Rule2022-13671
Prohibition on Inclusion of Adverse Information in Consumer Reporting in Cases of Human Trafficking (Regulation V)
Primary source
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Published
June 24, 2022
Effective
July 25, 2022
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Consumer Financial Protection Bureau (Bureau) is amending Regulation V, which implements the Fair Credit Reporting Act (FCRA), to address recent legislation that assists consumers who are victims of trafficking. This final rule establishes a method for a victim of trafficking to submit documentation to consumer reporting agencies, including information identifying any adverse item of information about the consumer that resulted from certain types of human trafficking, and prohibits the consumer reporting agencies from furnishing a consumer report containing the adverse item(s) of information. The Bureau is taking this action as mandated by the National Defense Authorization Act for Fiscal Year 2022 to assist consumers who are victims of trafficking in building or rebuilding financial stability and personal independence.
Full Text
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<title>Federal Register, Volume 87 Issue 121 (Friday, June 24, 2022)</title>
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[Federal Register Volume 87, Number 121 (Friday, June 24, 2022)]
[Rules and Regulations]
[Pages 37700-37724]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-13671]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1022
[Docket No. CFPB-2022-0023]
RIN 3170-AB12
Prohibition on Inclusion of Adverse Information in Consumer
Reporting in Cases of Human Trafficking (Regulation V)
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule.
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SUMMARY: The Consumer Financial Protection Bureau (Bureau) is amending
Regulation V, which implements the Fair Credit Reporting Act (FCRA), to
address recent legislation that assists consumers who are victims of
trafficking. This final rule establishes a method for a victim of
trafficking to submit documentation to consumer reporting agencies,
including information identifying any adverse item of information about
the consumer that resulted from certain types of human trafficking, and
prohibits the consumer reporting agencies from furnishing a consumer
report containing the adverse item(s) of information. The Bureau is
taking this action as mandated by the National Defense Authorization
Act for Fiscal Year 2022 to assist consumers who are victims of
trafficking in building or rebuilding financial stability and personal
independence.
DATES: This final rule is effective July 25, 2022.
FOR FURTHER INFORMATION CONTACT: Daniel Tingley, Counsel; Lanique
Eubanks or Brandy Hood, Senior Counsels, Office of Regulations, at 202-
435-7700 or <a href="https://reginquiries.consumerfinance.gov/">https://reginquiries.consumerfinance.gov/</a>. If you require
this document in an alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#0d4e4b5d4f524c6e6e687e7e646f64616479744d6e6b7d6f236a627b"><span class="__cf_email__" data-cfemail="e5a6a3b5a7baa486868096968c878c898c919ca586839587cb828a93">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
[[Page 37701]]
I. Summary of the Final Rule
The Bureau is adopting several amendments to Regulation V to
implement new section 605C of the Fair Credit Reporting Act (FCRA),\1\
added by the National Defense Authorization Act for Fiscal Year 2022
(2022 NDAA).\2\ In brief, section 605C provides that a consumer
reporting agency may not furnish a consumer report containing any
adverse item of information concerning a consumer that resulted from a
severe form of trafficking in persons or sex trafficking if the
consumer has provided trafficking documentation to the consumer
reporting agency.\3\ Under section 605C, the Bureau is required to
issue implementing regulations within 180 days of the enactment of the
2022 NDAA. Section 605C is effective 30 days after the Bureau issues
its final implementing regulations.
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\1\ Fair Credit Reporting Act, 15 U.S.C. 1681 et seq. For ease
of reference, section 605C of the FCRA is generally referred to as
``section 605C'' throughout this notice.
\2\ National Defense Authorization Act for Fiscal Year 2022
(2022 NDAA), Public Law 117-81, section 6102, 135 Stat. 2383-84
(2021) (to be codified at 15 U.S.C. 1681c-3), <a href="https://www.congress.gov/117/plaws/publ81/PLAW-117publ81.pdf">https://www.congress.gov/117/plaws/publ81/PLAW-117publ81.pdf</a>. The sponsors
of this section of the 2022 NDAA and some advocates refer to this
law as the ``Debt Bondage Repair Act,'' in reference to H.R. 2332
(introduced in the 117th Congress on Apr. 1, 2021).
\3\ For purposes of this rule, the terms ``severe forms of
trafficking in persons'' and ``sex trafficking'' will be referred to
individually (as defined in the section-by-section analysis of Sec.
1022.142(b)) or collectively as ``trafficking.''
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The Bureau is amending Regulation V as follows:
<bullet> Create new section 1022.142 in subpart O, the subpart on
miscellaneous duties of consumer reporting agencies, to add the
provisions implementing section 605C;
<bullet> Apply the new section to any ``consumer reporting agency''
as defined in section 603(f) of the FCRA, namely nationwide consumer
reporting agencies, nationwide specialty consumer reporting agencies,
and all other consumer reporting agencies;
<bullet> Define terms including, in particular, ``trafficking
documentation,'' ``severe forms of trafficking in persons,'' ``sex
trafficking,'' and ``victim of trafficking'';
<bullet> Clarify that ``trafficking documentation'' includes
certain determinations made by a non-governmental organization or
member of a human trafficking task force when authorized by a Federal,
State, or Tribal governmental entity, and that, for purposes of the new
section, documentation by a State governmental entity includes
documentation at both the State and local level;
<bullet> Permit a consumer to self-attest as a victim of
trafficking if the document or an accompanying document is signed or
certified by a Federal, State, or Tribal governmental entity, a court
of competent jurisdiction, or the representatives of these entities;
<bullet> Clarify that a document filed in a court of competent
jurisdiction is an acceptable determination that a consumer is a victim
of trafficking where: (1) a central issue in the case is whether the
consumer is a victim of trafficking; and (2) where the court has
conducted an initial review of the victim's claim for purposes of a
motion to dismiss or motion for summary judgment and the result is in
favor of the victim; and
<bullet> Establish procedures explaining how consumers should
submit the required documentation to consumer reporting agencies, what
actions a consumer reporting agency must perform when it receives that
documentation, the limited circumstances under which a consumer
reporting agency may ask for additional information, written policies
and procedures, and recordkeeping requirements to monitor compliance.
II. Background
A. Trafficking in the United States
According to the United States Department of State (State
Department), in the United States human traffickers compel victims to
engage in commercial sex and to work in legal and non-legal industries
and sectors, including, for example, agriculture, janitorial services,
construction, landscaping, restaurants, factories, child care, care for
persons with disabilities, domestic work, salon services, massage
parlors, peddling and begging, and drug smuggling and distribution.\4\
As the State Department has noted, it is difficult to find reliable
statistics related to human trafficking for a number of reasons,
including the hidden nature of the crime and barriers to identifying
victims of trafficking and sharing information about them.\5\
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\4\ U.S. Dep't of State, About Human Trafficking, <a href="https://www.state.gov/humantrafficking-about-human-trafficking">https://www.state.gov/humantrafficking-about-human-trafficking</a> (last visited
June 20, 2022).
\5\ Id.
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Congress enacted the first significant Federal legislation
addressing human trafficking in 2000. The Trafficking Victims
Protection Act of 2000 \6\ (TVPA) established the ``three Ps''
framework for combating human trafficking by providing increased
protections for victims, enhanced tools to prosecute perpetrators of
trafficking, and additional resources for prevention.\7\ Among other
things, the TVPA added new criminal provisions prohibiting ``severe
forms of trafficking in persons.'' This term includes two components of
human trafficking defined to include sex trafficking of children or by
force, fraud, or coercion of adults, as well as forced labor
trafficking with respect to involuntary servitude, peonage, debt
bondage, or slavery, commonly referred to as ``sex trafficking'' and
``labor trafficking,'' respectively.\8\ Since 2000, Congress has
reauthorized the TVPA on several occasions and continued to dedicate
additional tools and resources to the fight against trafficking on a
regular basis, including the creation and funding of the National Human
Trafficking Hotline.\9\
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\6\ Publish Law 106-386, 114 Stat. 1464.
\7\ U.S. Dep't of Just., Key Legislation, <a href="https://www.justice.gov/humantrafficking/key-legislation">https://www.justice.gov/humantrafficking/key-legislation</a> (last visited June
20, 2022).
\8\ Id.; see also 18 U.S.C. 1589 through 1591.
\9\ See, e.g., William Wilberforce Trafficking Victims
Protection Reauthorization Act of 2008, Public Law 110-457, 122
Stat. 5044; Justice for Victims of Trafficking Act of 2015, Public
Law 114-22, 129 Stat. 227 (creating the National Human Trafficking
Hotline by directing the Secretary of Health and Human Services
(HHS) to make grants for a national communication system to assist
victims of severe forms of trafficking in persons in communicating
with service providers and give priority to grant applicants that
have experience in providing telephone services to victims of severe
forms of trafficking in persons).
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Efforts by the United States Government to respond to the needs of
victims of trafficking recognize that victims have both immediate and
longer-term needs, including the need to improve financial stability to
support their long-term independence.\10\ Adverse consumer report
information resulting from having been trafficked can reduce the
ability of victims \11\ to
[[Page 37702]]
take basic steps to obtain housing and employment and to move toward
greater financial stability and independence.
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\10\ Coordination Collaboration Capacity, Federal Strategic
Action Plan on Services for Victims of Human Trafficking in the
United States 2013-2017 (Jan. 2014), at 9, <a href="https://ovc.ojp.gov/sites/g/files/xyckuh226/files/media/document/FederalHumanTraffickingStrategicPlan.pdf">https://ovc.ojp.gov/sites/g/files/xyckuh226/files/media/document/FederalHumanTraffickingStrategicPlan.pdf</a>.
\11\ The Bureau recognizes that some individuals and advocates
prefer the term ``survivor'' to ``victim.'' As the Department of
Justice (DOJ) has explained, ``[b]oth terms are important and have
different implications when used in the context of victim advocacy
and service provision. For example, the term `victim' has legal
implications within the criminal justice process and refers to an
individual who suffered harm as a result of criminal conduct. The
laws that give individuals particular rights and legal standing
within the criminal justice system use the term `victim.' . . .
`Survivor' is a term used widely in service providing organizations
to recognize the strength and courage it takes to overcome
victimization.'' See Training & Tech. Assistance Ctr., Off. for
Victims of Crime, U.S. Dep't of Just., Human Trafficking Task Force
e-Guide, <a href="https://www.ovcttac.gov/taskforceguide/eguide/1-understanding-human-trafficking/13-victim-centered-approach/">https://www.ovcttac.gov/taskforceguide/eguide/1-understanding-human-trafficking/13-victim-centered-approach/</a>(last
visited June 20, 2022). In this final rule, the Bureau is using the
term ``victim'' because that is the wording of section 6102 of the
2022 NDAA.
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B. The Fair Credit Reporting Act
The FCRA, enacted in 1970 and significantly amended in 1996, 2003,
2010, and 2018, regulates consumer reporting. It was enacted to protect
consumers by preventing the transmission of inaccurate information in
consumer reports and establishing confidential and responsible credit
reporting practices.\12\ The FCRA's statutory scheme was designed to
ensure that consumer reporting agencies adopt reasonable procedures for
meeting the needs of commerce in a manner which is fair and equitable
to consumers and protects the confidentiality, accuracy, relevancy, and
proper utilization of consumer information.\13\
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\12\ Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333
(9th Cir. 1995).
\13\ 15 U.S.C. 1681(b).
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Together with its implementing regulation, Regulation V,\14\ the
FCRA creates a regulatory framework for furnishing, using, and
disclosing information in reports associated with credit, insurance,
employment, and other decisions made about consumers. In doing so, the
FCRA and Regulation V impose obligations on entities that qualify as
``consumer reporting agencies.'' They also impose obligations on those
who use consumer report information or furnish information to consumer
reporting agencies (furnishers).
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\14\ 12 CFR part 1022.
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C. The National Defense Authorization Act for Fiscal Year 2022
Section 6102 of the 2022 NDAA amended the FCRA by inserting a new
section 605C, based on an earlier bill known as the Debt Bondage Repair
Act.\15\ Section 605C(b) provides that a consumer reporting agency may
not furnish a consumer report containing any adverse item of
information concerning a consumer that resulted from a severe form of
trafficking in persons or sex trafficking if the consumer has provided
trafficking documentation to the consumer reporting agency. As
described in more detail in the section-by-section analysis below,
section 605C(a) provides statutory definitions for a number of the
terms, including from the TVPA. Section 605C(c)(1) directs the Bureau
to issue implementing rules within 180 days of enactment, and section
605C(c)(2) mandates that the rules must establish a method by which
consumers must submit trafficking documentation to consumer reporting
agencies.
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\15\ See note 2 supra.
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III. Summary of the Rulemaking Process
On April 8, 2022, the Bureau published a proposed rule in the
Federal Register to implement section 605C.\16\ The comment period
ended on May 9, 2022. In response to the proposal, the Bureau received
over 60 comments from survivors of trafficking, consumers, consumer
groups, anti-trafficking advocacy groups, industry trade associations,
and others.
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\16\ See 87 FR 20771 (Apr. 8, 2022).
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Many commenters expressed general support for the proposed rule,
discussing, for example, the importance of section 605C's goal of
helping victims of trafficking recover financially. Some commenters
expressed general support for the proposed rule and stated that they
believed the proposal would help victims regain access to credit,
employment, housing, bank accounts, utilities, and other services. The
Bureau also received requests from commenters to alter, clarify, or
remove specific provisions of the proposed rule, with some comments
focusing on issues relating to potential fraud or abuse and others
focusing on revisions that would permit more consumers to take
advantage of the proposed amendments. As discussed in more detail
below, the Bureau has considered these comments in adopting this final
rule.
IV. Legal Authority
The Bureau is issuing this final rule pursuant to its authority
under the FCRA, the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act),\17\ and section 6102 of the 2022 NDAA.
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\17\ Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act), Public Law 111-203, 124 Stat. 1376 (2010).
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A. Dodd-Frank Act Section 1022(b) and the FCRA
Section 1022(b)(1) of the Dodd-Frank Act authorizes the Bureau to
prescribe rules as may be necessary or appropriate to enable the Bureau
to administer and carry out the purposes and objectives of the Federal
consumer financial laws, and to prevent evasions thereof.\18\ Effective
July 21, 2011, section 1061 of the Dodd-Frank Act transferred to the
Bureau the rulemaking and certain other authorities of the Federal
Trade Commission (FTC) and the prudential banking regulators (i.e., the
Board of Governors of the Federal Reserve System (FRB), the Federal
Deposit Insurance Corporation (FDIC), the National Credit Union
Administration (NCUA), and the Office of the Comptroller of the
Currency (OCC)) relating to specific ``enumerated consumer laws''
listed in the Dodd-Frank Act, including most rulemaking authority under
the FCRA.\19\ 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.\20\ As amended by the Dodd-Frank
Act, section 621(e) of the FCRA 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.\21\ The Bureau is
issuing this final rule pursuant to its authority under Sec.
1022(b)(1) of the Dodd-Frank Act and section 621(e) of the FCRA.
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\18\ Id. Sec. 1022(b)(1), 124 Stat. 1980 (codified at 12 U.S.C.
5512(b)(1)).
\19\ Id. Sec. 1061(b)(5)(A), 124 Stat. 2037 (codified at 12
U.S.C. 5581(b)(5)(A)). Section 1002(12)(F) of the Dodd-Frank Act
designates most of the FCRA (codified at 15 U.S.C. 1681 et seq.) as
an ``enumerated consumer law'' except with respect to sections
615(e) and 628 (codified at 15 U.S.C. 1681m(e), 1681w). Dodd-Frank
Act Sec. 1002(12)(F), 124 Stat. 1957 (codified at 12 U.S.C.
5481(12)(F)).
\20\ Dodd-Frank Act Sec. 1088, 124 Stat. 2086 (codified at 15
U.S.C. 1681 et seq.).
\21\ Id. Sec. 1088(a)(10)(E), 124 Stat. 2090 (codified at 15
U.S.C. 1681s(e)).
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B. The National Defense Authorization Act for Fiscal Year 2022
Section 6102(a) of the 2022 NDAA directs the Bureau to issue a rule
implementing the new section 605C. Section 6102(c) provides that the
rule issued to implement section 605C shall be limited to preventing a
consumer reporting agency from furnishing a consumer report containing
any adverse item of information about a consumer (as such terms are
defined, respectively, in section 603 of the FCRA (15 U.S.C. 1681a))
that resulted from trafficking.
V. Section-by-Section Analysis
Section 1022.142 Prohibition on Inclusion of Adverse Information in
Consumer Reporting in Cases of Human Trafficking
142(a) Scope
The Bureau proposed to apply the requirement to prohibit the
furnishing of adverse items of information about victims of trafficking
to any ``consumer reporting agency'' as defined in section 603(f), as
directed by section 6102(c) of the 2022 NDAA. Consistent with section
6102(c) of the 2022 NDAA, the Bureau proposed to apply new Sec.
1022.142 to any ``consumer reporting agency'' as
[[Page 37703]]
defined in section 603(f) of the FCRA. Thus, consistent with section
603(f), the requirement prohibiting a consumer reporting agency from
furnishing any adverse items of information about a consumer that
resulted from a severe form of trafficking in persons or sex
trafficking applies to all consumer reporting agencies, including the
nationwide consumer reporting agencies, nationwide specialty consumer
reporting agencies, and all other consumer reporting agencies such as
those focused on employment screening, tenant screening, check and bank
screening, personal property insurance, medical, low-income and
subprime, supplementary reports, utilities, retail, and gaming.\22\
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\22\ A list of many self-identified consumer reporting companies
is available on the Bureau's website at <a href="https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/consumer-reporting-companies/companies-list/">https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/consumer-reporting-companies/companies-list/</a> (last visited June 20,
2022).
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A few commenters addressed the proposed scope. Consumer advocate
commenters generally supported applying the requirement to all consumer
reporting agencies. However, one industry commenter suggested that the
final rule should provide an exception for resellers, as defined by
section 603(u) of the FCRA, that do not maintain a consumer file,
similar to the exception from the requirement to block information
resulting from identity theft in section 605B(d) of the FCRA. The
commenter reasoned that these resellers do not maintain a file on
consumers and, therefore, do not have the means to block such
information for use in future consumer reports.
For the reasons discussed below, the Bureau is finalizing Sec.
1022.142(a) as proposed. Section 6102(c) of the NDAA provides that any
rule issued by the Bureau to implement section 605C applies to all
consumer reporting agencies. Unlike the identity theft provision
identified by the commenter,\23\ the FCRA does not except or exempt any
types of consumer reporting agencies from this prohibition. Even if a
reseller does not maintain a file on consumers, if the reseller has
received a request to block information from a consumer, the reseller
can comply by ensuring that any consumer report it provides does not
contain items of adverse information requested by the consumer to be
blocked. Thus, the Bureau declines to provide exceptions for any types
of consumer reporting agencies.
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\23\ 15 U.S.C. 1681c-2(d).
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142(b) Definitions
142(b)(1) Appropriate Proof of Identity
Section 605C is silent regarding whether and how consumers must
establish their identity when submitting trafficking documentation to a
consumer reporting agency. The Bureau proposed to define ``appropriate
proof of identity'' as proof of identity that meets the requirements in
Sec. 1022.123.\24\ This section, which concerns proof of identify for
consumers regarding identity theft, fraud and active duty alerts,
consumer report information blocks, and truncation of Social Security
numbers, provides that consumer reporting agencies must develop and
implement reasonable requirements specifying what information consumers
must provide to constitute proof of identity.
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\24\ See 12 CFR 1022.123.
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The Bureau received several comments supporting the proposed
approach. Multiple commenters observed that trafficking survivors often
lack documentation that is frequently requested for proof of identity,
such as a driver's license, bank account statements, or utility bills.
Two commenters observed that many victims of trafficking may make use
of State-run address confidentiality programs, which shield the actual
addresses of victims of certain offenses in public records.\25\ For
these reasons, several commenters insisted on the importance of
requiring consumer reporting agencies to accept non-documentary means
of proof of identity.
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\25\ See, e.g., N.Y. Dep't of State, Address Confidentiality
Program, <a href="https://dos.ny.gov/address-confidentiality">https://dos.ny.gov/address-confidentiality</a> (last visited
June 20, 2022) (explaining that New York's address confidentiality
program is available to victims of human trafficking).
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A small number of comments recommended alterations to the
definition. Some individual consumers and consumer groups called for
the Bureau to describe a universal method to ensure all consumer
reporting agencies are held to the same standard when identifying
victims and proposed that the Bureau mandate the use of alternative
methods of identification validation. One commenter stated that the
Bureau should clarify Regulation V or provide other guidance to
prohibit excessive requirements for identification in order to ensure
that Congress's intent to protect trafficking survivors is not
undermined. This commenter emphasized that consumer reporting agencies
currently demand unnecessary amounts of identification or reject a
consumer's proof for minor discrepancies, and that these demands are
not commensurate with the risk of harm arising from misidentifying the
consumer. Additionally, another consumer group suggested providing
consumer reporting agencies with a safe harbor for reasonable proof of
identity procedures to offset the adoption of conservative and
inflexible procedures to mitigate criticism consumer reporting agencies
are not rigorous enough in their proof of identity standards.
For the reasons discussed below, the final rule adopts Sec.
1022.142(b)(1) as proposed, with additional clarifying text. Given the
particular needs and challenges of consumers, a universal, one-size-
fits-all standard specified in detail by the Bureau may not be a
workable solution. Section 1022.123 of Regulation V requires consumer
reporting agencies to develop and implement ``reasonable'' requirements
for what information consumers shall provide to constitute proof of
identity that are sufficient to enable the consumer reporting agency to
match consumers with their files and adjust the information to be
commensurate with an identifiable risk of harm arising from
misidentifying consumers. Section 1022.123 describes these requirements
with respect to section 605A (identity theft prevention and fraud and
active duty alerts), section 605B (consumer report information blocks),
and section 609(a)(1) (truncation of Social Security numbers) of the
FCRA. The final rule clarifies that, as used in Sec. 1022.142, the
requirements in Sec. 1022.123 should be applied for purposes of
section 605C.
The Bureau recognizes that the reasonableness of proof of identity
requirements depends on the context and may differ between consumers
trying to resolve problems caused by, for example, identity theft and
those who are victims of trafficking. The Bureau also recognizes the
importance of matching consumers who are victims of trafficking with
their files and adjusting information to be commensurate with an
identifiable risk of harm arising from misidentifying the consumer.
Accordingly, the Bureau is clarifying that the requirements in Sec.
1022.123 should be used for purposes of section 605C and tailored to
the needs of victims of trafficking for purposes of establishing a
consumer's identity. The Bureau expects consumer reporting agencies to
explore and implement a risk-based approach to verifying a consumer's
identity through both ``documentary'' \26\ and ``non-
[[Page 37704]]
documentary'' means.\27\ The Bureau will also monitor the
identification procedures for victims of trafficking to ensure consumer
reporting agencies are not applying excessive requirements for
identification and that the standards protect the confidentiality and
personal safety of survivors. Moreover, appropriate proof of identity
for the purposes of this section requires consumer reporting agencies
to develop reasonable requirements for victims of trafficking,
recognizing the challenges many victims might face in establishing
proof of identity by conventional methods used for other purposes. The
Bureau expects consumer reporting agencies to develop standards
specific to victims of trafficking such that Congress's intent to
protect survivors of trafficking is not undermined.
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\26\ Consumer reporting agencies could, for example, require
consumers to provide a social security number or card issued by the
Social Security Administration, a certified or official copy of a
birth certificate issued by the entity authorized to issue the birth
certificate, or a copy of a driver's license, an identification card
issued by the motor vehicle administration, or any other government
issued identification.
\27\ The Bureau encourages consumer reporting agencies to confer
with consumer groups, anti-trafficking advocacy groups and survivors
of trafficking for information on the types of identification,
including by non-documentary means, and confirmation questions a
victim of trafficking could easily answer to prove their identity.
Consumer reporting agencies should refer to the customer
identification program requirements for banks in 31 CFR 1020.220 for
examples.
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142(b)(2) Consumer Report
Proposed Sec. 1022.142(b)(2) defined the term ``consumer report''
to have the same meaning as that provided in section 603(d) of the
FCRA. The use of this definition is directed by section 6102(c) of the
2022 NDAA which provides that the Bureau's rule shall be limited to
preventing a consumer reporting agency from furnishing a consumer
report containing any adverse item of information about a consumer that
resulted from trafficking as the terms are defined in section 603 of
the FCRA.
The Bureau did not receive any comments on proposed Sec.
1022.142(b)(2) and is finalizing it as proposed.
142(b)(3) Consumer Reporting Agency
Proposed Sec. 1022.142(b)(3) defined ``consumer reporting agency''
to have the meaning provided in section 603(f) of the FCRA. The use of
this definition is directed by section 6102(c) of the 2022 NDAA.
The Bureau did not receive any comments on proposed Sec.
1022.142(b)(3) and is finalizing it as proposed.
142(b)(4) Severe Forms of Trafficking in Persons
Proposed Sec. 1022.142(b)(4) adopted the definition of ``severe
forms of trafficking in persons'' set forth in section 605C(a)(2) from
section 103 of the TVPA.\28\ Under that definition, the term ``severe
forms of trafficking in persons'' means:
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\28\ Section 605C(a)(2) provides that the term ``severe forms of
trafficking in persons'' has the same meaning given in section 103
of the TVPA, Pub. L. 106-386, 114 Stat. 1464, 1470, which is
currently codified at 22 U.S.C. 7102(11).
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(i) Sex trafficking in which a commercial sex act is induced by
force, fraud, or coercion, or in which the person induced to perform
such act has not attained 18 years of age; or
(ii) The recruitment, harboring, transportation, provision, or
obtaining of a person for labor or services, through the use of force,
fraud, or coercion for the purpose of subjection to involuntary
servitude, peonage, debt bondage, or slavery.
The language in the first paragraph of this definition is commonly
referred to as the ``sex trafficking'' component, and the language in
the second paragraph is commonly referred to as the ``labor
trafficking'' component.\29\
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\29\ Off. on Trafficking in Persons, U.S. Dep't of Health &
Human Servs., Fact Sheet: Human Trafficking, <a href="https://www.acf.hhs.gov/otip/fact-sheet/resource/fshumantrafficking">https://www.acf.hhs.gov/otip/fact-sheet/resource/fshumantrafficking</a> (last
visited June 20, 2022).
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The Bureau received few comments on this proposed definition.\30\
One consumer group stated that there may be circumstances where this
definition is overly narrow, arguing that all forms of trafficking in
persons or sex trafficking should be included as ``severe forms of
trafficking in persons.''
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\30\ One commenter argued that the sex trafficking component of
the definition of ``severe forms of trafficking in persons''
rendered the separate inclusion of victims of ``sex trafficking''
under this rule redundant and confusing. The Bureau disagrees, for
the reasons explained in the section-by-section analysis of Sec.
1022.142(b)(7) below.
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The Bureau is finalizing this definition as proposed. Section
605C(a)(2) provides that the term ``severe forms of trafficking in
persons'' has the meaning given in section 103 of the TVPA, which is
the definition set out above and in the proposed rule. Consistent with
the statute, the Bureau is adopting this definition in the final rule.
142(b)(5) Sex Trafficking
Proposed Sec. 1022.142(b)(5) adopted the definition of ``sex
trafficking'' set forth in section 605C(a)(2).\31\ Under that
definition, the term ``sex trafficking'' means the recruitment,
harboring, transportation, provision, obtaining, patronizing, or
soliciting of a person for the purpose of a commercial sex act.
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\31\ Section 605C(a)(2) provides the term ``sex trafficking''
has the same meaning given in section 103 of the TVPA, Public Law
106-386, 114 Stat. 1464, codified at 22 U.S.C. 7102. This definition
was amended by section 108 of the Justice for Victims of Trafficking
Act of 2015, Public Law 114-22, 129 Stat. 227, 238-39. This
definition is currently codified at 22 U.S.C. 7102(12).
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The Bureau received one comment on this definition which is
discussed in the section-by-section analysis of Sec. 1022.142(b)(7)
below.
142(b)(6) Trafficking Documentation
Section 605C(a)(1) defines ``trafficking documentation'' as
documentation of--a determination that a consumer is a victim of
trafficking, made by a Federal, State, or Tribal governmental entity,
or--by a court of competent jurisdiction and documentation that
identifies items of adverse information that should not be furnished by
a consumer reporting agency because the items resulted from a severe
form of trafficking in persons or sex trafficking of which the consumer
is the victim. The Bureau proposed to incorporate this statutory
definition with certain modifications regarding documentation
identifying a consumer who is a victim of trafficking involving a
``court of a competent jurisdiction.'' Proposed Sec. 1022.142(b)(6)(i)
described documentation requirements for a determination that a
consumer is a victim of trafficking (victim determination) and proposed
Sec. 1022.142(b)(6)(ii) described documentation requirements for
identified adverse items of information. Accordingly, the Bureau is
naming Sec. 1022.142(b)(6)(i) as ``victim determination'' and Sec.
1022.142(b)(6)(ii) as ``identified adverse items of information'' to
make it clear that ``trafficking documentation'' under section 605C
consists of two components: victim determinations and identified
adverse items of information. Each component is discussed in the
section-by-section analysis below.
142(b)(6)(i) Victim Determination
142(b)(6)(i)(A)
Section 605C(a)(1)(A)(i) provides the term ``trafficking
documentation'' means documentation of--a determination that a consumer
is a victim of trafficking made by a Federal, State, or Tribal
governmental entity. The Bureau proposed to adopt this statutory
definition of ``trafficking documentation.'' Under this definition, a
determination made by a Federal, State, or Tribal governmental entity
in the form of documentation that a consumer is a victim of trafficking
[[Page 37705]]
would have satisfied the requirements in proposed Sec.
1022.142(b)(6)(i)(A). As noted in the proposed rule, the Bureau found
through outreach that documentation directly identifying a person as a
victim of trafficking is scarce and is primarily limited to foreign-
born persons, a fact echoed by many commenters.\32\ The Bureau also
learned that victims of trafficking are often not identified and thus
many victims will not have documentation directly determining that they
are a victim of trafficking. For these reasons, as discussed further
below, the Bureau sought comment on multiple possible ways a consumer
might be able to document a determination by a governmental entity that
a consumer is a victim of trafficking.
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\32\ For example, HHS issues certification letters to foreign
national adults who have experienced a severe form of trafficking in
persons after receiving notification that the Department of Homeland
Security (DHS) has granted the person a continued presence, a T
visa, or that a bona fide T visa application has not been denied.
This certification letter provides that foreign national adult
victims of trafficking are eligible for certain Federal and State
benefits (health insurance, housing, food assistance, cash
assistance, Federal student financial aid). United States citizens
and lawful permanent residents do not need a Certification Letter to
access services and benefits available to victims of trafficking and
such as a letter identifying persons as victims of trafficking is
generally not provided to United States citizens or permanent
residents. This information is available at <a href="https://www.acf.hhs.gov/otip/victim-assistance/certification">https://www.acf.hhs.gov/otip/victim-assistance/certification</a> (last visited June 20, 2022).
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The Bureau has considered the comments and is adopting Sec.
1022.142(b)(6)(i)(A), with revisions to provide that victim
determinations include those made by certain non-governmental entities
and human trafficking task forces authorized by a Federal, State, or
Tribal governmental entity to make such determinations and that
documentation by a ``State governmental entity'' includes documentation
at both the State and local level.
Non-Governmental Organizations and Other Non-Governmental Sources.
In the proposed rule, the Bureau noted programs in which government
agencies grant money to certain organizations to assist victims of
trafficking. The Bureau discussed how, for example, the Office for
Victims of Crime (OVC) in the Department of Justice (DOJ) is the
largest Federal funder of services for human trafficking victims in the
United States.\33\ However, the Bureau understands this office does not
make or document determinations as to who is a victim of trafficking.
Instead, non-governmental organizations that receive grants from the
OVC to provide services to clients make determinations that individuals
are victims of trafficking, in some cases even when the person does not
self-identify as a victim.\34\ The Bureau sought comments about whether
and how such non-governmental sources of information might be
considered in making a determination that a consumer is a victim of
trafficking under section 605C. Specifically, the Bureau asked for
comments on whether entities that receive funding from a governmental
entity, and are subject to the terms and conditions of a government
program, may provide documentation in the form of a determination
identifying a person as a victim of trafficking that would satisfy
section 605C(a)(1)(A).
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\33\ A map and list of OVC-funded human trafficking services and
task forces is available on OVC's website at <a href="https://ovc.ojp.gov/program/human-trafficking/map">https://ovc.ojp.gov/program/human-trafficking/map</a> (last visited June 20, 2022). HHS also
provides funding to various organizations offering trafficking
assistance to victims. A list of the grantees is available at
<a href="https://www.acf.hhs.gov/otip/grants">https://www.acf.hhs.gov/otip/grants</a> (last visited June 20, 2022).
\34\ Off. for Victims of Crime, U.S. Dept of Just., OVC Human
Trafficking Program FAQs, at comment 33 ``Can I provide services to
a client who does not self-identify as a victim of human
trafficking?'', <a href="https://ovc.ojp.gov/program/human-trafficking/ovc-human-trafficking-program-faqs">https://ovc.ojp.gov/program/human-trafficking/ovc-human-trafficking-program-faqs</a> (last visited June 20, 2022).
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Commenters were largely in favor of treating determinations that
individuals are victims of trafficking made by non-governmental sources
receiving government money as determinations made by a governmental
entity, with few exceptions. One consumer group commenter suggested
that the Bureau should broaden the allowable categories of
documentation to show that the consumer is a trafficking survivor. The
commenter suggested that the Bureau promulgate a definition that
includes documentation from government-funded organizations under
section 605C itself, or that the Bureau use its broad general
rulemaking authority under section 621(e) to prescribe regulations as
may be necessary or appropriate to administer and carry out the
purposes and objectives of the FCRA. The commenter observed that
trained professionals who work in these organizations are generally in
the best position to speak with a client, understand their personal
background and history, and assess whether the consumer is a victim of
trafficking. An anti-trafficking advocacy group commenter stated that
trafficking survivors may have no or extremely limited interactions
with government agency personnel since trafficking-specific services
are primarily outsourced to non-governmental organizations rather than
administered by government agencies in the United States and that
social service providers at non-governmental agencies regularly conduct
trafficking assessments and are often better positioned to identify
trafficking survivors.
An industry group commenter agreed with the Bureau's preliminary
assessment discussed in the proposed rule that non-governmental sources
might be best suited to provide support for a determination that a
consumer is a victim as compared to a government agency or a court.
However, the commenter noted the risk for potential fraud and suggested
that the Bureau be cognizant of the fraudulent use of identity theft
reports under section 605B of the FCRA. The commenter suggested that if
the Bureau were to include determinations made by non-governmental
entities it should require that the entities be legitimate non-profit
organizations supported by government funding subject to the terms and
conditions of a government program and that these entities submit
trafficking documentation in good faith on behalf of a victim with the
permission and knowledge of the victim. The commenter further suggested
that consumer reporting agencies should be provided with a way to
verify that the entity is a legitimate non-profit organization and has
the victim's permission to act on the victim's behalf by, for example,
requiring these non-governmental sources to provide notice to the
Bureau which could be used by a consumer reporting agency for
verification purposes.
An individual commenter who regularly provides legal representation
to victims of trafficking encouraged the Bureau to include human
trafficking task force members \35\ as entities that can provide a
determination that a consumer is a victim of trafficking. The commenter
stated that governmental entity personnel do not typically work
directly with a consumer in the context of their victimization and that
task force members--who usually include service providers that
regularly screen and work closely with victims to provide housing,
medical care, financial assistance, counseling, legal aid, and other
recovery services--may be better positioned to attest to a consumer's
victim status.
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\35\ As explained in more detail below, multidisciplinary task
forces made up of local law enforcement agencies, victim service
providers, and Federal and State investigative, enforcement, and
regulatory agencies are a common approach to combatting human
trafficking in many jurisdictions.
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A national membership group representing prosecutors asked the
Bureau to provide a broad definition of ``trafficking documentation''
to encompass victims who may not yet have come into contact with the
[[Page 37706]]
criminal justice system or with an appropriate service provider. The
commenter recommended the Bureau allow for documentation that applies
to instances when a victim may receive mental or medical care or
evidence the person has been identified by law enforcement as a victim
of trafficking in an investigation. This commenter noted that the
burden of verifying the documented victim determinations should lie
with the consumer reporting agency as the entity reviewing the consumer
request to ensure that such victim service provider or law enforcement
agency was in contact with the individual victim and stated the Bureau
or the appropriate consumer reporting agency should ensure the
identification of the victim is authentic.
One anti-trafficking advocacy group commenter that receives grants
from State and Federal programs suggested that a statement from a
grantee organization confirming that a consumer seeking relief under
this rule is receiving services as a human trafficking victim should
qualify as a determination that the consumer is a victim of
trafficking. This commenter also urged the Bureau to provide that
documented referrals by a government entity to a program providing
specialized services to human trafficking survivors should similarly
qualify as documentation of trafficking victimization.
One sex workers and anti-trafficking advocacy group stated that
non-governmental organizations should not be required to prepare
certifications to be signed by governmental funding entities, because
these organizations are not generally required to disclose the identity
of victims and this would raise confidentiality concerns. This
commenter mentioned that non-governmental organizations may be
prohibited from providing a determination that a consumer is a victim
of trafficking because of pre-existing statutory language concerning
restrictions on certifications of United States citizens or lawful
permanent residents who are victims of severe forms of trafficking.\36\
A large banking industry trade group did not specifically oppose
including documentation from non-governmental entities receiving
governmental funding, but recommended the Bureau advocate for the
development of a compassionate and reliable means of providing
documentation set forth in section 605C.
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\36\ 22 U.S.C. 7105(b)(1)(F) (``Nothing in this section may be
construed to require United States citizens or lawful permanent
residents who are victims of severe forms of trafficking to obtain
an official certification from the Secretary of Health and Human
Services in order to access any of the specialized services
described in this subsection or any other Federal benefits and
protections to which they are otherwise entitled.'').
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The Bureau is finalizing Sec. 1022.142(b)(6)(i)(A) with certain
modifications. The Bureau finds the definition of ``trafficking
documentation'' includes a determination made by a Federal, State, or
Tribal governmental entity and is adopting this definition by
renumbering Sec. 1022.142(b)(6)(i)(A) to Sec. 1022.142(b)(6)(i)(A)(1)
for these governmental entities. The reference to a court of competent
jurisdiction has been moved to Sec. 1022.142(b)(6)(i)(B), as discussed
below in the section-by-section analysis.
The Bureau created new Sec. 1022.142(b)(6)(i)(A)(2) to clarify
that trafficking documentation includes a determination that a consumer
is a victim of trafficking made by a non-governmental organization or
member of a human trafficking task force, including victim service
providers affiliated with the organization or task force, when
authorized by a Federal, State, or Tribal governmental entity to make
such a determination.
The Bureau agrees that trained professionals providing services to
victims of trafficking, including those affiliated with a trafficking
task force, are often best suited to identify and make determinations
that a person has been or is being trafficked.\37\ The Bureau
understands that Federal, State, and Tribal governmental entities often
rely on the expertise these non-governmental organizations--including
multi-disciplinary human trafficking forces--possess in making victim
determinations. For instance, as of fiscal year 2020, there were over
47 multi-disciplinary trafficking task forces using an enhanced
collaborative model to combat human trafficking.\38\ OVC and the Bureau
of Justice Assistance in the DOJ use this model to: (1) employ victim-
centered approaches to identifying trafficking survivors; (2) provide
services to victims of all forms of human trafficking; and (3)
investigate and process all forms of trafficking. These task force
stakeholders are usually law enforcement, prosecutors, victim services
providers, and others at the local, State, and Federal levels,\39\ who
work with victim service providers affiliated with the task forces to
provide services to victims of trafficking such as counseling, housing,
referral to medical services, and financial assistance.\40\ Typically,
victims of trafficking are referred to victim service providers for
services from medical providers, other victim service providers, law
enforcement, and community organizations and members. Often these
victim service providers will conduct an initial screening and
assessment to determine whether the person has experienced human
trafficking followed by performing a victim-centered comprehensive
assessment used to identify services and assistance programs. Under
this model, non-governmental organizations or members in a human
trafficking task force could provide an individual with a documented
determination after an initial screening and assessment if authorized
to do so by a Federal, State, or Tribal governmental entity.
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\37\ The Bureau notes that the TVPA also recognizes the
important role of non-governmental organizations by requiring HHS
and DOJ, in establishing a program to assist United States citizens
and lawful permanent residents, to consult with non-governmental
organizations that provide services to victims of severe forms of
trafficking in the United States. See 22 U.S.C. 7105(f).
\38\ Nat'l Inst. of Just, Off. of Just. Programs, U.S. Dep't of
Just., Federally Backed Human Trafficking Task Force Model Yields
Progress, and Opportunities for Continued Growth, <a href="https://nij.ojp.gov/topics/articles/federally-backed-human-trafficking-task-force-model-yields-progress">https://nij.ojp.gov/topics/articles/federally-backed-human-trafficking-task-force-model-yields-progress</a> (last visited June 20, 2022).
\39\ Off. of Just. Programs, U.S. Dep't of Just., National
Criminal Justice Reference Sheet (May 2021), at 15, <a href="https://www.ojp.gov/pdffiles1/nij/grants/300863.pdf">https://www.ojp.gov/pdffiles1/nij/grants/300863.pdf</a>. Other participants
involved in task forces and viewed as integral to anti-trafficking
work are non-government and non-profit organizations, coalition and
community awareness groups, healthcare agencies, child welfare and
family services, and housing and homeless agencies.
\40\ Id. at 21.
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The Bureau concludes that the purpose of section 605C--to help
survivors of human trafficking restore their credit and gain access to
consumer financial products and services--is better served by providing
in the final rule that non-governmental organizations and members in a
human trafficking task force, including service providers affiliated
with these entities, may make determinations that a consumer is a
victim of trafficking if authorized to do so by a Federal, State, or
Tribal governmental entity. This means that where a Federal, State, or
Tribal governmental entity has authorized non-governmental
organizations or members in a human trafficking task force to make a
determination that a consumer is a victim of trafficking, documentation
of that determination by one of these entities satisfies the
trafficking documentation definition under Sec. 1022.142(b)(6)(i)(A).
The Bureau interprets the authorization by Federal, State, or Tribal
governmental entities as having effectively delegated authority to
these non-governmental organizations
[[Page 37707]]
and human trafficking task forces along with service providers
affiliated with these entities. The Bureau concludes that victim
determinations made by a non-governmental organization, human
trafficking task force, or a non-governmental-affiliated victim service
provider in the form of identifying an individual as a victim of
trafficking must be accepted by consumer reporting agencies if
authorized to make such a determination by a Federal, State, or Tribal
governmental entity.
The final rule does not limit Federal, State, and Tribal
governmental entities to authorizing only those non-governmental
entities and human trafficking task forces that receive funding from
these governmental entities. Nor does the final rule prescribe how a
Federal, State, or Tribal governmental entity may authorize non-
governmental organizations to make victim determinations, but certain
factors such as whether non-governmental organizations and human
trafficking task forces receive government funding and are subject to
the terms and conditions of a government program could be a factor
evaluated by a governmental entity. To clarify, the final rule does not
permit a non-governmental entity or human trafficking task force to
provide an authorization to make a victim determination under this
section for itself or another entity. Instead, the authorization must
be made by a Federal, State, or Tribal governmental entity, and each
governmental entity may establish their own criteria for making such
authorizations. The Bureau has concluded that victim determinations
made by a non-governmental organization, human trafficking task force,
or victim service provider affiliated with an organization or task
force must be accepted by consumer reporting agencies if the entity has
been authorized to make such a determination by a Federal, State, or
Tribal governmental entity.
The Bureau understands there may be concerns with non-governmental
organizations or members of human trafficking task forces, including
affiliated victim service providers, providing attestations or
certifications to be signed by these entities because doing so may
raise confidentiality concerns and these entities are not generally
required to disclose the identity of victims. The final rule does not
require governmental entities or non-governmental organizations to
submit such documentation. Rather, the final rule permits a consumer to
submit a victim determination from a governmental entity or a non-
governmental organization or human trafficking task force authorized by
a governmental entity in order to block adverse items of information
that resulted from a severe form of trafficking in persons or sex
trafficking. Moreover, under the final rule the decision to obtain a
victim determination is with the victim and the final rule does not
require or permit anyone to submit a victim determination to a consumer
reporting agency without the permission of the victim.
One commenter questioned whether non-governmental organizations may
be prohibited from providing a determination that a consumer is a
victim of trafficking because of pre-existing statutory language
concerning restrictions on certifications of United States citizens or
lawful permanent residents who are victims of a severe form of
trafficking in persons.\41\ The Bureau does not believe that this
provision of the TVPA conflicts with section 605C or the final rule
since section 605C, among other things, does not require an official
certification from the Department of Health and Human Services (HHS) in
order to block adverse items of information from a consumer report that
resulted from having been trafficked.
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\41\ 22 U.S.C. 7105(b)(1)(F).
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The Bureau is adopting Sec. 1022.142(b)(6)(i)(A) under section
605(c) as well as under its authority under section 621(e) of the FCRA,
which authorizes the Bureau to prescribe regulations that promote
accuracy and fairness in credit reporting, and under the general
rulemaking authority granted the Bureau under Sec. 1022(b)(1) of the
Dodd-Frank Act.
State governmental entity. The Bureau proposed treating
documentation of a determination that a consumer is a victim of
trafficking by a ``State governmental entity'' as including
documentation created at either the State or local level. The Bureau
noted that local law enforcement, as part of a local government, may
have documentation of a determination identifying victims of
trafficking, including, but not limited to, items in a police report.
The Bureau noted that there are Federal and State victims' rights acts
in addition to Tribal codes that depend on a determination that a
victim has been identified as such, including by Federal, State,
Tribal, or local jurisdictions.\42\ The Bureau also noted that some
State laws explicitly contemplate local entities making this
determination for victims of sex trafficking which triggers various
rights for the victim and obligations for the government under State
and Federal law.\43\ The Bureau further noted, however, that the local
entity may not always share that determination with State, Federal, or
Tribal governmental entities and thus that some victims of trafficking
would not be able to utilize such documentation.
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\42\ See, e.g., Victims' Rights & Restitution Act of 1990, 42
U.S.C. 10607; Crime Victims' Rights Act, 18 U.S.C. 3771. In these
Federal statutes and in some State laws, victims' rights attach
during an investigation (and independent of trial) and therefore
rely on a law-enforcement determination, which is quite often made
by a local governmental entity.
\43\ See, e.g., 23 Pa. Cons. Stat. sec. 5702(a) (requiring
county agencies to report to law enforcement children whom they
``identif[y] as being a sex trafficking victim'' within 24 hours);
Va. Code Ann. sec. 9.1-116.5 (creating a statewide Sex Trafficking
Response Coordinator who is responsible for ``creat[ing] a statewide
plan for local and State agencies to identify and respond to victims
of sex trafficking'').
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The Bureau solicited comments on whether it should interpret the
phrase ``a determination that a consumer is a victim of trafficking
made by a Federal, State, or Tribal governmental entity'' to mean any
determination, including those made by local government officials,
where a Federal, State or Tribal governmental entity could reasonably
be construed as making a determination that a consumer is a victim of
trafficking. The Bureau also sought comments concerning the nature of
information on trafficking in the possession of local governments, the
extent to which such information is or might usefully be shared with
Federal, State, and Tribal governmental entities, and the sort of
documentation generated by these governmental entities.
Commenters were largely in favor of including documentation
generated by local governmental entities. Specifically, one commenter
stated that local governmental entities at all levels, including county
and municipal law enforcement and prosecutors, are in as much of a
position to identify victims of trafficking as State and Federal
government entities. Another commenter agreed with the Bureau's
proposed treatment of local governmental entities and stated their
belief that a police report could serve as an example of documentation
establishing a person as a victim of trafficking. One association of
State attorneys general expressed support for the Bureau's proposed
interpretation to include both State and local law enforcement agencies
as entities that can make determinations of a victim's status under
State law because of their
[[Page 37708]]
collaboration on victim advocacy and enforcement work.
A commenter representing banks expressed concern with treating a
local governmental entity as ``State governmental entity.'' This
commenter contended that the Bureau's reference to treating
documentation from local law enforcement, such as police reports, as a
determination identifying victims of trafficking undermines and is
contrary to the intent of the statute providing that consumer reports
be accurate and reliable.
The Bureau is finalizing its proposal that documentation of a
determination that a consumer is a victim of trafficking made by a
``State governmental entity'' includes documentation created at either
the State or local level. The Bureau finds that local law enforcement,
as part of a local government, may have documentation of a
determination identifying victims of trafficking, including, but not
limited to, items in a police report. This is particularly relevant
since there is not a uniform mechanism in place within most
governmental entities to provide lawful permanent residents and United
States citizens with a certification that a person is a victim of
trafficking. In furtherance of assisting survivors of human trafficking
in restoring their credit and obtaining access to consumer financial
products, and the integral role of local law enforcement in the
identification and investigation of sex trafficking, the Bureau
concludes that it is imperative for local governments, including local
law enforcement, to possess the ability to make documented victim
determinations for purposes of this rule.\44\ This means victim
determinations made by local governmental entities could include victim
advocates within local prosecutorial or local law enforcement agencies
and offices administering specific services for victims of trafficking,
such as address confidentiality programs within State attorney general
offices.
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\44\ An evaluation of multi-disciplinary human trafficking task
forces identified law enforcement as leading half of the task forces
and as the most frequently cited referral stream to victim service
providers. William Adams et al., Evaluation of the Enhanced
Collaborative Model to Combat Human Trafficking, Technical Report
(May 2021), at 10, 14, 22, <a href="https://www.ojp.gov/pdffiles1/nij/grants/300863.pdf">https://www.ojp.gov/pdffiles1/nij/grants/300863.pdf</a>.
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The Bureau is concerned that a narrower definition could
substantially limit the availability of documentation for victims of
trafficking to submit to consumer reporting agencies. Interpreting
documentation of a determination that a consumer is a victim of
trafficking by a ``State governmental entity'' to include local
government entities will further the statutory goal of preventing
consumer reporting agencies from furnishing consumer reports containing
adverse items of information about a consumer that resulted from
trafficking.
The Bureau agrees with commenters that local law enforcement, as
typically the lead investigative agency, is often in the best position
to identify victims of sex trafficking. In response to comments and to
facilitate compliance, the Bureau interprets final Sec.
1022.142(b)(6)(i)(A)(1) as providing that documented victim
determinations made by a local governmental entity must be treated as
made by a State governmental entity for purposes of this rule.
In adopting this interpretation, the Bureau concludes that the
final rule will promote the purposes of section 605C by ensuring
victims are able to block adverse items of information resulting from
trafficking and further promote the accuracy and reliability of
consumer reports. The Bureau foresees victim determinations made by
local governments as likely being initiated by local law enforcement
after having interviewed victims of trafficking when receiving
referrals (from hotlines, tip lines, other law enforcement agencies,
victim service providers, other government agencies), performing sting
operations, or conducting routine traffic stops. The Bureau's adoption
of this interpretation is further supported by its regulatory authority
under section 621(e) of the FCRA, which authorizes the Bureau to
prescribe regulations that promote accuracy and fairness in credit
reporting, and the general rulemaking authority granted under section
1022(b)(1) of the Dodd-Frank Act.
142(b)(6)(i)(B)
Section 605C(a)(1)(A)(ii) provides the term ``trafficking
documentation'' means documentation of--by a court of competent
jurisdiction. The Bureau stated in the proposal it was incorporating
this statutory definition of ``trafficking documentation'' with certain
clarifying interpretations regarding documentation identifying a
consumer who is a victim of trafficking involving a ``court of
competent jurisdiction,'' and to clarify that the documentation may
consist of one or more documents as long as the collective
documentation satisfies the definition. To implement this, the Bureau
proposed to include two categories of documentation involving a ``court
of competent jurisdiction'' in the definition of ``trafficking
documentation.'' The first category of documents concerning a ``court
of competent jurisdiction'' is documentation, in the form of a
determination, that the consumer is a victim of trafficking made by a
court of competent jurisdiction in proposed Sec.
1022.142(b)(6)(i)(A).\45\ The second category is documentation
consisting of documents filed in a court of competent jurisdiction
indicating that a consumer is a victim of trafficking in proposed Sec.
1022.142(b)(6)(i)(B).\46\ The Bureau sought comments on whether it
should clarify in the regulation what documents filed in a court of
competent jurisdiction indicating that a consumer is a victim of
trafficking means. For example, the Bureau asked if a filing in a court
or a court opinion in which a consumer's status as a victim of
trafficking is an accepted fact, but not the central issue in the case,
could be considered a ``determination'' sufficient to satisfy section
605C(a)(1)(A)(ii) and whether such an interpretation would allow more
victims of trafficking to make use of the procedure created by section
605C.
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\45\ Examples of court documents made by a court of competent
jurisdiction could be a restitution order that provides a victim of
trafficking with restitution after a criminal conviction or a
criminal record relief court order (such as a vacatur, expungement,
or sealing of records) where victims of trafficking may obtain an
order to clear convictions of criminal offenses the victims were
forced to commit.
\46\ In the proposed rule, the Bureau stated an example of a
document filed in a court of competent jurisdiction indicating a
consumer is a victim of trafficking could be where victims of
trafficking file suit against their traffickers where they identify
as a victim of trafficking. A prior iteration of section 6102 of the
2022 NDAA in H.R. 2332 (introduced in the 117\th\ Congress) and S.
2040 (introduced in the 117\th\ Congress) provided that
``trafficking documentation'' included ``documentation of . . . a
determination by a court of competent jurisdiction that a consumer
is a victim of trafficking.'' This language was subsequently changed
and enacted into law to instead read ``documentation of . . . by a
court of competent jurisdiction.''
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Many commenters supported including a broad variety of court
documents in the definition, including court documents in which a
consumer's status as a victim of trafficking is an accepted fact, but
not the central issue in the case. Several industry commenters,
however, expressed concern that the approach would permit consumers to
block adverse items of information based only on unverified
allegations. One commenter stated the indicator of reliability would be
significantly higher if the document has to be filed under penalty of
perjury, such as verified petitions, affidavits, deposition
transcripts, and trial transcripts. Other commenters expressed concerns
about perpetrators
[[Page 37709]]
of crimes using this provision to block accurate criminal record
information relied upon by potential employers and landlords.
The Bureau is finalizing Sec. 1022.142(b)(6)(i)(B) by modifying
the regulatory text concerning language associated with a court of
competent jurisdiction. First, the category of court documentation, in
the form of a determination, that the consumer is a victim of
trafficking made by a court of competent jurisdiction in proposed Sec.
1022.142(b)(6)(i)(A) is moved to Sec. 1022.142(b)(6)(i)(B). The Bureau
believes these court documents could include criminal record relief
orders (sealing, expungement, or vacatur of records), civil suit
decisions involving human trafficking, and restitution orders. Due to
the sensitive nature involving victims of trafficking and because the
Bureau does not believe the details surrounding one's victimization
must be provided to consumer reporting agencies, consumer reporting
agencies must accept these documents with redactions that omit any
details that exceed what is sufficient to confirm an individual has
been identified as a victim of trafficking.
The second category of court documentation in proposed Sec.
1022.142(b)(6)(i)(B) consisted of documents filed in a court of
competent jurisdiction indicating that a consumer is a victim of
trafficking. After reviewing the comments, the Bureau is modifying
language in proposed Sec. 1022.142(b)(6)(i)(B) to clarify documents
filed in a court of competent jurisdiction where a central issue in the
case is whether the consumer is a victim of trafficking and the court
has, at a minimum, affirmed the consumer's claim either by accepting
certain pieces of evidence which are assumed to be true or finding that
there is no genuine dispute as to any material fact supporting a
judgment in favor of the victim as a matter of law constitutes an
acceptable victim determination under section 605C. The Bureau believes
this could include instances where victims of trafficking sue their
traffickers using private right of action provisions under Federal or
State victim protection laws where the court has conducted an initial
review of the victim's claim for purposes of a motion to dismiss or
motion for summary judgment and the result is in favor of the victim.
This approach could also allow more victims the opportunity to obtain a
victim determination even in instances where the civil suit was
dismissed without prejudice or not pursued because of intimidation by
the trafficker against the victim.
The Bureau is not interpreting documentation filed in a court of
competent jurisdiction to include court documents filed where the
consumer's status as a victim of trafficking is not a central issue in
the case. However, the Bureau believes that in many such cases a
consumer would be able to provide documentation obtained by other
means. For example, court records where a trafficker is being
criminally prosecuted for a crime other than for trafficking, but where
the consumer is identified as a victim of trafficking would not meet
the definition under Sec. 1022.142(b)(6)(i)(B). However, a consumer
often may instead be able to obtain a copy of the law enforcement
affidavit or other documented statements from a governmental entity or
entity with delegated authority from a governmental entity filed in the
criminal court proceedings on behalf of the prosecution which would
then constitute a victim determination made by a governmental entity
under Sec. 1022.142(b)(6)(i)(A).
One of the primary purposes of section 605C is to assist victims of
trafficking by restoring their credit and helping them obtain access to
consumer financial products and services which will prevent
revictimization and place the victims on a path to financial stability.
The Bureau is aware that some victims, given the nature of their
victimization and subsequent involvement in crimes they were forced to
commit as a result of having been trafficked, are apprehensive to
interact with and obtain relief from a governmental entity or a court.
The Bureau finds that accepting documents filed in a court of competent
jurisdiction where the consumer's status as a victim of trafficking is
a central issue and the court's actions after an initial review of the
consumer's claim passes a level of verification from the court will
prevent a consumer reporting agency from furnishing a consumer report
containing adverse information about a consumer that resulted from
trafficking. This provision of the rule is also supported by the
Bureau's regulatory authority under section 621(e) of the FCRA, which
authorizes the Bureau to prescribe regulations that promote accuracy
and fairness in credit reporting, and on the general rulemaking
authority granted the Bureau under section 1022(b)(1) of the Dodd-Frank
Act. Therefore, the Bureau concludes that documentation filed in a
court of competent jurisdiction where the consumer's status as a victim
of trafficking is a central issue and the court has, at a minimum,
affirmed the consumer's claim either by accepting certain pieces of
evidence which are assumed to be true or finding that the there is no
genuine dispute as to any material fact supporting a judgment in favor
of the victim as a matter of law satisfies section 605C.
142(b)(6)(i)(C)
The Bureau is adding Sec. 1022.142(b)(6)(i)(C) to the final rule
to provide that a signed statement by the consumer attesting that the
consumer is a victim of trafficking is an acceptable victim
determination if such statement or an accompanying document is signed
or certified by a representative of an entity described in Sec.
1022.142(b)(6)(i)(A) and (B). In the proposed rule, the Bureau did not
propose a provision to describe the specific types of documents that
could serve as a determination that a consumer is a victim of
trafficking. However, the Bureau asked for feedback on whether an
attestation or documentation submitted to a Federal, State, or Tribal
governmental entity by a person who self-identifies as a victim of
trafficking, or by another person or entity acting on that person's
behalf, may constitute a documented determination. The Bureau also
sought comment on the types of documents that could serve as a
``determination that a consumer is a victim of trafficking.'' The
Bureau stated it has not identified any standard ``determination''
procedures or forms in use by any governmental entities or courts
concerning human trafficking for persons who are not foreign national
adults (i.e., United States citizens or lawful permanent residents).
The Bureau received few comments on whether to include a person's
self-attestation as a victim of trafficking or an attestation by
another person or entity acting on that person's behalf. One anti-
trafficking organization deemed self-attestation the best approach
while providing the least restrictions and the most confidentiality. A
consumer advocacy group and a group focused on assisting victims of
trafficking, domestic violence, and sexual violence requested the
Bureau permit self-attestation of trafficking if an authorized third
party (such as an employee in a government-funded organization that
serves survivors, a government employee, or court personnel) signs off
on the self-attestation after performing an interview or assessment.
This commenter also suggested that in the alternative, the Bureau could
provide that the authorized third party may write a simple attestation/
certification identifying the name of the survivor and
[[Page 37710]]
that the survivor is a victim of trafficking.
An industry group representing banks urged the Bureau to not permit
self-attestations for purposes of establishing a consumer is a victim
of trafficking. This commenter stated that Congress did not provide for
an attestation in section 605C, unlike section 605B in reporting
identity theft, and that the text of section 605C requires the victim
determinations to be made by a ``Federal, State, or Tribal governmental
entity.'' The commenter also noted that allowing a person to self-
attest to being a victim of trafficking or someone acting on their
behalf may lead to abuse by permitting persons who fraudulently self-
identify as victims of trafficking to block accurate information.
A consumer group and anti-trafficking organization requested the
Bureau provide a specific non-exhaustive list of example documents that
would prove a consumer is a victim of trafficking. The consumer group
stated that if an enumerated list of acceptable documentation is not
provided then the rule may not be sufficiently concrete and clear to
require the consumer reporting agencies to implement section 605C's
protections effectively. The commenter urged the Bureau to clarify that
a victim who does not have such documents would still qualify for
relief under section 605C by providing alternative forms of
documentation. Another commenter recommended the Bureau create a form
similar to a declaration of a law enforcement officer used to provide
that a person is a victim of trafficking.\47\ The commenter also urged
the Bureau to create a sample attestation form that can be used by
organizations that receive government funding, so that the
organizations will have a template document for producing the
trafficking documentation required by the rule. An industry group also
requested examples of acceptable ``victim determinations'' and
recommended the Bureau issue an interim final rule with an open comment
period to allow industry members to continue to provide feedback on
this point, which will further help victims in identifying appropriate
documentation to be provided to consumer reporting agencies. A
commenter representing a group of anti-trafficking organizations stated
victims of trafficking should be able to obtain documentation through
State human trafficking coordinators or by showing that they have
sought a benefit or access to a program that they qualify for on the
basis of their victimization (e.g., crime victim compensation or
address confidentiality programs).
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\47\ U.S. Customs & Immigr. Servs., Dep't of Homeland Sec., Form
I-914 Application for T Nonimmigrant Status, Supp. B, Declaration of
Law Enforcement Officer for Victim of Trafficking in Persons (Dec.
2, 2021), <a href="https://www.uscis.gov/sites/default/files/document/forms/i-914supb.pdf">https://www.uscis.gov/sites/default/files/document/forms/i-914supb.pdf</a>.
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The Bureau has considered the comments and is modifying the final
rule by permitting a consumer to self-attest as a victim of trafficking
if the statement or an accompanying document is signed or certified by
a Federal, State, or Tribal governmental entity or court of competent
jurisdiction, or representative of an entity authorized by a Federal,
State, or Tribal governmental entity or court of competent jurisdiction
to provide victim determinations. Specifically, Sec.
1022.142(b)(6)(i)(C) provides that a victim determination includes
documentation of a signed statement by the consumer attesting that the
consumer is a victim of trafficking if such statement is also signed by
a representative of an entity described in Sec. 1022.142(b)(6)(i)(A)
or (B). The Bureau concludes that the statute requires only that the
consumer provide documentation of a determination that they are a
victim of trafficking made by a Federal, State, or Tribal governmental
entity or documentation of or by a court of competent jurisdiction. For
purposes of submitting trafficking documentation to consumer reporting
agencies, consumers are not required to reveal the details of their
trafficking to consumer reporting agencies since doing so may cause
some consumers to suffer additional harm. Therefore, the Bureau
concludes that so long as a self-attestation made by a consumer is
supported by a determination made by a Federal, State, or Tribal
governmental entity or a court of competent jurisdiction, as described
in Sec. 1022.142(b)(6)(i)(A) or (B), it satisfies the trafficking
documentation requirement as provided by Sec. 1022.142(b)(6)(i)(C).
The Bureau is finalizing Sec. 1022.142(b)(6)(i) without adding to
the text of the regulation a non-exhaustive list of documents that
serve as a ``determination that a consumer is a victim of trafficking''
or a model self-attestation form. However, the Bureau notes that a
victim may self-attest by making a statement to the effect that ``I
attest that I am a victim of trafficking for purposes of section 605C
of the Fair Credit Reporting Act. The signature of [NAME], employee of
[ORGANIZATION] certifies this statement.'' The Bureau believes this
approach affords the greatest flexibility to victims of trafficking
seeking to gather and submit to consumer reporting agencies the
documentation of determinations specified in section 605C(a)(1)(A). The
Bureau may consider issuing interpretations in the future that provide
specific examples to provide clarity on the types of ``determinations''
that establish a consumer is a ``victim of trafficking,'' such as by
issuing advisory opinions or consumer education materials. To clarify,
the Bureau's decision to not provide an exhaustive list of example
documents or a self-attestation form does not mean victims of
trafficking should not submit or consumer reporting agencies should not
accept certain documents referenced by commenters to establish a victim
determination under Sec. 1022.142(b)(6)(i)(A).\48\ The Bureau
encourages victims of trafficking to utilize pre-existing documentation
that may be accessible based on their participation in certain victim
assistance programs.
---------------------------------------------------------------------------
\48\ For example, one commenter referenced the following
documents as consisting of victim determinations: (1) Certification
Letters (issued by HHS); (2) Child Eligibility Letters (issued by
HHS)); (3) Continued Presence (issued by DHS); (4) T Visas (issued
by United States Citizenship and Immigration Services); (5) Bona
fide T Visa application; (6) U Visas with a Form I-918 Supplemental
B filled out indicating that the victim experienced human
trafficking; (7) Restitution orders; (8) Crime victim compensation;
(9) Criminal record relief court orders; (10) Civil suit decisions
related to human trafficking (such as suits brought by victims of
trafficking through the TVPA's private right of action provisions);
and (11) Documents issued by State government agencies (such as a
Notice of Confirmation as a Human Trafficking Victim in New York
State issued by New York State's Office of Temporary and Disability
Assistance).
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142(b)(6)(ii) Identified Adverse Items of Information
In the proposed rule, the Bureau incorporated section
605(C)(a)(1)(B), the second component of ``trafficking documentation,''
into proposed Sec. 1022.142(b)(6)(ii). Section 605(C)(a)(1)(B)
provides that ``trafficking documentation'' is documentation that
identifies items of adverse information that should not be furnished by
a consumer reporting agency because the items resulted from a severe
form of trafficking in persons or sex trafficking of which the consumer
is a victim.
The Bureau did not propose to prescribe what an ``adverse item of
information'' in a consumer report is, because it may vary depending on
the weight each individual user of a consumer report gives to certain
items of information as well as the consumer's individual
circumstances. The Bureau stated this information could include the
evaluation of factors enumerated in section 603(d) of the FCRA on
consumer
[[Page 37711]]
reports such as: credit worthiness, credit standing, credit capacity,
character, general reputation, personal characteristics, or mode of
living. The Bureau also stated that victims of trafficking may wish to
have items of information blocked from their consumer report that are
the result of trafficking because they do not believe those items
accurately reflect them even if the item does not result in, for
example, a lower credit score or less favorable evaluation by a user.
In the proposed rule, the Bureau provided examples of adverse items of
information that include records containing derogatory information,
such as payment delinquencies or defaults reported to a consumer
reporting agency on a loan or large purchase, records of coerced debt
where a loan is taken out by a victim of trafficking under force or
threat, records of criminal arrests and convictions, and records of
evictions or non-payment of rent.
Consumer and anti-trafficking groups as well as individual
commenters largely supported the proposed rule's approach of allowing
consumers to determine which items of adverse information resulted from
trafficking without requiring further documentation connecting the
information to trafficking. Numerous individuals, anti-trafficking, and
consumer groups urged the Bureau to permit victims to identify adverse
items of information that could have been reported to consumer
reporting agencies during and after the period during which a victim
was under the control of the trafficker and that resulted from having
been trafficked. A consumer group stated that consumer reporting
agencies often reject disputes from consumers if a family member,
attorney, or third party assists the consumer. This consumer group
urged the Bureau to require consumer reporting agencies to accept
requests from third parties using a document authorizing the third
party to act on a consumer's behalf along with identification of the
third party such as a driver's license. An anti-trafficking advocacy
group suggested that consumer reporting agencies should be required to
identify which information would be deemed adverse and required to
block that information since they are likely in a better position to
evaluate what is adverse information than the victim of trafficking.
Several industry groups expressed concerns, arguing that a broad,
vague definition might lead to inconsistent application by consumer
reporting agencies and that certain factual items should not be deemed
``adverse items of information,'' such as non-expunged criminal
records. The commenters also urged the Bureau to require consumers to
specify the time period during which they were trafficked and state the
reason why each item resulted from trafficking. The commenters also
stated that allowing consumers to identify items of adverse information
and prohibiting consumer reporting agencies from evaluating whether
those identified items resulted from trafficking may permit fraud.
These commenters asked the Bureau to consider limiting the ability to
submit trafficking documentation resulting from trafficking to the
victim, an attorney acting in the capacity as attorney for the victim,
or an individual employed by a non-profit counseling agency approved by
the Bureau and acting under a power of attorney for the victim in order
to avoid potential fraud and requests submitted without the victim's
authorization or knowledge.
An industry group commented that a consumer who requests criminal
records to be blocked should provide a court order consisting of a
determination that a consumer was a victim of a severe form of
trafficking in persons at the time the crime was committed. This
commenter also encouraged the Bureau to exclude from being blocked
information that the consumer has identified as resulting from
trafficking where the information being reported relates to the
revocation or failure to renew a professional license or certification
by a State entity and the reason for the revocation or failure to renew
will not be evident from the records. A few industry groups asked the
Bureau to create a form to include the adverse items of information
along with contact information, a description of the trafficking, list
of adverse items with a statement on how each item resulted from
trafficking, when the trafficking occurred, and a pre-printed statement
that the consumer is making the statement under penalty of perjury.
The Bureau is adopting Sec. 1022.142(b)(6)(ii) with revisions to
clarify that, in addition to the consumer, a representative designated
by the consumer may identify items of adverse information that should
not be furnished by a consumer reporting agency and that the consumer
must provide a preferred contact method relating to the consumer's
request to block adverse information that resulted from trafficking.
The text below in this section-by-section analysis also discusses the
Bureau's response to comments asking the Bureau to define what an
``adverse item of information'' in a ``consumer report'' is and the
request for the Bureau to create a form that a consumer could use to
identify adverse information.
The Bureau is revising the text of the rule in Sec.
1022.142(b)(6)(ii) to specifically provide that the documentation,
which may consist of a statement prepared by the consumer, identifying
adverse items of information may also be prepared by a designated
representative on behalf of the consumer. However, the final rule
provides that the designated representative cannot be a credit repair
organization as defined in section 403(3) of the Credit Repair
Organizations Act or an entity that would be a credit repair
organization, but for section 403(3)(B)(i) of the Credit Repair
Organizations Act.\49\ The Bureau notes this approach will reinforce
the need for consumer reporting agencies to accept trafficking
documentation, as required under Sec. 1022.142(d)(1), from third
parties identified as assisting with or acting on behalf of the
consumer while acknowledging the concern raised by some commenters of
potential abuse and fraud.
---------------------------------------------------------------------------
\49\ 15 U.S.C. 1679a(3); 15 U.S.C. 1679a(3)(B)(i).
---------------------------------------------------------------------------
New Sec. 1022.142(b)(6)(ii)(A) contains language from the proposed
rule providing that the documentation submitted to consumer reporting
agencies must include items of adverse information that should not be
furnished by a consumer reporting agency because the items resulted
from a severe form of trafficking in persons or sex trafficking of
which the consumer is a victim.
New Sec. 1022.142(b)(6)(ii)(B) provides that documentation
identifying the adverse items of information must also contain a
preferred method for a consumer reporting agency to contact the
consumer. As explained in the section-by-section analysis of Sec.
1022.142(f) below, the final rule requires a consumer reporting agency
to provide written or electronic notice to the consumer within five
days of reaching a final determination on a submission. Many commenters
underscored that victims of trafficking frequently have a heightened
need to keep their location confidential as well as to ensure their
request to block information is not communicated to a location where
their trafficker may be able to receive the information. The Bureau is
concerned that fear of a victim's safe address or phone number reaching
their trafficker may deter some victims from seeking to block adverse
information. For this reason, the final rule provides that victims of
trafficking must submit a preferred method of contact for use by the
consumer
[[Page 37712]]
reporting agency. Consumer reporting agencies are required to use that
method of contact and are prohibited from using that information for
any purpose other than to communicate about the consumer's request as
described in Sec. 1022.142 (d) through (f). The Bureau also
understands some consumers who are victims of trafficking may prefer to
provide the physical or email address contact information of the
consumer's designated representative instead of the consumer's contact
information. Accordingly, consumer reporting agencies must use the
preferred method of contact identified by consumer pursuant to Sec.
1022.142(b)(6)(ii) for communications under Sec. 1022.142 (d) through
(f) even if the preferred contact is the consumer's designated
representative and not the consumer.
The Bureau concludes that a victim of trafficking is in the best
position to reliably identify which adverse items of information
resulted from being trafficked. The Bureau is adopting the proposed
rule's approach of not defining what an ``adverse item of information''
in a ``consumer report'' is, because it may vary depending on the
weight each individual user of a consumer report gives to certain items
of information as well as the consumer's individual circumstances and
adding this language to the rule. The Bureau notes this approach will
allow a victim of trafficking the opportunity to include adverse items
of information that may not affect credit status, but resulted from
victimization. As discussed below under Sec. 1022.142(c) of the final
rule, the Bureau is not adopting any exceptions to the requirement that
consumer reporting agencies block adverse information that resulted
from trafficking. Under the final rule, if a consumer has identified
information resulting from trafficking as adverse, a consumer reporting
agency must block that information. For example, the Bureau is
concerned that some trafficking documentation may reference the time
period the consumer was trafficked, but the consumer may request to
block adverse items of information that arose after the victim was
trafficked. A consumer who has been trafficked may have, for example,
incurred debt or been evicted as a consequence of financial strain that
was the result of having been trafficked. Under the final rule a
consumer reporting agency must block adverse items of information that
the consumer identifies as having resulted from trafficking and may not
choose to only block adverse items of information that are the same or
overlap with the time period the consumer was trafficked.
The Bureau received requests from a few commenters to create a form
that a consumer could use to identify adverse information. Commenters
suggested that the form could include information such as the
consumer's personal information, contact information, period of time
the consumer was trafficked, items of adverse information with an
explanation why the information is the result of trafficking,
identification of who is submitting the form, and the signature of the
victim subject to penalty of perjury. The Bureau understands the ease
of access a form could provide to consumers as well as to consumer
reporting agencies and may determine to issue guidance in the future.
However, the final rule provides flexibility to consumers by only
requiring that consumers identify adverse items of information that
resulted from trafficking, and the Bureau has determined that there is
no need to include a form in the final rule.
142(b)(7) Victim of Trafficking
Proposed Sec. 1022.142(b)(7) adopted the definition of ``victim of
trafficking'' set out in section 605C(a)(3), which defines the term as
a person who is a victim of a ``severe form of trafficking in persons''
or ``sex trafficking.'' Several individual commenters recommended that
the Bureau use the term ``survivor'' rather than ``victim.'' These
commenters observed that many believe that the use of ``survivor''
minimizes any stigma associated with victimhood and empowers
individuals who have suffered harm from trafficking.
One advocacy group suggested that the Bureau remove the reference
to victims of sex trafficking in this definition, leaving only a victim
of ``severe forms of trafficking in persons'' within the definition of
a ``victim of trafficking.'' This commenter argued that the reference
to ``sex trafficking'' is unneeded and may lead to confusion because
``severe forms of trafficking in persons'' already includes a sex
trafficking component. According to the commenter, ``severe forms of
trafficking in persons'' is the term generally used in Federal law to
define eligibility for services and protections, and there is no
Federal offense of ``sex trafficking'' as it is defined in the TVPA, 22
U.S.C. 7102(12), thus there are no ``victims'' of that offense.
The Bureau is finalizing this definition as proposed. First, this
rule uses the term ``victim'' primarily because that is the wording of
section 6102 of the 2022 NDAA and the TVPA.\50\ While the Bureau
recognizes that the term ``survivor'' is preferred by many individuals,
service providers, and advocacy groups in other contexts, ``victim'' is
used more commonly in laws giving individuals rights and formal
standing within the justice system.\51\ Second, regarding the inclusion
of ``sex trafficking'' in the definition of ``victim of trafficking,''
section 605C(a)(3) expressly provides that ``victim of trafficking''
means a person who is a victim of (1) a severe form of trafficking in
persons or (2) sex trafficking. As discussed in the section-by-section
analysis of Sec. 1022.142(b)(5) above, ``sex trafficking'' means the
recruitment, harboring, transportation, provision, obtaining,
patronizing, or soliciting of a person for the purpose of a commercial
sex act. Only some kinds of sex trafficking are included within the
definition of ``severe forms of trafficking in persons,'' namely sex
trafficking in which a commercial sex act is induced by force, fraud,
or coercion, or in which the person induced to perform such act has not
attained 18 years of age. The Bureau concludes that the inclusion of a
victim of sex trafficking within the definition of ``victim of
trafficking'' is not superfluous or likely to lead to confusion.
Indeed, the fact that Congress expressly included victims of sex
trafficking as victims of trafficking suggests that Congress intended
the scope of this rule to apply more broadly than just to victims of
severe forms of trafficking in persons.
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\50\ Consistent with the TVPA, the Bureau is interpreting
section 605C to mean that a ``victim'' is a person who was subjected
to an act or practice described in the definitions of ``severe forms
of trafficking in persons'' and ``sex trafficking.'' A person who
engaged in or perpetrated a severe form of trafficking in persons or
sex trafficking--but who was not subjected to such an act or
practice by another person--is not a ``victim'' of those acts or
practices.
\51\ See note Error! Bookmark not defined. supra; Training &
Tech. Assistance Ctr., Off. for Victims of Crime, U.S. Dep't of
Just., Human Trafficking Task Force e-Guide, <a href="https://www.ovcttac.gov/taskforceguide/eguide/1-understanding-human-trafficking/13-victim-centered-approach">https://www.ovcttac.gov/taskforceguide/eguide/1-understanding-human-trafficking/13-victim-centered-approach</a> (last visited June 20,
2022).
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The Bureau understands that ``severe forms of trafficking in
persons,'' as defined in the TVPA, 22 U.S.C. 7102(11), is often the
definition used to define trafficking under Federal law.\52\ The Bureau
expects that many, if not
[[Page 37713]]
most, victims of trafficking seeking to make use of the procedure set
out in this section will have documentation identifying them as victims
of conduct that qualifies as a ``severe form of trafficking in
persons'' which includes components of ``sex trafficking'' and ``labor
trafficking,'' as opposed to ``sex trafficking'' as defined in the
TVPA, 22 U.S.C. 7102(12). However, the Bureau is concerned that
limiting the definition of ``victim of trafficking'' to only victims of
sex trafficking as defined in a ``severe form of trafficking in
persons'' could potentially limit the scope of the remedy created by
this section, in direct contradiction to the plain language of the
statute. Additionally, even if there is no Federal criminal offense of
``sex trafficking'' as defined in the TVPA, a person could still be
identified as a victim of the conduct meeting that definition.\53\
Finally, the Bureau does not believe that the inclusion of victims of
sex trafficking in general within this definition is likely to lead to
confusion among consumers, even if eligibility for other programs and
services is limited to victims of severe forms of trafficking, since
all victims who qualify for those other programs and services will also
be eligible under this section. For these reasons, the Bureau finalizes
this definition as proposed.
---------------------------------------------------------------------------
\52\ See, e.g., 8 CFR 214.11(b) (explaining that a person must
be ``a victim of a severe form of trafficking in persons'' to be
eligible for a temporary T-1 immigration benefit); Off. to Monitor &
Combat Trafficking in Persons, U.S. Dep't of State, 2021 Trafficking
in Persons Report (Jun. 2021), at 26-27, <a href="https://www.state.gov/reports/2021-trafficking-in-persons-report/">https://www.state.gov/reports/2021-trafficking-in-persons-report/</a> (describing the
``acts,'' ``means,'' and ``purpose'' elements of sex trafficking
under Federal law).
\53\ Notably, many States have sex trafficking statutes that
deviate from Federal law, such that a person may be legally
identified as a perpetrator or victim of conduct that meets the
statutory definition of ``sex trafficking'' under Federal law.
Training & Tech. Assistance Ctr., Off. for Victims of Crime, Dep't
of Just., Human Trafficking Task Force e-Guide: State Laws, <a href="https://www.ovcttac.gov/taskforceguide/eguide/1-understanding-human-trafficking/14-human-trafficking-laws/state-laws/">https://www.ovcttac.gov/taskforceguide/eguide/1-understanding-human-trafficking/14-human-trafficking-laws/state-laws/</a> (last visited June
20, 2022).
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142(c) Prohibition on Inclusion of Adverse Information of Trafficking
Victims
Section 605C(b) provides that a consumer reporting agency may not
furnish a consumer report containing any adverse item of information
about a consumer that resulted from a severe form of trafficking in
persons or sex trafficking if the consumer has provided trafficking
documentation to the consumer reporting agency. Proposed Sec.
1022.142(c) would have adopted this statutory language. The Bureau
sought comments on whether this provision warrants further
clarification.
The Bureau received several comments on this aspect of the
proposal. Consumer and anti-trafficking advocacy groups were largely in
favor of blocking all items of adverse information, including criminal
convictions and eviction histories. Several individual commenters asked
the Bureau to apply the final rule to victims of domestic violence,
arguing that there are similarities in financial hardship between
victims of domestic violence and human trafficking. An industry
commenter asked the Bureau to clarify that the types of adverse
information that should be excluded from a consumer report is limited
to only those adverse items that were related to the trafficking.
Similarly, another industry commenter urged the Bureau to require
victims to provide sufficient information to identify the adverse
information that must be removed. The commenter also suggested that
information on criminal convictions should require additional
documentation in the form of a court order showing that the record has
been expunged or the conviction underlying the record was reversed.
This commenter urged the Bureau to consider including a specific
exception permitting a consumer reporting agency to provide a Federal,
State, or local law enforcement agency with access to the blocked
information as provided for in section 605B(f) of the FCRA concerning
identity theft information. Further, this commenter argued that
information related to the revocation or non-renewal of required
professional licenses or certifications should be excluded from the
final rule because it is factual in nature and that the reason for
revocation or non-renewal will not be evident from the records. They
also asked the Bureau to create an exemption similar to section 605B(f)
of the FCRA that would allow consumer reporting agencies to provide
blocked information to law enforcement agencies.
After considering the comments, the Bureau is finalizing Sec.
1022.142(c) as proposed with minor technical revisions. The Bureau
concludes that the final rule applies to all types of adverse
information, including criminal and license records, and should not
contain an exception for law enforcement agencies to access such
information.\54\ The statute does not exclude adverse information about
licensure, criminal convictions, or any other type of adverse
information from this provision. Excluding these categories of
information would contradict the purpose of section 605C and the final
rule. The Bureau understands that a large number of victims of
trafficking have a criminal record as a result of being trafficked.
According to a recent study, a criminal record impacts one's current or
prospective employment opportunities because of background checks,
family law issues involving visitation and child custody, the ability
to obtain safe and affordable housing, medical care in the form of
discrimination by healthcare providers, education where college
applicants are required to answer criminal history questions as part of
the admissions process, student loans as eligibility for Federal aid
may be suspended if convicted of a drug offense, and immigration
relief.\55\ Thus, the Bureau finds that such information is clearly
``adverse,'' and if the criminal history is a result of trafficking the
Bureau concludes that it must be blocked. Applying Sec. 1022.142 to
all types of adverse information is consistent with section 605C and
will provide victims with the best ability to secure financial
integration and independence. Similarly, section 605C does not contain
an exception for consumer reporting agencies to provide blocked
information to law enforcement agencies and the Bureau concludes that
such an exception is not warranted because such information would be
blocked only after a consumer obtained a victim determination by an
entity pursuant to Sec. 1022.142(b)(6)(i).
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\54\ The Bureau notes, however, that there are limited
circumstances in which law enforcement agencies are able to obtain
certain consumer report and consumer file information from consumer
reporting agencies notwithstanding any other provision of the FCRA.
See sections 626 and 627 of the FCRA, 15 U.S.C. 1681u, 1681v.
\55\ Polaris, State Report Cards: Grading Criminal Record Relief
Laws for Survivors of Human Trafficking (Mar. 2019), at 6-7, <a href="https://polarisproject.org/wp-content/uploads/2019/03/Grading-Criminal-Record-Relief-Laws-for-Survivors-of-Human-Trafficking.pdf">https://polarisproject.org/wp-content/uploads/2019/03/Grading-Criminal-Record-Relief-Laws-for-Survivors-of-Human-Trafficking.pdf</a>.
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The Bureau also declines to expand the final rule to cover victims
of domestic violence who have not been victims of ``severe forms of
trafficking in persons'' or ``sex trafficking.'' Congress did not apply
section 605C to victims of domestic violence. Moreover, section 6102(c)
of the 2022 NDAA limits the Bureau's present rulemaking to preventing a
consumer reporting agency from furnishing a consumer report containing
any adverse item of information about a consumer that resulted from
``trafficking'' which section 605C defines as ``severe forms of
trafficking in persons'' and ``sex trafficking'' under the TVPA. This
does not mean, however, that consumers who are victims of domestic
violence cannot be victims of trafficking if they otherwise meet the
definition.
As explained in the proposal, the Bureau interprets Sec.
1022.142(c) to mean that a consumer reporting agency may not furnish
any adverse item of information in a consumer report to the extent such
information resulted from the consumer's involvement in a severe
[[Page 37714]]
form of trafficking in persons or sex trafficking and the consumer
submitted trafficking documentation to the consumer reporting agency.
In other words, this provision applies to information contained in the
consumer report, and not the furnishing of a consumer report more
generally. A consumer reporting agency may furnish a consumer report
about a consumer who is a victim of trafficking so long as the report
does not contain information that is required to be blocked by Sec.
1022.142. The Bureau concludes that final Sec. 1022.142(c) is
sufficiently clear because: (1) section 1022.142(b)(6)(ii)(A) limits
the definition of ``trafficking documentation'' to documentation that
identifies any items of adverse information that should not be
furnished by a consumer reporting agency because the items resulted
from a severe form of trafficking in persons or sex trafficking of
which the consumer is a victim; and (2) section 1022.142(e)(4),
described in the section-by-section analysis below, clarifies that a
consumer reporting agency may decline to block, or may rescind any
block of, adverse information if the consumer reporting agency cannot
properly identify the adverse items of information under Sec.
1022.142(b)(6)(ii).
142(d) Method of Submission to Consumer Reporting Agencies
142(d)(1)-(d)(3)
Proposed Sec. 1022.142(d) established a method for consumers to
submit trafficking documentation to consumer reporting agencies, as
required in section 605C(c)(2). Proposed Sec. 1022.142(d)(1) stated
that consumer reporting agencies must provide mailing addresses for a
consumer to submit required documentation and may also establish a
secure online portal for submissions. The proposed rule specifically
required consumer reporting agencies to accept documentation sent to:
(1) the mailing, and if applicable, website address used for disputes
under section 611 of the FCRA; and (2) the new dedicated mailing
address and, if applicable, a website address a consumer reporting
agency must maintain to block adverse items of information resulting
from trafficking. Proposed Sec. 1022.142(d)(2) provided that a
consumer reporting agency must add information on its publicly
available website stating how submissions for the blocking of adverse
items of information resulting from trafficking can be submitted.
Proposed Sec. 1022.142(d)(3) provided that consumer reporting agencies
must allocate a reasonable amount of personnel to respond to consumer
inquiries about the process for and status of submissions at the
existing toll-free number for disputes under section 611 of the FCRA
and establish a separate toll-free telephone number dedicated to
addressing submissions from consumers seeking to block adverse items of
information resulting from trafficking. For the reasons discussed
below, the Bureau is finalizing Sec. 1022.142(d) largely as proposed,
with revisions to clarify consumer reporting agencies are required to
provide and accept submissions at two mailing addresses and these
addresses must be provided to a consumer and consumer representative as
described in Sec. 1022.142(b)(6)(ii), submissions must consist of an
appropriate proof of identification under Sec. 1022.142(b)(1) and
trafficking documentation under Sec. 1022.142(b)(6), and to address
comments received regarding application of the toll-free telephone
number requirement to all consumer reporting agencies.
One consumer group commented in support of the requirement to
accept trafficking documentation at both existing addresses used for
disputes under section 611 and dedicated addresses established to
accept submissions under this section. Comments from industry groups
varied. One financial institution recommended that the Bureau require
consumer reporting agencies to use either the address used for section
611 disputes or a dedicated address for trafficking, while two trade
associations recommended that the Bureau require the use of existing
channels to limit costs for consumer reporting agencies and complexity
for consumers. Another trade association recommended that the Bureau
limit the requirement for additional mailing addresses (and web
addresses, if applicable) and a toll-free number to only nationwide
consumer reporting agencies as defined in section 603(p) of the
FCRA.\56\ A different trade association stated its opposition to
requiring consumer reporting agencies to create a toll-free number for
submissions under this section. This commenter argued that since the
existing toll-free number requirement for disputes is only applicable
to nationwide consumer reporting agencies under section 609(c)(1)(B),
requiring a toll-free number for disputes is beyond the scope of this
rulemaking and would be an unnecessary, new expense that may lead to
consumer confusion.
---------------------------------------------------------------------------
\56\ Section 603(p) defines ``consumer reporting agency that
compiles and maintains files on consumers on a nationwide basis''
(also known as a ``nationwide consumer reporting agency'') as
follows:
``a consumer reporting agency that regularly engages in the
practice of assembling or evaluating, and maintaining, for the
purpose of furnishing consumer reports to third parties bearing on a
consumer's credit worthiness, credit standing, or credit capacity,
each of the following regarding consumers residing nationwide:
(1) Public record information.
(2) Credit account information from persons who furnish that
information regularly and in the ordinary course of business.'' 15
U.S.C. 1681a(p). The three consumer reporting agencies that meet
that definition are Equifax, TransUnion, and Experian.
---------------------------------------------------------------------------
Several consumer groups urged the Bureau to require consumer
reporting agencies to post detailed information about how information
submitted by trafficking survivors is accessed, used, stored, and
protected on relevant websites. Another consumer group recommended
requiring consumer reporting agencies to provide links to other
resources, such as information about available civil legal services,
confidential mailing addresses, public benefits assistance, and the
National Human Trafficking Hotline.
For the reasons discussed below, the Bureau is finalizing Sec.
1022.142(d) with revisions to the proposal. Final Sec. 1022.142(d)(1)
clarifies that a consumer reporting agency must provide two mailing
addresses for a consumer, or consumer representative as described in
Sec. 1022.142(b)(6)(ii), to send a submission consisting of an
appropriate proof of identification under Sec. 1022.142(b)(1) and
trafficking documentation under Sec. 1022.142(b)(6). The final rule
also provides that a consumer reporting agency may establish a secure
online website portal for a consumer to upload a submission. This means
if a consumer reporting agency intends to accept a submission
electronically, it must create a secure online website portal and
provide information on its website informing consumers where to upload
the submission. New Sec. 1022.142(d)(1) requires consumer reporting
agencies to accept a submission sent to: (1) the mailing, and if
applicable, website address used for disputes under section 611 of the
FCRA; and (2) the mailing address and, if applicable, the website
address dedicated to blocking adverse items of information resulting
from a severe form of trafficking in persons or sex trafficking under
Sec. 1022.142.
The Bureau finds that the small costs related to requiring consumer
reporting agencies to establish a mailing address (or website address,
if applicable) specifically dedicated to trafficking are justified by
the benefits this approach would provide to consumers. Allowing
consumer reporting agencies to use either their existing address under
[[Page 37715]]
section 611 of the FCRA for disputes or a new address to receive
documentation from victims of trafficking would add confusion and
complexity for consumers, particularly if the consumer reporting agency
does not make clear the distinction between disputes and block requests
for victims of trafficking under this section. Additionally, the Bureau
is concerned about the potential confusion caused by various consumer
reporting agencies taking different approaches. These concerns are
equally valid for all types of consumer reporting agencies, so the
Bureau declines to apply this requirement to only the nationwide
consumer reporting agencies under section 603(p) of the FCRA. The
Bureau has determined that requiring all consumer reporting agencies to
establish dedicated addresses for each procedure will allow consumers
to make use of this section most efficiently and effectively at a
relatively low cost.
Section 1022.142(d)(2) of the final rule provides that a consumer
reporting agency must add information on its publicly available website
stating how submissions for the blocking of adverse items of
information resulting from a severe form of trafficking in persons or
sex trafficking should be provided to a consumer reporting agency.
For Sec. 1022.142(d)(3), the Bureau agrees, however, with comments
recommending that the toll-free telephone number requirement be limited
to nationwide consumer reporting agencies. As noted by several industry
commenters, nationwide consumer reporting agencies are currently
required to have toll-free telephone numbers at which personnel are
accessible to consumers during normal business hours under section
609(c)(1)(B) of the FCRA,\57\ so this requirement adds minimal extra
expense for those agencies. Requiring nationwide consumer reporting
agencies to make personnel available by phone to answer questions about
this process will provide significant benefits to consumers. Providing
an avenue for consumers to ask questions before submitting trafficking
documentation will make the process more efficient, and allowing
consumers to check the status of their submissions will allow them to
confirm that the process is working as intended. The Bureau recognizes
that the costs associated with staffing a toll-free telephone number
are greater for consumer reporting agencies that are not already
subject to a similar requirement, and the Bureau anticipates that
smaller, non-nationwide consumer reporting agencies are likely to
receive less contact from consumers. For those reasons, the Bureau has
limited the scope of this requirement to nationwide consumer reporting
agencies as provided for in Sec. 1022.142(d)(3).
---------------------------------------------------------------------------
\57\ See 15 U.S.C. 1681g(c)(1)(B).
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The Bureau declines to adopt further requirements requiring
consumer reporting agencies to post detailed information about how
information submitted by victims of trafficking is accessed, used,
stored, and protected. The Bureau's primary focus is on ensuring that
information on how a consumer may submit documentation to the consumer
reporting agency is made publicly available to consumers in a clear,
easy-to-understand format. Requiring other information risks making
that information more difficult for a consumer to find. If a consumer
reporting agency wishes to include information about other resources
for victims of trafficking, such as links to the National Human
Trafficking Hotline, relevant government agencies, or other service
providers, it may do so, but the Bureau declines to impose such a
requirement.
142(e)-(h) Overview
In order to fully implement the consumer protection provisions of
section 605C, the Bureau looked at pre-existing statutory and
regulatory requirements concerning the procedures used by consumers in
reporting identity theft and in disputing the accuracy of information
in consumer files and consumer reports and the obligations those
regulations place on consumer reporting agencies to identify what
aspects of those regulations might be useful in helping a consumer
seeking to report items of adverse information that result from a
severe form of trafficking in persons or sex trafficking of which the
consumer is a victim.
Section 1022.142(e) through (h) set forth below describe: (1)
provisions to address the blocking of adverse information identified by
the consumer, a requirement to notify the consumer and attempt to
resolve deficiencies, the timing of the final determination, and
limited situations in which the consumer reporting agency may decline
or rescind a block; (2) the obligations of consumer reporting agencies
to notify the consumer of the outcome with respect to the submission;
(3) a record retention requirement of seven years from the date the
submission is received by consumer reporting agencies; and (4) a
requirement that consumer reporting agencies establish and maintain
written policies and procedures to ensure and monitor compliance with
section 605C and these implementing regulations. The Bureau proposed
these procedural requirements under its authority in section 621(e) of
the FCRA to prescribe regulations that are necessary and appropriate to
administer and carry out the purposes and objectives of the FCRA, and
to prevent evasions or to facilitate compliance.\58\
---------------------------------------------------------------------------
\58\ Section 605C does not expressly address these issues, but
they are addressed in other statutory and regulatory provisions that
apply to other processes for identity theft and disputing
information in a consumer report.
---------------------------------------------------------------------------
142(e) Block of Adverse Information Resulting From Trafficking
142(e)(1)-(e)(3)
In the proposed rule, the Bureau acknowledged consumer reporting
agencies may encounter difficulty confirming certain information
submitted by consumers. Under proposed Sec. 1022.142(e), the Bureau
proposed to provide consumer reporting agencies with the authority to
decline to act, or to rescind action (if applicable) on a submission.
This provision is similar to section 605B(c) of the FCRA, which allows
a consumer reporting agency to decline to block information relating to
a consumer, or to rescind any block, if the consumer reporting agency
makes certain reasonable determinations. The Bureau also sought
feedback on the use or adoption of procedures in the existing process
in Regulation V for consumer reporting agencies that make reasonable
requests for additional information for the purpose of determining the
validity of alleged identity theft.\59\ As discussed in more detail in
the section-by-section analysis of Sec. 1022.142(f) below, the Bureau
also proposed in Sec. 1022.142(f)(1) to require a consumer reporting
agency to provide written notice to a consumer of the results of a
submission within five calendar days of receipt of the submission (or,
if rescinding a previously applied block, five calendar days after
rescinding). The Bureau requested comment on whether additional
clarification on the manner in which a consumer reporting agency must
notify the consumer and attempt to resolve any deficiencies in the
submission of trafficking documentation is warranted.
---------------------------------------------------------------------------
\59\ See 12 CFR 1022.3(i)(1)(iii).
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The Bureau also sought comment on whether the adverse items of
information should simply be blocked from being reported as proposed,
or should be deleted from the consumer's file (or the file be modified
as appropriate).\60\ Additionally, the Bureau
[[Page 37716]]
requested comment on whether a consumer reporting agency should be
required to notify a furnisher about the consumer's trafficking
documentation submission to prevent a consumer reporting agency from
furnishing a consumer report containing any adverse item of information
about a consumer that resulted from a severe form of trafficking in
persons or sex trafficking.
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\60\ Section 611(a)(5) of the FCRA takes the latter approach
with respect to successfully disputed information. 15 U.S.C.
1681i(a)(5).
---------------------------------------------------------------------------
In relation to comments on the proposed five-calendar-day notice
period in Sec. 1022.142(f), an industry group stated the timeframe for
blocking the adverse information is insufficient and should be separate
from the timeframe to notify the victim. This commenter urged the
Bureau to adopt timing that mirrors section 605B of the FCRA for ease
of implementation and allow at least four business days for blocking
and five business days to provide notice to the consumer after the
placement or rejection of a requested block to provide notice to a
consumer. The commenter also requested that the Bureau modify the
timing from calendar days to business days to account for Federal
holidays and weekends.
In response to the request for comment on whether information
should be blocked from being reported, deleted, or modified as
appropriate, a consumer advocate commenter was supportive of deletion
of the adverse information to ensure it was not accidentally reinserted
or did not reappear after being ``soft deleted'' or suppressed. An
industry commenter stated the Bureau should require the consumer
reporting agency or furnisher to delete the items of adverse
information or modify the credit file with some indication to align
with current identity theft disputes procedures instead of suppressing
the information. A commenter encouraged the Bureau to require adverse
information to be blocked, not deleted, because the blocked information
could be useful to law enforcement and prosecutors who are prosecuting
traffickers. However, this commenter suggested that the information
should be maintained in a secure fashion that can only be accessed
through proper legal service. The commenter also suggested that
consumer reporting agencies should be required to either flag that
information has been suppressed without disclosing the reason for the
suppression or suppress the information without any flag. One consumer
group suggested that in some cases it may be better for the consumer if
the item is not deleted because permanent deletion of consumer
information could be detrimental to the consumer's record and the act
of deleting the information will likely result in reinsertion because a
furnisher is likely to provide it again. This commenter encouraged the
Bureau to issue regulations that could require a consumer reporting
agency to do what is in the best interest of the consumer on blocking
or deletion.
Commenters were divided on whether consumer reporting agencies
should be required to notify a furnisher of an item of adverse
information when it receives a submission from a consumer. One
individual commenter, a financial institution, a consumer group, and an
industry group supported notification because it would prevent the
furnisher from re-furnishing the information to that consumer reporting
agency and from providing the information to other agencies, providing
more benefits to consumers. Two other consumer groups and three
industry trade associations opposed furnisher notification, citing
concerns about the further dissemination of sensitive consumer
information and potential compliance obligations that it would place on
furnishers that receive this information. Two consumer groups advocated
for allowing a consumer to opt in or out of furnisher notification at
the time of submission, arguing that this approach would attain many of
the benefits of automatic notification while allowing victims to
control the dissemination of their personal information.
The Bureau has considered the comments, and for the reasons set
forth below, is finalizing Sec. 1022.142(e) with several revisions and
is renumbering the section. The Bureau is moving proposed Sec.
1022.142(e), which addresses the authority to decline or rescind a
block, to Sec. 1022.142(e)(4) and renaming final Sec. 1022.142(e) to
reflect that it addresses the blocking of adverse information resulting
from trafficking. The Bureau is further finalizing the rule with new
Sec. 1022.142(e)(1) through (e)(3) to cover the block of adverse
information identified by the consumer as resulting from a severe form
of trafficking in persons or sex trafficking, the requirement to notify
the consumer and attempt to resolve deficiencies, and the final
determination on blocking the reporting of adverse information
identified by the consumer as resulting from a severe form of
trafficking in persons or sex trafficking. These new provisions cover
timing and procedural questions raised in response to the Bureau's
request for feedback on the adoption of procedures used for identity
theft in Regulation V for supplemental requests. The Bureau is also
finalizing the rule without also requiring the deletion of adverse
information in a consumer's file resulting from a severe form of
trafficking in persons or sex trafficking or notification to
furnishers.
The Bureau is implementing a multi-step process that a consumer
reporting agency must follow when it receives a submission under Sec.
1022.142(d)(1). First, Sec. 1022.142(e)(1) provides that a consumer
reporting agency has four business days from receipt of the consumer's
submission to block items of adverse information identified by the
consumer or their representative from appearing in a consumer report.
The Bureau concludes that four business days provides consumer
reporting agencies with adequate time to institute a block of the items
of adverse information identified by the consumer or their
representative. Action within this timeframe is important since the
Bureau recognizes a consumer may be in urgent need of housing or
employment that could be facilitated by the block of the adverse
information.
Second, the Bureau is imposing a time period of five business days
under which a consumer reporting agency must notify the consumer and
attempt to resolve any deficiency in the consumer's submission in new
Sec. 1022.142(e)(2)(i). The Bureau recognizes in some cases the
submission may not be complete, and the consumer reporting agency may
need to obtain additional information from the consumer on a case-by-
case basis in order to confirm the submission is complete. Section
1022.142(e)(2)(i) of the final rule provides that a consumer reporting
agency is required to notify the consumer and attempt to resolve any
deficiencies limited to instances where: (1) the consumer reporting
agency cannot reasonably confirm the appropriate proof of identity for
the consumer and, if applicable, the consumer's representative under
Sec. 1022.142(b)(1); (2) the consumer did not provide documentation
consisting of a victim determination under Sec. 1022.142(b)(6)(i); or
(3) the consumer reporting agency cannot properly identify the adverse
items of information under Sec. 1022.142(b)(6)(ii). The final rule
also provides that a consumer reporting agency may not ask for
information on the validity of the facts or circumstances detailed in
the contents of the submitted trafficking documentation establishing
the consumer is a victim of trafficking or whether the identified
adverse information resulted from a severe form of trafficking in
persons or sex trafficking under Sec. 1022.142(b)(6).
Third, Sec. 1022.142(e)(2)(ii) provides a consumer reporting
agency with a maximum of 25 business days after
[[Page 37717]]
receiving the consumer's submission under Sec. 1022.142(d)(1) to make
a final determination on whether the submission is complete in order to
perform the final determination of the block under Sec. 1022.142(e)(3)
or decline to block or rescind any block under Sec. 1022.142(e)(4).
The Bureau expects consumer reporting agencies to make any requests for
clarifying information as expeditiously as possible (and limited to the
reasons in Sec. 1022.142(e)(2)(i)) in order to allow consumers with an
adequate amount of time to provide the requested information. For
example, the Bureau expects a consumer reporting agency to send a
request for additional information, if needed to complete the
submission, to the preferred method of contact identified by the
consumer required by Sec. 1022.142(b)(6)(ii)(B). If the consumer
reporting agency does not receive a response from the consumer, the
consumer reporting agency must send an additional request to the
consumer with sufficient time for a response within the 25-business day
limit for a final determination in Sec. 1022.142(e)(2)(ii). The
Bureau's timeframe for action by the consumer reporting agency reflects
a balance between the four-business-day timeframe for a consumer
reporting agency to block the reporting of information in the context
of alleged identity theft (under section 605B) and the 30-day timeframe
a consumer reporting agency generally has to conduct a reasonable
reinvestigation of the completeness or accuracy of a disputed item
(under section 611). The Bureau concludes that these timeframes are
reasonable and addresses concerns noted by commenters.
Fourth, Sec. 1022.142(e)(3) requires the consumer reporting agency
to initiate a block (if the consumer reporting agency lacked enough
information to perform a block under Sec. 1022.142(e)(1)) or maintain
a block initiated pursuant to Sec. 1022.142(e)(1) upon confirming the
completion of the consumer's submission and in accordance with the
requirements of Sec. 1022.142(e)(2).
The Bureau is not requiring consumer reporting agencies to notify a
furnisher about the consumer's submission in the final rule. The Bureau
requested comment on requiring a consumer reporting agency to notify
the furnisher of the block in order to give a furnisher the opportunity
to cease furnishing the blocked information to the consumer reporting
agency that provided the notification. In the proposed rule, the Bureau
evaluated whether this could then help ensure that blocked information
is not refurnished and reinserted in a consumer report and help prevent
the adverse items of information from being furnished by other consumer
reporting agencies. However, the Bureau is declining to require
notification to furnishers given the serious privacy and data security
concerns raised by commenters who noted a risk that information that is
passed to a furnisher could more easily reach a trafficker and put the
consumer at risk. The Bureau encourages consumer reporting agencies to
develop a process to ensure the reinsertion of adverse items resulting
from a severe form of trafficking in persons or sex trafficking after
being blocked from the consumer's file does not occur. However, the
Bureau cautions that consumer reporting agencies should not provide
furnishers with information about the consumer's request or the reason
for the block.
The final rule also does not require consumer reporting agencies to
delete adverse items of information identified by the victim of
trafficking from the consumer's credit file. The Bureau has determined
that requiring consumer reporting agencies to delete that information
would be counterproductive because, as explained above, the final rule
does not require a consumer reporting agency to notify the furnisher of
adverse information that a consumer has submitted the required
documentation. If the information is deleted, but the furnisher is not
provided with a reason, there is a substantial risk that the
information will be reinserted into the report, whereas a block without
deletion makes it more likely that the consumer reporting agency will
not include the adverse information in future reports after the
information is confirmed to remain blocked in Sec. 1022.142(e)(3).
142(e)(4) Authority To Decline or Rescind a Block
In the proposed rule, the Bureau stated consumer reporting agencies
may encounter difficulty confirming certain information submitted by
consumers. Under proposed section 1022.142(e), the Bureau proposed to
provide consumer reporting agencies with the authority to decline to
act, or to rescind action (if applicable) on a submission. The proposed
provision was similar to section 605B(c) of the FCRA, which allows a
consumer reporting agency to decline to block information relating to a
consumer, or to rescind any block, if the consumer reporting agency
makes certain reasonable determinations.\61\
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\61\ 15 U.S.C. 1681c-2(c).
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Proposed Sec. 1022.142(e) provided that a consumer reporting
agency may decline to block, or may rescind any block, of adverse items
of information resulting from a severe form of trafficking in persons
or sex trafficking where: (1) the consumer reporting agency requests
and cannot reasonably confirm the appropriate proof of identity under
Sec. 1022.142(b)(1); (2) the consumer cannot provide documentation
under Sec. 1022.142(b)(6)(i); or (3) the consumer reporting agency
cannot properly identify the adverse items of information under Sec.
1022.142(b)(6)(ii).
The section-by-section analysis of Sec. 1022.142(e) of the
proposed rule discussed how the Bureau is not proposing to interpret
section 605C as giving a consumer reporting agency the discretion to
contest the merits of the submitted trafficking documentation, if such
documentation meets the definition in section 605C(a) and in proposed
Sec. 1022.142(b)(6)(i). In the section-by-section analysis of Sec.
1022.142(e) in the proposed rule, the Bureau did not propose to
interpret section 605C as giving a consumer reporting agency the
discretion to challenge a consumer's determination that an adverse item
of information resulted from a severe form of trafficking in persons or
sex trafficking under Sec. 1022.142(b)(6)(ii). However, the Bureau
sought comments on these approaches.
The Bureau proposed to clarify in Sec. 1022.142(e) that consumer
reporting agencies can request appropriate proof of identity of the
consumer who is a victim of trafficking as defined in Sec.
1022.142(b)(1) and that consumer reporting agencies can decline or
rescind a block if it cannot reasonably confirm the appropriate proof
of identity. Proposed Sec. 1022.142(e) also required a consumer
reporting agency, prior to exercising its authority to decline or
rescind a block, to notify the consumer and attempt to resolve any
deficiency in the consumer's submission.
The Bureau received comments from industry and consumer advocates
on certain aspects of this provision. Several consumer advocates
supported the Bureau's proposed approach and urged the Bureau not to
give consumer reporting agencies discretion to decide whether consumers
were victims of trafficking beyond confirming that the consumer has
provided required trafficking documentation and identified the adverse
information that resulted from trafficking. At least one consumer
advocate urged the Bureau to provide an enumerated list of acceptable
[[Page 37718]]
documentation, prohibit a consumer reporting agency from rejecting that
documentation, and expressly state that a consumer reporting agency
cannot reject a request for any reason other than those listed in Sec.
1022.142(e). The same commenter also asked that the final rule
specifically state that a consumer reporting agency cannot decline to
block adverse information because the consumer reporting agency
questions the merits of the submitted trafficking documentation or the
consumer's determination that an adverse item of information resulted
from trafficking. An industry commenter generally supported the
proposed provision, but asked that the reasons for rescinding or
declining a block be expanded to cover two additional scenarios: (1) a
material misrepresentation of fact; and (2) criminal record information
if the victim is required to register as a sex offender.
For the reasons discussed below, the Bureau is adopting its
proposal by renumbering proposed Sec. 1022.142(e) to Sec.
1022.142(e)(4) and by clarifying the limited circumstances under which
a consumer reporting agency may decline or rescind a block. New Sec.
1022.142(e)(4) provides that a consumer reporting agency may only
decline or rescind a block only if the consumer reporting agency cannot
reasonably confirm the appropriate proof of identity for the consumer
and, if applicable, the consumer's representative under Sec.
1022.142(b)(1), the consumer cannot provide documentation consisting of
a victim determination under Sec. 1022.142(b)(6)(i), or the consumer
reporting agency cannot properly identify the adverse items of
information under Sec. 1022.142(b)(6)(ii). This means a consumer
reporting agency can request appropriate proof of identity of the
consumer who is a victim of trafficking as defined in Sec.
1022.142(b)(1) and, if applicable, the consumer's representative, and
that consumer reporting agencies can decline or rescind a block if it
cannot reasonably confirm the appropriate proof of identity. Similar to
the section-by-section analysis of Sec. 1022.142(e) in the proposed
rule, the Bureau does not interpret section 605C as giving the consumer
reporting agency the discretion to contest the merits of the submitted
trafficking documentation, if it meets the definition in section
605C(a) and in Sec. 1022.142(b)(6)(i), nor does it interpret the
statute as giving a consumer reporting agency the discretion to
challenge a consumer's determination that an adverse item of
information resulted from a severe form of trafficking in persons or
sex trafficking under Sec. 1022.142(b)(6)(ii). Accordingly, the Bureau
is amending the text of new Sec. 1022.142(e)(4) to provide that a
consumer reporting agency may not decline to block or rescind any block
of adverse information identified by the consumer or if applicable, the
consumer's representative, based on the validity of the facts or
circumstances detailed in the contents of the submitted trafficking
documentation under Sec. 1022.142(b)(6) of this section.
Section 1022.142(e)(4) also provides that a consumer reporting
agency may decline or rescind a block only after the consumer is
notified using the method of contact specified by the consumer in Sec.
1022.142(b)(6)(ii)(B) and the consumer reporting agency attempted to
resolve any deficiency in the consumer's submission as required in
Sec. 1022.142(e)(2). The Bureau believes requiring consumer reporting
agencies to notify the consumer and attempt to resolve any deficiencies
in the consumer's submission will facilitate compliance and is
appropriate to prevent a consumer reporting agency from furnishing a
consumer report containing any adverse item of information about a
consumer that resulted from trafficking by providing consumers an
opportunity to complete their submission or correct mistakes with
respect to information or documentation they provide initially and
making it less likely that a consumer reporting agency will decline to
block or a rescind a block in error. In doing so, the Bureau is relying
on its regulatory authority under section 621(e) of the FCRA, which
authorizes the Bureau to prescribe regulations that promote accuracy
and fairness in credit reporting, and on the general rulemaking
authority granted the Bureau under section 1022(b)(1) of the Dodd-Frank
Act.
The Bureau concludes that giving consumer reporting agencies
additional discretion to evaluate the validity of the facts or
circumstances detailed in the contents of trafficking documentation, as
defined in Sec. 1022.142(b)(6), would make it difficult for consumers
to understand how to properly submit a request, may decrease the
Bureau's ability to monitor for compliance, and could also lead to
invalid reasons for declining or rescinding a block. As discussed in
more detail above in the section-by-section analysis of Sec.
1022.142(c), Congress did not provide an exception for criminal
convictions and the final rule does not provide such an exception. The
Bureau also concludes that the final rule should not provide a material
misrepresentation of fact as a reason a consumer reporting agency may
decline or rescind a block since the Bureau does not interpret section
605C(a)(1) as permitting a consumer reporting agency to make factual
determinations on whether a consumer is a victim of trafficking or if
adverse items of information identified by the consumer resulted from a
severe form of trafficking in persons or sex trafficking. The Bureau
also finds doing so could lead to confusion and result in improper
denials if the consumer reporting agency inappropriately concludes that
a material misrepresentation of fact was made. Accordingly, the Bureau
is finalizing the proposed rule, with the clarifications noted above.
142(f) Notification to Consumer of Actions Taken in Response to the
Consumer's Submission
The Bureau proposed in Sec. 1022.142(f)(1) to require a consumer
reporting agency to provide written notice to a consumer of the results
of a submission within five calendar days of receipt of the submission
(or, if rescinding a previously applied block, five calendar days after
rescinding). As proposed, Sec. 1022.142(f)(2) would have required a
consumer reporting agency to provide notice in writing informing the
consumer that the review of the submission is completed, a statement
explaining the outcome, a consumer report provided at no cost to the
consumer that is based upon the consumer's revised file (if
applicable), a description of the procedures used to determine the
outcome, a method for contacting the consumer reporting agency to
appeal the determination or revise the submission to cure any of the
noted reasons for declining to block the requested adverse information,
and the web page consumers can use to submit complaints to the Bureau.
The Bureau received mixed comments on the proposed notice
requirements. Several individual and consumer group commenters
expressed their general support for the proposal. Two industry trade
associations objected to the proposed five-calendar-day notice period.
One of these commenters specifically urged the Bureau to mirror section
605B of the FCRA for ease of implementation and allow at least four
business days for blocking and five business days to provide notice to
the consumer. This commenter also argued that the requirement to
provide written notice is beyond the scope of the rulemaking directed
by section 605C. The other commenter stated five days is an
insufficient time to require consumer
[[Page 37719]]
reporting agencies to provide a written notice for documents that are
submitted, but not rescinded. This commenter also proposed the Bureau
change ``provide'' to ``send'' to address the delivery time that is not
typically within the control of a consumer reporting agency. One
consumer group recommended that the Bureau require consumer reporting
agencies to use a preferred mailing address provided by the victim
because of safety and privacy concerns. An industry trade association
made a similar request, noting that consumer reporting agencies may not
have a current address or contact information for the consumer.
Multiple individual commenters and consumer groups supported
requiring a consumer reporting agency to automatically send a revised
consumer report to the consumer. Other commenters recommended that the
Bureau require consumer reporting agencies to provide instructions for
obtaining a current copy of their credit report rather than
automatically mailing a copy, in accordance with existing procedures to
protect the privacy of victims. One industry commenter questioned how
this requirement would apply to consumer reporting agencies like
background screeners that do not maintain a file from which to draft
new reports. The Bureau also received several comments urging the
adoption of other requirements not addressed in the proposal. One
consumer group commenter urged the Bureau to require a consumer
reporting agency to include in the notice details on the appeals
process if a request is declined, and another opposed allowing the
consumer reporting agency to demand specific additional items of
information before it would approve a trafficking block.
For the reasons discussed below, the Bureau is finalizing Sec.
1022.142(f) largely as proposed, with some revisions to address certain
comments received regarding timing requirements. As described above,
Sec. 1022.142(e) of the final rule adopts certain timeframes for the
consumer reporting agency to block the reporting of information after
receipt of documentation from the consumer. Final Sec. 1022.142(f) has
been modified to account for the timing requirements in new Sec.
1022.142(e) by changing the allotted time for a consumer reporting
agency to provide notice to the consumer from five calendar days after
receipt of the submission to five business days after a final
determination on a consumer's submission under Sec. 1022.142(e)(3)
(or, if rescinding a previously applied block, five business days after
rescinding under Sec. 1022.142(e)(4)) in order to improve
implementation of this section.
The Bureau concludes that the contents of the notice required by
Sec. 1022.142(f) are appropriately tailored to providing consumers the
information they need to ensure that their submission was handled
correctly by the consumer reporting agency. This information ensures
that the consumer is provided with a thorough explanation of the
outcome and the appeals process, and providing a copy of the revised
consumer report allows the consumer to verify that the correct items
have been blocked. Moreover, requiring a notice to the consumer on how
to submit a complaint to the Bureau will facilitate compliance and is
appropriate to prevent a consumer reporting agency from furnishing a
consumer report containing any adverse item of information about a
consumer that resulted from trafficking by providing consumers with the
information they need to determine if a consumer reporting agency
declined to block or a rescind a block in error and with information
about how to get any such error corrected.
If the consumer is not notified of the outcome by the consumer
reporting agency, the consumer would either have to separately request
a copy of their credit report, perhaps incurring a fee, or wait to see
if they are subject to an adverse action the next time their consumer
report is used, which may mean missing out on credit, employment, or
housing opportunities. Many victims of trafficking will be in
particularly urgent need of housing, employment, or credit, and knowing
within a reasonable time that a consumer reporting agency has blocked
adverse items of information may facilitate a victim's ability to
obtain these vital services. The Bureau also finds that these
requirements in Sec. 1022.142(f) are necessary to prevent a consumer
reporting agency from furnishing a consumer report containing any
adverse item of information about a consumer that resulted from
trafficking because it provides consumers with the opportunity to
review the outcome and, if the consumer reporting agency incorrectly
rejected a submission, to dispute that outcome.
The Bureau recognizes that certain consumer reporting agencies may
not maintain a file from which they produce reports, including some
background screeners. The final text accounts for this situation, as it
requires the consumer reporting agency to provide a report ``that is
based upon the consumer's revised file (if applicable) as a result of
the consumer's submission.'' \62\ Accordingly, the Bureau declines to
adopt a special exception for consumer reporting agencies that do not
maintain files on consumers. Finally, the Bureau adopts a minor
clarification that the notice must be sent by the preferred
communication method specified by the consumer in the submission as
provided for in Sec. 1022.142(b)(6)(ii)(B).
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\62\ Emphasis added.
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142(g) Record Retention
Proposed Sec. 1022.142(g) would have required a consumer reporting
agency to retain evidence of submissions under section 605C. The
proposal would have also required a consumer reporting agency to
maintain documentation concerning the outcome of the submissions,
reasons for declining or rescinding to act (if applicable), and
compliance with Sec. 1022.142. In the proposed rule, consumer
reporting agencies would have needed to retain this information for a
period of seven years after the date the submission by the consumer is
received. Under section 605 of the FCRA, most adverse information would
be excluded from consumer reports after seven years automatically.
The Bureau received comments from individuals, industry, and
consumer groups on this proposed provision. While most commenters
supported a record retention requirement, all who commented suggested
revisions. A few commenters suggested that record retention
requirements should be extended to 10 years because certain
bankruptcies may be reported for 10 years. Another commenter suggested
that consumer reporting agencies should be required to publish their
policies on recordkeeping and data collection. Similarly, a consumer
advocate urged the Bureau to provide additional information about the
data protection obligations of consumer reporting agencies so that
survivors understand how their information will be protected. The
commenter also suggested that the Bureau communicate any exceptions to
the general record retention rule so that survivors can better
determine whether they want to submit a request.
Two industry commenters opposed the proposed record retention
requirements because they believe that the requirements are
antithetical to current data privacy and data security regulation and
could increase the scope of, and risk related to, a data breach. They
suggested that the requirements are too broad or too long, and one
suggested that victims may hesitate to provide information because
victims
[[Page 37720]]
may fear that their information will be shared with others. One
commenter argued that submitted information should be destroyed under
standard data retention timeframes, which are often much shorter than
seven years. The other commenter suggested aligning record retention
requirements with the statute of limitations or statute of repose for
the FCRA.
For the reasons stated below, the Bureau is finalizing Sec.
1022.142(g) with minor revisions to cross references within the rule.
The final rule provides that a consumer reporting agency must retain
evidence of submissions and compliance with this section for a period
of seven years after the consumer's submission, which the Bureau has
determined is an appropriate period of time to require consumer
reporting agencies to retain records. The Bureau concludes that it is
not appropriate to tie record retention requirements to the statute of
limitations or statute of repose because it would unnecessarily
complicate the requirements. Those time periods can be difficult to
determine and provide less clarity for all involved. While some adverse
information remains on a consumer report for longer than seven years,
the Bureau has determined that seven years strikes the right balance
because most adverse information will be excluded from a consumer
report after seven years.
The Bureau finds that requiring consumer reporting agencies to
maintain records of compliance will enable the Bureau to assess
consumer reporting agencies' compliance with the rules. This
requirement will also facilitate compliance by supporting effective and
efficient enforcement of the rule in order to prevent a consumer
reporting agency from furnishing a consumer report containing any
adverse item of information about a consumer that resulted from a
severe form of trafficking in persons or sex trafficking.
The final rule contains several clarifying revisions, including one
technical correction to clarify that the record retention requirements
apply to all submissions sent to the mailing or website address made
available under Sec. 1022.142(d)(1). The final rule also clarifies the
types of evidence that must be retained under this section by including
cross-references to actions taken by a consumer reporting agency under
Sec. 1022.142(e)(1) through (e)(3) and (f) as well as the reasons
provided under Sec. 1022.142(e)(4) for declining to block or
rescinding any block of items of adverse information identified by the
consumer.
142(h) Policies and Procedures To Ensure and Maintain Compliance
Proposed Sec. 1022.142(h) required consumer reporting agencies to
establish and maintain written policies and procedures reasonably
designed to ensure and monitor the compliance of the consumer reporting
agency and its employees with the requirements of this section. Rather
than proposing a one-size-fits-all approach, proposed Sec. 1022.142(h)
specified that these written policies and procedures must be
appropriate to the nature, size, complexity, and scope of the
activities of the consumer reporting agency and its employees. For
example, consumer reporting agencies must develop policies and
procedures that address how requests are evaluated and processed, and
the limited circumstances a consumer reporting agency may decline or
rescind a block under Sec. 1022.142(e).
The Bureau received few comments on this provision. A consumer
advocate recommended requiring policies and procedures to detail how
trafficking-specific information will be used, shared, and protected
and making such policies and procedures available to review before
submitting a request. One commenter asked the Bureau to specify
penalties for failing to comply with this provision.
The Bureau is finalizing Sec. 1022.142(h) as proposed. The Bureau
believes requiring consumer reporting agencies to maintain written
policies and procedures is necessary to administer the rule by enabling
the Bureau to assess consumer reporting agencies' compliance with the
rule and to facilitate compliance in order to prevent a consumer
reporting agency from furnishing a consumer report containing any
adverse item of information about a consumer that resulted from human
trafficking. Written policies and procedures will help consumer
reporting agencies ensure they have developed practices that fully
implement the requirements of this section that are tailored to the
nature, size, complexity, and scope of the activities of the consumer
reporting agency and its employees. The Bureau understands that some,
if not all, consumer reporting agencies have pre-existing policies and
procedures to ensure compliance of the FCRA and Regulation V and these
policies and procedures also describe how consumer's information
submitted to them will be used, shared, and protected.
The Bureau expects consumer reporting agencies to make information
available to consumers who are victims of trafficking information on
how their submission of information will be used, shared, and
protected. The Bureau believes this is particularly important given the
treatment and harm inflicted upon victims of trafficking by their
trafficker.
VI. Effective Date
Pursuant to section 6102(c) of the 2022 NDAA, the amendments to the
FCRA shall go into effect 30 days after the Bureau issues a final rule.
In accordance with procedures for the issuance of Bureau rules, a final
Bureau rule is deemed to be issued on the earlier of ``(a) [w]hen the
final rule is posted on the Bureau's website; or (b) [w]hen the final
rule is published in the Federal Register.'' \63\ This means the
effective date of section 605C could be based on the date the final
rule is posted on the Bureau's website instead of the date the final
rule is published in the Federal Register, if posting on the Bureau's
website is first. Under section 553(d) of the Administrative Procedure
Act,\64\ the required publication or service of a substantive rule must
be made not less than 30 days before its effective date, with certain
exceptions not applicable here.
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\63\ 12 CFR 1074.1.
\64\ 5 U.S.C. 553(d).
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In the proposed rule, the Bureau proposed an effective date of 30
days after the date of the final rule's publication in the Federal
Register so that the final rule would take effect at the same time as
section 605C. The Bureau received two comments requesting a later
effective date to give the industry more time to implement the rule.
One commenter explained that this extra time is needed to allow the
consumer reporting agencies to train employees and implement necessary
compliance controls.
The Bureau has considered these comments and has determined that,
as proposed, the final rule will become effective 30 days after
publication in the Federal Register. Thus, the final rule will take
effect as close to the effective date of section 605C as possible. The
Bureau finds that an effective date of a rule that is contemporaneous
to the statutory effective date will avoid uncertainty for consumers
who are victims of trafficking as well as for consumer reporting
agencies. To the extent a consumer reporting agency receives a
submission between any time period that section 605C is in effect and
the effective date of the rule, the Bureau expects consumer reporting
agencies to otherwise comply with section 605C(b)
[[Page 37721]]
by not furnishing a consumer report containing any adverse item of
information about a consumer that resulted from a severe form of
trafficking in persons or sex trafficking if the consumer has provided
trafficking documentation to the consumer reporting agency.\65\
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\65\ Consumer reporting agencies could look to new section
1022.142 on how to handle submissions between the statutory and rule
effective date to the extent there is a gap.
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VII. Dodd-Frank Act Section 1022(b)(2) Analysis
In developing this final rule, the Bureau has considered the rule's
potential benefits, costs, and impacts in accordance with section
1022(b)(2)(A) of the Consumer Financial Protection Act of 2010
(CFPA).\66\ In developing the final rule, the Bureau has consulted or
offered to consult with the prudential banking regulators (the FDIC,
FRB, NCUA, and OCC) and the Bureau of Indian Affairs, several offices
in the DOJ, the Office on Trafficking in Persons in HHS, Department of
Homeland Security (DHS), and the FTC, including regarding consistency
of this rule with any prudential, market, or systemic objectives
administered by those agencies, in accordance with section
1022(b)(2)(B) of the CFPA. Most commenters did not specifically address
the Bureau's proposed section 1022(b) analysis; the Bureau discusses
those comments that were relevant to the analysis below.
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\66\ 12 U.S.C. 5512(b)(2)(A).
---------------------------------------------------------------------------
The Bureau expects that the final rule will benefit consumers who
are victims of a severe form of trafficking in persons or sex
trafficking and have adverse information on file with a consumer
reporting agency as a result of that trafficking. The benefits to
individual consumers who are victims of trafficking could be
considerable--adverse information from consumer reporting agencies
could negatively affect a consumer's ability to obtain housing,
employment, credit, or other immediate and longer-term services
necessary to support long-term independence and financial stability.
Conversely, the final rule will impose costs on consumer reporting
agencies in the form of compliance costs associated with processing
requests from consumers to block adverse information and effecting the
necessary blocks. While the Bureau does not have data to quantify these
costs, the Bureau expects the costs of complying with the requirements
of the final rule to be small in magnitude. Consumer reporting agencies
are already required by 15 U.S.C. 1681c-2 to have systems in place to
accept reports of identity theft, and to respond to those reports by
suppressing information on any consumer reports. Consumer reporting
agencies also have systems in place to address treatment of inaccurate
and unverifiable information as required by 15 U.S.C. 1681i(a)(5) and
concerning the notice of results of reinvestigation under 15 U.S.C.
1681i(a)(6). This rule's procedural requirements are modeled on these
requirements.
Some industry commenters noted that the proposed requirement to
have a dedicated toll-free phone number to receive requests to block
adverse information related to trafficking would be particularly
burdensome for smaller consumer reporting agencies, as the regime for
identity theft block requests only requires the nationwide consumer
reporting agencies to maintain a dedicated toll-free phone number. The
Bureau has modified this provision in the final rule to only impose
this requirement on consumer reporting agencies that already maintain a
dedicated toll-free number for identity theft. As a result, the final
rule will not impose this cost on covered persons.
Although the Bureau characterizes qualitatively the nature of the
benefits to consumers and the costs to firms above, it is not able to
quantify the overall magnitude of the likely costs and benefits of the
proposed rule. Quantifying these costs and benefits would require an
estimate of the number of consumers likely to submit information to
support a block under the rule in a typical year. Not all victims of
trafficking will necessarily have adverse information with a consumer
reporting agency, and among those who do, not all will make a
submission or be able to provide the required documentation.\67\ For
instance, a report by the non-profit Polaris, cited by both industry
and consumer advocate commenters, found that 26 percent of trafficking
victims had bank accounts or credit cards fraudulently opened in their
names.\68\ While illustrating the importance of the problem this rule
is intended to address, this statistic also indicates that not all
victims of trafficking necessarily have adverse information with a
consumer reporting agency. The Bureau does not have a way to estimate
the number of trafficking victims who will make a request, and
according to the State Department, there is no reliable estimate of the
annual number of trafficking victims in the United States.
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\67\ This may occur if the consumer is not aware of the adverse
information or is not seeking any product or service that might rely
on a consumer report including that information (e.g., if the
adverse information relates to credit and the consumer is not
currently seeking new credit). In addition, although the proposed
rule is intended to make the submission process as straightforward
as possible for victims of trafficking and intends to conduct
outreach to ensure that victims are aware of their rights, consumers
may not utilize the reporting process if they do not know their
right to make a request, because they lack the required
documentation, or because they believe the process to be more costly
in time and effort than the potential benefits of blocking the
adverse information.
\68\ Polaris Project, On-Ramps, Intersections, and Exit Routes
(July 2018), at 23, <a href="https://polarisproject.org/wp-content/uploads/2018/08/A-Roadmap-for-Systems-and-Industries-to-Prevent-and-Disrupt-Human-Trafficking-Financial-Industry.pdf">https://polarisproject.org/wp-content/uploads/2018/08/A-Roadmap-for-Systems-and-Industries-to-Prevent-and-Disrupt-Human-Trafficking-Financial-Industry.pdf</a>.
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To provide a rough sense of scale, the Bureau compares available
statistics on human trafficking in the United States to statistics on
identity theft, which have a similar treatment under the FCRA as under
the final rule. In 2020, the National Human Trafficking Hotline made
8,701 referrals for potential victims of trafficking.\69\ For
comparison, the FTC received nearly 1.4 million complaints related to
identity theft in 2020.\70\ Both the number of referrals from the
National Human Trafficking Hotline and the number of identity theft
complaints to the FTC likely undercount the true incidence of
trafficking and identity theft, respectively. However, given that not
all victims of trafficking will have adverse information with a
consumer reporting agency, it seems reasonable to assume that the
annual number of consumer submissions to consumer reporting agencies
under the final rule would be at least two orders of magnitude less
than the volume similar requests related to identity theft. As a
result, the Bureau expects that although the benefits of the final rule
to individual consumers who are victims of trafficking may be
considerable, the aggregate benefits to consumers and the aggregate
costs to consumer reporting agencies are likely to be small.\71\
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\69\ Off. to Monitor & Combat Trafficking in Persons, U.S. Dep't
of State, 2021 Trafficking in Persons Report (Jun. 2021), <a href="https://www.state.gov/reports/2021-trafficking-in-persons-report/">https://www.state.gov/reports/2021-trafficking-in-persons-report/</a>.
\70\ Fed. Trade Comm'n, Consumer Sentinel Network Data Book 2020
(Feb. 2021), at 7, <a href="https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf">https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf</a>.
\71\ It is possible that consumer reporting agencies may incur
some costs associated with submissions from individuals who claim
fraudulently that adverse items of information in their consumer
reports result from a severe form of trafficking in persons or sex
trafficking of which they allege to be a victim. Given the
documentation requirements in the proposed rule, the Bureau does not
expect this would happen often. One individual commenter
specifically supported this assessment, asserting that the
documentation requirements in the Proposed Rule would reduce or
eliminate the possibility of fraud.
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[[Page 37722]]
The final rule may increase consumer access to credit, to the
extent that consumers who are victims of trafficking and have adverse
information related to that trafficking present on a credit report, and
blocking that adverse information makes it easier for those consumers
to obtain credit.
The final rule will not have a unique impact on insured depository
institutions or insured credit unions with less than $10 billion in
assets described in section 1026(a) of the Dodd-Frank Act. Finally, the
final rule would not have a unique impact on rural consumers.
VIII. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct an initial regulatory flexibility analysis (IRFA) and a
final regulatory flexibility analysis (FRFA) of any rule subject to
notice-and-comment rulemaking requirements, unless the head of the
agency certifies that the rule will not, if promulgated, have a
significant economic impact on a substantial number of small
entities.\72\ The Bureau also is subject to certain additional
procedures under the RFA involving the convening of a panel to consult
with small business representatives prior to proposing a rule for which
an IRFA is required.\73\ The final rule will apply to all consumer
reporting agencies, including all those that are small businesses under
the RFA. However, it is unlikely that any small business will
experience a significant economic impact as a result of the rule. As
discussed in section VII above, the number of submissions for blocking
adverse information each year are likely to be small, and consumer
reporting agencies are already required to have processes in place for
processing similar requests due to existing requirements related to
identity theft and dispute procedures under section 611 of the FCRA.
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\72\ 5 U.S.C. 601 through 612.
\73\ 5 U.S.C. 609.
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Accordingly, the Director certifies that this final rule will not
have a significant economic impact on a substantial number of small
entities. Thus, a FRFA is not required for this final rule.
IX. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA),\74\ Federal
agencies are generally required to seek approval from the Office of
Management and Budget (OMB) for data collection, disclosure, and
recordkeeping requirements (collectively, information collection
requirements) prior to implementation. Under the PRA, the Bureau may
not conduct or sponsor, and, notwithstanding any other provision of
law, a person is not required to respond to, an information collection
unless the information collection displays a valid control number
assigned by OMB. As part of its continuing effort to reduce paperwork
and respondent burden, the Bureau conducts a preclearance consultation
program to provide the general public and Federal agencies with an
opportunity to comment on the information collection requirements in
accordance with the PRA. This helps ensure that the public understands
the Bureau's requirements or instructions, respondents can provide the
requested data in the desired format, reporting burden (time and
financial resources) is minimized, information collection instruments
are clearly understood, and the Bureau can properly assess the impact
of information collection requirements on respondents.
---------------------------------------------------------------------------
\74\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------
This final rule amends 12 CFR part 1022 (Regulation V). The
Bureau's OMB control number for Regulation V is 3170-0002. As described
below, the final rule creates the following new information collection
requirements in Regulation V:
<bullet> The final rule will require consumer reporting agencies to
accept trafficking and other documentation from consumers, process the
submissions, and block any adverse item of information identified by
the consumer that resulted from a severe form of trafficking in persons
or sex trafficking under Sec. 1022.142(d)-(e). Consumer reporting
agencies will be required to inform consumers of their decision and
actions with respect to the submission under Sec. 1022.142(f).
<bullet> The final rule requires consumer reporting agencies to
retain evidence of all submissions by consumers pursuant to these
regulations, including actions taken in response to the submissions,
reasons for declining or rescinding the block requests, and compliance
with this section for a seven-year period under Sec. 1022.142(g).
<bullet> The final rule requires consumer reporting agencies to
establish and maintain written policies and procedures reasonably
designed to ensure and monitor the compliance of the consumer reporting
agency and its employees with the requirements of this rule under Sec.
1022.142(h).
The collections of information contained in this final rule, and
identified as such, have been submitted to OMB for review under section
3507(d) of the PRA. A complete description of the information
collection requirements (including the burden estimate methods) is
provided in the information collection request (ICR) that the Bureau
has submitted to OMB under the requirements of the PRA. A separate
comment period on the information collections concluded on June 17,
2022. OMB received no comments.
Title of Collection: Regulation V: Fair Credit Reporting Act.
OMB Control Number: 3170-0002.
Type of Review: Revision of a currently approved collection.
Affected Public: Private Sector; Federal, State, and Tribal
Governments.
Estimated Number of Respondents: The Bureau does not have enough
information to estimate the number of respondents and is assuming de
minimis. The Bureau requested comment on this assumption, but received
no comments addressing this point.
Estimated Total Annual Burden Hours: The Bureau does not have
enough information to know how frequently this collection will occur or
the burden it will impose. The Bureau received no comments directly
addressing the burden of this collection. Two industry trade
associations submitted comments arguing for a shorter record retention
period under Sec. 1022.142(g), but neither commenter argued that the
proposed requirement was too burdensome or provided an estimate of the
burden of the proposed requirement in terms of time or financial
resources.
If OMB has not approved the new information collection requirements
prior to publication of the final rule in the Federal Register, the
Bureau will publish a separate notification in the Federal Register
announcing OMB's approval prior to the effective date of the final
rule.
The Bureau has a continuing interest in the public's opinion of its
collections of information. At any time, comments regarding the burden
estimate, or any other aspect of the information collection, including
suggestions for reducing the burden, may be sent to the Consumer
Financial Protection Bureau (Attention: PRA Office), 1700 G Street NW,
Washington, DC 20552, or by email to <a href="/cdn-cgi/l/email-protection#3f7c796f7d606f6d7e7f5c594f5d11585049"><span class="__cf_email__" data-cfemail="074441574558575546476461776529606871">[email protected]</span></a>.
Where applicable, the Bureau will display the control number
assigned by OMB to any documents associated with any information
collection requirements adopted in this rule.
[[Page 37723]]
X. Congressional Review Act
Pursuant to the Congressional Review Act,\75\ 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).
---------------------------------------------------------------------------
\75\ 5 U.S.C. 801 et seq.
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List of Subjects in 12 CFR Part 1022
Banks, banking, Consumer protection, Credit unions, Holding
companies, National banks, Privacy, Reporting and recordkeeping
requirements, Savings associations.
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 ACT (REGULATION V)
0
1. Revise the authority citation for part 1022 to read as follows:
Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1681a, 1681b, 1681c,
1681c-1, 1681c-3, 1681e, 1681g, 1681i, 1681j, 1681m, 1681s, 1681s-2,
1681s-3, and 1681t; Sec. 214, Pub. L. 108-159, 117 Stat. 1952.
Subpart O--Miscellaneous Duties of Consumer Reporting Agencies
0
2. Add Sec. 1022.142 to read as follows:
Sec. 1022.142 Prohibition on inclusion of adverse information in
consumer reporting in cases of human trafficking.
(a) Scope. This section applies to any consumer reporting agency as
defined in section 603(f) of the FCRA, 15 U.S.C. 1681a(f).
(b) Definitions. For purposes of this section:
(1) Appropriate proof of identity means proof of identity that
meets the requirements in Sec. 1022.123, for purposes of section 605C
of the FCRA.
(2) Consumer report has the meaning provided in section 603(d) of
the FCRA, 15 U.S.C. 1681a(d).
(3) Consumer reporting agency has the meaning provided in section
603(f) of the FCRA, 15 U.S.C. 1681a(f).
(4) Severe forms of trafficking in persons has the meaning provided
in section 103 of the Trafficking Victims Protection Act of 2000, 22
U.S.C. 7102(11).
(5) Sex trafficking has the meaning provided in section 103 of the
Trafficking Victims Protection Act of 2000, as amended by section 108
of the Justice for Victims of Trafficking Act of 2015, 22 U.S.C.
7102(12).
(6) Trafficking documentation means one or more documents that
satisfy paragraphs (b)(6)(i) and (ii) of this section:
(i) Victim determination. Documentation that:
(A) Is of a determination that a consumer is a victim of
trafficking made by a:
(1) Federal, State, or Tribal governmental entity; or
(2) Non-governmental organization or members of a human trafficking
task force, including victim service providers affiliated with the
organization or task force, authorized by a Federal, State, or Tribal
governmental entity to make such a determination;
(B) Is of a determination that a consumer is a victim of
trafficking made by a court of competent jurisdiction or determination
consisting of documents filed in a court of competent jurisdiction
where a central issue in the case is whether the consumer is a victim
of trafficking and the court has, at a minimum, affirmed the consumer's
claim either by accepting certain pieces of evidence which are assumed
to be true or finding that the there is no genuine dispute as to any
material fact supporting a judgment in favor of the victim as a matter
of law; or
(C) Is of a signed statement by the consumer attesting that the
consumer is a victim of trafficking if such statement or an
accompanying document is signed or certified by a representative of an
entity described in paragraph (b)(6)(i)(A) or (B) of this section.
(ii) Identified adverse items of information. Documentation, which
may consist of a statement prepared by the consumer or by any
designated representative on behalf of a consumer (except for a credit
repair organization as defined in section 403(3) of the Credit Repair
Organizations Act, 15 U.S.C. 1679a(3), or an entity that would be a
credit repair organization, but for section 403(3)(B)(i) of the Credit
Repair Organizations Act, 15 U.S.C. 1679a(3)(B)(i)), that:
(A) Identifies any items of adverse information that should not be
furnished by a consumer reporting agency because the items resulted
from a severe form of trafficking in persons or sex trafficking of
which the consumer is a victim; and
(B) Must contain a preferred method for a consumer reporting agency
to contact the consumer electronically or in writing such as an email
address or physical address where mail can be received. A consumer
reporting agency shall use only the consumer's preferred method of
contact for communications under paragraphs (d), (e), and (f) of this
section about the consumer's submission and shall not use the
consumer's preferred contact information for any other purpose.
(7) Victim of trafficking means a person who is a victim of a
severe form of trafficking in persons or sex trafficking.
(c) Prohibition on inclusion of adverse information of trafficking
victims. A consumer reporting agency may not furnish a consumer report
containing any adverse item of information about a consumer that
resulted from a severe form of trafficking in persons or sex
trafficking if the consumer has provided trafficking documentation as
defined under paragraph (b)(6) of this section to the consumer
reporting agency.
(d) Method of submission to consumer reporting agencies. (1)
Mailing and website address. A consumer reporting agency must provide
two mailing addresses for a consumer or consumer representative, as
described in paragraph (b)(6)(ii) of this section, to send a submission
consisting of an appropriate proof of identification under paragraph
(b)(1) of this section and trafficking documentation under paragraph
(b)(6) of this section. A consumer reporting agency may also establish
a secure online website portal for a consumer to upload a submission. A
consumer reporting agency must accept a submission sent to the mailing
and, if applicable, website address used for disputes under section 611
of the FCRA, and must accept a submission sent to a mailing and, if
applicable, website address dedicated to blocking adverse items of
information resulting from a severe form of trafficking in persons or
sex trafficking under this section.
(2) Disclosing methods for submission. A consumer reporting agency
must add information on its publicly available website stating how
submissions for the blocking of adverse items of information resulting
from a severe form of trafficking in persons or sex trafficking should
be provided to a consumer reporting agency.
(3) Toll-free telephone number. A consumer reporting agency that
compiles and maintains files on consumers on a nationwide basis, as
defined in section 603(p) of the FCRA, 15 U.S.C. 1681a(p), must:
(i) Allocate a reasonable amount of personnel to respond to
consumer inquiries about the process for and status of a consumer's
submission at the toll-free telephone number used for
[[Page 37724]]
disputes under section 611 of the FCRA; and
(ii) Establish a toll-free telephone number dedicated to addressing
submissions from consumers seeking to block adverse items of
information resulting from a severe form of trafficking in persons or
sex trafficking under this section.
(e) Block of adverse information resulting from trafficking. (1)
Block upon receipt of the submission. Except as otherwise provided in
this section, within four business days of receipt of the consumer's
submission under paragraph (d)(1) of this section, a consumer reporting
agency must block the reporting of any adverse item of information
identified by the consumer (or their representative) as resulting from
a severe form of trafficking in persons or sex trafficking.
(2) Requirement to notify the consumer and attempt to resolve
deficiencies. (i) In general. Within five business days of receipt of
the consumer's submission under paragraph (d) of this section, a
consumer reporting agency must notify a consumer if additional
information is necessary for the purpose of completing the submission
and attempt to resolve any deficiency in the consumer's submission. A
consumer reporting agency may only request additional information where
the consumer reporting agency cannot reasonably confirm the appropriate
proof of identity under paragraph (b)(1) of this section for the
consumer or, if applicable, the consumer's representative, the consumer
did not provide victim determination documentation under paragraph
(b)(6)(i) of this section, or the consumer reporting agency cannot
properly identify the adverse items of information under paragraph
(b)(6)(ii) of this section. A consumer reporting agency may not,
however, ask for information on the validity of the facts or
circumstances detailed in the contents of the submitted trafficking
documentation establishing the consumer is a victim of trafficking or
whether the identified adverse information resulted from a severe form
of trafficking in persons or sex trafficking under paragraph (b)(6) of
this section.
(ii) Timing of final determination. A consumer reporting agency
must make a final determination on the consumer's submission no later
than 25 business days after receiving the submission provided in
paragraph (d)(1) of this section.
(3) Final determination of the block. Upon confirming completion of
the submission from the consumer under paragraph (d)(1) of this section
and in accordance with the requirements under paragraph (e)(2) of this
section, the consumer reporting agency must initiate or maintain the
action described in paragraph (e)(1) of this section by blocking the
reporting of the items of adverse information on the consumer.
(4) Authority to decline or rescind a block. A consumer reporting
agency may decline to block, or may rescind any block of, adverse items
of information resulting from a severe form of trafficking in persons
or sex trafficking, in accordance with the timing requirements under
paragraph (e)(2)(ii) of this section, only where the consumer reporting
agency cannot reasonably confirm the appropriate proof of identity
under paragraph (b)(1) of this section for the consumer, and, if
applicable, the consumer's representative, the consumer cannot provide
documentation consisting of a victim determination under paragraph
(b)(6)(i) of this section, or the consumer reporting agency cannot
properly identify the adverse items of information under paragraph
(b)(6)(ii) of this section. A consumer reporting agency may not,
however, decline to block or rescind any block of adverse information
identified by the consumer or if applicable, the consumer's
representative, based on the validity of the facts or circumstances
detailed in the contents of the submitted trafficking documentation as
defined in paragraph (b)(6) of this section. A consumer reporting
agency may decline or rescind a block only after notifying the consumer
using the method of contact specified by the consumer in paragraph
(b)(6)(ii)(B) of this section and attempting to resolve any deficiency
in the consumer's submission as required in paragraph (e)(2) of this
section.
(f) Notification to consumer of actions taken in response to the
consumer's submission--(1) In general. A consumer reporting agency must
provide written or electronic notice to a consumer of actions performed
in response to a consumer's submission no later than five business days
after a final determination on a consumer's submission under paragraph
(e)(3) of this section (or, if rescinding a previously applied block,
five business days after rescinding under paragraph (e)(4) of this
section). The consumer reporting agency must use the method of contact
specified by the consumer in paragraph (b)(6)(ii)(B) of this section.
(2) Contents. The notice must include the following:
(i) A statement that the review of the submission is completed;
(ii) A statement of the outcome of the submission, including the
reason(s) if the consumer reporting agency declined to block the
adverse information identified by the consumer, or rescinded such a
block, under paragraph (e)(4) of this section;
(iii) A consumer report, provided at no cost to the consumer, that
is based upon the consumer's revised file (if applicable) as a result
of the consumer's submission;
(iv) A description of the procedure used to determine the outcome;
(v) A method for contacting the consumer reporting agency to appeal
the determination or revise the submission to cure any of the noted
reasons for declining to block the adverse information identified by
the consumer; and
(vi) The web page consumers can use to submit complaints to the
Consumer Financial Protection Bureau.
(g) Record retention. For a period of seven years after the
consumer's submission is received at the mailing or website address
made available under paragraph (d)(1) of this section, a consumer
reporting agency must retain evidence of all such submissions and
compliance with this section, including the actions taken by the
consumer reporting agency under paragraphs (e)(1) through (e)(3), and
(f) of this section and the reasons provided under paragraph (e)(4) of
this section for declining to block or rescinding any block of items of
adverse information identified by the consumer.
(h) Policies and procedures to ensure and maintain compliance. A
consumer reporting agency must establish and maintain written policies
and procedures reasonably designed to ensure and monitor the compliance
of the consumer reporting agency and its employees with the
requirements of the paragraphs in this section. These written policies
and procedures must be appropriate to the nature, size, complexity, and
scope of the activities of the consumer reporting agency and its
employees.
Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2022-13671 Filed 6-23-22; 8:45 am]
BILLING CODE 4810-AM-P
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</html>Indexed from Federal Register on June 24, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.