On February 14, TransUnion filed its annual 10-K report pursuant to the Securities and Exchange Act. Under the section entitled “Risks Related to Laws, Regulations and Government Oversight,” the company disclosed that it was in “active settlement discussions” with the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) over the alleged Fair Credit Reporting Act compliance lapses related to tenant screening.

In the filing, the company stated in March 2022, it received a Notice and Opportunity to Respond and Advise (NORA) letter from the CFPB alleging that TransUnion and its tenant and employment screening business TransUnion Rental Screening Solutions, Inc. failed to: “(i) follow reasonable procedures to ensure maximum possible accuracy of information in consumer reports and (ii) disclose to consumers the sources of such information.” On July 27, 2022, the CFPB advised the company that it had obtained authority to pursue a joint enforcement action with the FTC.

While TransUnion is actively trying to settle this matter, it disclosed that if negotiations were not successful the company expected the CFPB and FTC to pursue litigation and seek “redress, civil monetary penalties and injunctive relief.”

To conclude that section of its filing, TransUnion also noted that recently the credit reporting industry had been subjected to heightened scrutiny. “Based in part on public comments from CFPB officials, we believe this trend is likely to continue and could result in more legislative and regulatory scrutiny of the practices of our industry and additional regulatory enforcement actions and litigation … .”

As we reported here, on November 15, 2022, the CFPB issued two reports highlighting what it perceived to be errors that frequently occur in tenant background checks and the impact the CFPB believed those errors could have on potential renters. In the press release accompany those reports, the CFPB stated, “[t]he reports describe how errors in these background checks contribute to higher costs and barriers to quality rental housing. Too often, these background checks — which purport to contain valuable tenant background information — are filled with largely unvalidated information of uncertain accuracy or predictive value. While renters bear the costs of errors and false information in these reports, they have few avenues to make tenant screening companies fix their sloppy procedures.” As a result, the CFPB pledged, among other priorities, to continue to work closely with the FTC to take action on those issues. The NORA letter to TransUnion appears to be a continuation of that pledge and recent trend of cooperation between those two agencies.