FTC Releases Substantial Revisions to Fair Credit Reporting Act Policy Guidance

by Troutman Sanders CFPB Team

On July 20, 2011, the Federal Trade Commission (FTC) issued a staff report on the Fair Credit Reporting Act (FCRA). Among a host of other changes, the report rescinds 16 CFR 600.1 (defining the authority and purpose of the FTC in providing interpretive guidance under FCRA), 600.2 (describing the legal effect of the FTC's policy guidance), and the Appendix to Part 600 (general commentary and definitions of terms used in FTC's policy guidance).  The report includes other changes to FTC policy guidance reflecting legislative changes set forth in the Consumer Credit Reporting Reform Act (CCRA) and the Fair and Accurate Credit Transactions Act (FACT Act).

Perhaps most notably, the staff report repealed the FTC's 1990 Statement of General Policy or Interpretations under the FCRA, which heretofore had been the primary source of compliance guidance for firms regulated by the FCRA.  The report described the 1990 guidance as "obsolete," "stale" and "in conflict" with the FRCA as amended by the CCRA and FACT Act.

Though the FTC and the CFPB will share enforcement authority, the FTC's report comes on the eve of the transfer of rulemaking and interpretive guidance under the FCRA to the CFPB, effectively giving both agencies new policy guidance to compel compliance from firms covered by the FCRA - the first shot across the bow to credit reporting agencies concerning a new regulatory and enforcement regime under the FCRA.

Taken in tandem with the CFPB's release of its report on July 19, 2011 detailing discrepancies in credit scores sold to lenders and those sold to consumers, credit reporting agencies should expect a rapidly evolving regulatory landscape spearheaded by the CFPB with enforcement support from the FTC. 

The full report is available here.

Read more at Consumer Financial Protection Bureau Report by Troutman Sanders LLP.

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