FCRA at 40: It's a matter of interpretation

They say life begins at 40 — so watch what’s happening to the Fair Credit Reporting Act as it enters an exciting new phase of its regulatory career.

To mark this consumer protection milestone, the FTC has issued Forty Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report and Summary of Interpretations.  The report offers a brief overview of the FTC’s role in enforcing and interpreting the FCRA and includes a section-by-section summary of the agency’s interpretations of the Act.

But the report does more than just take a look back.  If you work in the credit reporting arena, you don’t make a move without consulting the FTC’s 1990 Commentary on the FCRA.  Since then, however, Congress has updated the law several times, most significantly by the Consumer Credit Reporting Reform Act of 1996 and the Fair and Accurate Credit Transactions Act of 2003 — the FACT Act.

So the FTC has announced that it’s withdrawing the 1990 Commentary, which has become partially outdated.  The report also modifies some interpretations of the Commentary in five specific areas, and adds several interpretations reflecting changes Congress has made to the FCRA, rules issued by the FTC and other agencies under the FACT Act, statements in staff opinion letters, and staff’s experience from significant enforcement actions.  Furthermore, recent legislation has transferred the authority to issue interpretive guidance under the FCRA to the Consumer Financial Protection Bureau.  Withdrawing the 1990 Commentary ensures that the out-of-date interpretations don’t carry over to the CFPB.