FTC Approves Changes to FCRA Rules; clarifies application to motor vehicle dealers | Sheppard Mullin Richter & Hampton LLP


On September 8, the FTC approved final revisions that would align several rules implementing parts of the Fair Credit Reporting Act (FCRA) with the Dodd-Frank Act, which transferred regulatory authority over parts of the FCRA to CFPB, and thus restricts the regulatory authority of the FTC FCRA for these rules. As such, the FTC has approved changes that clarify that in some cases these FCRA rules enforced by the FTC only apply to motor vehicle dealers, which have been specifically excluded from the scope of the requirements. by Dodd-Frank. The FTC previously asked for comments on proposed rule changes last year.

The changes affect the following rules:

  • Rule of address discrepancy. The rule describes the obligations of consumer reporting users when they receive a notice of address discrepancy from a national consumer information agency (CRA);
  • Affiliate Marketing Rule. This rule gives consumers the right to prohibit a person from using certain information obtained from an affiliate to solicit the consumer;
  • Cabinet rule. Under this rule, entities providing information to rating agencies are required to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of consumer information provided to a rating agency. rating;
  • Pre-screen removal notice rule. This rule sets out the requirements for those who use information from consumer reports to make unsolicited credit or insurance offers to consumers; and
  • Risk-based pricing rule. Under this rule, those who use information from a consumer report to offer less favorable terms to consumers are required to provide them with notice regarding the use of that data.

Put into practice : These changes are largely technical in nature and do not substantially alter the applicability of the FCRA to financial services companies in general. Rather, the changes serve to clarify that in some cases these five long-standing FCRA rules, as promulgated by the FTC, now apply more narrowly and exclusively to motor vehicle dealers in light of the specific exclusion. by Dodd-Frank of the motor vehicle dealers of the scope of the Dodd-Frank requirements. . Other financial services companies must still comply but are subject to CFPB rules on these matters, which are substantially similar to those of the FTC. In addition to complying with federal consumer protection law obligations, motor vehicle dealers also have many obligations under state consumer credit laws.

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