On April 7, the Bureau of Consumer Financial Protection (CFPB) issued a request for comment on proposed amendments to the regulation implementing the Fair Credit Reporting Act (FCRA), intended to assist consumers who are survivors of human trafficking. The proposed amendments would prohibit consumer reporting agencies (CRAs) from reporting adverse information resulting from certain types of human trafficking, as well as establish a method for trafficking survivors to submit documentation to CRAs identifying such information.
The National Defense Authorization Act for Fiscal Year 2022 (NDAA) directed the CFPB to issue a rule that amends Regulation V to include the adoption of a new section (Section 605C) to the FCRA. This new rule is also referred to as the Debt Bondage Repair Act, which the House of Representatives passed in June 2021. Under Section 605C, the CFPB is required to issue implementing regulations within 180 days of the enactment of the 2022 NDAA. Section 605C is effective 30 days after the CFPB issues its final implementing regulations.
In the accompanying press release, the CFPB explained that it is issuing the proposed rulemaking in response to Congress’s directive as part of the recently enacted Debt Bondage Repair Act to enact rules implementing that act’s prohibition against CRA’s providing consumer reports that include “any negative item of information about a survivor of trafficking from any period the survivor was being trafficked.”
CFPB Director Chopra stated in the press release that recovering survivors of human trafficking “shouldn’t be penalized for abuse they have endured” and asserted that the proposed amendments “will help ensure that survivors can work to rebuild their lives, including accessing credit, opening a bank account, and finding a job.”
The CFPB’s proposed amendments to Regulation V, the regulation that implements the FCRA, would create new provisions within Subsection O of the FCRA to implement the trafficking information prohibition and would apply those provisions to any “consumer reporting agency” as defined under the FCRA. The amendments would also add defined terms related to human trafficking and trafficking information, establish procedures for how affected consumers may submit the required documentation, and prescribe recordkeeping requirements for CRAs to ensure compliance.
Troutman Pepper will continue to monitor important developments involving the CFPB and the consumer reporting industry and will provide further updates as they become available.