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From Banking and Finance Law Daily, September 13, 2018

CFPB updates its rule on FCRA model disclosures

By Nicole D. Prysby, J.D.

The Consumer Financial Protection Bureau announced that it has issued an interim final rule updating two model disclosures to reflect changes made to the Fair Credit Reporting Act by recent legislation. The interim final rule (Docket No. CFPB-2018-0025) is effective on Sept. 21, 2018, and public comments must be received by the Bureau within 60 days after publication of the rule in the Federal Register.

In May 2018, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which requires nationwide consumer reporting agencies to provide "national security freezes" free of charge to consumers. The May 2018 legislation also extends from 90 days to one year the minimum time that nationwide consumer reporting agencies must include an initial fraud alert in a consumer’s file. The Act mandates that whenever the FCRA requires a consumer to receive either the Summary of Consumer Rights or the Summary of Consumer Identity Theft Rights, a notice regarding the new security freeze right also must be included. Congress set an effective date of Sept. 21, 2018, for the security freeze right, the notice requirement, and the change in duration for initial fraud alerts. The interim final rule amends the model forms to incorporate the new required notice and the change to the minimum duration of initial fraud alerts, and also makes adjustments to update contact information for certain FCRA enforcement agencies.

The FCRA requires the CFPB to write model forms of the Summary of Consumer Rights and the Summary of Consumer Identity Theft Rights. Existing versions are published in Appendices I and K to FCRA Regulation V. Consumer reporting agencies and other entities can use the model forms or their own substantially similar forms. The interim final rule updates the CFPB’s model forms. The interim final rule also takes steps to mitigate the impact of these changes on users of the existing model forms by permitting a compliance alternative. The interim final rule provides that the CFPB will regard the use of the model forms published in Appendices I and K on Nov. 14, 2012, to constitute compliance with the FCRA provisions requiring such forms, so long as a separate page that contains the additional required information is provided in the same transmittal.

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