Questions over consumer privacy, particularly in regard to credit reporting agencies like Experian, have become a hotly debated topic on a state and federal level. In February, several Senate hearings addressed the need for improved disclosure of the categories of data collected and shared, as well as a need for opt-out processes. As of now, many states are debating changes in how private information is collected and used, meaning there will most likely be significant changes in the future. California is proposing changes to the California Consumer Privacy Act (CCPA), while other states are working to create or expand their own versions of the law. While these are proposed changes at this point, it’s important to understand how the proposed changes may affect laws regarding tenant screening reports in the future.
Senator Maxine Waters’ introduced two bills that would make significant changes to the Fair Credit Reporting Act: the Protecting Innocent Consumers Affected by a Shutdown Act and the Comprehensive Consumer Credit Reporting Reform Act. These bills, if passed, will greatly impact credit reporting agencies around the country. Waters’ Protecting Innocent Consumers Affected by a Shutdown would create a national database of consumers affected by government shutdowns and prevent credit reporting agencies from reporting any negative financial information that occurs during the shutdown or within 90 days following it.
The second bill, the Comprehensive Consumer Credit Reporting Reform Act, would establish new requirements for consumer agencies who are notified of errors on reports, require those who furnish the consumer information to keep records for accuracy verification and reduce the time negative items are allowed to stay on a report from 7 to 4 years. Bankruptcies history would be reduced from 10 years to 7. This proposed legislation would impact consumer reporting agencies nationally – including tenant screening services.
The consensus to come out of this series of hearings is that it’s of the utmost importance to offer consumers choice and transparency when their information is being furnished to a reporting agency. State legislation like California’s CCPA has been introduced to:
- Hawaii
- Illinois
- Massachusetts
- Maryland
- New Hampshire
- New Jersey
- New York
- Rhode Island
- Texas
- Washington
Most of the proposed changes revolve around consumer consent and protection.
As legislation moves forward, it’s important to stay up-to-date with local and federal laws to make sure you’re fully compliant when requesting tenant screening services. Always obtain your tenant’s consent to screening in writing in order verify your compliance with the Fair Credit Reporting Act and be transparent on the types of reporting you’ll be using their information for; also, be sure to inform the tenant of their rights to dispute the accuracy of the report.
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