On September 8, the FTC approved final revisions that would bring several rules implementing parts of the Fair Credit Reporting Act (FCRA) in line with the Dodd-Frank Act, which transferred rulemaking authority related to parts of the FCRA to the CFPB, and thereby narrowed the FTC’s FCRA rulemaking authority for these rules. As such, the FTC approved changes that clarify that in some cases these FCRA rules enforced by the FTC apply only to motor vehicle dealers, which were specifically excluded from the scope of Dodd-Frank’s requirements. The FTC previously sought comment on the proposed rule changes last year.
The changes affect the following rules:
- Address Discrepancy Rule. The rule outlines the obligations of users of consumer reports when they receive a notice of address discrepancy from a nationwide consumer reporting agency (CRA);
- Affiliate Marketing Rule. This rule provides consumers the right to restrict a person from using certain information obtained from an affiliate to make solicitations to the consumer;
- Furnisher Rule. Under this rule entities that furnish information to CRAs are required to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the consumer information provided to a CRA;
- Pre-screen Opt-Out Notice Rule. This rule outlines requirements for those who use consumer report information to make unsolicited credit or insurance offers to consumers; and
- Risk-Based Pricing Rule. Under this rule those who use information from a consumer report to offer less favorable terms to consumers are required to provide them with a notice about the use of such data.
Putting It Into Practice: These changes are largely technical in nature, and do not substantively change the applicability of the FCRA to financial services companies generally. Rather, the changes serve to clarify that in some cases these five longstanding FCRA rules as promulgated by the FTC now more narrowly apply exclusively to motor vehicle dealers in light of Dodd-Frank’s specific exclusion of motor vehicle dealers from the scope of Dodd-Frank’s requirements. Other financial services companies must still comply but are subject to the CFPB’s rules on these topics, which are substantially similar to the FTC’s. In addition to complying with obligations under federal consumer protection laws, motor vehicle dealers also have many obligations under state consumer credit laws.