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Updated FCRA Summary of Consumer Rights Form and DOL FMLA Forms

As Published in the October, 2018 Issue of the PELRAS Newsletter


Published on: Tue 9th Oct, 2018 By: Julie Aquino


In September 2018, the Consumer Financial Protection Bureau (“CFPB”) issued an interim rule that updates an important disclosure form under the Fair Credit Reporting Act (“FCRA”). Employers must start using the new model disclosure form when taking adverse action against an applicant or employee based on information contained in a background check performed by a third party.

The FCRA applies whenever an employer uses a third party (referred to under the FCRA as a “consumer reporting agency”) to obtain a background check on an applicant or employee. The background check is referred to under the FCRA as a “consumer report”, which includes any information on the applicant’s or employee’s creditworthiness, credit standing or capacity, character, general reputation, personal characteristics, and or “mode of living, including information concerning the employee’s or applicant’s criminal history.” The FCRA does not apply to background investigations conducted by the employer itself without use of a third party. 

When a third party is hired to conduct a background investigation, the FCRA requires the employer to tell the applicant or employee that it may use information in the background report to make an employment decision.  This notice must be contained in a stand-alone document and the employer must obtain the applicant’s or employee’s signed consent. The requirement that the notice be in a stand-alone document means that it cannot simply appear on a page of the employment application with other information or application questions. If the employer intends to reject an applicant based on information contained in the background report, it must then provide the individual with a copy of the background report and a Summary of Consumer Rights form.  Then after the employer rejects the applicant, it must then provide the person with notice of the decision and an opportunity to contest the information with the third party who prepared the background report. 

So, what recently changed with respect to the Summary of Consumer Rights form? In September 2018, the CFPB updated this form to provide notice of new “security freeze” rights under the FCRA. These new rights allow an applicant or employee to obtain a “national security freeze” free of charge from the consumer reporting agency providing the background report. The “national security freeze” restricts prospective lenders from accessing the individual’s credit report—making the work of identity thieves more difficult.  The new form is available on the CFPB website: https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.docx. Also, if you need a copy of the stand-alone consent form that must be signed by the applicant or employee before the employer obtains a background report from a third party, please contact your legal counsel for a copy of the notice.  

Lastly, there is another set of important forms recently updated by the federal government. The Department of Labor (“DOL”) recently updated its model Family and Medical Leave Act (“FMLA”) forms, such as the FMLA Notice of Eligibility and Rights & Responsibilities, FMLA Designation form, and the Certification of Health Care Provider form. The DOL made no material changes to these forms; however, the previous versions were set to expire and so employers should download and use the new forms, which are now valid through August 31, 2021. The DOL model FMLA forms can be downloaded from the DOL’s website: https://www.dol.gov/whd/fmla/forms.htm.