Tag: Summary of Your Rights Under the Fair Credit Reporting Act

It Is Time for Employers to Update Their FCRA Summary of Rights Notices April 7, 2023 The Consumer Financial Protection Bureau (CFPB) recently released a new rule that employers should turn their focus on. The agency urges employers to take swift action due to the updated "Summary of Your Rights Under the Fair Credit Reporting Act." Employers must provide this Summary to applicants and employees when taking adverse action based on negative findings in an applicant's background check. On March 17th, 2023, the CFPB released an updated version of the ubiquitous notice, the "Summary of Your Rights Under the Fair Credit Reporting Act." As a result, consumer reporting agencies (CRAs) and employers must incorporate this version into their screening procedures. This new rule will take effect on April 19th, 2023. However, the CFPB has provided a grace period until March 20th, 2024, for CRAs and users of consumer reports to comply. What to Know About the "Summary of Your Rights Under the Fair Credit Reporting Act" Employers must ensure they comply with legal requirements when taking adverse action. This compliance is especially crucial when making decisions based on negative information found in a background check. For example, employers must abide by the Fair Credit Reporting Act (FCRA) when considering adverse action. The FCRA prevents employers from taking immediate steps, such as revoking a conditional offer of employment, due to a background check. Employers must provide several documents to the affected applicant during the pre-adverse action process. The applicant can expect a copy of the consumer report, a Summary of Rights under the FCRA, and information concerning the nature of the decision. The agency charged with overseeing these requirements, the CFPB, maintains a standardized version of this form. Users of consumer reports must use this version in their hiring processes. What Has Changed? It is necessary to use the latest version of the forms provided by the CFPB. However, employers may find it worthwhile to note that the changes often prove minor. For example, changes may include updates to contact information for federal agencies and corrections to formatting. The CFPB also removed certain obsolete types of business entities, including "Federal Land Banks." What Should You Do Now? Though these changes take effect on April 19th, 2023, the CFPB has provided a significant grace period. The agency has allowed employers until March 20th, 2024, to comply. However, as always, it pays to get ahead regarding compliance. As such, it is advisable to immediately provide applicants and current employees with the most up-to-date form. Employers should also remember that anyone who has received the previous version will not need the updated information. These changes clearly illustrate how state and federal employment regulations relating to background checks are constantly changing. The best way to keep your company at the forefront of these changes is to partner with an experienced background check provider. Pre-employ makes background checks easy and reliable. Speak with a compliance expert today. Source

Tag: Summary of Your Rights Under the Fair Credit Reporting Act

It Is Time for Employers to Update Their FCRA Summary of Rights Notices

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