[Federal Register Volume 89, Number 15 (Tuesday, January 23, 2024)]
[Rules and Regulations]
[Pages 4167-4171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00786]
=======================================================================
-----------------------------------------------------------------------
CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1022
Fair Credit Reporting; File Disclosure
AGENCY: Consumer Financial Protection Bureau.
ACTION: Advisory opinion.
-----------------------------------------------------------------------
SUMMARY: The Consumer Financial Protection Bureau (CFPB or Bureau) is
issuing this advisory opinion to address certain obligations that
consumer reporting agencies have under section 609(a) of the Fair
Credit Reporting Act (FCRA). This advisory opinion underscores that, to
trigger a consumer reporting agency's file disclosure requirement under
FCRA section 609(a), a consumer does not need to use specific language,
such as ``complete file'' or ``file.'' This advisory opinion also
highlights the requirements regarding the information that must be
disclosed to a consumer under FCRA section 609(a). In addition, this
advisory opinion affirms that consumer reporting agencies must disclose
to a consumer both the original source and any intermediary or vendor
source (or sources) that provide the item of information to the
consumer reporting agency under FCRA section 609(a).
DATES: This advisory opinion is effective on January 23, 2024.
FOR FURTHER INFORMATION CONTACT: Amanda Quester, Alexandra Reimelt, 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
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 FCRA regulates consumer reporting.\2\ Congress enacted the
statute ``to ensure fair and accurate credit reporting, promote
efficiency in the banking system, and protect consumer privacy.'' \3\
One of the problems with the credit reporting industry that Congress
recognized and sought to remedy with the FCRA was that a consumer ``is
not always given access to the information in [their] file.'' \4\ In
light of its broad remedial and consumer protection purposes, courts
have recognized that the FCRA ``must be read in a liberal manner in
order to effectuate the congressional intent underlying it.'' \5\
---------------------------------------------------------------------------
\2\ See 15 U.S.C. 1681-1681x.
\3\ Safeco Ins. Co. of Am. v. Barr, 551 U.S. 47, 52 (2007); see
also 15 U.S.C. 1681 (recognizing ``a need to insure that consumer
reporting agencies exercise their grave responsibilities with
fairness, impartiality, and a respect for the consumer's right to
privacy''); S. Rep. No. 91-517, at 1 (1969) (noting that purpose of
the statute is, in part, to ``prevent consumers from being unjustly
damaged because of inaccurate or arbitrary information in a credit
report'' and to ``prevent an undue invasion of the individual's
right of privacy in the collection and dissemination of credit
information'').
\4\ S. Rep. No. 91-517, at 3 (1969) (noting, as an example of
this problem, that ``[i]nsurance reporting firms generally do not
admit to making a report on an individual and ordinarily will not
reveal the contents of their file to [them]. Credit bureaus
sometimes build roadblocks in the path of the consumer.''). When
introducing the bill that would become the FCRA, Senator Proxmire
stated that ``[m]any credit reporting agencies refuse to show
consumers their files possibly out of fear of litigation and partly
to protect its information sources.'' 115 Cong. Rec. 2412 (1969).
\5\ See, e.g., Fed. Trade Comm'n, 40 Years of Experience With
the Fair Credit Reporting Act: An FTC Staff Report With Summary of
Interpretations, at 32 (2011); Cortez v. Trans Union, LLC, 617 F.3d
688, 706 (3rd Cir. 2010); Guimond v. Trans Union Credit Info. Co.,
45 F.3d 1329, 1333 (9th Cir. 1995) (``[The FCRA] was crafted 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. These consumer[-]oriented objectives support a
liberal construction of the FCRA'' (citations omitted).).
---------------------------------------------------------------------------
The FCRA also promotes transparency of the credit reporting system
to consumers in many ways, including by generally requiring that
consumer reporting agencies disclose to consumers all information in
their file upon request. Under section 609(a), a consumer reporting
agency must, upon request, clearly and accurately disclose to the
consumer ``[a]ll information in the consumer's file at the time of the
request'' and ``[t]he sources of the information.'' \6\ This
requirement applies to all consumer reporting agencies.\7\ Consumers
are entitled to free file disclosures in many circumstances. For
example, each nationwide consumer reporting agency and nationwide
specialty consumer reporting agency, including any nationwide tenant
screening or employment background screening company, must provide at
[[Page 4168]]
least one free file disclosure annually.\8\ Consumers also are entitled
to free file disclosures in certain other circumstances, such as in
connection with adverse action notices and fraud alerts.\9\
---------------------------------------------------------------------------
\6\ See 15 U.S.C. 1681g(a). This requirement is subject to
several exceptions. For example, consumer reporting agencies are not
required to disclose to a consumer any information concerning credit
scores or any other risk scores or predictors relating to the
consumer. See 15 U.S.C. 1681g(a)(1)(B). The Consumer Credit
Reporting Reform Act of 1996 revised FCRA section 609(a) to require
that consumers receive all information in the file rather than only
the ``nature and substance'' of the information. Public Law 104-208,
110 Stat. 3009 (1996).
\7\ See 15 U.S.C. 1681a(f) (defining ``consumer reporting
agency'').
\8\ See 15 U.S.C. 1681j; 12 CFR 1022.136 (centralized source for
requesting annual file disclosures from nationwide consumer
reporting agencies); 12 CFR 1022.137 (streamlined process for
requesting annual file disclosures from nationwide specialty
consumer reporting agencies); CFPB, Bulletin 2012-09 (Nov. 29, 2012)
(explaining FCRA's ``streamlined process'' requirement for consumers
to obtain free annual reports from nationwide specialty consumer
reporting agencies), https://www.consumerfinance.gov/compliance/supervisory-guidance/bulletin-fcra-process-requirement-consumers/.
\9\ See 15 U.S.C. 1681j(b)-(d). In other instances, consumers
may be required to pay for a file disclosure, with the fee capped by
regulation. A list of consumer reporting companies is available at:
https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/consumer-reporting-companies/companies-list/.
---------------------------------------------------------------------------
The FCRA defines a consumer's ``file'' as ``all of the information
on that consumer that is recorded and retained by a consumer reporting
agency, regardless of how the information is stored.'' \10\ Consumer
reporting agencies possess files on hundreds of millions of Americans.
These files typically include information about, among other things, a
consumer's credit, criminal, employment, and rental histories. Consumer
reporting agencies may obtain this information from multiple sources,
including companies that provide information about their direct
experiences with consumers and third parties who gather information
from courts and other sources of public records.\11\ Errors by a
furnisher or a third-party source can affect a consumer's file at many
different consumer reporting agencies.\12\ Consumer reporting agencies
use the information in consumer files to produce and sell consumer
reports,\13\ which creditors, insurers, landlords, employers, and
others who have a permissible purpose use to make eligibility and other
decisions about consumers. The potential for the vast quantity of
information contained in consumer files to include errors poses
significant risks to accuracy, fairness, and consumer privacy in the
consumer reporting system.
---------------------------------------------------------------------------
\10\ See 15 U.S.C. 1681a(g) (defining ``file'').
\11\ CFPB, Market Snapshot: Background Screening Reports:
Criminal background checks in employment 5-6 (Oct. 2019), https://files.consumerfinance.gov/f/documents/201909_cfpb_market-snapshot-background-screening_report.pdf. See also Nat'l Consumer Law Ctr.,
Broken Records: How Errors by Criminal Background Checking Companies
Harm Workers and Business 10-11 (2012), https://www.nclc.org/images/pdf/pr-reports/broken-records-report.pdf.
\12\ 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 failure
to include LexisNexis in the report creates a material risk that
LexisNexis could continue to report inaccurate information to others
in the future'').
\13\ See 15 U.S.C. 1681a(d) (defining ``consumer report'').
---------------------------------------------------------------------------
Section 609(a)'s file disclosure requirements are central to the
statute's accuracy, fairness, and privacy purposes. Consumers have a
right to see the information consumer reporting agencies keep about
them in their files at any time. Absent file disclosure requirements, a
consumer may not be able to review their file, determine whether it
contains any incomplete or inaccurate information, and, if it does,
file a dispute under FCRA sections 611 and 623, and have the
information corrected or deleted.\14\ Disclosure of the information in
a consumer's file upon request is a critical component of the FCRA's
carefully calibrated dispute provisions.\15\ Moreover, file disclosure
also promotes the FCRA's fairness purpose by enabling consumers to
identify any negative information in their files that may be used to
make credit and other eligibility determinations about them and take
steps to improve their credit profiles.\16\
---------------------------------------------------------------------------
\14\ See 15 U.S.C. 1681i.
\15\ See, e.g., Gillespie v. Equifax Info. Servs., LLC, 484 F.3d
938, 941 (7th Cir. 2007) (stating that ``a primary purposes of the
statutory scheme provided by the disclosure in Sec. 1681g(a)(1) is
to allow consumers to identify inaccurate information in their
credit files and correct this information via the grievance
procedure established under Sec. 1681i''). In addition, the Bureau
has previously emphasized the importance of consumer reporting
agencies using disputes to assess furnisher data quality. For
example, the Bureau has directed consumer reporting agencies to
revise their accuracy procedures to identify and take corrective
action regarding data from furnishers whose dispute response
behavior indicates the furnisher is not a source of reliable,
verifiable information about consumers. See CFPB, Supervisory
Highlights: Issue 24, Summer 2021 (June 2021), https://files.consumerfinance.gov/f/documents/cfpb_supervisory-highlights_issue-24_2021-06.pdf.
\16\ The FTC and the CFPB have brought several enforcement
actions to address violations of the FCRA's file disclosure
requirements. See, e.g., FTC v. TransUnion Rental Screening
Solutions, Inc., No. 1:23-cv-2659 (D. Colo. 2023) (alleging that
defendant violated FCRA section 609(a) by failing to disclose the
sources of information contained in consumers' files in response to
consumers' requests); United States v. HireRight Solutions, Inc.,
No. 112-cv-01313 (D.D.C. 2012) (alleging that defendant violated
FCRA section 609(a)(1) by either failing to provide consumers with
information in their files or failing to do so upon request); United
States v. First Advantage SafeRent, Inc., No. 8:10-cv-0090-PJM (D.
Md. 2010) (alleging that defendant violated FCRA section 609(a)(1)
by rejecting requests for file disclosure submitted by facsimile and
requiring consumers complete and submit a written file disclosure
request form through the U.S. mail); In re MIB, Inc. (d/b/a Medical
Information Bureau), 101 F.T.C. 415 (1983) (alleging that defendant
violated FCRA section 609(a) when it required consumer to sign a
release form as a prerequisite for obtaining their file disclosure).
---------------------------------------------------------------------------
Consumers may suffer significant harm when they are unable to
obtain all information in their files upon request. Without access to
all information in their file, a consumer often cannot even take the
initial steps to dispute inaccurate information in their consumer
reports or take well-informed action to improve their credit profile.
Disputing inaccurate information on a consumer report and improving
one's credit profile, often challenging and time-consuming processes
for consumers, are made even more difficult when consumers do not have
access to all of the information in their file. For example, if a
consumer identifies an error in an item of information in their file,
but the consumer reporting agency has only disclosed to the consumer
the original source of the information and not also the vendor source
that directly provided the information to the consumer reporting agency
and from which the error arose, the consumer would not be able to
identify the source of the erroneous information and may not be able to
correct it.\17\
---------------------------------------------------------------------------
\17\ See Leo v. AppFolio, Inc., No. 17-5771 RJB, 2018 WL 623647,
at *8 (W.D. Wash. Jan. 30, 2018).
---------------------------------------------------------------------------
The CFPB is issuing this advisory opinion to highlight certain file
disclosure requirements imposed under FCRA section 609(a). First, this
advisory opinion underscores that, to trigger a consumer reporting
agency's file disclosure requirement under FCRA section 609(a), a
consumer does not need to use specific language, such as ``complete
file'' or ``file.'' Next, this advisory opinion highlights the
requirements regarding the information that must be disclosed to a
consumer under FCRA section 609(a). Finally, this advisory opinion
affirms that consumer reporting agencies must disclose to a consumer
both the original source and any intermediary or vendor source (or
sources) that provide the item of information to the consumer reporting
agency under FCRA section 609(a).
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. Requests Under FCRA Section 609(a)
Section 609(a) of the FCRA provides, with certain exceptions, that
``[e]very consumer reporting agency shall, upon request . . . clearly
and accurately disclose to the consumer, among other things: (1) All
information in the consumer's file at the time of the request . . .;
and (2) The sources of the information.'' Section 610 in turn specifies
the conditions and form of
[[Page 4169]]
disclosures to consumers. The Bureau is aware that some industry
stakeholders have taken the position that consumers must use specific
language in order to request file disclosures under section 609(a),
such as the term ``complete file.'' \18\ As the Third Circuit recently
held, such requirements contravene the FCRA.\19\ The CFPB interprets
the FCRA to require consumer reporting agencies to provide a file
disclosure upon receipt of a ``request'' from a consumer who provides
proper identification even if the consumer does not use the specific
term ``request,'' ``file,'' ``complete file,'' or any other specific
words in making such a request.
---------------------------------------------------------------------------
\18\ See, e.g., Brief of the Chamber of Commerce of the United
States as Amicus Curiae in Support of Appellees, Kelly v. RealPage,
Inc., No. 21-1672 (Aug. 5, 2021), https://www.chamberlitigation.com/cases/kelly-v-realpage-inc at 5, 28-29 (arguing that to trigger the
requirements of FCRA section 609(a) ``the request must specifically
be for `[a]ll information in the consumer's file,' meaning the
complete file''); Brief of Amici Curiae Consumer Data Industry
Association and Professional Background Screening Association in
Support of Defendants-Appellees and Affirmance, Kelly v. RealPage,
Inc., No. 21-1672 (Aug. 5, 2021), https://www.cdiaonline.org/wp-content/uploads/2021/08/2021-08-05-CDIA-Amicus.pdf at 7, 14-19.
According to these stakeholders, a request for a ``report'' would
not trigger section 609(a)'s disclosure obligations. These arguments
were recently rejected by the Third Circuit. Kelly v. RealPage,
Inc., 47 F.4th 202, 219-20 (3rd Cir. Aug. 24, 2022) (``Nothing in
the statute's text, context, purpose, or history indicates that any
magic words are required for a consumer to effect a `request' under
Sec. 1681g(a) or that a consumer's request for `my consumer report'
is any less effective at triggering the [consumer reporting
agency]'s disclosure obligations than a request for `my file.' '').
\19\ Kelly v. RealPage, Inc., 47 F.4th 202, 221 (3rd Cir. 2022)
(``[W]hen read as a whole, the statute is unambiguous in providing
that any generalized `request' by a consumer for the [consumer
reporting agency]'s information about her triggers the CRA's
disclose obligation under Sec. 1681g(a).'').
---------------------------------------------------------------------------
To obtain a file disclosure, the FCRA does not require consumers to
use any specific language. Instead, the statute requires consumers to
do two things: make a ``request'' and provide proper
identification.\20\ Once these conditions are satisfied, FCRA section
609(a) states that a consumer reporting agency ``shall'' provide the
file disclosure. The statute's use of ``shall'' in this context makes
clear that a consumer reporting agency may not add additional
conditions as a prerequisite to complying with section 609(a).\21\
---------------------------------------------------------------------------
\20\ 15 U.S.C. 1681g(a), 1681h(a)(1).
\21\ This is consistent with longstanding interpretations from
FTC staff. See, e.g., Fed. Trade Comm'n, 40 Years of Experience With
the Fair Credit Reporting Act: An FTC Staff Report With Summary of
Interpretations, at 75 & n.248, citing 1990 comment 610-2 (2011).
---------------------------------------------------------------------------
The statute does not define the term ``request'' as used in section
609(a). In construing the term's meaning, the Bureau is guided by the
statute's broad remedial purposes.\22\ As noted above, it is clear that
one of Congress's goals in the FCRA was to facilitate consumers' access
to their own information and, through such access, to promote the
accuracy, privacy, and fairness of the consumer reporting system.\23\
These goals would be thwarted if a consumer's right to a file
disclosure depended upon the use of specific words--particularly since
no such requirement appears in the statute and because consumers are
unlikely to know which words any particular consumer reporting agency
expects to hear before honoring its file disclosure obligations. As the
Third Circuit explained, if the FCRA were read otherwise:
---------------------------------------------------------------------------
\22\ See supra note 5.
\23\ See supra notes 3, 4.
[C]onsumers could only access their files pursuant to [section
609(a)] if they are familiar with the esoteric distinction between
``files'' and ``consumer reports'' in the Definitions section of the
FCRA. Construing [section 609(a)] in this way would severely limit
consumers' ``access to . . . information in [their] file'' and
frustrate their ability to know when they are ``being damaged by an
adverse credit report,'' or to ``correct[] inaccurate information''
in their report.\24\
---------------------------------------------------------------------------
\24\ Kelly v. RealPage, Inc., 47 F.4th 202, 221 (3rd Cir. Aug.
24, 2022); see also Taylor v. Screening Reports, Inc., 294 FRD. 680,
684 (N.D. Ga. 2013) (``[A] consumer who requests his `report,'
without limitation, is entitled to his entire consumer file.'').
Thus, to obtain a file disclosure under section 609(a), a consumer
need not specifically request ``[a]ll information in the consumer's
file'' or request a ``complete file'' or even use the word ``file.''
For example, a consumer's request to a consumer reporting agency for a
``report'' or ``credit report'' or ``consumer report'' or ``file'' or
``record,'' along with proper identification, trigger a consumer
reporting agency's obligation under section 609(a).
The CFPB's interpretation of section 609(a)--that consumers do not
need to use the words ``file'' or ``complete file'' to invoke their
right to a file disclosure--is consistent with the way Congress itself
refers to section 609(a) requests in parts of the FCRA. Although
section 609(a) requires disclosure of all information in the consumer's
``file'' (with only limited, specified exceptions), Congress used the
term ``consumer report'' as a short-hand term for the disclosures
required by section 609(a) in some sections that refer to consumer
requests and consumer-facing materials.\25\ For example, FCRA section
609(c)(1)(B)(i) requires that the Summary of Rights provided to
consumers include a description of ``the right of the consumer to
obtain a copy of a consumer report under [FCRA section 609(a)].'' \26\
Similarly, FCRA section 612(a)(1), which requires nationwide consumer
reporting agencies and nationwide specialty consumer reporting agencies
to ``make all disclosures pursuant to section [609(a)]'' available for
free annually, later refers to such file disclosures as ``consumer
reports'' when it refers to a ``streamlined process for consumers to
request consumer reports under [FCRA section 612(a)(1)(A)].'' \27\
---------------------------------------------------------------------------
\25\ Presumably Congress appreciated that ``consumer report'' is
an easy-to-understand term for consumers even if it is somewhat
imprecise in describing what must be disclosed under section 609(a).
\26\ 15 U.S.C. 1681g(c)(1)(B)(i).
\27\ 15 U.S.C. 1681j(a)(1). The implementation of free file
disclosure requirement for nationwide consumer reporting agencies
also makes it clear that consumers do not need use the term ``file''
or ``complete file'' to invoke their rights under FCRA section
609(a). FCRA section 612(a)(1)(B) requires the nationwide consumer
reporting agencies to make free annual section 609(a) disclosures
via a ``centralized source.'' The nationwide consumer reporting
agencies do so through the website annualcreditreport.com, which is
the only authorized website for obtaining such disclosures and which
refers to those disclosures as ``credit reports.'' 12 CFR 1022.136.
---------------------------------------------------------------------------
2. Information Required To Be Disclosed Under FCRA Section 609(a)(1)
Section 609(a) of the FCRA generally requires consumer reporting
agencies to, upon request, ``clearly and accurately'' disclose ``all
information in the consumer's file at the time of the request.'' To
meet this standard, a file disclosure must be understandable to the
average consumer.\28\ It must assist a consumer in identifying
inaccuracies in their file, exercising their rights to dispute any
incomplete or inaccurate information, and knowing when they are being
impacted by adverse information in their file.\29\
---------------------------------------------------------------------------
\28\ See, e.g., Shaw v. Experian Info. Sols., Inc., 891 F.3d
749, 759 (9th Cir. 2018).
\29\ 15 U.S.C. 1681i(a); 1681s-2.
---------------------------------------------------------------------------
Some consumers are experiencing difficulty in obtaining clear,
accurate, and complete file disclosures, particularly from background
screening companies. As discussed below, in this advisory opinion the
Bureau is highlighting that (1) section 609(a)(1) of the FCRA requires
that a consumer reporting agency clearly and accurately disclose to a
consumer all information in the consumer's file at the time of the
request, including, among other things, all information the consumer
reporting agency provided or might provide to a user, and (2) when a
consumer reporting agency provides only summarized information to a
user, section 609(a)(1) of the FCRA requires that the consumer
reporting agency provide the consumer with the information that formed
the
[[Page 4170]]
basis of the summarized information given to the user.
Section 609(a) generally requires a consumer reporting agency to
provide a consumer with a file disclosure that, among other things,
accurately reflects the information the consumer reporting agency
provided or might provide to a user.\30\ For example, a consumer
reporting agency must provide a file disclosure to the consumer that
allows the consumer to see criminal history information in the format
that users see or will see it, so that the consumer can check for any
inaccuracies and exercise their rights to dispute any information that
may be inaccurate as presented to users (such as duplicative listings
for a single case).
---------------------------------------------------------------------------
\30\ Note that the requirement in FCRA section 609(a)(1) that
consumer reporting agencies disclose ``[a]ll information in the
consumer's file at the time of the request'' is subject to
exceptions. For example, section 609(a)(1)(B) does not require
consumer reporting agencies to disclose to a consumer any
information concerning credit scores or any other risk scores or
predictors relating to the consumer. See 15 U.S.C. 1681g(a)(1)(B).
---------------------------------------------------------------------------
Additionally, there are a number of situations under the FCRA where
a consumer reporting agency must provide information that is not or
would not be included in a user report when providing a file disclosure
under FCRA section 609(a).\31\ One example of such a situation is when
only summarized information, such as a credit or risk score, a tenant
screening score, or a recommendation is provided to users. The CFPB
interprets FCRA section 609(a)(1)'s requirement to disclose to the
consumer ``all information in the consumer's file at the time of the
request'' to include information that formed the basis of summarized
information that a consumer reporting agency provided to a user.
Providing only summarized information to users does not relieve a
consumer reporting agency of its obligations under the plain language
of section 609(a)(1) to provide to the consumer ``all information in
the consumer's file at the time of the request.''
---------------------------------------------------------------------------
\31\ See, e.g., 15 U.S.C. 1681g(a)(2) (requiring disclosure of
the sources of the information).
---------------------------------------------------------------------------
If a consumer reporting agency disclosed nothing to a consumer when
it only provided summarized information to a user, the consumer would
be unaware of the records upon which the summarized information was
based, undermining the consumer's ability to exercise their right to
dispute any incomplete or inaccurate information contained in their
file.\32\ This would also be the case if a consumer reporting agency
disclosed to a consumer the summarized information it provided to a
user without also disclosing the underlying information in the file.
---------------------------------------------------------------------------
\32\ 15 U.S.C. 1681i(a).
---------------------------------------------------------------------------
The Bureau's interpretations regarding information required to be
disclosed under section 609(a)(1) are consistent with the FCRA's
purposes. When initially passing the FCRA, Congress stated that ``under
this bill credit reporting agencies are required to make full
disclosure to the consumer of all of the information obtained. The
consumer will then be given the opportunity to correct inaccurate or
misleading data.'' \33\ The FCRA provides consumers the right to
dispute any incomplete or inaccurate information contained in the
consumer's file.\34\ A consumer's ability to exercise this right is
damaged if consumer reporting agencies withhold information that they
are required to disclose under section 609(a)(1), including information
that reveals inaccuracies in reports provided to users or information
that forms the basis of summarized information (such as tenant
screening scores). Withholding such information would also damage a
consumer's ability to know when they are being impacted by adverse
information in their file.
---------------------------------------------------------------------------
\33\ 115 Cong. Rec. 33408, 33412 (1969). See also Selvam v.
Experian Info. Sols., Inc., 651 F. App'x 29, 33 (2d Cir. 2016)
(``The purpose of Sec. 1681g . . . is to enable consumers to obtain
information in order to dispute any potential inaccuracies in the
file so that inaccurate information is not sent to third
parties.'').
\34\ 15 U.S.C. 1681i(a).
---------------------------------------------------------------------------
3. Sources of Information Under FCRA Section 609(a)(2)
Section 609(a) of the FCRA generally requires consumer reporting
agencies to, upon request, disclose all information in the consumer's
file at the time of the request and the sources of the information.\35\
The CFPB is aware that, in response to these consumer requests, some
consumer reporting agencies are not disclosing all sources of an item
of information in the consumer's file and instead have disclosed only
one source of the item of information. For example, some consumer
reporting agencies that acquire public record information (e.g.,
eviction proceeding records) from a vendor are only disclosing to
consumers the jurisdiction that was the original source for these
records (e.g., the county court). The Bureau continues to interpret
FCRA section 609(a)(2)'s requirement to disclose ``the sources of the
information'' to include both the original source and any intermediary
or vendor source (or sources) that provide the item of information from
the original source to the consumer reporting agency.
---------------------------------------------------------------------------
\35\ 15 U.S.C. 1681g(a). FCRA section 609(a)(2) requires
disclosure of ``[t]he sources of the information'' but provides that
``the sources of information acquired solely for use in preparing an
investigative consumer report and actually used for no other purpose
need not be disclosed: Provided, That in the event an action is
brought under this title, such sources shall be available to the
plaintiff under appropriate discovery procedures in the court in
which the action is brought.'' 15 U.S.C. 1681g(a)(2).
---------------------------------------------------------------------------
The CFPB's interpretation is based on the plain language of FCRA
section 609(a)(2) itself, which refers to ``sources'' in the plural.
The statute does not limit this requirement to ``a source'' or ``the
original source'' of the information.\36\ This interpretation is also
consistent with the FTC's 40 Years Report, which states that ``CRAs
must disclose the sources of information in the consumer's file, except
for sources of information acquired solely for use in preparing an
investigative consumer report.'' \37\
---------------------------------------------------------------------------
\36\ Courts have found that all sources of the information must
be disclosed to consumers. See, e.g., Clark v. Trans Union LLC, No.
3:15cv391, 2016 WL 7197391, at *11 (E.D. Va. Dec. 9, 2016) (stating
that ``TransUnion's argument that it properly disclosed the
`ultimate sources' of information, but not the supposedly less
pertinent LexisNexis disclosure as to how the data was collected, or
by whom, does not persuade''); Dennis v. Trans Union, LLC, 2014 WL
5325231, at *7 (E.D. Pa. Oct. 20, 2014) (stating that ``[a]s the
plain language of Section 1681g(a)(2) does not limit `sources' in
any way, the Court will not impose a limitation on the number of
sources a CRA could have, and therefore be required to disclose, for
a particular piece of information''). But see Shimon v. Equifax
Info. Servs. LLC, 994 F.3d 88, 93 (2d Cir. 2021) (granting summary
judgment to consumer reporting agency because not ``objectively
unreasonable'' to fail to disclose third-party vendor as the source
of information).
\37\ Fed. Trade Comm'n, 40 Years of Experience With the Fair
Credit Reporting Act: An FTC Staff Report With Summary of
Interpretations, at 71 (2011). FTC staff published the 40 Years
Report, an updated compilation of past FTC interpretations of the
FCRA, to coincide with the transfer of authority to the Bureau.
Effective July 21, 2011, the Dodd-Frank Act transferred rulemaking
authority related to most of the FCRA to the Bureau, giving the
Bureau the primary regulatory and interpretive roles under the FCRA.
---------------------------------------------------------------------------
Additionally, and as described in part I.C.1, a consumer does not
need to use specific language to trigger a consumer reporting agency's
obligations under FCRA section 609(a)(2). As such, consumers do not
need to specifically request that consumer reporting agencies identify
all the sources of the information in their file in in order to be
entitled to receive such information. This interpretation is consistent
with the principle that the FCRA should be construed in light of its
broad remedial purpose.\38\
---------------------------------------------------------------------------
\38\ See supra note 5.
---------------------------------------------------------------------------
The Bureau's interpretation also is consistent with the FCRA's
purposes. Congress passed the FCRA in part to ``prevent consumers from
being unjustly
[[Page 4171]]
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
up-to-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 highly sensitive information in their file and to
address and prevent further dissemination of incomplete or inaccurate
data.
---------------------------------------------------------------------------
\39\ S. Rep. No. 91-517, at 1 (1969).
\40\ Courts 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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\42\ 15 U.S.C. 1681s.
\43\ 15 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).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\46\ Pub. L. 111-203, 124 Stat. 1376 (2010).
\47\ 12 U.S.C. 5512(b)(1).
---------------------------------------------------------------------------
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.\48\
---------------------------------------------------------------------------
\48\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------
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).
---------------------------------------------------------------------------
\49\ 5 U.S.C. 801 et seq.
Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2024-00786 Filed 1-22-24; 8:45 am]
BILLING CODE 4810-AM-P