Fair Credit Reporting; Name-Only Matching Procedures
| Published date | 10 November 2021 |
| Citation | 86 FR 62468 |
| Record Number | 2021-24471 |
| Section | Rules and Regulations |
| Court | Consumer Financial Protection Bureau |
62468
Federal Register / Vol. 86, No. 215 / Wednesday, November 10, 2021 / Rules and Regulations
1
85 FR 77987 (Dec. 3, 2020).
2
See Nat’l Consumer Law Ctr., Broken Records
Redux: How Errors by Criminal Background Check
Companies Continue to Harm Consumers Seeking
Jobs and Housing 3 (Dec. 2019), https://
www.nclc.org/images/pdf/criminal-justice/report-
broken-records-redux.pdf; Bureau of Consumer Fin.
Prot., Market Snapshot: Background Screening
Reports: Criminal background checks in
employment 3–4 (Oct. 2019), https://files.consumer
finance.gov/f/documents/201909_cfpb_market-
snapshot-background-screening_report.pdf (CFPB
Background Screening Report); Sharon Dietrich,
Preventing Background Screeners from Reporting
Expunged Criminal Cases, Sargent Shriver Nat’l Ctr.
on Poverty L. (Apr. 2015).
3
See, e.g., Bureau of Consumer Fin. Prot.,
Complaint Bulletin: COVID–19 issues described in
consumer complaints 15 (July 2021), https://
files.consumerfinance.gov/f/documents/cfpb_covid-
19-issues-described-consumer-complaints_
complaint-bulletin_2021-07.pdf (CFPB Complaint
Bulletin) (noting that, in their complaints to the
Bureau, some consumers have reported being
denied applications for housing because
information in their tenant screening reports was
inaccurate, and other consumers reported facing
homelessness because an eviction had negatively
affected their credit, making it more difficult to
secure housing); Kaveh Waddell, How Tenant
Screening Reports Make It Hard for People to
Bounce Back from Tough Times, Consumer Reports
(Mar. 11, 2021), https://www.consumerreports.org/
algorithmic-bias/tenant-screening-reports-make-it-
hard-to-bounce-back-from-tough-times/; Lauren
Kirchner & Matthew Goldstein, How Automated
Background Checks Freeze Out Renters, N.Y. Times
(May 28, 2020), https://www.nytimes.com/2020/05/
28/business/renters-background-checks.html.
4
CFPB Background Screening Report, supra note
2, at 13–14.
5
15 U.S.C. 1681(b).
6
Guimond v. Trans Union Credit Info., 45 F.3d
1329, 1333 (9th Cir.1995) (citations omitted).
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Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs
designated this rule as not a major rule,
as defined by 5 U.S.C. 804(2).
Authority: 7 U.S.C. 1633, 7701–7772, and
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[FR Doc. 2021–24490 Filed 11–9–21; 8:45 am]
BILLING CODE 3410–34–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1022
Fair Credit Reporting; Name-Only
Matching Procedures
AGENCY
: Bureau of Consumer Financial
Protection.
ACTION
: Advisory opinion.
SUMMARY
: The Bureau of Consumer
Financial Protection (Bureau) is issuing
this advisory opinion to highlight that a
consumer reporting agency that uses
inadequate matching procedures to
match information to consumers,
including name-only matching (i.e.,
matching information to the particular
consumer who is the subject of a
consumer report based solely on
whether the consumer’s first and last
names are identical or similar to the
names associated with the information),
in preparing consumer reports is not
using reasonable procedures to assure
maximum possible accuracy under
section 607(b) of the Fair Credit
Reporting Act (FCRA).
DATES
: This advisory opinion is
effective on November 10, 2021.
FOR FURTHER INFORMATION CONTACT
:
Brandy Hood, Courtney Jean, Kristin
McPartland, Amanda Quester, or
Pavneet Singh, Senior Counsels, Office
of Regulations, at (202) 435–7700 or
https://reginquiries.consumer
finance.gov/. If you require this
document in an alternative electronic
format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION
: The
Bureau is issuing this advisory opinion
through the procedures for its Advisory
Opinions Policy.
1
Refer to those
procedures for more information.
I. Advisory Opinion
A. Background
Accuracy in consumer reports is of
vital importance to the consumer
reporting system, particularly as
consumer reports play an increasingly
important role in the lives of American
consumers. Consumer reporting
agencies assemble and evaluate credit,
public record, and other consumer
information into consumer reports. The
information in these reports is used by
many different types of businesses, from
creditors and insurers to landlords and
employers, to make eligibility and other
decisions about consumers. Creditors,
for example, use information in
consumer reports to determine whether,
and on what terms, to extend credit to
a particular consumer. The majority of
landlords and employers use
background screening reports to screen
prospective tenants and employees.
2
Inaccurate information in consumer
reports can have significant adverse
impacts on consumers. These impacts
are particularly concerning for
prospective renters and job seekers
struggling to recover from the impacts of
the COVID–19 pandemic. Consumers
with inaccurate information in their
consumer reports may, for example, be
denied credit or housing they would
have otherwise received, or may be
offered less attractive terms than they
would have been offered if their
information had been accurate. For
example, an applicant whose tenant
screening report shows past litigation or
a poor rental payment history may find
it difficult or more expensive to rent
property.
3
Job-seekers with inaccurate
information in their consumer reports
may also be denied employment
opportunities.
4
Inaccurate information
in consumer reports can also harm the
businesses that use such reports by
leading them to incorrect decisions.
Consumer report accuracy relies on the
various parties to the consumer
reporting system: the three nationwide
consumer reporting agencies—Equifax,
Experian, and TransUnion; other
consumer reporting agencies, such as
background screening companies;
entities such as creditors who furnish
information to consumer reporting
agencies (i.e., furnishers); public record
repositories; users of credit reports; and
consumers.
The FCRA, enacted in 1970, regulates
consumer reporting. The statute was
designed to ensure that ‘‘consumer
reporting agencies adopt reasonable
procedures for meeting the needs of
commerce for consumer credit,
personnel, insurance, and other
information in a manner which is fair
and equitable to the consumer, with
regard to the confidentiality, accuracy,
relevancy, and proper utilization of
such information.’’
5
The FCRA was
enacted ‘‘to protect consumers from the
transmission of inaccurate information
about them and to establish credit
reporting practices that utilize accurate,
relevant, and current information in a
confidential and responsible manner.’’
6
Because of the importance of consumer
report accuracy to businesses and
consumers, the structure of the FCRA
creates interrelated legal standards and
requirements to support the policy goal
of accurate credit reporting. Among
these is the requirement that, when
preparing a consumer report, consumer
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7
15 U.S.C. 1681e(b).
8
Fair and Accurate Credit Transactions Act of
2003, Public Law 108–159, sec. 319, 117 Stat. 1952
(2003).
9
See Fed. Trade Comm’n, Report to Congress
Under Section 319 of the Fair and Accurate Credit
Transactions Act of 2003, at 64 (Dec. 2012), https://
www.ftc.gov/sites/default/files/documents/reports/
section-319-fair-and-accurate-credit-transactions-
act-2003-fifth-interim-federal-trade-commission/
130211factareport.pdf.
10
Fed. Trade Comm’n, Accuracy in Consumer
Reporting Workshop (Dec. 10, 2019), https://
www.ftc.gov/news-events/events-calendar/
accuracy-consumer-reporting-workshop.
11
See Bureau of Consumer Fin. Prot., Housing
Insecurity and the COVID–19 Pandemic, at 5 (Mar.
1, 2021), https://files.consumerfinance.gov/f/
documents/cfpb_Housing_insecurity_and_the_
COVID-19_pandemic.pdf.
12
See id. at 8, 18; see also Pew Research Ctr.,
Economic Fallout From COVID–19 Continues To
Hit Lower-Income Americans the Hardest (Sept. 24,
2020), https://www.pewresearch.org/social-trends/
2020/09/24/economic-fallout-from-covid-19-
continues-to-hit-lower-income-americans-the-
hardest/.
13
See Bureau of Consumer Fin. Prot., Consumer
Response Annual Report, at 22 (Mar. 2021), https://
files.consumerfinance.gov/f/documents/cfpb_2020-
consumer-response-annual-report_03-2021.pdf;
Bureau of Consumer Fin. Prot., Consumer Response
Annual Report, at 19 (Mar. 2020), https://
files.consumerfinance.gov/f/documents/cfpb_
consumer-response-annual-report_2019.pdf; Bureau
of Consumer Fin. Prot., Consumer Response Annual
Report, at 19 (Mar. 2019), https://files.consumer
finance.gov/f/documents/cfpb_consumer-response-
annual-report_2018.pdf; Bureau of Consumer Fin.
Prot., Consumer Response Annual Report, at 13
(Mar. 2018), https://files.consumerfinance.gov/f/
documents/cfpb_consumer-response-annual-
report_2017.pdf; Bureau of Consumer Fin. Prot.,
Consumer Response Annual Report, at 18 (Mar.
2017), https://files.consumerfinance.gov/f/
documents/201703_cfpb_Consumer-Response-
Annual-Report-2016.PDF.
14
See Bureau of Consumer Fin. Prot., Consumer
Response Annual Report, at 22 (Mar. 2021), https://
files.consumerfinance.gov/f/documents/cfpb_2020-
consumer-response-annual-report_03-2021.pdf for
more in-depth analyses. Additionally, consumers
with a problem with a credit or consumer report
may submit multiple complaints, for example,
complaints about data furnishers and complaints
about consumer reporting agencies. Id. at 21.
15
See generally Bureau of Consumer Fin. Prot.,
Consumer Complaint Database, https://
www.consumerfinance.gov/data-research/
consumer-complaints/ (last visited Oct. 21, 2021).
16
U.S. Census Bureau, Frequently Occurring
Surnames from the 2010 Census, https://
www.census.gov/topics/population/genealogy/data/
2010_surnames.html (last revised Dec. 27, 2016).
17
For example, one study catalogued a number of
first-and-last name combinations such as James
Smith that each corresponded to over 30,000
individuals in the United States. See Lee Hartman,
Southern Illinois University, John Smith et al.:
Some observations on how the 20 most popular first
names combine with the 20 most popular surnames
in the United States (n.d.), https://web.archive.org/
web/20190225042148/http:/mypage.siu.edu/
lhartman/johnsmith.html; see also Mona Chalabi &
Andrew Flowers, Dear Mona, What’s The Most
Common Name In America? (Nov. 20, 2014),
https://fivethirtyeight.com/features/whats-the-most-
common-name-in-america/ (cataloguing common
first-and-last name combinations). Indeed, one
court, in evaluating an FCRA section 607(b) claim,
noted that there could be as many as 125,000
individuals named ‘‘David Smith’’ living in the
United States. Smith v. LexisNexis Screening
Solutions, Inc., 837 F.3d 604, 610 (6th Cir. 2016)
(noting that ‘‘‘David Smith’ is an exceedingly
common first-and-last-name combination—to the
tune of over 125,000 individuals living in the
United States’’).
reporting agencies ‘‘shall follow
reasonable procedures to assure
maximum possible accuracy of the
information concerning the individual
about whom the report relates.’’
7
This
requirement remains as important today
as it was when the statute was enacted
in 1970.
Concerns about the accuracy of
information included in consumer
reports are long-standing. In 2003,
Congress passed the Fair and Accurate
Credit Transactions (FACT) Act, which,
in addition to expanding the FCRA’s
substantive consumer protections,
required the Federal Trade Commission
(FTC) to conduct an ongoing study of
consumer report accuracy and
completeness.
8
In 2012, the FTC
published a report summarizing results
of that study, finding, among other
things, that one in five consumers who
participated in the study had an error on
at least one of their three nationwide
credit reports.
9
More recently, the
Bureau and the FTC hosted a full-day
public workshop to discuss issues
affecting the accuracy of both traditional
credit reports and employment and
tenant background screening reports.
10
The Bureau is especially concerned
about the effects of these accuracy
problems in light of the economic and
public health impacts of COVID–19.
Income shocks resulting from the
pandemic, such as a job loss, reduced
work hours, or the death or illness of a
family member, have contributed to an
increase in housing and financial
insecurity for many households.
11
Low-
income and minority renters have been
disproportionately affected by the
economic effects of the COVID–19
pandemic, including job losses.
12
The
Bureau is concerned that the risk that
inaccurate data will be included in
consumer reports may be further
heightened by increased volumes of
negative information in the consumer
reporting system resulting from the
pandemic. Inaccurate information in
consumer reports can have devastating
impacts on consumers, including
impairing the ability of renters and job-
seekers negatively impacted by the
pandemic to secure new rental housing,
find employment, and otherwise recover
from the pandemic’s economic effects.
An increase in housing instability and
financial distress caused by inaccurate
consumer reporting information could
undermine the nation’s efforts to
recover from the pandemic.
Consumer complaints received by the
Bureau reflect significant consumer
concern about inaccuracies in consumer
reports. Complaints about ‘‘incorrect
information on your report’’ have
represented the largest percentage of
consumer complaints received by the
Bureau regarding credit or consumer
reporting each year for at least the last
five years.
13
In 2020 alone, companies
provided responses to more than
191,000 such complaints, which
represents approximately 68 percent of
credit or consumer reporting complaints
responded to by companies that year.
14
Inaccuracies in consumer reports can
in part be attributed to errors introduced
by consumer reporting agencies during
the ‘‘matching’’ process. When
preparing a consumer report, a
consumer reporting agency must assign
or ‘‘match’’ information it obtains from
a public data source or receives from a
furnisher to the specific consumer who
is the subject of the report. Each year,
the Bureau receives many complaints
from consumers arising from errors that
likely occurred during the matching
process. Some consumers who submit
such complaints include narrative
descriptions noting, among other things,
their frustration at trying to get such
errors corrected, as well as the negative
consequences of such errors, such as not
being able to complete planned
purchases of homes or cars.
15
One method of matching, ‘‘name-only
matching,’’ is particularly likely to lead
to inaccuracies in consumer reports.
Name-only matching occurs when a
consumer reporting agency uses only
first and last name to determine whether
a particular item of information relates
to a particular consumer, without using
other personally identifying information
such as address, date of birth, or Social
Security number. Matching errors are
particularly common when using name-
only matching because many consumers
have the same or similar names. For
example, in the United States, the 2010
census (the most recent to have last
name statistics available) found more
than 2.4 million respondents with the
last name of Smith, 1.9 million
respondents with the last name of
Johnson, 1.6 million respondents with
the last name of Williams, and more
than 1 million respondents each with
the last name of Brown, Jones, Garcia,
Miller, Davis, Rodriguez, Martinez, or
Hernandez.
16
Given the commonality of
many first and last names, it is not
unlikely that thousands, or even tens of
thousands, of consumers, might share a
particular first and last name
combination.
17
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18
Joshua Comenetz, Frequently Occurring
Surnames in the 2010 Census 3–7 (Oct. 2016),
https://www2.census.gov/topics/genealogy/
2010surnames/surnames.pdf; U.S. Census Bureau,
Hispanic Surnames Rise in Popularity (Aug. 9,
2017), https://www.census.gov/library/stories/2017/
08/what-is-in-a-name.html; U.S. Census, What’s in
a Name (Dec. 15, 2016), https://www.census.gov/
newsroom/blogs/random-samplings/2016/12/what_
s_in_a_name.html.
19
Frequently Occurring Surnames in the 2010
Census, supra note 18, at 4, 6, 7 & table 4 (noting
that 14 of the 15 most rapidly increasing last names
that were among the top 1,000 most common last
names in both 2000 and 2010 were predominantly
Asian or Hispanic).
20
Id. at 7. Relatedly, one study estimated that
four of the top 13 most common first-and-last-name
combinations in the United States are names of
Spanish origin. Specifically, the study estimated
that there are more than 25,000 individuals in the
United States each named Maria Garcia, Maria
Rodriguez, Maria Hernandez, or Maria Martinez.
See John Smith et al., supra note 17.
21
Frequently Occurring Surnames in the 2010
Census, supra note 18, at 7.
22
Complaint at ¶¶9–17, U.S. v. InfoTrack Info.
Servs, Inc., No. 1:14–cv–02054 (N.D. Ill. Mar. 24,
2014), https://www.ftc.gov/enforcement/cases-
proceedings/122-3092/infotrack-information-
services-inc-et-al.
23
Complaint at ¶¶5–11, Bureau of Consumer Fin.
Prot. v. Sterling Infosys., Inc., No. 1:19–cv–10824
(S.D.N.Y. Nov. 22, 2019), https://www.consumer
finance.gov/enforcement/actions/sterling-
infosystems-inc/.
24
Consent Order at ¶¶4–13, In re Gen. Info.
Servs., Inc., 2015–CFPB–0028 (Oct. 29, 2015),
https://files.consumerfinance.gov/f/201510_cfpb_
consent-order_general-information-service-inc.pdf;
see also, e.g., Complaint at ¶¶8–21, Fed. Trade
Comm’n v. RealPage, Inc., No. 3:18–cv–02737–N
(N.D. Tex. Oct. 16, 2018), https://www.ftc.gov/
enforcement/cases-proceedings/152-3059/realpage-
inc (alleging defendant violated FCRA section
607(b) by using matching criteria that required ‘‘an
exact match on the applicant’s last name only,’’ and
‘‘a ‘soft’, or non-exact, match for first name, middle
name, and date of birth,’’ resulting in defendant
providing tenant screening reports with criminal
record information for individuals other than the
applicant).
25
Assurance of Voluntary Compliance/Assurance
of Voluntary Discontinuance at ¶IV.E.6, In re
Equifax Info. Servs. LLC, Experian Info. Solutions,
Inc., and TransUnion LLC (May 20, 2015), https://
www.ohioattorneygeneral.gov/Files/Briefing-Room/
News-Releases/Consumer-Protection/2015-05-20-
CRAs-AVC.aspx.
26
Following the launch of the NCAP, the
nationwide consumer reporting agencies took steps
to remove public records not meeting the specified
criteria and, beginning in April 2018, ceased
including civil judgments and tax liens in the
consumer reports they issued. Bankruptcies are the
only type of public record that continue to be
reported by the nationwide consumer reporting
agencies. Other consumer reporting agencies,
however, continue to include civil judgments and
tax liens on the consumer reports they prepare. See
Bureau of Consumer Fin. Prot., Quarterly Consumer
Credit Trends: Public records, credit scores, and
credit performance (Dec. 2019), https://
files.consumerfinance.gov/f/documents/cfpb_
quarterly-consumer-credit-trends_public-records-
credit-scores-performance_2019-12.pdf; Bureau of
Consumer Fin. Prot., Quarterly Consumer Credit
Trends: Public Records (Feb. 2018), https://
files.consumerfinance.gov/f/documents/cfpb_
consumer-credit-trends_public-records_022018.pdf.
27
617 F.3d 688 (3d Cir. 2010).
28
Id.
29
Ramirez v. TransUnion, LLC, 951 F.3d 1008,
1032 (9th Cir. 2020), rev’d on standing grounds, 141
S. Ct. 2190 (June 25, 2021).
30
Id. at 1022.
31
Id. at 1031–33. Consumers have also brought
other private party claims under the FCRA relating
to matching using limited personal identifiers. See,
The risk of mismatching from name-
only matching is likely to be greater for
Hispanic, Asian, and Black individuals
because there is less last-name diversity
in those populations than among the
non-Hispanic white population.
18
For
example, a study of 2010 census data
indicated that the percentage of non-
Hispanic white respondents covered by
the top 10 most common last names is
lower than the corresponding
percentages for Hispanic, Asian, and
Black respondents.
19
The study found
the highest level of last-name clustering
among Hispanic respondents, noting
that just 26 last names cover a quarter
of the Hispanic population (as
compared to 319 last names required to
cover a quarter of the population
identified as non-Hispanic white alone)
and that 16.3 percent of Hispanic
respondents reported one of the top 10
most common last names (as compared
to 4.5 percent for non-Hispanic white
alone respondents).
20
The study further
noted that these clustering patterns were
similar for Asian and Black
respondents.
21
The Bureau, the FTC, and State
attorneys general have brought
enforcement actions in this area. In
2014, a background screening company
settled FTC allegations that it violated
FCRA section 607(b) by failing to use
reasonable procedures to assure
maximum possible accuracy of
consumer report information when it
provided employers background
screening reports about job applicants
that included, based on name-only
matching, information about whether
the applicants were registered in a
National Sex Offender Registry.
22
In
2019, the Bureau settled allegations that
a background screening company
violated FCRA section 607(b) by
matching publicly sourced criminal
records to job applicants based only on
limited personal identifiers, which
could include first and last name and
either date of birth or address, a practice
that resulted in ‘‘a heightened risk of
false positives’’ because commonly
named individuals (e.g., John Smith)
might share the same first and last name
and date of birth or address.
23
Similarly,
in 2015, the Bureau took action against
a background screening company for
violating FCRA section 607(b) by
permitting, but not requiring, employers
to provide middle names for job
applicants for purposes of matching
criminal record information to
particular consumers. According to the
Bureau’s complaint, the company’s
procedures resulted in the reporting of
mismatched criminal record
information about consumers.
24
In March 2015, the three nationwide
consumer reporting agencies—Equifax,
Experian, and TransUnion—launched
the National Consumer Assistance Plan
(NCAP), an initiative aimed at
enhancing the accuracy of credit reports
and making it easier for consumers to
correct errors on their credit reports.
The NCAP was the result of a settlement
between the nationwide consumer
reporting agencies and over thirty State
Attorneys General that required the
nationwide consumer reporting agencies
to, among other things, form a working
group to establish standards regarding
the collection of public record data for
consumer credit reports.
25
Pursuant to
the NCAP, starting July 1, 2017, public
record data obtained by the nationwide
consumer reporting agencies for
inclusion on credit reports must contain
name, address, and Social Security
Number and/or date of birth and must
be refreshed at least every 90 days.
26
Courts have also spoken on this topic.
For example, a decade ago, the Third
Circuit in Cortez v. Trans Union, LLC
considered a case in which the
nationwide consumer reporting agency
TransUnion had indicated in a
consumer report that the consumer’s
name matched a name on a list
maintained by the Office of Foreign
Assets Control (OFAC), despite the fact
that TransUnion had information within
its own files showing that the OFAC
alert was not about the correct
consumer.
27
The Third Circuit upheld
the district court’s ruling that
TransUnion’s matching protocols that
compared only the consumer’s name to
the names on the OFAC list did not
satisfy the requirement of FCRA section
607(b).
28
Nonetheless, TransUnion did
not adequately update its matching
practices, and it was sued a second time
for similar practices in Ramirez v.
TransUnion LLC. In a 2020 decision that
was later overturned on other grounds,
the Ninth Circuit ruled that ‘‘despite
[Cortez], TransUnion continued to use
problematic matching technology. . . .
In doing so, it ran an unjustifiably high
risk of error.’’
29
The court upheld a jury
verdict deeming TransUnion liable for
violating section 607(b) because it used
‘‘rudimentary name-only matching
software without any additional checks
to avoid false positives.’’
30
The Ninth
Circuit held that the violation was
willful because the correct reading of
the FCRA should have been clear to
TransUnion after Cortez.
31
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e.g., Lopez v. Nat’l Credit Reporting, Inc., 2013 WL
1999624 (N.D. Cal. May 13, 2013) (denying motion
to dismiss in case alleging violation of FCRA
section 607(b) related to mixed file due to match
based only on name and similar area of residence).
32
Nat’l Consumer Law Ctr., Broken Records
Redux, supra note 2, at 18, 38.
33
Letter from American Civil Liberties Union et
al. to Secretary Marcia L. Fudge, U.S. Dep’t of Hous.
& Urban Dev. et al. (July 13, 2021), at 7–8
(addressing technology’s role in housing
discrimination), https://www.aclu.org/letter/
coalition-memo-re-addressing-technologys-role-
housing-discrimination.
34
15 U.S.C. 1681a(f).
35
15 U.S.C. 1681e(b).
36
15 U.S.C. 1681(a); see also Guimond, 45 F.3d
at 1333. Inaccuracy based on mistaken identity was
one of the reasons a first version of the FCRA was
introduced. As Senator William Proxmire stated
when introducing the legislation, ‘‘There are many
varieties of inaccurate information .... One is the
case of mistaken identity, where two individuals
with the same names are confused, and the
deserving individual is denied credit because of
something done by the other person.’’ 114 Cong.
Rec. 24,902, 24,903 (1968).
37
15 U.S.C. 1681a(d).
38
15 U.S.C. 1681b.
39
15 U.S.C. 1681b(a)(3)(A).
40
See Consent Order at ¶¶4–13, In re Gen. Info.
Servs., Inc., 2015–CFPB–0028 (Oct. 29, 2015),
https://files.consumerfinance.gov/f/201510_cfpb_
consent-order_general-information-service-inc.pdf;
Complaint at ¶¶5–11, Bureau of Consumer Fin.
Prot. v. Sterling Infosys., Inc., No. 1:19–cv–10824
(S.D.N.Y. Nov. 22, 2019), https://www.consumer
finance.gov/enforcement/actions/sterling-
infosystems-inc/.
Despite these enforcement actions, the
steps taken by the nationwide consumer
reporting agencies pursuant to the
NCAP, and these court decisions, it
appears that some consumer reporting
agencies continue to use matching
practices that do not satisfy the standard
of ‘‘reasonable procedures to assure
maximum possible accuracy of the
information concerning the individual
about whom the report relates,’’ as
required by FCRA section 607(b). The
NCLC stated in a 2019 report that some
background screening companies are
still relying on name-only matches.
32
NCLC and other consumer and civil
rights groups recently requested that the
Bureau provide guidance that name-
only matching is a practice that fails to
comply with the FCRA.
33
The Bureau is issuing this advisory
opinion to remind consumer reporting
agencies that their matching practices
must comply with their FCRA
obligation to ’’follow reasonable
procedures to assure maximum possible
accuracy’’ under section 607(b), and that
the practice of name-only matching in
particular is far from sufficient to meet
that standard. Indeed, as illustrated by
the foregoing discussion, multiple
additional elements beyond names may
often be required to meet the FCRA
standard of ‘‘reasonable procedures to
assure maximum possible accuracy.’’
B. Coverage
This advisory opinion applies to all
consumer reporting agencies as defined
in FCRA section 603(f).
34
As used in
this advisory opinion, ‘‘name-only
matching’’ refers to matching
information to the particular consumer
who is the subject of a consumer report
based solely on whether the consumer’s
first and last names are identical or
similar to the first and last names
associated with the information,
without verifying the match using
additional identifying information for
the consumer. ‘‘Matching procedures’’
refers to the broader set of practices and
procedures consumer reporting agencies
use to link information to a consumer’s
consumer report.
C. Legal Analysis
FCRA section 607(b) provides that
‘‘[w]henever a consumer reporting
agency prepares a consumer report it
shall follow reasonable procedures to
assure maximum possible accuracy of
the information concerning the
individual about whom the report
relates.’’
35
The Bureau interprets the
requirement in section 607(b) to include
as an integral component that the
information in fact pertains to the
consumer who is the subject of the
report. Indeed, the text of section 607(b)
refers explicitly to ‘‘the individual about
whom the report relates.’’ This
interpretation is consistent with the core
purpose of the FCRA as described in
FCRA section 602—i.e., to require
consumer reporting agencies to adopt
reasonable procedures for meeting the
needs of commerce for consumer credit,
personnel, insurance, and other
information in a manner that is fair and
equitable to the consumer with regard to
confidentiality, accuracy, and the
proper use of such information.
36
Other provisions of the FCRA that
directly relate to section 607(b) also
support this interpretation. For
example, section 603(d) of the FCRA
defines ‘‘consumer report’’ to include
certain communications ‘‘bearing on a
consumer’s credit worthiness, credit
standing, credit capacity, character,
general reputation, personal
characteristics, or mode of living’’ that
are ‘‘used or expected to be used . . .
for the purpose of . . . establishing the
consumer’s eligibility’’ for credit,
employment, insurance, and other
purposes.
37
Information in a consumer
report on a different consumer than the
consumer report purports to relate to
would not have any utility in serving as
a factor in establishing the eligibility of
the person the consumer report purports
to relate to. Additionally, section 604 of
the FCRA generally provides that a
consumer reporting agency may not
provide a consumer report about a
particular consumer unless there is a
permissible purpose, such as a
legitimate business need related to a
transaction initiated by the consumer.
38
The FCRA expressly ties many of these
permissible purposes to the specific
consumer who is the subject of the
report, making it clear that Congress
intended that information in the
consumer report would relate to that
specific consumer. For instance, in
FCRA section 604(a)(3)(A), Congress
allowed consumer reporting agencies to
release a consumer report to a person if
they have reason to believe the person
‘‘intends to use the information in
connection with a credit transaction
involving the consumer on whom the
information is to be furnished.’’
39
The steps that a consumer reporting
agency takes in matching information it
obtains or receives to the correct
consumer in preparing consumer
reports are critical in assessing whether
a consumer reporting agency is
following ‘‘reasonable procedures to
assure maximum possible accuracy of
the information concerning the
individual about whom the report
relates’’ under FCRA section 607(b). As
detailed in part I.A. above, matching
information to the consumer who is the
subject of a consumer report by name
alone creates significant accuracy
concerns because most names are
shared with other consumers and, in
some cases, with thousands of other
consumers. In preparing consumer
reports, it is not a reasonable procedure
to assure maximum possible accuracy to
use insufficient identifiers to match
information to the consumer who is the
subject of the report. In particular, it has
been the consistent view of the Bureau
that name-only matching is not a
procedure that assures maximum
possible accuracy, and thus, consumer
reporting agencies that use name-only
matching violate FCRA section 607(b).
40
That continues to be the Bureau’s
position as outlined in this advisory
opinion. Moreover, nothing in this
analysis creates a safe harbor for the
FCRA requirement of ‘‘reasonable
procedures to assure maximum possible
accuracy’’ with respect to matching.
Based on the high risk that name-only
matching will result in the inclusion of
information that does not pertain to the
consumer who is the subject of the
report and the relative lack of burden on
a consumer reporting agency associated
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62472
Federal Register / Vol. 86, No. 215 / Wednesday, November 10, 2021 / Rules and Regulations
41
Public Law 111–203, 124 Stat. 1376 (2010).
42
12 U.S.C. 5512(b)(1).
43
5 U.S.C. 553(b).
44
5 U.S.C. 603(a), 604(a).
45
44 U.S.C. 3501–3521.
46
5 U.S.C. 801 et seq.
with utilizing additional identifiers or
not including name-only matched
information in a consumer report, the
Bureau continues to conclude that it is
not a reasonable procedure to use name-
only matching to match information to
the consumer who is the subject of the
report in preparing a consumer report.
In some cases, in preparing consumer
reports, consumer reporting agencies
may obtain information from a data
broker, database, or other source that
does not have or use identifying
information other than consumers’
names. It is not a reasonable procedure
for the consumer reporting agency to
simply include information from such
sources in a consumer’s report without
taking additional steps to match the
information to the consumer who is the
subject of the report, such as consulting
other databases or sources of
information that contain additional
identifying information.
II. Regulatory Matters
This advisory opinion is an
interpretive rule issued under the
Bureau’s authority to interpret the
FCRA, including under section
1022(b)(1) of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act,
41
which authorizes guidance as
may be necessary or appropriate to
enable the Bureau to administer and
carry out the purposes and objectives of
Federal consumer financial laws.
42
As an interpretive rule, this advisory
opinion is exempt from the notice-and-
comment rulemaking requirements of
the Administrative Procedure Act.
43
Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis.
44
The Bureau has also
determined that this advisory opinion
does not impose any new or revise any
existing recordkeeping, reporting, or
disclosure requirements on covered
entities or members of the public that
would be collections of information
requiring approval by the Office of
Management and Budget under the
Paperwork Reduction Act.
45
Pursuant to the Congressional Review
Act,
46
the Bureau will submit a report
containing this interpretive rule and
other required information to the United
States Senate, the United States 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 interpretive
rule as not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
Dated: November 3, 2021.
Rohit Chopra,
Director, Bureau of Consumer Financial
Protection.
[FR Doc. 2021–24471 Filed 11–9–21; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 107
[Docket No. FAA–2018–1087; Amdt. No.
107–9]
RIN 2120–AK85
Operation of Small Unmanned Aircraft
Systems Over People; Technical
Amendments
AGENCY
: Federal Aviation
Administration (FAA), U.S. Department
of Transportation (DOT).
ACTION
: Technical amendments.
SUMMARY
: The Federal Aviation
Administration is making technical
amendments to the ‘‘Operation of Small
Unmanned Aircraft Systems over
People’’ final rule, which was published
on January 15, 2021. The final rule
document inadvertently misnumbered
regulatory text and used inconsistent
language to refer to a process.
DATES
: Effective November 10, 2021.
FOR FURTHER INFORMATION CONTACT
:
Michael Machnik, General Aviation and
Commercial Division, Flight Standards
Service, Federal Aviation
Administration, 800 Independence
Avenue SW, 8th Floor, Washington, DC
20591; telephone 1–844–FLY–MYUA;
email: UASHelp@faa.gov.
SUPPLEMENTARY INFORMATION
:
Electronic Access and Filing
A copy of the notice of proposed
rulemaking (NPRM) (84 FR 3856,
February 13, 2019), all comments
received, the final rule, and all
background material may be viewed
online at https://www.regulations.gov
using the docket number listed above. A
copy of these technical amendments
will be placed in the docket. Electronic
retrieval help and guidelines are
available on the website. It is available
24 hours each day, 365 days each year.
An electronic copy of this document
may also be downloaded from the Office
of the Federal Register’s website at
https://www.federalregister.gov and the
Government Publishing Office’s website
at https://www.govinfo.gov. A copy may
also be found at the FAA’s Regulations
and Policies website at https://
www.faa.gov/regulations_policies.
Copies may also be obtained by
sending a request to the Federal
Aviation Administration, Office of
Rulemaking, ARM–1, 800 Independence
Avenue SW, Washington, DC 20591, or
by calling (202) 267–9677. Commenters
must identify the docket or notice
number of this rulemaking.
All documents the FAA considered in
developing these technical
amendments, including economic
analyses and technical reports, may be
accessed in the electronic docket for this
rulemaking.
Good Cause for Adoption Without Prior
Notice
Section 553(b)(3)(B) of the
Administrative Procedure Act (APA) (5
U.S.C. 551 et seq.) authorizes agencies
to dispense with notice and comment
procedures for rules when the agency
for ‘‘good cause’’ finds that those
procedures are ‘‘impracticable,
unnecessary, or contrary to the public
interest.’’ Section 553(d)(3) of the APA
requires that agencies publish a rule not
less than 30 days before its effective
date, except as otherwise provided by
the agency for good cause found and
published with the rule.
Because this action merely makes
technical amendments to a published
final rule, the FAA finds that notice and
public comment under 5 U.S.C. 553(b)
is unnecessary. For the same reason, the
FAA finds that good cause exists under
5 U.S.C. 553(d) for making this rule
effective in less than 30 days.
Background
On January 15, 2021, the ‘‘Operation
of Small Unmanned Aircraft Systems
Over People’’ final rule (RIN 2120–
AK85) published in the Federal Register
at 86 FR 4314. After the rule was
published, the FAA discovered three
minor drafting errors that require
correction. This document corrects
drafting errors in § 107.110(b) and (c)
and in § 107.125(a)(2). In §107.110, two
paragraphs were designated improper
paragraph levels. Section 107.110(b)
should change to § 107.110 (a)(2) and
§ 107.110(c) should change to
§ 107.110(b). The final drafting errors
that occur in § 107.125(a)(2) should read
as ‘‘FAA-accepted declaration of
compliance,’’ instead of ‘‘current’’
declaration of compliance, to match the
language in § 107.115(a)(2).
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