The Federal Trade Commission (FTC) has updated several of their guidance documents that help apartment firms understand how to use credit and background screenings to manage properties, operations and workforce without violating federal law.
Also known as “consumer reports,” these reports go beyond just traditional creditworthiness screenings and include rental, criminal and other court records. As such, their use is governed by the Fair Credit Reporting Act (FCRA), which is enforced by the FTC. Given the necessity of using such reports to screen residents and employees, it is important for members to fully understand the FCRA requirements.
The new or updated FTC guidance includes:
- Using Consumer Reports: What Landlords Need to Know
- What Tenant Background Screening Companies Need to Know About the Fair Credit Reporting Act
- Using Consumer Reports: What Employers Need to Know
- Background Checks: What Employers Need to Know
- What Employment Background Screening Companies Need to Know About the Fair Credit Reporting Act
- Consumer Reports: What Information Furnishers Need to Know
Each of the guidance documents provide invaluable information as to how various consumer reports can be used by apartment firms, the legal requirements surrounding their use and existing consumer notification standards. For example, the FTC provides a snapshot of steps that a property manager/owner must take after turning down an applicant or taking any number of other adverse actions such as requiring a co-signer for the lease term based on their consumer report.
- House Financial Services Committee Holds Oversight Hearing of Credit Bureaus
- Letter to House Financial Services Committee Regarding the Comprehensive Consumer Credit Reporting Reform Act of 2019
- FHFA Redirects Credit Scoring Model Initiative
- NMHC/NAA Weigh in on Behalf of Renters Calling for Expanded Credit Scoring Models
- NMHC/NAA Senate Banking Letter Regarding Credit Reporting Hearing