New rules from the CFPB for small business owners.

Posted on Nov 26, 2018

New CFPB Rules For EmployersThe Economic Growth, Regulatory Relief, and Consumer Protection Act took effect in May of this year. In conjunction with this legislation, the Consumer Financial Protection Bureau (“CFPB”) has issued an interim final rule that applies to employers under a new section of the Fair Credit Reporting Act.

As of September 21st, employers must update the Summary of Consumer Rights provided to applicants and employees before obtaining a consumer report and concurrent with potential adverse action based on the report.  Importantly, the notices must inform applicants and employees that they can receive free “national security freezes,” and that fraud alerts must be in place for a minimum of one year.

This rule allows for the applicant and employer to both be informed, prior to employment, of their respective rights and obligations should any action need to be taken thereafter. Small business owners need to be aware of this new rule established by the CFPB because there could be ramifications if it is not followed. The rule is currently in place and employers can obtain the information and model form from the CFPB’s website.

If you have any questions, please contact us. 

For related information on small businesses, visit these links:

Do You Know Your Duns Number?
Ins and Outs of Small Business Credit

Kellam T. Parks
Managing Member of Parks Zeigler, PLLC