Nonprofit HR’s Blog

Beginning January 1, 2013, the new regulations that the Consumer Financial Protection Board (CFPB) has issued will be in full effect. This will require all employers and consumer reporting agencies to supply applicants’ with the updated forms. Organizations need to prepare to update their paperwork.

The new forms — Appendices F, G and H to 16 CFR part 698 — can be found on the government’s official documents site. The forms now reflect that employees or applicants should reach out to the CPFB for questions regarding their rights under the FCRA.

The FCRA governs third-party credit reporting agencies that perform background checks on applicants and employees on behalf of employers. Federal and state laws generally permit employers to obtain consumer reports and/or investigative consumer reports on applicants and employees if employers and their third-party consumer credit reporting agencies/background screening vendors follow certain protocol.

This protocol includes furnishing forms that (1) disclose to the applicant the employer’s intention to obtain a consumer report and/or investigative consumer report; (2) obtain the applicant’s advance authorization to conduct a background check; (3) notify the applicant in advance of the employer’s intent to take adverse action based on the information contained in the report(s) and provide a copy of the report; and (4) notify the applicant of the adverse action.

As the hiring process has received increased legislative and administrative scrutiny in recent months and years, employers can expect that FCRA forms may continue to change.