2018-20184. Summaries of Rights Under the Fair Credit Reporting Act (Regulation V)

AGENCY:

Bureau of Consumer Financial Protection.

ACTION:

Interim final rule with request for public comment.

SUMMARY:

The Bureau of Consumer Financial Protection (Bureau) is issuing an interim final rule to update the Bureau's model forms for the Summary of Consumer Identity Theft Rights and the Summary of Consumer Rights to incorporate a notice of rights required by a new provision of the Fair Credit Reporting Act, added by the Economic Growth, Regulatory Relief, and Consumer Protection Act.

DATES:

This interim final rule is effective on September 21, 2018. Comments must be received on or before November 19, 2018.

ADDRESSES:

You may submit comments, identified by Docket No. CFPB-2018-0025 or RIN 3170-AA82, by any of the following methods:

• Email: [e-mail]. Include Docket No. CFPB-2018-0025 or RIN 3170-AA82 in the subject line of the email.
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Mail: Comment Intake, Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552.
• Hand Delivery/Courier: Comment Intake, Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552.

Instructions: All submissions should include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. Because paper mail in the Washington, DC area and at the Bureau is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to http://www.regulations.gov. In addition, comments will be available for public inspection and copying at 1700 G Street NW, Washington, DC 20552, on official business days between the hours of 10:00 a.m. and 5:00 p.m. Eastern Time. You can make an appointment to inspect the documents by telephoning 202-435-7275.

All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Sensitive personal information, such as account numbers or Social Security numbers, should not be included. Comments will not be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT:

Seth Caffrey, David Hixson, Amanda Quester, or Pavneet Singh, Senior Counsels, Office of Regulations, at 202-435-7700 or https://reginquiries.consumerfinance.gov/​. If you require this document in an alternative electronic format, please contact [e-mail].

SUPPLEMENTARY INFORMATION:

I. Summary of the Interim Final Rule

Effective September 21, 2018, new section 605A(i)(5) of the Fair Credit Reporting Act (FCRA), added by the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), requires that a new notice of rights be included whenever a consumer is required to receive a summary of rights required by FCRA section 609. This new notice of rights does not appear in the model forms currently in Appendices I and K, which were published on November 14, 2012. The interim final rule amends the model forms to incorporate the new required notice of rights, amends the model form in Appendix I to reflect a statutory change to the minimum duration of initial fraud alerts, and makes adjustments to update contact information for certain FCRA enforcement agencies in the model form in Appendix K. To mitigate the impact of these changes on users of the existing model forms, the interim final rule also provides that the Bureau will regard the use of the model forms published in Appendices I and K on November 14, 2012, to constitute compliance with the FCRA provisions requiring such forms, so long as a separate page that contains the additional required information is provided in the same transmittal. The Bureau is soliciting comment on the interim final rule's amendments to Appendices I and K to inform possible further revisions to the model forms that the Bureau may consider in the future.

II. Background

A. Summaries of Rights Required by the FCRA

Section 609 of the FCRA requires the Bureau to prepare two consumer disclosures: A model summary of rights to obtain and dispute information in consumer reports and to obtain credit scores (Summary of Consumer Rights); and a model summary of rights of identity theft victims (Summary of Consumer Identity Theft Rights).^[1] The Bureau's model forms for the Summary of Consumer Identity Theft Rights and the Summary of Consumer Rights are found in Appendices I and K to Regulation V, respectively.

The Summary of Consumer Rights explains certain major consumer rights under the FCRA, including the right to obtain a copy of a consumer report, the frequency and circumstances under which a consumer is entitled to receive a free consumer report, the right to dispute information in a consumer's file, and the right to obtain a credit score. A consumer reporting agency must provide a Summary of Consumer Rights whenever it makes a written disclosure of information from a consumer's file or a credit score to the consumer.^[2] The FCRA also requires certain other persons to provide a Summary of Consumer Rights to consumers under specified circumstances.^[3]

The Summary of Consumer Identity Theft Rights explains the rights consumers have under the FCRA when they seek to remedy the effects of fraud or identity theft, including the right to place a fraud alert and block certain information from appearing in a consumer report. A consumer reporting agency must provide a Summary of Consumer Identity Theft Rights that contains all of the information required by the Bureau if a consumer contacts the consumer reporting agency and expresses a belief that the consumer is a victim of fraud or identity theft involving credit, an electronic fund transfer, or an account or transaction at or with a financial institution or other creditor.^[4]

Regulation V provides that use or distribution of the Bureau's model forms and disclosures in Appendices I and K, or substantially similar forms and disclosures, will constitute compliance with any FCRA section or subsection requiring that such forms and disclosures be used by or supplied to any person.^[5] Substantially similar means that all information in the Bureau's prescribed model is included in the document that is distributed, and that the document distributed is formatted in a way consistent with the format prescribed by the Bureau.^[6] The document that is distributed cannot include anything that interferes with, detracts from, or otherwise undermines the information contained in the Bureau's prescribed model.^[7]

B. Economic Growth, Regulatory Relief, and Consumer Protection Act

On May 24, 2018, the President signed the Act into law.^[8] Section 301(a)(1) of the Act amends the FCRA to extend from 90 days to one year the minimum time that nationwide consumer reporting agencies must include an initial fraud alert in a consumer's file under FCRA section 605A(a)(1)(A). Section 301(a)(2) of the Act adds new FCRA section 605A(i), which requires nationwide consumer reporting agencies to provide national security freezes free of charge to consumers. At any time a consumer is required to receive a summary of rights required under FCRA section 609, new FCRA section 605A(i)(5) requires inclusion of a notice of rights regarding the right to obtain a security freeze. Section 301(c) of the Act provides that the amendments made by section 301 of the Act take effect 120 days after the date of enactment, which is September 21, 2018.

III. Legal Authority

The Bureau is issuing this interim final rule pursuant to its authority under the FCRA and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).^[9] Effective July 21, 2011, section 1061 of the Dodd-Frank Act ^[10] transferred to the Bureau the rulemaking and certain other authorities of the Federal Trade Commission (FTC) and the prudential regulators relating to the enumerated consumer laws, including most rulemaking authority under the FCRA.^[11] Likewise, section 1088 of the Dodd-Frank Act made conforming amendments to the FCRA transferring rulemaking authority under much of the FCRA to the Bureau,^[12] except those regulations applicable to certain motor vehicle dealers.^[13] As amended by the Dodd-Frank Act, the FCRA generally authorizes the Bureau to issue regulations “as may be necessary or appropriate to administer and carry out the purposes and objectives of [the FCRA], and to prevent evasions thereof or to facilitate compliance therewith.” ^[14]

IV. Administrative Procedure Act

Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the Bureau for good cause finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest.^[15] Similarly, publication of this interim final rule at least 30 days before its effective date is not required if provided for by the Bureau for good cause found.^[16]

The Bureau finds that prior notice and public comment are unnecessary because the revisions involve technical changes necessary for the regulation to contain model forms that comply with section 301 of the Act. The revisions merely incorporate a new notice of rights required by the Act into the model forms, update the description of initial fraud alerts in the Summary of Consumer Identity Theft Rights to reflect the new minimum duration of initial fraud alerts specified in the Act, and make adjustments to update contact information for certain FCRA enforcement agencies in the Summary of Consumer Rights. The revisions also include in both model forms optional language clarifying that the security freeze right applies only to nationwide consumer reporting agencies. Entities that do not wish to use the new model forms may use substantially similar forms. They may also continue using the existing model forms (or substantially similar forms) to comply with the provisions in the FCRA that require such forms if they provide the notice of rights required by new FCRA section 605A(i)(5) on a separate page in the same transmittal and, for the Summary of Consumer Identity Theft Rights, a short explanation of the changed minimum duration of initial fraud alerts.

The Bureau also finds that prior notice and public comment are impractical because notice and comment would afford insufficient time to finalize the revisions to the model forms necessary for them to comply with section 301 of the Act before the effective date of that section. If revisions to the model forms were not finalized prior to the effective date of the statutory changes, legal uncertainty and risk could arise as to how entities could comply with both the regulation and section 301 of the Act at the same time.

The Bureau also finds that there is good cause for this interim final rule to be effective less than 30 days after publication to ensure that these necessary technical revisions to the model forms are in effect by the effective date of section 301 of the Act to avoid the legal uncertainty and risk that could arise as to how entities could comply with both the regulation and section 301 of the Act at the same time.

For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for prior public comment are unnecessary and impractical and that there is good cause for this interim final rule to be effective less than 30 days after publication.

V. Section-by-Section Analysis

Appendix I to Part 1022—Summary of Consumer Identity Theft Rights

Effective September 21, 2018, FCRA section 605A(i)(5) requires that whenever a consumer is required to receive a summary of rights required under FCRA section 609, a notice of rights regarding the new security freeze right must be included. This notice of rights does not appear in the model form for the Summary of Consumer Identity Theft Rights currently in Appendix I. To conform to this statutory change, the Bureau is amending the model form in Appendix I to include the new required notice of rights.

Under section 301 of the Act, a security freeze prohibits consumer reporting agencies that are described in FCRA section 603(p) (nationwide consumer reporting agencies) from releasing information subject to various exceptions. To clarify the scope of the new security freeze right under the FCRA, the Bureau has added a sentence before the new notice of rights in the model form in Appendix I stating that the following FCRA right applies with respect to nationwide consumer reporting agencies. The Bureau will regard the model form in Appendix I without this sentence as substantially similar to the model form in Appendix I and will regard use of the model form without this sentence to constitute compliance with the FCRA provisions requiring such forms.

The model form for the Summary of Consumer Identity Theft Rights currently in Appendix I provides that “[a]n initial fraud alert stays in your file for at least 90 days” (emphasis in original). Effective September 21, 2018, section 301(a)(1) of the Act amends the FCRA to extend the minimum time from 90 days to one year that nationwide consumer reporting agencies must include fraud alerts in a consumer's file under FCRA section 605A(a)(1)(A). To conform to this statutory change, the Bureau is amending the model form in Appendix I to provide that “[a]n initial fraud alert stays in your file for at least one year.”

The Bureau recognizes that some entities may have already begun preparing to implement the Act and may be preparing Summaries of Consumer Identity Theft Rights that include the notice of rights required by FCRA section 605A(i)(5) in a different location on the form than shown on the new model form published today. The Bureau will regard use of forms that are the same as the model form published today but that include the notice of rights required by FCRA section 605A(i)(5) in a different location on the form to constitute compliance with the FCRA provisions requiring the Summary of Consumer Identity Theft Rights and will regard such forms as substantially similar to the model form for the Summary of Consumer Identity Theft Rights published today.^[17]

The Bureau recognizes that some entities may find it less burdensome to include the notice of rights required by FCRA section 605A(i)(5) on a separate page in the same transmittal with the Summary of Consumer Identity Theft Rights published on November 14, 2012, and to clarify in the separate page that the Act changed the minimum duration of initial fraud alerts from 90 days to one year. To mitigate the impact of the model form changes on users of the existing model forms, the Bureau will regard the use of the model form for the Summary of Consumer Identity Theft Rights published on November 14, 2012 (or a substantially similar form), with a separate page provided in the same transmittal that includes the notice of rights required by FCRA section 605A(i)(5) and that states on the separate page, before or after the notice of rights required by FCRA section 605A(i)(5), that “The minimum duration of initial fraud alerts changed from 90 days to one year effective September 21, 2018,” to constitute compliance with the FCRA provisions requiring the Summary of Consumer Identity Theft Rights.^[18] The Bureau will regard the model form for the Summary of Consumer Identity Theft Rights published on November 14, 2012 (or a substantially similar form), provided with such a separate page, as substantially similar to the model form for the Summary of Consumer Identity Theft Rights published in this document.^[19]

Appendix K to Part 1022—Summary of Consumer Rights

Effective September 21, 2018, FCRA section 605A(i)(5) requires that whenever a consumer is required to receive a summary of rights required under FCRA section 609, a notice of rights regarding the new security freeze right must be included. This notice does not appear in the model form for the Summary of Consumer Rights currently in Appendix K. To conform to this statutory change, the Bureau is amending the model form in Appendix K to include the new required notice of rights.

Under section 301 of the Act, a security freeze prohibits consumer reporting agencies that are described in FCRA section 603(p) (nationwide consumer reporting agencies) from releasing information subject to various exceptions. To clarify the scope of the new security freeze right under the FCRA, the Bureau has added a sentence before the new notice of rights in the model form in Appendix K stating that the following FCRA right applies with respect to nationwide consumer reporting agencies. The Bureau will regard the model form in Appendix K without this sentence as substantially similar to the model form in Appendix K and will regard use of the model form without this sentence to constitute compliance with the FCRA provisions requiring such forms.

The Bureau has also amended the model form in Appendix K to update contact information provided for certain FCRA enforcement agencies.

The Bureau recognizes that some entities may have already begun preparing to implement the Act and may be preparing Summaries of Consumer Rights that include the notice of rights required by FCRA section 605A(i)(5) in a different location on the form than shown on the new model form published today. The Bureau will regard use of forms that are the same as the model form published today but that include the notice of rights required by FCRA section 605A(i)(5) in a different location on the form to constitute compliance with the FCRA provisions requiring the Summary of Consumer Rights and will regard such forms as substantially similar to the model form for the Summary of Consumer Rights published today.^[20]

The Bureau recognizes that some entities may find it less burdensome to include the notice of rights required by FCRA section 605A(i)(5) on a separate page in the same transmittal with the Summary of Consumer Rights published on November 14, 2012. To mitigate the impact of these changes on users of the existing model forms, the Bureau will regard the use of the model form for the Summary of Consumer Rights published on November 14, 2012 (or a substantially similar form), with a separate page provided in the same transmittal that includes the notice of rights required by FCRA section 605A(i)(5), to constitute compliance with the FCRA provisions requiring the Summary of Consumer Rights.^[21] The Bureau will regard the model form for the Summary of Consumer Rights published on November 14, 2012 (or a substantially similar form), provided with such a separate page as substantially similar to the model form for the Summary of Consumer Rights published in this document.^[22]

VI. Request for Comment

The Bureau may consider possible further revisions to the model forms in Appendices I and K to Regulation V in the future. Although notice-and-comment rulemaking procedures are not required for the revisions made in this interim final rule, the Bureau invites comment on this interim final rule, implementation of the Act in the model forms, and any other changes that may be necessary or appropriate to the model forms in Appendices I and K to Regulation V.^[23]

VII. Effective Date

This interim final rule is effective on September 21, 2018.

VIII. Dodd-Frank Act Section 1022(b) Analysis

A. Overview

In developing the interim final rule, the Bureau has considered the potential benefits, costs, and impacts required by section 1022(b)(2) of the Dodd-Frank Act. Specifically, section 1022(b)(2) calls for the Bureau to consider the potential benefits and costs of a regulation to consumers and covered persons, including the potential reduction of access by consumers to consumer financial products or services, the impact on depository institutions and credit unions with $10 billion or less in total assets as described in section 1026 of the Dodd-Frank Act, and the impact on consumers in rural areas. In addition, section 1022(b)(2)(B) directs the Bureau to consult, before and during the rulemaking, with appropriate prudential regulators or other Federal agencies, regarding consistency with objectives those agencies administer. The Bureau has consulted, or offered to consult, with the prudential regulators and the FTC regarding consistency with any prudential, market, or systemic objectives administered by those agencies.

In considering the relevant potential benefits, costs, and impacts, the Bureau consulted the available data and applied its knowledge and expertise concerning consumer financial markets. Where available, the Bureau used the economic analyses that it regards as most reliable and helpful to consider the relevant potential benefits, costs, and impacts of the interim final rule. However, the Bureau notes that, in some instances, there are limited data available to inform the quantification of the potential benefits, costs, and impacts. Where possible, the Bureau makes quantitative estimates based on economic principles as well as available data. However, where data are limited, the Bureau generally provides a qualitative discussion of the interim final rule's potential benefits, costs, and impacts.

The Bureau is using a post-statute baseline to assess the impact of this interim final rule. Using a post-statute baseline, the analysis evaluates the benefits, costs, and impacts of the interim final rule as compared to enactment of the statute alone. A post-statute baseline focuses the consideration of the benefits, costs, and impacts on the amendments in this interim final rule, which are technical and do not impose any new substantive obligations on regulated entities.^[24]

As discussed above, the interim final rule amends Regulation V, which implements the FCRA, to reflect new FCRA section 605A(i), added by the Act. Under the interim final rule, the Bureau is amending two model forms in Regulation V to conform to new FCRA section 605A(i)(5). The amended model form in Regulation V, Appendix K, the Summary of Consumer Rights, reflects two changes relative to the current model form: The addition of a notice of rights that details the consumer's right to a security freeze; and an update to the contact information listed for certain FCRA enforcement agencies. The amended model form in Regulation V, Appendix I, the Summary of Consumer Identity Theft Rights, reflects two changes relative to the current model form: The addition of the same notice of rights detailing the consumer's right to a security freeze that has been added to the Summary of Consumer Rights; and an update to the disclosed minimum amount of time that an initial fraud alert stays in a consumer's file. The rule also includes in both model forms optional language clarifying that the security freeze right applies only to nationwide consumer reporting agencies.

Rather than requiring entities subject to the interim final rule to use the new model forms, the interim final rule allows entities to comply in a variety of ways. These include, for example: (1) Allowing entities to continue to use the current forms while also including a separate page that includes the new statutorily prescribed notice of rights and, with respect to the disclosure in Appendix I, either highlighting in the separate page the change from 90 days to one year for the minimum duration of initial fraud alerts or updating the current forms to include the change in the minimum duration of initial fraud alerts; or (2) allowing entities flexibility as to the placement of the new notice of rights on the forms. For the purpose of this analysis, the Bureau does not differentiate between which of these methods of compliance an entity chooses, and these methods are collectively referred to as the “alternative approach.”

Regarding baseline behavior and practices, the Bureau assumes that if the interim final rule were not adopted, entities subject to the rule would comply with both new FCRA section 605A(i)(5) and current Regulation V. For the purpose of this analysis, the Bureau assumes that if the interim final rule were not adopted, to convey the information required by new FCRA section 605A(i)(5) along with the information contained in either of the current model forms under current Regulation V, entities subject to the rule would comply in a manner that is substantially similar to the alternative approach described above, using two double-sided sheets of standard printer paper.^[25]

As this analysis details below, the similarity between the alternative approach and the assumed behavior and practices under the baseline result in the Bureau estimating minimal additional costs under the interim final rule. Where illuminating, the Bureau also considers the costs to entities of adopting the amended model forms. These analyses demonstrate that the Bureau's estimate of costs is not affected by whether entities adopt the model form or use the alternative approach.

B. Potential Benefits and Costs to Consumers and Covered Persons

Benefits

The impact on consumers of the interim final rule depends on whether a particular consumer prefers, or would otherwise benefit from, receiving the amended disclosures.^[26] As described above, this analysis assumes that entities subject to the rule would provide the information required by both new FCRA section 605A(i)(5) and current Regulation V, even if this rule were not adopted. However, this rule provides entities with the option to provide the information from these two sources under the unified disclosure designs of the amended model forms. The Bureau expects that these unified designs will make finding and comprehending information easier for consumers relative to the baseline by lowering the cost to consumers of information search and processing. The precise magnitude of this benefit to consumers is difficult to quantify because the Bureau does not have data regarding how much individual consumers value it. However, the Bureau can estimate, broadly, the scope of consumers who may benefit. Prior to the Act, of the consumers who experienced one or more attempted or successful incidents of identity theft and who also contacted a consumer reporting agency, approximately 70 percent requested a fraud alert be placed on their file.^[27] This large proportion reflects a substantial consumer demand for this service.^[28] Similarly, prior to the Act, about 40 percent of consumers who experienced one or more attempted or successful incidents of identity theft, and who also contacted a consumer reporting agency, requested a security freeze.^[29] After the Act, the Bureau expects demand for fraud alerts and security freezes will increase; ^[30] and, of the consumers who demand these services, some will become informed through the disclosures required by Regulation V and new FCRA section 605A(i)(5). These consumers are likely to benefit from this rule through lower information search and processing costs relative to the baseline, as described above.

Regarding benefits to industry, this interim final rule harmonizes Regulation V with the FCRA, as amended by the Act. The Bureau intends to reduce legal uncertainty and risk in the industry regarding responsibilities and liabilities among market participants about how they may comply with both the statute and Regulation V at the same time. There may be a general benefit from the certainty and risk reduction provided through this harmonization. However, without data on how entities would comply with the statute and Regulation V absent this interim final rule, the Bureau cannot quantify the benefit of this additional certainty.

Costs

The Bureau estimates minimal additional costs under the interim final rule. The Bureau does not anticipate any additional one-time costs due to this rule, relative to the baseline. Regarding ongoing costs, this interim final rule does not alter the circumstances under which disclosures under the FCRA are required. Nor does the Bureau estimate any additional costs to providing disclosures due to this rule, relative to the baseline. Nonetheless, this analysis considers each of the potential sources of cost for each of the disclosures that are updated by this interim final rule, given the baseline, including: Development of new disclosure templates, destruction or disposal of out-of-date materials, changes to production of disclosures, and changes to delivery of disclosures.

Summary of Consumer Rights

The Bureau believes that the costs of this interim final rule of development of a new Summary of Consumer Rights disclosure template, or destruction or disposal of out-of-date materials, will be minimal. As stated above, the Bureau believes that the alternative approach allowed by this rule is substantially similar to how entities would comply with both new FCRA section 605A(i)(5) and current Regulation V if this interim final rule were not adopted. The Bureau therefore expects that to come into compliance with this rule, relative to the baseline, entities subject to the rule will not incur additional costs to update disclosure templates or to destroy, or dispose of, out-of-date materials.^[31]

Regarding production and delivery of the Summary of Consumer Rights disclosure, there are two relevant classes of recipients: Consumers and employers. The Bureau estimates additional costs under the interim final rule to be very small for production and delivery to either class. Each is considered separately below.

For production and delivery to consumers, the Bureau estimates minimal additional costs under the interim final rule. The Bureau expects that the alternative approach will take two double-sided sheets to be printed, which is the same number of sheets as under the approach the Bureau assumes entities will take under the baseline.^[32] Since the printing needs are the same, there are no additional costs.^[33] It is possible that use of the alternative approach could result in an entity using a third sheet of paper to produce the disclosure; however, the Bureau believes that any entity choosing to use an extra sheet of paper under the interim final rule would also choose to do so under the baseline.^[34]

For production and delivery to employers, the Bureau estimates minimal additional costs under the interim final rule. Under the FCRA, employers must be provided a copy of the Summary of Consumer Rights disclosure by a consumer reporting agency before the consumer reporting agency furnishes a consumer report for employment purposes, unless the consumer reporting agency already provided a copy of the disclosure to that employer. The Bureau believes that, under the baseline, consumer reporting agencies will provide an updated copy of the Summary of Consumer Rights to employers once the Act takes effect. However, because the Bureau assumes that consumer reporting agencies' baseline approach will be substantially similar to the alternative approach under this interim final rule, the Bureau estimates the cost to sending an updated copy to employers to be the same under the rule as under the baseline.^[35]

Summary of Consumer Identity Theft Rights

For the same reasons described in the previous part, the Bureau believes that the additional costs under this interim final rule of development of a new Summary of Consumer Identity Theft Rights disclosure template, or destruction or disposal of out-of-date materials, will be minimal.

Regarding production and delivery of the Summary of Consumer Identity Theft Rights disclosure, the Bureau estimates the total change in costs will be very small. The Bureau expects that the alternative approach will take no more than two double-sided sheets to be printed, which is the same number of sheets as under the approach the Bureau assumes entities will take under the baseline. Since the printing needs are the same, there are no new costs.^[36]

The Bureau does not anticipate that the interim final rule will generate costs for consumers, given the baseline.

C. Potential Specific Impacts of the Rule

This analysis estimates minimal additional costs under the interim final rule, and therefore the Bureau does not believe that the rule would reduce consumers' access to consumer financial products or services.

The Bureau does not expect the interim final rule to have distinct impacts on depository institutions and credit unions with $10 billion or less in total assets or on consumers in rural areas, relative to other entities or consumers.

IX. Regulatory Flexibility Act Analysis

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where general notice of proposed rulemaking is not required.^[37] As noted previously, the Bureau has determined that it is unnecessary to publish a general notice of proposed rulemaking for this interim final rule. Accordingly the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply.

X. Paperwork Reduction Act

The Bureau has determined that the interim final rule does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring approval by the Office of Management and Budget under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

XI. Congressional Review Act

Pursuant to the Congressional Review Act,^[38] the Bureau will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to the rule's published effective date. The Office of Information and Regulatory Affairs has designated this rule as not a “major rule” as defined by 5 U.S.C. 804(2).

List of Subjects

• Banks
• Banking
• Consumer protection
• Credit unions
• Fair Credit Reporting Act
• Holding companies
• National banks
• Privacy
• Reporting and recordkeeping requirements
• Savings associations
• State member banks

Authority and Issuance

For the reasons set forth above, the Bureau amends Regulation V, 12 CFR part 1022, as set forth below:

PART 1022—FAIR CREDIT REPORTING (REGULATION V)

1. The authority citation for part 1022 continues to read as follows:

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1681a, 1681b, 1681c, 1681c-1, 1681e, 1681g, 1681i, 1681j, 1681m, 1681s, 1681s-2, 1681s-3, and 1681t; Sec. 214, Public Law 108-159, 117 Stat. 1952.

2. Revise Appendix I to read as follows:

Appendix I to Part 1022—Summary of Consumer Identity Theft Rights

The prescribed form for this summary is a disclosure that is substantially similar to the Bureau's model summary with all information clearly and prominently displayed. A summary should accurately reflect changes to those items that may change over time (such as telephone numbers) to remain in compliance. Translations of this summary will be in compliance with the Bureau's prescribed model, provided that the translation is accurate and that it is provided in a language used by the recipient consumer.

3. Revise Appendix K to read as follows:

Appendix K to Part 1022—Summary of Consumer Rights

The prescribed form for this summary is a disclosure that is substantially similar to the Bureau's model summary with all information clearly and prominently displayed. The list of Federal regulators that is included in the Bureau's prescribed summary may be provided separately so long as this is done in a clear and conspicuous way. A summary should accurately reflect changes to those items that may change over time (e.g., dollar amounts, or telephone numbers and addresses of Federal agencies) to remain in compliance. Translations of this summary will be in compliance with the Bureau's prescribed model, provided that the translation is accurate and that it is provided in a language used by the recipient consumer.

Dated: September 11, 2018.

Mick Mulvaney,

Acting Director, Bureau of Consumer Financial Protection.

Footnotes

1.  15 U.S.C. 1681g(c)(1)(A), (d)(1).

2.  15 U.S.C. 1681g(c)(2)(A) (requirement to provide a Summary of Consumer Rights with any written file disclosure). A consumer reporting agency must also provide an employer with a Summary of Consumer Rights before furnishing a consumer report for employment purposes. 15 U.S.C. 1681b(b)(1)(B) (requirement to provide a Summary of Consumer Rights with a report for employment purposes if the Summary of Consumer Rights has not been provided previously).

3.  See, e.g., 15 U.S.C. 1681b(b)(3) (generally requiring persons using a consumer report for employment purposes to provide the consumer with a Summary of Consumer Rights before taking any adverse action based on the report). The Bureau must also actively publicize the availability of the Summary of Consumer Rights, conspicuously post its availability on the Bureau's internet website, and promptly make it available to consumers, on request. 15 U.S.C. 1681g(c)(1)(C).

4.  15 U.S.C. 1681g(d)(2).

5.  12 CFR 1022.1(c)(1).

6.  12 CFR 1022.1(c)(2).

7.  Id.

8.  Public Law 115-174, 132 Stat. 1296 (2018).

9.  Public Law 111-203, 124 Stat. 1376 (2010).

10.  12 U.S.C. 5581.

11.  Section 1002(12)(F) of the Dodd-Frank Act designates most of the FCRA as an “enumerated consumer law.”

12.  The Dodd-Frank Act did not, however, transfer to the Bureau rulemaking authority for FCRA sections 615(e) (“Red Flag Guidelines and Regulations Required”) and 628 (“Disposal of Records”).

13.  Dodd-Frank Act section 1029.

14.  Dodd-Frank Act section 1088(a)(10)(E) (codified at 15 U.S.C. 1681s(e)).

15.  5 U.S.C. 553(b)(B).

16.  5 U.S.C. 553(d)(3).

17.  The Bureau will also regard use of forms that deviate in other ways from the model form published today but that are still substantially similar to the model form published today to constitute compliance with the FCRA provisions requiring the Summary of Consumer Identity Theft Rights.

18.  An entity using this approach need not include the sentence about the minimum duration of initial fraud alerts on the separate page if it changes “90 days” to “one year” in the model form for the Summary of Consumer Identity Theft Rights published on November 14, 2012. Entities may also, at their option, add the following statement on the separate page before the notice of rights required by FCRA section 605A(i)(5): “The following FCRA right applies with respect to nationwide consumer reporting agencies.”

19.  The use of the versions of the model forms in Appendices I, K, M, and N as published on December 21, 2011, should be discontinued no later than September 21, 2018. See 76 FR 79308 (Dec. 21, 2011); 77 FR 67744 (Nov. 14, 2012); 81 FR 25323 (Apr. 28, 2016).

20.  The Bureau will also regard use of forms that deviate in other ways from the model form published today but that are still substantially similar to the model form published today to constitute compliance with the FCRA provisions requiring the Summary of Consumer Rights.

21.  Entities may also, at their option, add the following statement on the separate page before the notice of rights required by FCRA section 605A(i)(5): “The following FCRA right applies with respect to nationwide consumer reporting agencies.”

22.  See supra note 18.

23.  We note that, in 2010, the FTC proposed revisions to these and other model forms, but the rulemaking was not finalized. See Summary of Rights and Notices of Duties under the Fair Credit Reporting Act, 75 FR 52655 (Aug. 27, 2010).

24.  The Bureau has discretion in future rulemakings to choose the relevant provisions to discuss and the most appropriate baseline for that particular rulemaking. The Bureau also considers the benefits, costs, and impacts of certain other requirements in new FCRA section 605A(i) related to the new disclosure requirements where doing so provides a more complete understanding of the impacts of these requirements on consumers and covered persons.

25.  The Summary of Consumer Rights model form in current Regulation V can be printed on three sides of standard printer paper. Since the new information required by new FCRA section 605A(i)(5) can be printed on a single side, the combination of these disclosures should take no more than four sides of paper, or two double-sided sheets of paper. The Summary of Consumer Identity Theft Rights model form in current Regulation V can be printed on two sides of standard printer paper. Therefore, the combination of this disclosure and the information required by new FCRA section 605A(i)(5) should take no more than three sides of paper, or the equivalent of two double-sided sheets of paper.

26.  Benefits will also depend on the extent to which entities adopt the model forms or substantially similar forms (rather than using the alternative approach). Since each rule is unique, the Bureau does not have data that would allow it to reliably estimate adoption rates. However, in general, greater adoption of the model forms or substantially similar disclosures will lead to a greater benefit of this rule.

27.  U.S. Dep't. of Justice, Victims of Identity Theft, 2014 at 1, 18 (Sept. 27, 2015), available at https://www.bjs.gov/​index.cfm?​ty=​pbdetail&​iid=​5408.

28.  The Bureau assumes about one million consumers contact consumer reporting agencies requesting fraud alerts annually. This estimate is based on survey data from the U.S. Department of Justice. Approximately 17.6 million people were victims of identity theft in 2014, and an estimated 8.1 percent contacted a consumer reporting agency. See id.

29.  See id.

30.  The Act provides, and prescribes the disclosure of, new rights to consumers. The Bureau expects that these new rights will be of value to consumers, and that these new disclosures will help to inform consumers of their rights.

31.  If entities were to choose to adopt the model form, or if this analysis were to adopt a pre-statute baseline, the Bureau would continue to estimate these costs to be small. Because the Bureau is providing model forms, it believes the cost of developing new disclosure templates would be small. Because the Bureau is allowing the alternative approach, it believes that entities could use their old stock rather than destroying or disposing of it.

32.  The Bureau typically accounts for printing costs in terms of the cost of double-sided printing on standard 8.5 inch by 11 inch printer paper. However, this interim final rule does not specify how entities print or the size of the paper they use. Indeed, the Bureau expects that each entity will use the method of printing that is least costly to it.

33.  The Bureau also assumes there to be no substantial cost of electronic distribution, and therefore that there is no change in costs, regardless of the chosen method of delivery.

34.  If entities were to adopt the model form, then the Bureau would continue to estimate these costs to be small because the amended Summary of Consumer Rights model form disclosure takes two double-sided sheets to be printed, which is the same number of sheets as under the approach the Bureau assumes entities will take under the baseline.

If this analysis were to adopt a pre-statute baseline, then this analysis would still estimate minimal additional costs due to this part of the rule. When printed on double-sided sheets, the disclosure under current Regulation V takes two sheets of standard printer paper, which is the same number of sheets as under both the amended model form and the alternative approach under this interim final rule. Although this rule does technically imply that additional ink would be used relative to printing the current disclosure, the Bureau typically estimates a total cost per sheet of printing inclusive of paper costs, depreciation of printing hardware, and the ink required for a double-sided, completely printed, sheet. Therefore, the implied cost of additional ink would already have been counted in the cost of previous rules.

35.  If entities were to adopt the model form, then the Bureau would continue to estimate additional costs to be small because the amended Summary of Consumer Rights model form disclosure takes two double-sided sheets to be printed, which is the same number of sheets as under the approach the Bureau assumes entities will take under the baseline.

If this analysis were to adopt a pre-statute baseline, the Bureau would estimate a one-time cost to consumer reporting agencies of between $0 and $435,000, depending on the method by which the disclosures are delivered. This estimate assumes printing costs of $0.20 per disclosure (two sheets * $0.10 per sheet), and postage cost of $0.375 per disclosure. See U.S. Postal Serv., Postal Explorer—Price List, https://pe.usps.com/​text/​dmm300/​Notice123.htm#_​c096. It further assumes that there are approximately 757,310 employers in the United States that use consumer reports for employment purposes, and that each employer requests consumer reports from at most one consumer reporting agency. This estimated number of employers comes from the fact that there are approximately 5,726,160 firms in the United States that have employees (2014) and a survey which reported that 13 percent of employers use credit reports to screen candidates for all positions. The reported range of potential cost depends on the proportion of disclosures assumed to be sent electronically. If all disclosures were sent electronically, the estimated cost would be approximately $0. However, if all disclosures were sent via U.S. mail, the estimated cost would be approximately $435,000 (($0.20 + $0.375)*757,310). See U.S. Small Bus. Admin., Firm Size Data, available at https://www.sba.gov/​advocacy/​firm-size-data and Society for Human Res. Mgmt., Background Checking—The Use of Credit Background Checks in Hiring Decisions (July 19, 2012), available at https://www.shrm.org/​hr-today/​trends-and-forecasting/​research-and-surveys/​Pages/​creditbackgroundchecks.aspx.

36.  This analysis assumes there to be no substantial cost of electronic distribution, and therefore no change in costs, regardless of the chosen method of delivery.

If entities were to choose to adopt the model form, the Bureau would continue to estimate the costs to be very small because the amended Summary of Consumer Identity Theft Rights model form disclosure takes two double-sided sheets to be printed, which is the same number of sheets as under the approach the Bureau assumes entities will take under the baseline.

If this analysis were to adopt a pre-statute baseline, printing the amended Summary of Consumer Identity Theft Rights model form would use one additional sheet of paper relative to the current model form, and the total change in costs would be between $0 and approximately $140,000 annually, depending on the methods by which consumer reporting agencies distribute their disclosures. These estimates assume additional printing costs of $0.10 per disclosure (one sheet * $0.10 per sheet), but no additional postage cost (the cost to send a business class letter via the USPS is the same whether it contains one or two sheets of paper). In addition, these estimates assume that about 1.4 million consumers contact consumer reporting agencies regarding identity theft. See supra note 26.

An estimated 42 percent of consumers submit disputes to consumer reporting agencies online, 44 percent by mail, 13 percent by phone, and the remainder by fax, walk-ins, or other methods (which the Bureau assumes result in burden resembling disputes submitted by mail). Under the assumptions that these methods of contact are representative of consumer behavior across products, and that consumer reporting agencies respond in-kind to electronic disputes but respond to all other methods of consumer contact via U.S. mail, 42 percent of these disclosures would be sent electronically, and 58 percent would be sent via U.S. mail. This would result in an expected cost to consumer reporting agencies of approximately $81,200 annually. See Bureau of Consumer Fin. Protection, Key Dimensions and Processes in the U.S. Credit Reporting System 27 (Dec. 2012), available at http://files.consumerfinance.gov/​f/​201212_​cfpb_​credit-reporting-white-paper.pdf.

37.  5 U.S.C. 603(a), 604(a).

38.  5 U.S.C. 801 et seq.