New CFPB Forms & the Fair Credit Reporting Act

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Provide Education- Foundation SHS was built upon Quick Updates:

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Facilitators Mike McCarty CEO SHS Metro Nashville PD Domestic Violence

Division Breaking the Cycle iRefCheck

NEW CFPB Forms Consumer Financial Protection Bureau

(CFPB) New FCRA Enforcer

New Forms to implement by 1/1/2013 Notice to Users of Consumer Reports A Summary of Your Rights Under the FCRA Notice to Furnishers of Information

Overview of FCRA Requirements

Consumer Reporting Agency SHS is a Consumer Reporting

Agency under federal law: We assemble information on

consumers; For a fee

So You must operate under the

FCRA

What is a consumer report?A report prepared by consumer

reporting agency that includes information on an applicant’s or employees: Credit worthiness Credit Standing Credit Capacity Character General Reputation Personal characteristics; and/ or Mode of living

AND is expected to be used for employment purposes

Consumer Report Consumer Report Can Be: Credit Report Criminal Records Driving Records Civil Lawsuits Education Verifications Employment Verifications

Investigative Consumer Report

Special type of consumer report

Gathered from personal interviews with neighbors, friends, associates or current & past employers

Not a criminal background check but could be: Personal reference checks Professional reference checks

Fair Credit Reporting Act Applies to all forms of

background screening if using CRA

Protects consumers Requires use of “up-to-date”

information One click criminal database

searches NOT compliant Verify information with

court of record Does NOT apply to

volunteers

FCRA Limitations Limits arrest/ non-

conviction report to 7 years; unless

Salary is $75K or above

No limit on convictions (could be state law limitations)

Adverse Action2 Step Process if based “in

whole or part” on consumer report

Pre-Adverse Action Letter Copy of report Summary of Rights Under

FCRA Send via certified mail

Allow 5 Business Days Adverse Action Letter

DisputesFCRA allows: Consumers to dispute

accuracy of information; Must be in writing Safe Hiring contact

information provided in sample Pre-Adverse Action Letters

Willful Non- Compliance of FCRAHunter, et al v. First Transit

Inc. Failed to provide

disclosures to applicants BEFORE running background check;

Failed to follow two-step adverse action process when denied employment

$5.9 Million Settlement

So Where Does That Leave Us? If you use a 3rd party to do

background checks you must comply with FCRA

Need to have background screening policy

Recent litigation is for non-compliance of FCRA not the adverse action decision

SHS Online System Pre-Adverse & Adverse Action Added to

Online System Currently testing and should be ready before

1/1/13 Select a candidate’s screening report and system

will create Pre-Adverse Action process (step 1) Select again after 5 business days for Adverse

Action

Questions? Sign up for blog: info.safehiringsolutions.com

Contact Mike McCarty

317-745-6946

Mike.mccarty@safehiringsolutions.com