section 605A(i)(5) along with the information 
contained in either of the current model forms under current Regulation 
V, entities subject to the rule would comply in a manner that is 
substantially similar to the alternative approach described above, 
using two

[[Page 47031]]

double-sided sheets of standard printer paper.\25\
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    \25\ The Summary of Consumer Rights model form in current 
Regulation V can be printed on three sides of standard printer 
paper. Since the new information required by new FCRA section 
605A(i)(5) can be printed on a single side, the combination of these 
disclosures should take no more than four sides of paper, or two 
double-sided sheets of paper. The Summary of Consumer Identity Theft 
Rights model form in current Regulation V can be printed on two 
sides of standard printer paper. Therefore, the combination of this 
disclosure and the information required by new FCRA section 
605A(i)(5) should take no more than three sides of paper, or the 
equivalent of two double-sided sheets of paper.
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    As this analysis details below, the similarity between the 
alternative approach and the assumed behavior and practices under the 
baseline result in the Bureau estimating minimal additional costs under 
the interim final rule. Where illuminating, the Bureau also considers 
the costs to entities of adopting the amended model forms. These 
analyses demonstrate that the Bureau's estimate of costs is not 
affected by whether entities adopt the model form or use the 
alternative approach.

B. Potential Benefits and Costs to Consumers and Covered Persons

Benefits
    The impact on consumers of the interim final rule depends on 
whether a particular consumer prefers, or would otherwise benefit from, 
receiving the amended disclosures.\26\ As described above, this 
analysis assumes that entities subject to the rule would provide the 
information required by both new FCRA section 605A(i)(5) and current 
Regulation V, even if this rule were not adopted. However, this rule 
provides entities with the option to provide the information from these 
two sources under the unified disclosure designs of the amended model 
forms. The Bureau expects that these unified designs will make finding 
and comprehending information easier for consumers relative to the 
baseline by lowering the cost to consumers of information search and 
processing. The precise magnitude of this benefit to consumers is 
difficult to quantify because the Bureau does not have data regarding 
how much individual consumers value it. However, the Bureau can 
estimate, broadly, the scope of consumers who may benefit. Prior to the 
Act, of the consumers who experienced one or more attempted or 
successful incidents of identity theft and who also contacted a 
consumer reporting agency, approximately 70 percent requested a fraud 
alert be placed on their file.\27\ This large proportion reflects a 
substantial consumer demand for this service.\28\ Similarly, prior to 
the Act, about 40 percent of consumers who experienced one or more 
attempted or successful incidents of identity theft, and who also 
contacted a consumer reporting agency, requested a security freeze.\29\ 
After the Act, the Bureau expects demand for fraud alerts and security 
freezes will increase; \30\ and, of the consumers who demand these 
services, some will become informed through the disclosures required by 
Regulation V and new FCRA section 605A(i)(5). These consumers are 
likely to benefit from this rule through lower information search and 
processing costs relative to the baseline, as described above.
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    \26\ Benefits will also depend on the extent to which entities 
adopt the model forms or substantially similar forms (rather than 
using the alternative approach). Since each rule is unique, the 
Bureau does not have data that would allow it to reliably estimate 
adoption rates. However, in general, greater adoption of the model 
forms or substantially similar disclosures will lead to a greater 
benefit of this rule.
    \27\ U.S. Dep't. of Justice, Victims of Identity Theft, 2014 at 
1, 18 (Sept. 27, 2015), available at https://www.bjs.gov/index.cfm?ty=pbdetail&iid=5408.
    \28\ The Bureau assumes about one million consumers contact 
consumer reporting agencies requesting fraud alerts annually. This 
estimate is based on survey data from the U.S. Department of 
Justice. Approximately 17.6 million people were victims of identity 
theft in 2014, and an estimated 8.1 percent contacted a consumer 
reporting agency. See id.
    \29\ See id.
    \30\ The Act provides, and prescribes the disclosure of, new 
rights to consumers. The Bureau expects that these new rights will 
be of value to consumers, and that these new disclosures will help 
to inform consumers of their rights.
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    Regarding benefits to industry, this interim final rule harmonizes 
Regulation V with the FCRA, as amended by the Act. The Bureau intends 
to reduce legal uncertainty and risk in the industry regarding 
responsibilities and liabilities among market participants about how 
they may comply with both the statute and Regulation V at the same 
time. There may be a general benefit from the certainty and risk 
reduction provided through this harmonization. However, without data on 
how entities would comply with the statute and Regulation V absent this 
interim final rule, the Bureau cannot quantify the benefit of this 
additional certainty.
Costs
    The Bureau estimates minimal additional costs under the interim 
final rule. The Bureau does not anticipate any additional one-time 
costs due to this rule, relative to the baseline. Regarding ongoing 
costs, this interim final rule does not alter the circumstances under 
which disclosures under the FCRA are required. Nor does the Bureau 
estimate any additional costs to providing disclosures due to this 
rule, relative to the baseline. Nonetheless, this analysis considers 
each of the potential sources of cost for each of the disclosures that 
are updated by this interim final rule, given the baseline, including: 
Development of new disclosure templates, destruction or disposal of 
out-of-date materials, changes to production of disclosures, and 
changes to delivery of disclosures.
Summary of Consumer Rights
    The Bureau believes that the costs of this interim final rule of 
development of a new Summary of Consumer Rights disclosure template, or 
destruction or disposal of out-of-date materials, will be minimal. As 
stated above, the Bureau believes that the alternative approach allowed 
by this rule is substantially similar to how entities would comply with 
both new FCRA section 605A(i)(5) and current Regulation V if this 
interim final rule were not adopted. The Bureau therefore expects that 
to come into compliance with this rule, relative to the baseline, 
entities subject to the rule will not incur additional costs to update 
disclosure templates or to destroy, or dispose of, out-of-date 
materials.\31\
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    \31\ If entities were to choose to adopt the model form, or if 
this analysis were to adopt a pre-statute baseline, the Bureau would 
continue to estimate these costs to be small. Because the Bureau is 
providing model forms, it believes the cost of developing new 
disclosure templates would be small. Because the Bureau is allowing 
the alternative approach, it believes that entities could use their 
old stock rather than destroying or disposing of it.
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    Regarding production and delivery of the Summary of Consumer Rights 
disclosure, there are two relevant classes of recipients: Consumers and 
employers. The Bureau estimates additional costs under the interim 
final rule to be very small for production and delivery to either 
class. Each is considered separately below.
    For production and delivery to consumers, the Bureau estimates 
minimal additional costs under the interim final rule. The Bureau 
expects that the alternative approach will take two double-sided sheets 
to be printed, which is the same number of sheets as under the approach 
the Bureau assumes entities will take under the baseline.\32\ Since the 
printing needs are the same, there are no additional costs.\33\ It is

[[Page 47032]]

possible that use of the alternative approach could result in an entity 
using a third sheet of paper to produce the disclosure; however, the 
Bureau believes that any entity choosing to use an extra sheet of paper 
under the interim final rule would also choose to do so under the 
baseline.\34\
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    \32\ The Bureau typically accounts for printing costs in terms 
of the cost of double-sided printing on standard 8.5 inch by 11 inch 
printer paper. However, this interim final rule does not specify how 
entities print or the size of the paper they use. Indeed, the Bureau 
expects that each entity will use the method of printing that is 
least costly to it.
    \33\ The Bureau also assumes there to be no substantial cost of 
electronic distribution, and therefore that there is no change in 
costs, regardless of the chosen method of delivery.
    \34\ If entities were to adopt the model form, then the Bureau 
would continue to estimate these costs to be small because the 
amended Summary of Consumer Rights model form disclosure takes two 
double-sided sheets to be printed, which is the same number of 
sheets as under the approach the Bureau assumes entities will take 
under the baseline.
    If this analysis were to adopt a pre-statute baseline, then this 
analysis would still estimate minimal additional costs due to this 
part of the rule. When printed on double-sided sheets, the 
disclosure under current Regulation V takes two sheets of standard 
printer paper, which is the same number of sheets as under both the 
amended model form and the alternative approach under this interim 
final rule. Although this rule does technically imply that 
additional ink would be used relative to printing the current 
disclosure, the Bureau typically estimates a total cost per sheet of 
printing inclusive of paper costs, depreciation of printing 
hardware, and the ink required for a double-sided, completely 
printed, sheet. Therefore, the implied cost of additional ink would 
already have been counted in the cost of previous rules.
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    For production and delivery to employers, the Bureau estimates 
minimal additional costs under the interim final rule. Under the FCRA, 
employers must be provided a copy of the Summary of Consumer Rights 
disclosure by a consumer reporting agency before the consumer reporting 
agency furnishes a consumer report for employment purposes, unless the 
consumer reporting agency already provided a copy of the disclosure to 
that employer. The Bureau believes that, under the baseline, consumer 
reporting agencies will provide an updated copy of the Summary of 
Consumer Rights to employers once the Act takes effect. However, 
because the Bureau assumes that consumer reporting agencies' baseline 
approach will be substantially similar to the alternative approach 
under this interim final rule, the Bureau estimates the cost to sending 
an updated copy to employers to be the same under the rule as under the 
baseline.\35\
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    \35\ If entities were to adopt the model form, then the Bureau 
would continue to estimate additional costs to be small because the 
amended Summary of Consumer Rights model form disclosure takes two 
double-sided sheets to be printed, which is the same number of 
sheets as under the approach the Bureau assumes entities will take 
under the baseline.
    If this analysis were to adopt a pre-statute baseline, the 
Bureau would estimate a one-time cost to consumer reporting agencies 
of between $0 and $435,000, depending on the method by which the 
disclosures are delivered. This estimate assumes printing costs of 
$0.20 per disclosure (two sheets * $0.10 per sheet), and postage 
cost of $0.375 per disclosure. See U.S. Postal Serv., Postal 
Explorer--Price List, https://pe.usps.com/text/dmm300/Notice123.htm#_c096. It further assumes that there are approximately 
757,310 employers in the United States that use consumer reports for 
employment purposes, and that each employer requests consumer 
reports from at most one consumer reporting agency. This estimated 
number of employers comes from the fact that there are approximately 
5,726,160 firms in the United States that have employees (2014) and 
a survey which reported that 13 percent of employers use credit 
reports to screen candidates for all positions. The reported range 
of potential cost depends on the proportion of disclosures assumed 
to be sent electronically. If all disclosures were sent 
electronically, the estimated cost would be approximately $0. 
However, if all disclosures were sent via U.S. mail, the estimated 
cost would be approximately $435,000 (($0.20 + $0.375)*757,310). See 
U.S. Small Bus. Admin., Firm Size Data, available at https://www.sba.gov/advocacy/firm-size-data and Society for Human Res. 
Mgmt., Background Checking--The Use of Credit Background Checks in 
Hiring Decisions (July 19, 2012), available at https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Pages/creditbackgroundchecks.aspx.
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Summary of Consumer Identity Theft Rights
    For the same reasons described in the previous part, the Bureau 
believes that the additional costs under this interim final rule of 
development of a new Summary of Consumer Identity Theft Rights 
disclosure template, or destruction or disposal of out-of-date 
materials, will be minimal.
    Regarding production and delivery of the Summary of Consumer 
Identity Theft Rights disclosure, the Bureau estimates the total change 
in costs will be very small. The Bureau expects that the alternative 
approach will take no more than two double-sided sheets to be printed, 
which is the same number of sheets as under the approach the Bureau 
assumes entities will take under the baseline. Since the printing needs 
are the same, there are no new costs.\36\
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    \36\ This analysis assumes there to be no substantial cost of 
electronic distribution, and therefore no change in costs, 
regardless of the chosen method of delivery.
    If entities were to choose to adopt the model form, the Bureau 
would continue to estimate the costs to be very small because the 
amended Summary of Consumer Identity Theft Rights model form 
disclosure takes two double-sided sheets to be printed, which is the 
same number of sheets as under the approach the Bureau assumes 
entities will take under the baseline.
    If this analysis were to adopt a pre-statute baseline, printing 
the amended Summary of Consumer Identity Theft Rights model form 
would use one additional sheet of paper relative to the current 
model form, and the total change in costs would be between $0 and 
approximately $140,000 annually, depending on the methods by which 
consumer reporting agencies distribute their disclosures. These 
estimates assume additional printing costs of $0.10 per disclosure 
(one sheet * $0.10 per sheet), but no additional postage cost (the 
cost to send a business class letter via the USPS is the same 
whether it contains one or two sheets of paper). In addition, these 
estimates assume that about 1.4 million consumers contact consumer 
reporting agencies regarding identity theft. See supra note 26.
    An estimated 42 percent of consumers submit disputes to consumer 
reporting agencies online, 44 percent by mail, 13 percent by phone, 
and the remainder by fax, walk-ins, or other methods (which the 
Bureau assumes result in burden resembling disputes submitted by 
mail). Under the assumptions that these methods of contact are 
representative of consumer behavior across products, and that 
consumer reporting agencies respond in-kind to electronic disputes 
but respond to all other methods of consumer contact via U.S. mail, 
42 percent of these disclosures would be sent electronically, and 58 
percent would be sent via U.S. mail. This would result in an 
expected cost to consumer reporting agencies of approximately 
$81,200 annually. See Bureau of Consumer Fin. Protection, Key 
Dimensions and Processes in the U.S. Credit Reporting System 27 
(Dec. 2012), available at http://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-white-paper.pdf.
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    The Bureau does not anticipate that the interim final rule will 
generate costs for consumers, given the baseline.

C. Potential Specific Impacts of the Rule

    This analysis estimates minimal additional costs under the interim 
final rule, and therefore the Bureau does not believe that the rule 
would reduce consumers' access to consumer financial products or 
services.
    The Bureau does not expect the interim final rule to have distinct 
impacts on depository institutions and credit unions with $10 billion 
or less in total assets or on consumers in rural areas, relative to 
other entities or consumers.

IX. Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where general notice of proposed rulemaking is not required.\37\ As 
noted previously, the Bureau has determined that it is unnecessary to 
publish a general notice of proposed rulemaking for this interim final 
rule. Accordingly the RFA's requirements relating to an initial and 
final regulatory flexibility analysis do not apply.
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    \37\ 5 U.S.C. 603(a), 604(a).
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X. Paperwork Reduction Act

    The Bureau has determined that the interim final rule 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, 44 
U.S.C. 3501 et seq.

XI. Congressional Review Act

    Pursuant to the Congressional Review Act,\38\ the Bureau will 
submit a report containing this rule and other required information to 
the U.S. Senate, the U.S. House of Representatives, and the

[[Page 47033]]

Comptroller General of the United States prior to the rule's published 
effective date. The Office of Information and Regulatory Affairs has 
designated this rule as not a ``major rule'' as defined by 5 U.S.C. 
804(2).
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    \38\ 5 U.S.C. 801 et seq.
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List of Subjects

    Banks, Banking, Consumer protection, Credit unions, Fair Credit 
Reporting Act, Holding companies, National banks, Privacy, Reporting 
and recordkeeping requirements, Savings associations, State member 
banks.

Authority and Issuance

    For the reasons set forth above, the Bureau amends Regulation V, 12 
CFR part 1022, as set forth below:

PART 1022--FAIR CREDIT REPORTING (REGULATION V)

0
1. The authority citation for part 1022 continues to read as follows:

    Authority:  12 U.S.C. 5512, 5581; 15 U.S.C. 1681a, 1681b, 1681c, 
1681c-1, 1681e, 1681g, 1681i, 1681j, 1681m, 1681s, 1681s-2, 1681s-3, 
and 1681t; Sec. 214, Public Law 108-159, 117 Stat. 1952.

0
2. Revise Appendix I to read as follows:

Appendix I to Part 1022--Summary of Consumer Identity Theft Rights

    The prescribed form for this summary is a disclosure that is 
substantially similar to the Bureau's model summary with all 
information clearly and prominently displayed. A summary should 
accurately reflect changes to those items that may change over time 
(such as telephone numbers) to remain in compliance. Translations of 
this summary will be in compliance with the Bureau's prescribed 
model, provided that the translation is accurate and that it is 
provided in a language used by the recipient consumer.


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0
3. Revise Appendix K to read as follows:

Appendix K to Part 1022--Summary of Consumer Rights

    The prescribed form for this summary is a disclosure that is 
substantially similar to the Bureau's model summary with all 
information clearly and prominently displayed. The list of Federal 
regulators that is included in the Bureau's prescribed summary may 
be provided separately so long as this is done in a clear and 
conspicuous way. A summary should accurately reflect changes to 
those items that may change over time (e.g., dollar amounts, or 
telephone numbers and addresses of Federal agencies) to remain in 
compliance. Translations of this summary will be in compliance with 
the Bureau's prescribed model, provided that the translation is 
accurate and that it is provided in a language used by the recipient 
consumer.
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    Dated: September 11, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-20184 Filed 9-17-18; 8:45 am]
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