November 30, 2021

Volume XI, Number 334

Advertisement
Advertisement

November 30, 2021

Subscribe to Latest Legal News and Analysis

November 29, 2021

Subscribe to Latest Legal News and Analysis

FTC Approves Changes to FCRA Rules; Clarifies Application to Motor Vehicle Dealers

On September 8, the FTC approved final revisions that would bring several rules implementing parts of the Fair Credit Reporting Act (FCRA) in line with the Dodd-Frank Act, which transferred rulemaking authority related to parts of the FCRA to the CFPB, and thereby narrowed the FTC’s FCRA rulemaking authority for these rules.  As such, the FTC approved changes that clarify that in some cases these FCRA rules enforced by the FTC apply only to motor vehicle dealers, which were specifically excluded from the scope of Dodd-Frank’s requirements.  The FTC previously sought comment on the proposed rule changes last year.

The changes affect the following rules:

  • Address Discrepancy Rule. The rule outlines the obligations of users of consumer reports when they receive a notice of address discrepancy from a nationwide consumer reporting agency (CRA);

  • Affiliate Marketing Rule. This rule provides consumers the right to restrict a person from using certain information obtained from an affiliate to make solicitations to the consumer;

  • Furnisher Rule. Under this rule entities that furnish information to CRAs are required to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the consumer information provided to a CRA;

  • Pre-screen Opt-Out Notice Rule. This rule outlines requirements for those who use consumer report information to make unsolicited credit or insurance offers to consumers; and

  • Risk-Based Pricing Rule. Under this rule those who use information from a consumer report to offer less favorable terms to consumers are required to provide them with a notice about the use of such data.

Putting It Into Practice:  These changes are largely technical in nature, and do not substantively change the applicability of the FCRA to financial services companies generally.  Rather, the changes serve to clarify that in some cases these five longstanding FCRA rules as promulgated by the FTC now more narrowly apply exclusively to motor vehicle dealers in light of Dodd-Frank’s specific exclusion of motor vehicle dealers from the scope of Dodd-Frank’s requirements.  Other financial services companies must still comply but are subject to the CFPB’s rules on these topics, which are substantially similar to the FTC’s.   In addition to complying with obligations under federal consumer protection laws, motor vehicle dealers also have many obligations under state consumer credit laws.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 252
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices. 

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
Advertisement
Advertisement
Advertisement