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Q.  What is the FCRA?

A.  The FCRA, otherwise known as the Fair Credit Reporting Act, is the primary piece of federal legislation that  is used to regulate background screening and credit checks.  The FCRA was originally passed in 1970 and major amendments were made in 1996, 1998 and 2003. You can read the entire text of the act here.

Q.  Who regulates the FCRA?

A. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).

Q.  What are the rules laid out by the FCRA?

A.  The FCRA is very complex legislation.  Here are just some of the key points it spells out:

  • What are permissible purposes for running a background check.
  • The roles and responsibilities of:
    • Employers
    • Consumer Reporting Agencies (CRA’s)
    • Data Providers
  • A subject’s (individual consumer) rights and responsibilities.
  • Guidelines for obtaining a subject’s authorization prior to running a background check.
  • Guidelines for notifying a subject that a background check may be requested.
  • When a subject of a background check should be provided a copy of their report.
  • How and when to notify a subject that they are being denied employment due to the results of their background check.

This is just a quick overview of  the FCRA.  We will explore it more in depth in future posts!