Hunton Employment & Labor Perspectives

Employers who conduct background checks on applicants or employees must comply with the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq.  Among other things, the FCRA requires employers who procure criminal background reports (“consumer reports”) to provide applicants and employees with a Summary of Rights form as prepared by the Consumer Financial Protection Bureau (CFPB) when providing them with the FCRA-required pre-adverse action notices. See 15 U.S.C. § 1681b(b)(3)(A)(ii).

On November 22, 2019, the federal Consumer Financial Protection Bureau (CFPB) filed a complaint in the U.S. District Court for the Southern District of New York against Sterling Infosystems, Inc. (“Sterling”) regarding allegations that it violated the Fair Credit Reporting Act (FCRA) in providing criminal background checks to employers.  Sterling is a “consumer reporting agency” as defined by the FCRA, which provides background check results to employers when requested.  The CFPB is an independent federal agency tasked with regulating and enforcing a host of consumer protection and financial protection statutes, including the FCRA.

The Consumer Financial Protection Bureau (“CFPB”) issued a new “A Summary of Your Rights Under the Fair Credit Reporting Act” (“FCRA”)  (“Summary of Rights”) form on September 12, 2018.  This form replaces the previous version issued on November 12, 2012, and is expected to be implemented by employers on September 21, 2018.