A relatively new federal agency, the Consumer Financial Protection Bureau (“CFPB”), created as part of the Dodd-Frank Act of 2010, has replaced the Federal Trade Commission (“FTC”) as the primary rulemaking and enforcement authority for background checking of individuals under the federal Fair Credit Reporting Act (“FCRA”). The CFPB has issued regulations revising the Summary of Consumer Rights form used by employers, as well as two forms used by Consumer Reporting Agencies (“CRA”). The new forms take effect January 1, 2013.
The FCRA regulates employers that use CRAs to conduct background checks for hiring, promotion or other employment-related decisions. Before obtaining a consumer report about an applicant or employee, the employer must (1) provide a disclosure stating that it may request a consumer report and (2) obtain authorization from the individual. Additionally, before taking an adverse employment action based on information contained in a consumer report, the employer must provide the individual with (1) a written notice enclosing a copy of the consumer report and (2) a copy of the Summary of Consumer Rights form. This is commonly known as the “Pre-Adverse Action Notice.”
Read full story by Duane Morris LLP on 11/5/2012 New Forms for FCRA Background Checks Effective January 1, 2013 | Duane Morris LLP – JDSupra.