CFPB releases new memo on enforcement philosophy
The acting director of the Consumer Financial Protection Bureau (CFPB), Mick Mulvaney, recently issued a memo that clarifies the mission of the CFPB and its enforcement philosophy.
The CFPB is one of the agencies with enforcement authority over the Fair Credit Reporting Act (FCRA), which provides protections to consumers and obligations to consumer reporting agencies (CRA) like Checkr and end-users of background reports, and whether they take a hard or soft line on enforcement can potentially affect your compliance risk.
In Mulvaney’s memo, he expressly steers enforcement efforts away from “push[ing] the envelope” in contrast to the previous director, Richard Cordray:
I think it is fair to say that the previous governing philosophy here was to aggressively “push the envelope” in pursuit of the “mission;” that we were the “good guys” and the “new sheriff in town,” out to fight the “bad guys.”
Mulvaney clarifies that the CFPB will now direct its enforcement efforts toward “quantifiable and unavoidable harm to the consumer.” Or in other words, the CFPB may be less active in seeking out lawsuits under the FCRA unless there is obvious quantifiable injury to the consumer. This development aligns with what industry experts predicted about the future of the CFPB with the incoming presidential administration.
Note, though, that this does not affect the actions of private litigants or plaintiffs seeking damages under the FCRA, nor does it affect your compliance with state or municipal fair hiring laws. It is still important as ever to comply with FCRA in your background check process, including your disclosure, authorization, and adverse action processes.
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