Rule2021-19918
Duties of Users of Consumer Reports Regarding Address Discrepancies
Primary source
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Published
September 17, 2021
Effective
October 18, 2021
Issuing agencies
Federal Trade Commission
Abstract
The Federal Trade Commission ("FTC" or "Commission") is issuing a final rule ("Final Rule") to amend its Duties of Users of Consumer Reports Regarding Address Discrepancies Rule ("Address Discrepancy Rule") to correspond to changes made to the Fair Credit Reporting Act ("FCRA") by the Dodd-Frank Act.
Full Text
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<title>Federal Register, Volume 86 Issue 178 (Friday, September 17, 2021)</title>
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[Federal Register Volume 86, Number 178 (Friday, September 17, 2021)]
[Rules and Regulations]
[Pages 51817-51819]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-19918]
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FEDERAL TRADE COMMISSION
16 CFR Part 641
RIN 3084-AB63
Duties of Users of Consumer Reports Regarding Address
Discrepancies
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is
issuing a final rule (``Final Rule'') to amend its Duties of Users of
Consumer Reports Regarding Address Discrepancies Rule (``Address
Discrepancy Rule'') to correspond to changes made to the Fair Credit
Reporting Act (``FCRA'') by the Dodd-Frank Act.
DATES: This rule is effective October 18, 2021.
FOR FURTHER INFORMATION CONTACT: David Lincicum (202-326-2773),
Division of Privacy and Identity Protection, Bureau of Consumer
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Address Discrepancy Rule
The Fair and Accurate Credit Transactions Act of 2003 (``FACT
Act'') was signed into law on December 4, 2003. Public Law 108-159, 117
Stat. 1952. The FACT Act added section 605(h) to the Fair Credit
Reporting Act (``FCRA''), which requires a national consumer reporting
agency (``CRA'') that receives a request for a consumer report that
contains an address substantially different from the address on file
for the consumer to notify the requester of the existence of the
discrepancy.\1\ Section 605(h) also required federal banking agencies,
the National Credit Union Administration and the Commission to issue
regulations providing guidance regarding reasonable policies and
procedures that a user of a consumer report should employ when the user
receives a notice of address discrepancy.\2\ In 2007, the agencies
issued the Address Discrepancy Rule to satisfy this requirement.\3\
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\1\ Section 605 is codified at 15 U.S.C. 1681c.
\2\ 15 U.S.C. 1681c(h)(2).
\3\ 16 CFR part 641.
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The Address Discrepancy Rule requires a user of consumer reports to
develop and implement reasonable policies and procedures designed to
enable the user to form a reasonable belief that a consumer report
relates to the consumer about whom it has requested a consumer report,
when the user receives a notice of address discrepancy.\4\ Users must
also develop and implement reasonable policies and procedures for
furnishing an address for the consumer that the user has reasonably
confirmed as accurate to the CRA from whom it received the notice when
the user (1) can confirm the consumer report relates to the consumer
about whom the user requested the
[[Page 51818]]
report, (2) establishes a continuing relationship with the consumer,
and (3) regularly furnishes information about the consumer to the
CRA.\5\
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\4\ 16 CFR 641.1(c).
\5\ 16 CFR 641.1(d).
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B. Dodd-Frank Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act
(``Dodd-Frank Act'') was signed into law in 2010.\6\ The Dodd-Frank Act
substantially changed the federal legal framework for financial
services providers. Among the changes, the Dodd-Frank Act transferred
to the Consumer Financial Protection Bureau (``CFPB'') the Commission's
rulemaking authority under portions of the FCRA.\7\ Accordingly, in
2012, the Commission rescinded several of its FCRA rules, which had
been replaced by rules issued by the CFPB.\8\ The FTC retains
rulemaking authority for other rules promulgated under the FCRA to the
extent the rules apply to motor vehicle dealers described in section
1029(a) of the Dodd-Frank Act \9\ predominantly engaged in the sale and
servicing of motor vehicles, the leasing and servicing of motor
vehicles, or both (``motor vehicle dealers'').\10\ The rules for which
the FTC retains rulemaking authority include the Address Discrepancy
Rule, which now applies only to consumer report users that are motor
vehicle dealers.\11\ Consumer report users that are not motor vehicle
dealers are covered by the CFPB's rule.\12\
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\6\ Public Law 111-203 (2010).
\7\ 15 U.S.C. 1681 et seq. The Dodd-Frank Act does not transfer
to the CFPB rulemaking authority for section 615(e) of the FCRA
(``Red Flag Guidelines and Regulations Required'') and section 628
of the FCRA (``Disposal of Records''). See 15 U.S.C. 1681s(e).
\8\ 77 FR 22200 (April 13, 2012).
\9\ 12 U.S.C. 5519.
\10\ 77 FR 22200 (April 13, 2012).
\11\ Id.
\12\ 12 CFR 1022.82.
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II. Regulatory Review of the Address Discrepancy Rule
On September 15, 2020, the Commission solicited comments on the
Address Discrepancy Rule as part of its periodic review of its rules
and guides.\13\ The Commission sought information about the costs and
benefits of the Rule, and its regulatory and economic impact. In
addition, the Commission proposed to narrow the scope of the Address
Discrepancy Rule to motor vehicle dealers excluded from Consumer
Financial Protection Bureau jurisdiction as described in the Dodd-Frank
Act.\14\ The Commission received one comment.\15\
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\13\ 85 FR 57172 (September 15, 2020).
\14\ 12 U.S.C. 5519.
\15\ The comment can be found at <a href="http://www.regulations.gov/document/FTC-2020-0065-0001">www.regulations.gov/document/FTC-2020-0065-0001</a>.
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III. Overview of Final Rule
The Commission adopted the Address Discrepancy Rule at a time when
it had rulemaking authority for a broader group of consumer report
users. While the Dodd-Frank Act did not change the Commission's
enforcement authority for the Address Discrepancy Rule, it did narrow
the Commission's rulemaking authority with respect to the Rule. It now
covers only motor vehicle dealers.\16\ The amendments in the Dodd-Frank
Act necessitate a technical revision to the Address Discrepancy Rule to
ensure the regulation is consistent with the text of the amended FCRA.
Accordingly, the Final Rule amends the Address Discrepancy Rule to
properly reflect the Rule's scope.
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\16\ 15 U.S.C. 1681s(e)(1); 12 U.S.C. 5519.
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The sole commenter on the Rule stated the Address Discrepancy Rule
allowed him to discover a case of identity theft involving the misuse
of his Social Security number, and argued the Rule should not be
changed.\17\ The Commission agrees no changes other than those required
by the Dodd-Frank Act are necessary and the Final Rule makes no further
amendments to the existing Rule. Although the Commission is revising
the scope of the Rule so it is consistent with the applicable statute,
the protections provided to consumers will not change: Users of
consumer reports have the same obligations with respect to address
discrepancies under the CFPB's corresponding rule as under the FTC's
rule.
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\17\ John Kahn (comment 1), <a href="http://www.regulations.gov/document/FTC-2020-0065-0001">www.regulations.gov/document/FTC-2020-0065-0001</a>.
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IV. Paperwork Reduction Act
The Address Discrepancy Rule contains information collection
requirements as defined by 5 CFR 1320.3(c), the definitional provision
within the Office of Management and Budget (``OMB'') regulations that
implement the Paperwork Reduction Act (``PRA''). 44 U.S.C. 3501 et seq.
OMB has approved the Rule's existing information collection
requirements through December 31, 2021 (OMB Control No. 3084-0137).
The Final Rule amends 16 CFR part 641. The amendments do not modify
or add to information collection requirements previously approved by
OMB. The amendments do not make any substantive changes to the Rule,
other than to narrow the scope to motor vehicle dealers. The existing
clearance already reflects that change in scope.
Therefore, the Commission does not believe the amendments
substantially or materially modify any ``collections of information''
as defined by the PRA.
V. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996, requires an
agency to either provide an Initial Regulatory Flexibility Analysis
(``IRFA'') with a proposed rule, or certify the proposed rule will not
have a significant impact on a substantial number of small
entities.\18\ The Commission published an Initial Regulatory
Flexibility Analysis in order to inquire into the impact of the
proposed Rule on small entities.\19\ The Commission received no
responsive comments.
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\18\ 5 U.S.C. 603-605.
\19\ 85 FR 57172, 57174 (Sept. 15, 2020).
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The Commission does not believe these amendments have the threshold
impact on small entities. The amendments effectuate changes to the
Dodd-Frank Act and will not impose costs on small motor vehicle dealers
because the amendments are for clarification purposes and will not
result in any increased burden on any motor vehicle dealer. Thus, a
small entity that complies with current law need not take any different
or additional action under the Final Rule. Therefore, the Commission
certifies the rule will not have a significant economic impact on a
substantial number of small businesses.
Although the Commission certifies under the RFA the rule will not
have a significant impact on a substantial number of small entities,
and hereby provides notice of that certification to the Small Business
Administration, the Commission nonetheless has determined that
publishing a final regulatory flexibility analysis (``FRFA'') is
appropriate to ensure the impact of the rule is fully addressed.
Therefore, the Commission has prepared the following analysis:
A. Need for and Objectives of the Final Rule
To address the Dodd-Frank Act's changes to the Commission's
rulemaking authority the amendments change the scope of the Rule. With
this action, the Commission makes the current scope of the Rule
clearer.
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B. Significant Issues Raised in Public Comments in Response to the IRFA
The Commission did not receive any comments that addressed the
burden on small entities. In addition, the Commission did not receive
any comments filed by the Chief Counsel for Advocacy of the Small
Business Administration (``SBA'').
C. Estimate of Number of Small Entities to Which the Final Rule Will
Apply
The Commission anticipates many covered motor vehicle dealers may
qualify as small businesses according to the applicable SBA size
standards.\20\ As explained in the IRFA, however, determining a precise
estimate of the number of small entities is not readily feasible. No
commenters addressed this issue. Nonetheless, as discussed above, these
amendments do not add any additional burdens on any covered small
businesses.
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\20\ Table of Small Bus. Size Standards Matched to North
American Indus. Classification System Codes, 13 CFR 121.201
(available at: <a href="https://www.sba.gov/document/support--table-size-standards">https://www.sba.gov/document/support--table-size-standards</a>), updated Aug. 19, 2019. For example, used car dealers are
classified as NAICS 441120 and new car dealers as NAICS 441110.
Under those standards, the SBA would classify as small businesses
independent used car dealers having annual receipts of less than $27
million and new car dealers having fewer than 200 employees each.
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D. Projected Reporting, Recordkeeping, and Other Compliance
Requirements, Including Classes of Covered Small Entities and
Professional Skills Needed To Comply
The amendments do not impose any new reporting, recordkeeping, or
other compliance requirements.
E. Description of Steps Taken To Minimize Significant Economic Impact,
if Any, on Small Entities, Including Alternatives
The Commission did not propose any specific small entity exemption
or other significant alternatives because the amendments will not
increase reporting requirements and will not impose any new
requirements or compliance costs.
VI. Other Matters
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).
Final Rule Language
List of Subjects in 16 CFR Part 641
Consumer protection, Credit, Trade Practices
For the reasons stated above, the Federal Trade Commission amends
part 641 of title 16 of the Code of Federal Regulations as follows:
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1. Revise the authority section for part 641 to read as follows:
Authority: Pub. L. 108-159, sec. 315; 15 U.S.C. 1681c(h); 12
U.S.C. 5519(d).
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2. In Sec. 641.1, revise paragraph (a) to read as follows:
Sec. 641.1 Duties of users of consumer reports regarding address
discrepancies.
(a) Scope. This section applies to users of consumer reports that
are motor vehicle dealers excluded from Consumer Financial Protection
Bureau jurisdiction as described in 12 U.S.C. 5519.
* * * * *
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-19918 Filed 9-16-21; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on September 17, 2021.
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