FCRA and New Security Freeze Notice Requirement

Issue/Inquiry

The Bank needs information regarding the addition of the Security Freeze Right Notice to the summary of the Consumer Rights Model Form under the Fair Credit Reporting Act (“FCRA”). There is an interim final rule and comments are due November 19, 2018. When is the Bank required to comply? 

Response Summary

The interim rule amending the model forms in Appendices I and K of Regulation V became effective on September 21, 2018. The Consumer Financial Protection Bureau (“CFPB”) invited comments on the interim rule, but did not believe it was necessary to allow prior public comment before the rule went into effect.

Response Detail

Effective September 21, 2018, section 605A(i)(5) of the FCRA was added per the Economic Growth, Regulatory Relief, and Consumer Protection Act (“Economic Growth Act”), which requires that a new notice of rights be included whenever a consumer is required to receive a summary of rights to comply with the FCRA section 609.

Under section 301 of the Economic Growth Act, a security freeze prohibits consumer reporting agencies that are described in section 603(p) (i.e., nationwide consumer reporting agencies) from releasing information (subject to various exceptions).

Consequently, the CFPB published an interim rule amending two model forms in Regulation V in order to conform to section 605A(i)(5) of the FCRA. In the model form appearing in Appendix K (“A Summary of Your Rights Under the Fair Credit Reporting Act”), the following changes have been made:

• Addition of notice of rights detailing the consumer’s right to a security freeze
• An update to the contact information listed for certain FCRA enforcement agencies

In the model form appearing in Appendix I (“Remedying the Effects of Identity Theft”), the following changes have been made:

• Addition of notice of rights detailing the consumer’s right to a security freeze
• An update to the disclosed minimum amount of time that an initial fraud alert remains in the consumer’s file

The interim final rule became effective on September 21, 2018. The CFPB invited comments to the interim rule, with the comment period closing on November 19, 2018, but the agency did not believe that prior public comment was necessary before the rule went into effect. CFPB, Summaries of Rights Under the Fair Credit Reporting Act (Regulation V), 83 Federal Register 47027 (September 18, 2018), 42027, 42028, 47030, 47031, 47033, 47038.

This entry was posted on Monday, October 22nd, 2018 at 6:00 am.