FCRA and Reg V: Coverage and Permissible Purpose

Question 1

What is considered to be a “consumer report”?

Answer 1

Any written or oral communication bearing on a consumer’s creditworthiness or general reputation that is collected to establish the consumer’s eligibility for
1. Credit or insurance to be used for personal, family, or household purposes, or
2. Employment purposes, or
3. Any other authorized purposes

Question 2

What constitutes a consumer reporting agency?

Answer 2

Anyone who regularly engages in assembling or evaluating consumer credit or other information to furnish consumer reports to third parties.

Question 3

Aside from furnishing consumer reports, what are two additional responsibilities of consumer reporting agencies?

Answer 3

1. Must purge obsolete information
2. May report negative credit information for no longer than seven years and bankruptcies for no longer than 10 years unless the information is related to credit or insurance for $150,000 or more

Question 4

How is “affiliate” defined under FCRA?

Answer 4

Any company that’s related by common ownership or common corporate control with another company.

Question 5

How is “person” defined under FCRA?

Answer 5

Any individual, partnership, corporation, trust, estate cooperative, association, government or governmental subdivision or agency, or other entity

Question 6

Under what circumstances can a consumer reporting agency furnish a consumer report?

Answer 6

1. If authorized in writing by the consumer
2. Court order issued by a federal grand jury
3. In connection with a credit or insurance transaction
4. Employment (must disclose and obtain written authorization from the individual)
5. Legitimate business need for the information (in connection with a business transaction initiated by the consumer, account review to determine if consumer still qualifies, for use by a potential investor, servicer or anyone who will be liable for the business’ debt)

Question 7

How does the definition for “adverse action” under FCRA differ from ECOA’s definition?

Answer 7

The definition is essentially the same, with an additional requirement that the reason for denial be wholly or partially due to information from a consumer report

Question 8

How is “consumer” defined under FCRA?

Answer 8

An individual