The Fair Credit Reporting Act (FCRA) was enacted in 1970 and was administered by the Federal Reserve Board until 2011 when rulemaking authority for it and several other federal consumer protection regulations were transferred to the Consumer Financial Protection Bureau (CFPB) by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Rules). The CFPB established the new Regulation V for Fair Credit Reporting. The primary purpose of the FCRA was to provide guidance to consumer reporting agencies about collecting and disseminating information about consumers to be used in credit evaluations and for other purposes, including insurance applications and employment. The FCRA also has rules for users of consumer reports and consumer information.
Credit Reporting Agencies – Credit bureaus (credit reporting agencies) are common types of consumer reporting agencies. Under FCRA, credit bureaus must verify the accuracy of credit records they maintain when consumers dispute the accuracy. Credit bureaus must notify the consumer if it reinserts negative information that it had removed because of the consumer’s dispute. Under the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which amended the FCRA, consumers may obtain a free credit report once every 12 months. Consumers must request the reports, and they may be obtained from three national consumer credit reporting agencies – TransUnion, Experian, and Equifax.
Creditors – A creditor is covered by the FCRA because it provides information to consumer reporting agencies. Under FCRA, if a creditor provides information to consumer reporting agencies, it must:
- Provide complete and accurate information;
- Investigate information disputed by the consumer and correct the error or provide an explanation about its accuracy within 30 days of receiving the dispute; and
- Inform consumers about negative information reported or about to be reported to a consumer reporting agency within 30 days.