Fair Credit Reporting Act (FCRA)

Where the law comes from

The FCRA's text was added by Pub. L. 91-508 on October 26, 1970, as title VI of Pub. L. 90-321 (source note to 15 U.S.C. 1681). The CFPB's Regulation V, 12 CFR part 1022 implements it: "The purpose of this part is to implement the Fair Credit Reporting Act (FCRA)."

Scope, in the sources' words

• Consumer. The FCRA defines "consumer" as "an individual" (15 U.S.C. 1681a(c)).

• Person. "any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity" (15 U.S.C. 1681a(b)).

• Regulation V. Regulation V "generally applies to persons that obtain and use information about consumers to determine the consumer's eligibility for products, services, or employment, share such information among affiliates, and furnish information to consumer reporting agencies" (12 CFR 1022.1(a)).

• How these definitions map to a particular account or program is a question teams often review with their own compliance team or counsel.

Key definitions, in the law's words

• Consumer report. "any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living" used or expected to be used as a factor in establishing eligibility for credit or insurance, employment, or another purpose authorized under section 1681b. The statute lists exclusions. (15 U.S.C. 1681a(d))

• Consumer reporting agency. "any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports." (15 U.S.C. 1681a(f))

• Furnisher. Regulation V: "Furnisher means an entity that furnishes information relating to consumers to one or more consumer reporting agencies for inclusion in a consumer report." The definition lists four exclusions. (12 CFR 1022.41(c))

Provisions that come up in lending, servicing and collections

• Permissible purposes. A consumer reporting agency "may furnish a consumer report under the following circumstances and no other." One listed circumstance is a person who "intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer." (15 U.S.C. 1681b(a)(3)(A))

• Furnisher accuracy. "A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate." (15 U.S.C. 1681s-2(a)(1)(A))

• Date of delinquency. A furnisher reporting a delinquent account "being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the date of delinquency on the account." (15 U.S.C. 1681s-2(a)(5)(A))

• Disputes at the consumer reporting agency. The agency "shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate" before the end of the 30-day period beginning when it receives the notice of dispute. That period "may be extended for not more than 15 additional days" in the case the statute describes. (15 U.S.C. 1681i(a)(1))

• Furnisher duties after notice of a dispute. After notice from a consumer reporting agency, the furnisher is directed to "conduct an investigation with respect to the disputed information" and to "report the results of the investigation to the consumer reporting agency," among other steps listed in the statute. (15 U.S.C. 1681s-2(b)(1))

• Reporting periods. A consumer report may not contain "Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years," and cases under title 11 (bankruptcy) that "antedate the report by more than 10 years," except as authorized under subsection (b). (15 U.S.C. 1681c(a))

Regulation V defines accuracy for furnished information as information that correctly "Reflects the terms of and liability for the account or other relationship," "Reflects the consumer's performance and other conduct with respect to the account or other relationship," and "Identifies the appropriate consumer." (12 CFR 1022.41(a))

Enforcement and private actions

• Agencies. "The Federal Trade Commission shall be authorized to enforce compliance with the requirements imposed by this subchapter under the Federal Trade Commission Act," except where enforcement is committed to another agency and subject to subtitle B of the Consumer Financial Protection Act of 2010. (15 U.S.C. 1681s(a)(1))

• Willful noncompliance. "Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer" in the amounts listed in the statute. (15 U.S.C. 1681n(a))

• Negligent noncompliance. "Any person who is negligent in failing to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer" for actual damages, costs and fees as listed. (15 U.S.C. 1681o(a))

• Time limit to sue. An action may be brought "not later than the earlier of" "2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability" or "5 years after the date on which the violation that is the basis for such liability occurs." (15 U.S.C. 1681p)