March 11, 2024
The Consumer Financial Protection Bureau (CFPB) recently focused on inaccurate tenant screening reports. This attention is due to what the agency has identified as “sloppy” background check practices. As such, the CFPB issued guidance addressing erroneous background checks and practices regarding sharing credit reports.
These two advisory opinions will address tenant screening practices and background checks. They would help guarantee the accuracy and reliability of either check. In addition to assisting landlords in making educated decisions, the CFPB hopes to ensure potential tenants can access the information themselves.
According to the CFPB, this new guidance stems mainly from a 2023 public inquiry from the agency and the Federal Trade Commission. This inquiry asked the public about their experiences with background checks for potential tenants. More than 600 responses described problems individuals experienced in the screening process. As such, the CFPB used this information to create its guidance for screeners and landlords.
One of the most notable points the CFPB focused on in its guidance is that background check providers must be accurate in the information they provide in their reports. For example, the reports should remove any unnecessary information. Unnecessary information includes expunged or sealed records and outdated or duplicated information.
The CFPB also reminded consumer reporting agencies that all information items have distinct reporting periods. In addition, the agency stressed that the periods depended on the date of the information. The CFPB used a criminal conviction as an example when explaining these timeframes.
In most cases, reports cannot include convictions that happened at least seven years ago based on the charge’s date. The CFPB also reminded agencies to include disposition information. The agency mentioned eviction proceedings, criminal charges, and other court filings as examples.
The CFPB’s second focus concerns individuals’ access to their information. According to the CFPB, background check information should become accessible to the individual involved. The agency emphasized that consumers have the right to receive all information in their files. This ability is crucial for potential tenants to guarantee accurate information and correct any false or misleading information.
This guidance has highlighted many of the issues present in tenant background checks. As such, the CFPB stressed the importance of landlords ensuring that the reports they receive comply with these requirements. This information is also relevant to background checks for other purposes, including employment. As CFPB Director Rohit Chopra emphasized, “Background check reports, and all other consumer reports, must be accurate, up to date, and available to the people that the reports are about.”
Disclaimer:
Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.