[Federal Register Volume 86, Number 178 (Friday, September 17, 2021)]
[Rules and Regulations]
[Pages 51819-51821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19910]


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FEDERAL TRADE COMMISSION

16 CFR Part 660

RIN 3084-AB63


Duties of Furnishers of Information to Consumer Reporting 
Agencies Rule

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
issuing a final rule (``Final Rule'') to amend the Duties of Furnishers 
of Information to Consumer Reporting Agencies Rule (``Furnisher Rule'') 
to correspond to changes made to the Fair Credit Reporting Act 
(``FCRA'') by the Dodd-Frank Act.

DATES: The rule is effective October 18, 2021.

FOR FURTHER INFORMATION CONTACT: David Lincicum (202-326-2773), 
Division of Privacy and Identity Protection, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Furnisher Rule

    The Fair and Accurate Credit Transactions Act of 2003 (``FACT 
Act'') was signed into law on December 4, 2003. Public Law 108-159, 117 
Stat. 1952. Section 312 of the FACT Act amended section 623 \1\ of the 
FCRA by requiring the FTC, with other agencies, to issue guidelines for 
use by furnishers regarding the accuracy and integrity of the 
information about consumers that they furnish to consumer reporting 
agencies (``CRAs'') and to prescribe regulations requiring furnishers 
to establish reasonable policies and procedures for implementing the 
guidelines. Section 312 also required the Commission and the other 
agencies to issue regulations identifying the circumstances under which 
a furnisher must reinvestigate direct consumer disputes concerning the 
accuracy of information provided by the furnisher to a CRA. On July 1, 
2009, the Commission issued the Furnisher Rule and the accompanying 
guidelines that took effect on July 1, 2010.\2\
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    \1\ 15 U.S.C. 1681s-2.
    \2\ 74 FR 31484.
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    The Rule requires furnishers to establish and implement reasonable 
written policies and procedures regarding the accuracy and integrity of 
the information relating to consumers that they furnish to a CRA.\3\ 
The Rule also requires that furnishers respond to direct disputes from 
consumers.\4\
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    \3\ 16 CFR 660.3.
    \4\ 16 CFR 660.4.
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B. Dodd-Frank Act

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``Dodd-Frank Act'') was signed into law in 2010.\5\ The Dodd-Frank Act 
substantially changed the federal legal framework for financial 
services providers. Among the changes, the Dodd-Frank Act transferred 
to the Consumer Financial Protection Bureau (``CFPB'') the Commission's 
rulemaking authority under portions of the FCRA.\6\ Accordingly, in 
2012, the Commission rescinded several of its FCRA rules, which had 
been replaced by rules issued by the CFPB.\7\ The FTC retained 
rulemaking authority for other rules to the extent the rules apply to 
motor vehicle dealers described in section 1029(a) of the Dodd-Frank 
Act \8\ predominantly engaged in the sale and servicing of motor 
vehicles, the leasing and servicing of motor vehicles, or both (``motor 
vehicle dealers'').\9\ The retained rules include the Furnisher Rule, 
which now applies only to motor vehicle dealers.\10\ Furnishers 
originally covered

[[Page 51820]]

by the Furnisher Rule that are not motor vehicle dealers are covered by 
the CFPB's rule.\11\ The Commission continues to have authority to 
enforce the CFPB's rule and has brought several actions alleging 
violations of the rule.\12\
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    \5\ Public Law 111-203 (2010).
    \6\ 15 U.S.C. 1681 et seq. The Dodd-Frank Act does not transfer 
to the CFPB rulemaking authority for section 615(e) of the FCRA 
(``Red Flag Guidelines and Regulations Required'') and section 628 
of the FCRA (``Disposal of Records''). See 15 U.S.C. 1681s(e).
    \7\ 77 FR 22200 (April 13, 2012); 12 U.S.C. 5519.
    \8\ 15 U.S.C. 5519.
    \9\ 77 FR 22200.
    \10\ Id.
    \11\ 12 CFR 1022.40-43.
    \12\ See, e.g., FTC v. Midwest Recovery Systems, LLC, Case No. 
4:20-cv-01674 (E.D. Mo. November 25, 2020); United States v. Credit 
Protection Association, LP, Case No. 3:16-cv-01255-D (N.D. Tex. May 
9, 2016); United States v. Consumer Portfolio Services, Inc., Case 
No. SACV14-00819 (C.D. Cal. May 28, 2014); United States v. 
Telecheck Services, Inc., Case No. 1:14-cv-00062 (D.D.C. January 16, 
2014).
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II. Regulatory Review of the Furnisher Rule

    On September 30, 2020, the Commission solicited comments on the 
Furnisher Rule as part of its periodic review of its rules and guides. 
The Commission sought information about the costs and benefits of the 
Rule, and its regulatory and economic impact. In addition, the 
Commission proposed amending sections 660.1 and 660.2 to narrow the 
scope of the Furnisher Rule to motor vehicle dealers excluded from CFPB 
jurisdiction as described in the Dodd-Frank Act. The Commission 
received one comment stating that the Furnisher Rule assists millions 
of consumers to discover inaccuracies in their consumer reports and 
emphasizing the need for continued enforcement of the Rule.\13\ The 
Commission agrees with this commenter.
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    \13\ East Bay Community Law Center (Comment 3), available at 
www.regulations.gov/comment/FTC-2020-0072-0003. The Commission 
received two comments concerning consumer reporting agency 
activities unrelated to the Furnisher Rule. The comments are 
available at www.regulations.gov/document/FTC-2020-0068-0001/comment.
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III. Overview of Final Rule

    The Commission adopted the Furnisher Rule at a time when it had 
rulemaking authority for a broader group of consumer report users. 
While the Dodd-Frank Act did not change the Commission's enforcement 
authority for the Furnisher Rule, it did narrow the Commission's 
rulemaking authority with respect to the Rule. It now covers only motor 
vehicle dealers.\14\ The amendments in the Dodd-Frank Act necessitate 
technical revisions to the Furnisher Rule to ensure the regulation is 
consistent with the text of the amended FCRA. Accordingly, the 
Commission amends the Furnisher Rule to properly reflect the Rule's 
scope.
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    \14\ 15 U.S.C. 1681s(e)(1); 12 U.S.C. 5519.
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    The amendment to section 660.1 narrows the scope of the Furnisher 
Rule to ``motor vehicle dealers,'' as defined in amended section 660.2.
    The amendment to section 660.2 adds a definition of ``motor vehicle 
dealer'' that defines motor vehicle dealers as those entities excluded 
from CFPB jurisdiction as described in the Dodd-Frank Act.\15\ The 
amendments also change the definition of ``identity theft'' by 
replacing the Rule's reference to 16 CFR 603.2(a), a provision of an 
FTC rule that has since been rescinded,\16\ with a reference to 12 CFR 
1022.3(h), the equivalent provision in the CFPB's rule. The amendments 
make no other substantive changes to the Rule.
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    \15\ 12 U.S.C. 5519.
    \16\ 77 FR 22200 (April 13, 2012).
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IV. Paperwork Reduction Act

    The Furnisher Rule contains information collection requirements as 
defined by 5 CFR 1320.3(c), the definitional provision within the 
Office of Management and Budget (``OMB'') regulations that implement 
the Paperwork Reduction Act (``PRA''). 44 U.S.C. 3501 et seq. OMB has 
approved the Rule's existing information collection requirements 
through July 31, 2022 (OMB Control No. 3084-0144). Under the existing 
clearance, the FTC has attributed to itself the estimated burden 
regarding all motor vehicle dealers and then shares equally the 
remaining estimated PRA burden with the CFPB for other persons for 
which both agencies have enforcement authority regarding the Furnisher 
Rule.
    The Final Rule amends 16 CFR part 660. The amendments do not modify 
or add to information collection requirements previously approved by 
OMB. The amendments narrow the scope to motor vehicle dealers. The 
Rule's OMB clearance already reflects that change. Therefore, the 
Commission does not believe the amendments substantially or materially 
modify any ``collections of information'' as defined by the PRA.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires an 
agency to either provide an Initial Regulatory Flexibility Analysis 
(``IRFA'') with a proposed rule, or certify that the proposed rule will 
not have a significant impact on a substantial number of small 
entities.\17\ The Commission published an Initial Regulatory 
Flexibility Analysis in order to inquire into the impact of the 
proposed Rule on small entities.\18\ The Commission received no 
responsive comments.
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    \17\ 5 U.S.C. 603-605.
    \18\ 85 FR 61659, 61661 (Sept. 30, 2020).
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    The Commission does not believe these amendments have the threshold 
impact on small entities. The amendments effectuate changes to the 
Dodd-Frank Act and will not impose costs on small motor vehicle dealers 
because the amendments are for clarification purposes and will not 
result in any increased burden on any motor vehicle dealer. Thus, a 
small entity that complies with current law need not take any different 
or additional action under the Final Rule. Therefore, the Commission 
certifies that amending the Furnisher Rule will not have a significant 
economic impact on a substantial number of small businesses.
    Although the Commission certifies under the RFA the Final Rule will 
not have a significant impact on a substantial number of small 
entities, and hereby provides notice of that certification to the Small 
Business Administration, the Commission nonetheless has determined that 
publishing a final regulatory flexibility analysis (``FRFA'') is 
appropriate to ensure the impact of the rule is fully addressed. 
Therefore, the Commission has prepared the following analysis:

A. Need for and Objectives of the Final Rule

    To address the Dodd-Frank Act's changes to the Commission's 
rulemaking authority, the amendments clarify that the Rule applies only 
to motor vehicle dealers.

B. Significant Issues Raised in Public Comments in Response to the IRFA

    The Commission did not receive any comments that addressed the 
burden on small entities. In addition, the Commission did not receive 
any comments filed by the Chief Counsel for Advocacy of the Small 
Business Administration (``SBA'').

C. Estimate of Number of Small Entities to Which the Final Rule Will 
Apply

    The Commission anticipates many covered motor vehicle dealers may 
qualify as small businesses according to the applicable SBA size 
standards. As explained in the IRFA, however, determining a precise 
estimate of the number of small entities is not readily feasible. No 
commenters addressed this issue. Nonetheless, as discussed above, these 
amendments do not add any additional burdens on any covered small 
businesses.

[[Page 51821]]

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements, Including Classes of Covered Small Entities and 
Professional Skills Needed To Comply

    The amendments impose no new reporting, recordkeeping, or other 
compliance requirements.

E. Description of Steps Taken To Minimize Significant Economic Impact, 
if Any, on Small Entities, Including Alternatives

    The Commission did not propose any specific small entity exemption 
or other significant alternatives because the amendments will not 
increase reporting requirements and will not impose any new 
requirements or compliance costs.

VI. Other Matters

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

List of Subjects in 16 CFR Part 660

    Consumer protection, Credit, Trade practices.

    For the reasons stated above, the Federal Trade Commission amends 
part 660 of title 16 of the Code of Federal Regulations as follows:


0
1. Revise the authority section for part 660 to read as follows:

    Authority:  Pub. L. 108-159, sec. 311; 15 U.S.C. 1681s-2; 12 
U.S.C. 5519(d).


0
2. Revise Sec.  660.1 to read as follows:


Sec.  660.1   Scope.

    This part applies to furnishers of information to consumer 
reporting agencies that are motor vehicle dealers as defined by Sec.  
660.2 of this part (referred to as ``furnishers'').

0
3. In Sec.  660.2, revise paragraph (d) and add paragraph (f) to read 
as follows:


Sec.  660.2  Definitions.

* * * * *
    (d) Identity theft has the same meaning as in 12 CFR 1022.3(h).
* * * * *
    (f) Motor vehicle dealer means any person excluded from Consumer 
Financial Protection Bureau jurisdiction as described in 12 U.S.C. 
5519.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-19910 Filed 9-16-21; 8:45 am]
BILLING CODE 6750-01-P