Unknown. Consumer financial protection circular

4,993 words·~23 min read·/register/2024/11/12/2024-26099·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2024-11-12.xml --- 89 218 Tuesday, November 12, 2024 Contents Consumer Financial Protection Bureau of Consumer Financial Protection RULES Consumer Financial Protection Circular: Background Dossiers and Algorithmic Scores for Hiring, Promotion, and Other Employment Decisions, 88875-88877 2024-26099 Census Bureau Census Bureau NOTICES Hearings, Meetings, Proceedings, etc.: Tribal Consultation, 88950 2024-26172 Centers Medicare Centers for Medicare & Medicaid Services RULES Medicare Program:

End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, etc., 89084-89213 2024-25486 NOTICES Medicare and Medicaid Programs: Approval of Application by Community Health Accreditation Partner Inc. for Continued Approval of its Hospice Accreditation Program, 89015-89017 2024-26123 Approval of Application by the American Association for Accreditation of Ambulatory Surgery Facilities dba QUAD A for Continued Approval of its Ambulatory Surgical Center Accreditation Program, 89014-89015 2024-26124 Commerce Commerce Department See Census Bureau See Economic Analysis Bureau See International Trade Administration See National Oceanic and Atmospheric Administration Defense Department Defense Department RULES Federal Acquisition Regulation:

Clarification of System for Award Management Preaward Registration Requirements, 89472-89475 2024-26062 Federal Acquisition Circular 2025-01; Introduction, 89464 2024-26060 Federal Acquisition Circular 2025-01; Small Entity Compliance Guide, 89475-89476 2024-26065 Prohibition on Unmanned Aircraft Systems from Covered Foreign Entities, 89464-89472 2024-26061 NOTICES Arms Sales, 88976-88986 2024-26154 2024-26155 2024-26156 2024-26157 2024-26158 Charter Amendments, Establishments, Renewals and Terminations:

Defense Advisory Committee for the Prevention of Sexual Misconduct, 88979 2024-26101 United States Military Academy Board of Visitors, United States Naval Academy Board of Visitors, and Board of Visitors of the United States Air Force Academy, 88978-88979 2024-26106 Economic Analysis Bureau Economic Analysis Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Services Surveys: Quarterly Survey of Financial Services Transactions between U.S.

Financial Services Providers and Foreign Persons, 88952 2024-26165 Services Surveys: Quarterly Survey of Foreign Airline Operators' Revenues and Expenses in the United States, 88951 2024-26169 Services Surveys: Quarterly Survey of Ocean Freight Revenues and Foreign Expenses of U.S. Carriers and Quarterly Survey of U.S. Airline Operators' Foreign Revenues and Expenses, 88950-88951 2024-26166 Education Department Education Department NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: High School and Beyond 2022 First Follow-up Field Test Data Collection, 88986-88987 2024-26135 Applications for New Awards: Research Training Programs in the Education Sciences, 88987-88990 2024-26104 Energy Department Energy Department See Federal Energy Regulatory Commission See Southwestern Power Administration See Western Area Power Administration NOTICES Hearings, Meetings, Proceedings, etc.: International Energy Agency, 88990-88991 2024-26147 Environmental Protection Environmental Protection Agency RULES Reconsideration of the Dust-Lead Hazard Standards and Dust-Lead Post-Abatement Clearance Levels, 89416-89461 2024-25070 PROPOSED RULES Air Quality:

Definition of Volatile Organic Compounds—Exclusion of (Z)-1-chloro-2,3,3,3-tetrafluoropropene (HCFO-1224yd(Z)), 88940-88947 2024-25971 Pesticide Tolerance; Exemptions, Petitions, Revocations, etc.: Chemicals in or on Various Commodities (September 2024), 88948-88949 2024-25764 NOTICES Charter Amendments, Establishments, Renewals and Terminations: Great Lakes Advisory Board, 89011 2024-26116 Pesticide Product Registration: Application for New Active Ingredients (September 2024), 89011-89012 2024-26170 Export Import Export-Import Bank NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Application for Exporter Short Term Single Buyer Insurance, 89012 2024-26163 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: Airbus Canada Limited Partnership (Type Certificate Previously Held by C Series Aircraft Limited Partnership (CSALP); Bombardier, Inc.) Airplanes, 88878-88881 2024-25977 Bombardier, Inc., Airplanes, 88884-88888 2024-25978 2024-25979 SAS Airplanes, 88881-88884 2024-25980 PROPOSED RULES Airspace Designations and Reporting Points:

Roanoke Rapids, NC, 88915-88916 2024-26037 Airworthiness Directives: ATR—GIE Avions de Transport Regional Airplanes, 88913-88915 2024-25981 De Havilland Aircraft of Canada Limited (Type Certificate Previously Held by Bombardier, Inc.) Airplanes, 88910-88913 2024-25982 International Aero Engines AG Engines, 88908-88910 2024-26092 The Boeing Company Airplanes, 88906-88908 2024-26128 Federal Communications Federal Communications Commission RULES Implementation of the National Suicide Hotline Act, 88890-88905 2024-25912 Federal Election Federal Election Commission NOTICES Meetings;

Sunshine Act, 89012 2024-26295 Federal Energy Federal Energy Regulatory Commission NOTICES Application: Duke Energy Carolinas, LLC, 88991-88992 2024-26145 Combined Filings, 88993-88995 2024-26149 Environmental Issues: Venice Gathering System, LLC, Proposed Venice Gathering System Pipeline Abandonment Project, 88995-88997 2024-26140 Records Governing Off-the-Record Communications, 88992-88993 2024-26148 Federal Highway Federal Highway Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 89079-89080 2024-26129 Federal Mediation Federal Mediation and Conciliation Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 89012-89013 2024-26151 Federal Reserve Federal Reserve System RULES Federal Reserve Bank Capital Stock, 88877-88878 2024-26091 NOTICES Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 89013 2024-26164 Federal Trade Federal Trade Commission RULES Premerger Notification:

Reporting and Waiting Period Requirements, 89216-89414 2024-25024 Foreign Assets Foreign Assets Control Office NOTICES Sanctions Action, 89081-89082 2024-26118 2024-26137 General Services General Services Administration RULES Federal Acquisition Regulation: Clarification of System for Award Management Preaward Registration Requirements, 89472-89475 2024-26062 Federal Acquisition Circular 2025-01; Introduction, 89464 2024-26060 Federal Acquisition Circular 2025-01; Small Entity Compliance Guide, 89475-89476 2024-26065 Prohibition on Unmanned Aircraft Systems from Covered Foreign Entities, 89464-89472 2024-26061 Geological Geological Survey NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Nonferrous Metals Surveys, 89025-89026 2024-26160 Saint Lawrence Great Lakes St. Lawrence Seaway Development Corporation NOTICES Hearings, Meetings, Proceedings, etc.: Advisory Board, 89080 2024-26115 Health and Human Health and Human Services Department See Centers for Medicare & Medicaid Services See National Institutes of Health NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 89017-89018 2024-26103 Homeland Homeland Security Department See Transportation Security Administration See U.S.

Citizenship and Immigration Services Indian Affairs Indian Affairs Bureau NOTICES Proclaiming Certain Lands as Reservation: Snoqualmie Indian Tribe, 89026-89028 2024-26183 Interior Interior Department See Geological Survey See Indian Affairs Bureau See National Park Service International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Aluminum Foil from People's Republic of China, 88972-88975 2024-26167 Certain Aluminum Foil from the People's Republic of China, 88957-88959 2024-26168 Certain Hot-Rolled Carbon Steel Flat Products from India and Indonesia, 88964-88965 2024-26120 Certain Hot-Rolled Carbon Steel Flat Products from India, Indonesia, the People's Republic of China, Taiwan, Thailand, and Ukraine, 88971-88972 2024-26142 Certain Hot-Rolled Carbon Steel Flat Products from Thailand, 88966-88967 2024-26143 Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules, from the People's Republic of China, 88969-88970 2024-26141 Hydrofluorocarbon Blends from the People's Republic of China, 88970-88971 2024-26176 Laminated Woven Sacks from the People's Republic of China, 88965-88966 2024-26180 Phosphate Fertilizers from the Kingdom of Morocco, 88952-88953 2024-26178 Phosphate Fertilizers from the Russian Federation, 88960-88961 2024-26179 Sodium Nitrite from the People?s Republic of China, 88967-88968 2024-26122 Steel Propane Cylinders from the People's Republic of China, 88968-88969 2024-26121 Steel Wire Garment Hangers from the People's Republic of China, 88956-88957 2024-26177 Wooden Cabinet and Vanities and Components Thereof from the People's Republic of China, 88953-88956 2024-26174 Wooden Cabinets and Vanities and Components Thereof from the People's Republic of China, 88962-88964 2024-26175 Request for Panel Review:

United States-Mexico-Canada Agreement, 88959-88960 2024-26102 2024-26105 International Trade Com International Trade Commission NOTICES Investigations; Determinations, Modifications, and Rulings, etc.: Certain Vaporizer Devices, Cartridges Used Therewith, and Components Thereof, 89041-89044 2024-26161 Steel Wire Garment Hangers from China, 89040-89041 2024-26117 Justice Department Justice Department See Parole Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Community Oriented Policing Services Community Policing Advancement Performance Report, 89044 2024-26133 Request for Registration under the Gambling Devices Act, 89044-89045 2024-26131 Labor Department Labor Department See Mine Safety and Health Administration Mine Mine Safety and Health Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Training Plans, New Miner Training, Newly-Hired Experienced Miner Training, 89045-89049 2024-26113 NASA National Aeronautics and Space Administration RULES Federal Acquisition Regulation:

Clarification of System for Award Management Preaward Registration Requirements, 89472-89475 2024-26062 Federal Acquisition Circular 2025-01; Introduction, 89464 2024-26060 Federal Acquisition Circular 2025-01; Small Entity Compliance Guide, 89475-89476 2024-26065 Prohibition on Unmanned Aircraft Systems from Covered Foreign Entities, 89464-89472 2024-26061 National Institute National Institutes of Health NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Data Use Certification for the National Institutes of Health Brain Development Cohorts, 89019-89020 2024-26138 Hearings, Meetings, Proceedings, etc.: Center for Scientific Review, 89018 2024-26111 Fogarty International Center, 89020 2024-26112 National Institute of Allergy and Infectious Diseases, 89019 2024-26110 National Institute of Diabetes and Digestive and Kidney Diseases, 89020-89021 2024-26071 2024-26073 National Institute of General Medical Sciences, 89018-89019 2024-26074 National Institute of Mental Health, 89021 2024-26139 National Oceanic National Oceanic and Atmospheric Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Office of Marine and Aviation Operations: Occupational Health, Safety, and Readiness Forms, 88975-88976 2024-25591 National Park National Park Service NOTICES Intended Disposition: U.S. Army Corps of Engineers, Albuquerque District, Albuquerque, NM, 89034-89035 2024-26088 U.S. Department of the Interior, Bureau of Land Management, Colorado State Office, Canyons of the Ancients National Monument, Dolores, CO, 89037-89038 2024-26085 Inventory Completion:

California State University, Sacramento, Sacramento, CA, 89036-89037 2024-26077 Gilcrease Museum, Tulsa, OK, 89029-89030 2024-26087 Museum of Us, San Diego, CA, 89037 2024-26079 Rochester Museum and Science Center, Rochester, NY, 89028-89029 2024-26081 San Diego State University, San Diego, CA, 89038-89040 2024-26080 The San Diego Archaeological Center, San Diego, CA, 89033-89034 2024-26084 Yale Peabody Museum, Yale University, New Haven, CT, 89040 2024-26089 Repatriation of Cultural Items:

Field Museum, Chicago, IL, 89034 2024-26082 Peabody Museum of Archaeology and Ethnology, Harvard University, Cambridge, MA, 89030 2024-26086 San Francisco State University Native American Graves Protection and Repatriation Act Program, San Francisco, CA, 89035-89036 2024-26076 Turtle Bay Exploration Park, Redding, CA, 89028 2024-26078 Wesleyan University, Middletown, CT, 89031-89033 2024-26083 Yale Peabody Museum, Yale University, New Haven, CT, 89030-89031 2024-26090 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Environmental Assessments;

Availability, etc.: Energy Northwest, Columbia Generating Station; Finding of No Significant Impact, 89049-89052 2024-26109 Pacific Gas and Electric Company; Diablo Canyon Independent Spent Fuel Storage Installation; Finding of No Significant Impact, 89056-89058 2024-26107 Licenses; Exemptions, Applications, Amendments, etc.: Limerick Generating Station, Units 1 and 2, Constellation Energy Generation, LLC, 89052-89056 2024-26075 Parole Parole Commission NOTICES Meetings; Sunshine Act, 89045 2024-26320 Postal Regulatory Postal Regulatory Commission NOTICES Negotiated Service Agreement Filings, 89058-89061 2024-26132 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances:

Veterans Day (Proc. 10855), 88871-88873 2024-26249 Securities Securities and Exchange Commission NOTICES Meetings; Sunshine Act, 89061 2024-26215 Self-Regulatory Organizations; Proposed Rule Changes: Cboe BYX Exchange, Inc., 89071-89074 2024-26095 Cboe BZX Exchange, Inc., 89063-89066 2024-26097 Cboe EDGA Exchange, Inc., 89067-89070 2024-26096 Cboe EDGX Exchange, Inc., 89074-89078 2024-26094 New York Stock Exchange LLC, 89061-89063, 89070-89071 2024-26093 2024-26098 Small Business Small Business Administration NOTICES Disaster Declaration:

Cheyenne River Sioux Tribe; Public Assistance Only, 89078 2024-26108 Florida; Public Assistance Only, 89079 2024-26152 U.S. Virgin Islands; Public Assistance Only, 89078-89079 2024-26182 Southwestern Southwestern Power Administration NOTICES Integrated System Power Rates, 88997-88999 2024-26144 State Justice State Justice Institute NOTICES Hearings, Meetings, Proceedings, etc.: Board of Directors, 89079 2024-26173 Transportation Department Transportation Department See Federal Aviation Administration See Federal Highway Administration See Great Lakes St.

Lawrence Seaway Development Corporation Security Transportation Security Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Maryland Three Airports: Enhanced Security Procedures for Operations at Certain Airports in the Washington, DC, Metropolitan Area Flight Restricted Zone, 89022 2024-26072 TSA PreCheck Application Program Fee, 89022-89024 2024-25701 Treasury Treasury Department See Foreign Assets Control Office U.S. Citizenship U.S.

Citizenship and Immigration Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Change of Address, 89024-89025 2024-26126 Veteran Affairs Veterans Affairs Department RULES Changes in Rates VA Pays for Special Modes of Transportation, 88888-88889 2024-25975 PROPOSED RULES Schedule for Rating Disabilities: Neurological Conditions and Convulsive Disorders, 88917-88940 2024-25665 NOTICES Hearings, Meetings, Proceedings, etc.: Advisory Committee on Former Prisoners of War, 89082 2024-26136 Western Western Area Power Administration NOTICES Final 2028 Parker-Davis Project Power Marketing Plan and Call for Resource Pool Applications, 88999-89011 2024-26162 Separate Parts In This Issue Part II Health and Human Services Department, Centers for Medicare & Medicaid Services, 89084-89213 2024-25486 Part III Federal Trade Commission, 89216-89414 2024-25024 Part IV Environmental Protection Agency, 89416-89461 2024-25070 Part V Defense Department, 89464-89476 2024-26062 2024-26060 2024-26065 2024-26061 General Services Administration, 89464-89476 2024-26062 2024-26060 2024-26065 2024-26061 National Aeronautics and Space Administration, 89464-89476 2024-26061 2024-26062 2024-26060 2024-26065 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription. 89 218 Tuesday, November 12, 2024 Rules and Regulations CONSUMER FINANCIAL PROTECTION BUREAU 12 CFR Chapter X Consumer Financial Protection Circular 2024-06: Background Dossiers and Algorithmic Scores for Hiring, Promotion, and Other Employment Decisions AGENCY:

Consumer Financial Protection Bureau. ACTION: Consumer financial protection circular. SUMMARY: The Consumer Financial Protection Bureau

(CFPB)has issued Consumer Financial Protection Circular 2024-06, titled, “Background Dossiers and Algorithmic Scores for Hiring, Promotion, and Other Employment Decisions.” In this circular, the CFPB responds to the question, “Can an employer make employment decisions utilizing background dossiers, algorithmic scores, and other third-party consumer reports about workers without adhering to the Fair Credit Reporting Act (FCRA)?” DATES: The CFPB released this circular on its website on October 24, 2024. ADDRESSES: Enforcers, and the broader public, can provide feedback and comments to *Circulars@cfpb.gov.* FOR FURTHER INFORMATION CONTACT: George Karithanom, Regulatory Implementation & Guidance Program Analyst, Office of Regulations, at 202-435-7700 or at: *https://reginquiries.consumerfinance.gov/.* If you require this document in an alternative electronic format, please contact *CFPB_Accessibility@cfpb.gov.* SUPPLEMENTARY INFORMATION: Question Presented Can an employer make employment decisions utilizing background dossiers, algorithmic scores, and other third-party consumer reports about workers without adhering to the Fair Credit Reporting Act (FCRA)? Response No. Similar to credit reports and credit scores used by lenders to make lending decisions, background dossiers—such as those that convey scores about workers—that are obtained from third parties and used by employers to make hiring, promotion, reassignment, or retention decisions are often governed by the FCRA. Many background dossiers that are compiled from databases collecting public records, employment history, collective-bargaining activity, or other information about a worker are “consumer reports” under the FCRA. Other types of consumer reports may include, for example, reports that convey scores assessing a current worker's risk level or performance. Employers that use consumer reports—both initially when hiring workers and for subsequent employment purposes—must comply with FCRA obligations, including the requirement to obtain a worker's permission to procure a consumer report, the obligation to provide notices before and upon taking adverse actions, and a prohibition on using consumer reports for purposes other than the permissible purposes described in the FCRA. The third-party providers furnishing these reports are “consumer reporting agencies” regulated by the FCRA, which (among other things) imposes an obligation to follow reasonable procedures to assure maximum possible accuracy, a requirement to disclose information in a worker's file to the worker upon request, and a requirement to investigate worker disputes alleging inaccuracies. Consumer Reports for Employment Purposes Similar to how credit reports and credit scores are commonly used by lenders, employers commonly purchase consumer reports to make employment decisions about workers. The most traditional form of consumer report in use in the United States for employment purposes is a background dossier that checks a worker's public records, including criminal history. Recent technological advances have resulted in a rapid increase in the monitoring of workers across many sectors. 1 This has been compounded by an increase in remote work. Together, these phenomena have resulted in an increase in third-party technology companies that have made it easier and more cost effective to track, assess, and evaluate workers. 2 1 Veena Dubal, *On Algorithmic Wage Discrimination,* UC San Francisco Research Paper No. Forthcoming

(2023)*https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4331080* (hereinafter *Algorithmic Wage Discrimination* ); Merve Hickok & Nestor Maslej, *A Policy Primer And Roadmap On AI Worker Surveillance And Productivity Scoring Tools*

(2023)AI Ethics 3, 673-687

(2023)(hereinafter *Policy Primer* ) *https://link.springer.com/article/10.1007/s43681-023-00275-8.* 2 *Id.* Consumer reporting agencies and other background screening companies now offer a range of reports to employers, including those that record current workers' activities, personal habits and attributes, and even their biometric information. For example, some employers now use third parties to monitor workers' sales interactions, to track workers' driving habits, to measure the time that workers take to complete tasks, to record the number of messages workers send and the quantity and duration of meetings they attend, and to calculate workers' time spent off-task through documenting their web browsing, taking screenshots of computers, and measuring keystroke frequency. 3 In some circumstances, this information might be sold by “consumer reporting agencies” to prospective or current employers. 3 *See, e.g.,* Diego Areas Munhoz, *“Robot Bosses” Spur Lawmaker Push to Police AI Job Surveillance,* Bloomberg Law (Sept. 8, 2023) *https://news.bloomberglaw.com/daily-labor-report/robot-bosses-spur-lawmaker-push-to-police-ai-job-surveillance;* Remarks of Benjamin Wiseman at the Harvard Journal of Law & Technology on Worker Surveillance and AI, *FTC.gov* (Feb. 8, 2024), Jolt-2-8-24-final.pdf ( *ftc.gov* ). Some companies may analyze worker data 4 in order to provide reports containing assessments or scores of worker productivity or risk to employers. 5 Today, such scores are used to make automated recommendations or determinations related to worker pay; predict worker behavior, including potential union organizing activity and likelihood that a worker will leave their job; schedule shifts or job responsibilities; or issue warnings or other disciplinary actions. 6 4 Companies may engage in such analysis by making inferences and determinations about worker behavior and performance using algorithms, or sets of rules in computer programming code for solving a problem or performing a task based on input data. The algorithmic models used may also include “artificial intelligence” or “AI” models, which often develop and train algorithms using “machine learning,” which is the process of gathering data and supplying it to the computer program to train the algorithm to find patterns or make predictions. Conventional algorithms and AI models may also set performance goals or other parameters based on external data—for instance, by comparing a worker's output to an industry standard. 5 *See, e.g., Policy Primer;* Diego Areas Munhoz, “ *Robot Bosses” Spur Lawmaker Push to Police AI Job Surveillance,* Bloomberg Law (Sept. 8, 2023) *https://news.bloomberglaw.com/daily-labor-report/robot-bosses-spur-lawmaker-push-to-police-ai-job-surveillance.* 6 *See, e.g., Algorithmic Wage Discrimination;* Theara Coleman, *The (ongoing) fight against workplace AI surveillance,* The Week (Jan. 15, 2024) *https://theweek.com/tech/workplace-ai-surveillance.* Analysis Congress passed the FCRA in response to concerns about companies that assemble detailed dossiers about consumers and sell this information. 7 In doing so, Congress was particularly cognizant of the impact of so-called “credit reporting” on consumers' employment. Indeed, the Senate Report accompanying the bill that would be enacted as the FCRA noted in particular how “a consumer's future employment career could be jeopardized because of an incomplete credit report.” 8 To address those concerns, the FCRA regulates information in the form of “consumer reports,” a term defined to include “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for” certain purposes, including “employment purposes.” 9 7 *See generally* 115 Cong. Rec. S2410-11 (daily ed. Jan. 31, 1969) (statement of Sen. William Proxmire). 8 S. Rep. 91-517, at 4 (1970). 9 15 U.S.C. 1681(d)(1)(B). Under the FCRA, the “term `consumer' means an individual.” 15 U.S.C. 1681a(c). Among other things, the FCRA excludes from the definition of “consumer report” certain communications made to employers in connection with investigations of “suspected misconduct relating to employment” or “compliance with Federal, State, or local laws and regulations, the rules of a self-regulatory organization, or any pre-existing written policies of the employer.” 15 U.S.C. 1681a(d)(2)(D), (y). This Circular does not focus on such communications. While all of the general obligations of the FCRA apply to consumer reports provided for employment purposes, there are a few additional obligations that apply only to this kind of consumer report. For example, section 604(b) includes additional requirements when a consumer report is used for employment purposes, including a requirement to get permission from the worker. 10 It also generally requires employers to provide notice to workers and a copy of their report *before* taking adverse action. 11 In addition, upon request by a worker, “consumer reporting agencies” must disclose the identity of anyone who has used a consumer report for employment purposes in the two-year period preceding the date the request is made, which is longer than the one-year period used for other purposes. 12 And “consumer reporting agencies” must follow certain procedures when reporting public record information for employment purposes. 13 10 15 U.S.C. 1681b(b)(1) (2). The issue of whether an employer can use dossiers, scores, or other surveillance on workers may also be a topic of negotiation at the individual or collective bargaining level. 11 15 U.S.C. 1681b(3)(A). *But see* 15 U.S.C. 1681b(b)(3)(B) (C),

(4)(exceptions from § 1681b(b)(3)(A) for workers in the transportation industry in certain circumstances and for consumer reports relevant to national security investigations in certain circumstances). 12 15 U.S.C. 1681g(a)(3)(A)(i). 13 15 U.S.C. 1681k. Subject to an exemption for national security investigations, CRAs that compile and report for employment purposes public record information that is likely to have an adverse effect on a consumer's ability to obtain employment must

(1)notify the consumer that the information is being reported and of the name and address of the recipient, or

(2)maintain “strict procedures” to ensure that the public record information is complete and up to date. *Id.* Beyond the obligations that apply only to consumer reports used for employment purposes, the FCRA's general obligations also provide important protections for workers. Among other things, the FCRA provides workers the right to know what is in their file at a “consumer reporting agency” and dispute incomplete or inaccurate information, 14 requires such entities, in response to a consumer's dispute, to correct or delete inaccurate, incomplete, or unverifiable information, 15 and generally prohibits reporting of outdated negative information. 16 In addition to requiring that most employers give workers notice before taking an adverse action, the FCRA also generally requires that any person taking adverse action based on a consumer report provide notice to the consumer upon taking the adverse action. 17 Finally, the FCRA strictly limits “consumer reporting agencies” to providing consumer reports only for certain specified permissible purposes. 18 That means the background screener could not share consumer reports containing workers' data with employers or others, absent a FCRA permissible purpose. 19 14 15 U.S.C. 1681g(a); 15 U.S.C. 1681i(a)(1). 15 15 U.S.C. 1681i(a)(5). 16 15 U.S.C. 1681c. 17 15 U.S.C. 1681b(b)(3)(A), 1681m(a). 18 *See* 15 U.S.C. 1681b(a). 19 For example, courts have held that consumer reporting agencies generally cannot furnish consumer reports for targeted marketing. *See Trans Union Corp.* v. *FTC,* 81 F.3d 228, 233-34 (D.C. Cir. 1996). When looking at whether an employer that makes employment decisions based on a report from a third party is regulated by the FCRA, enforcers should consider two key questions: 1. Does the employer's use of data qualify as a use for “employment purposes” under the FCRA? 2. Is the report obtained from a “consumer reporting agency,” meaning that the report-maker “assembled” or “evaluated” consumer information to produce the report? On the first question, the FCRA defines “employment purposes” to mean “a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee.” 20 The FCRA thus applies both to information used for the purpose of evaluating a consumer for employment initially, and to information used for ongoing employment purposes— *i.e.,* promotion, reassignment, or retention. 21 20 15 U.S.C. 1681a(h). 21 The FCRA's application to both prospective and current workers is confirmed by FCRA section 603(k), which provides that an “adverse action” under FCRA includes “a denial of employment or any other decision for employment purposes that adversely affects any *current or prospective* employee.” 15 U.S.C. 1681a(k)(1)(B)(ii) (emphasis added). *See also Ernst* v. *Dish Network, LLC,* 49 F. Supp. 3d 377, 383 (S.D.N.Y. 2014) (background report was collected, expected to be used, and used for the employment purposes of “evaluat[ing] [the] Plaintiff for reassignment or retention as an employee”). On the second question, a third party could be a “consumer reporting agency” that assembles or evaluates consumer information if they collect consumer information in order to furnish reports to employers. 22 A company that employers use to help make employment decisions could meet this standard in a number of ways. For example, similar to a “nationwide consumer reporting agency,” like Equifax, Experian, or TransUnion, some companies collect consumer data from third parties for dissemination to employers in background reports. Traditional background screening companies “assemble” or “evaluate” information about workers, often from public sources, such as criminal history records. Other firms might collect information from employers about workers' collective bargaining activity, or job performance, and then sell it to other employers to make hiring decisions. 22 The FCRA regulates consumer reports as furnished by “consumer reporting agencies,” which it defines as: “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.” 15 U.S.C. 1681a(f). In addition, an entity could “assemble” or “evaluate” consumer information within the meaning of the term “consumer reporting agency” if the entity collects consumer data in order to train an algorithm that produces scores or other assessments about workers for employers. For example, the developer of a phone app that monitors a transportation worker's driving activity and provides driving scores to companies for employment purposes could “assemble” or “evaluate” consumer information if the developer obtains or uses data from sources other than an employer receiving the report, including from other employer-customers or public data sources, to generate the scores. 23 23 That may be true even when the assessment is performed through a software program licensed to employers, because the software provider furnishes the reports. Federal Trade Commission

(FTC)staff opined more than two decades ago that a seller of particular software that allowed users to compile and de-duplicate credit report information from the three major nationwide consumer reporting agencies was not itself a consumer reporting agency, reasoning that the software seller was not “assembling or evaluating” any information itself. FTC Advisory Opinion (Oct. 27, 1997), *https://www.ftc.gov/legal-library/browse/advisory-opinions/advisory-opinion-cast-10-27-97; see also* FTC, *40 Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report with Summary of Interpretations* at 12-13, 29 (July 2011). The FTC's guidance, however, focused on technology that was in existence at the time the guidance was drafted. Significant changes in the software and general technological landscape have taken place in the years since, rendering the FTC's prior guidance inapplicable to many of the kinds of technology used today. For example, software developers today often take a more active role in providing ongoing services to clients, such as by performing ongoing maintenance of the software, or by licensing services to clients instead of selling software as a point-in-time product. Accordingly, a third-party software provider could meet the definition of a consumer reporting agency where it assembles or evaluates consumer information to develop software that produces reports used to evaluate a worker “for employment, promotion, reassignment or retention,” or where the software itself assembles or evaluates information about a worker to produce reports used for those purposes. Judicial decisions declining to find software providers to be CRAs are likewise distinguishable. For instance, in *Zabriskie* v. *Fed. Nat'l Mortg. Ass'n,* 940 F.3d 1022, 1029 (9th Cir. 2019), the court determined that Fannie Mae did not act as a CRA by licensing a proprietary software that allowed lenders to determine whether their loans met requirements for Fannie Mae to purchase, but relied on reasoning inapplicable to third-party software developers that analyze worker data that companies use for employment purposes. *Id.* (reasoning that Congress intended to exclude Fannie Mae from the definition of a “consumer reporting agency” and that Fannie Mae did not have the purpose of furnishing consumer reports to a third party, but rather to determine the loans' eligibility for purchase). Not all third parties that assemble or evaluate data will qualify as “consumer reporting agencies.” For example, section 603(d)(2)(A)(i) of the FCRA excludes from the definition of “consumer report” any “report containing information solely as to transactions or experiences between the consumer and the person making the report.” But this exception applies only to reports containing information *solely* about transactions or experiences between the consumer and the report-maker. The exception by its own terms does not apply to a report containing information not about transactions or experiences between the report-maker and the consumer, such as when the report includes algorithmic scores, as described above. About Consumer Financial Protection Circulars *Consumer Financial Protection Circulars* are intended to promote consistency in approach across the various enforcement agencies and parties, pursuant to the CFPB's statutory objective to ensure Federal consumer financial law is enforced consistently. 12 U.S.C. 5511(b)(4). *Consumer Financial Protection Circulars* are also intended to provide transparency to partner agencies regarding the CFPB's intended approach when cooperating in enforcement actions. *See, e.g.,* 12 U.S.C. 5552(b) (consultation with CFPB by State attorneys general and regulators); 12 U.S.C. 5562(a) (joint investigatory work between CFPB and other agencies). *Consumer Financial Protection Circulars* are general statements of policy under the Administrative Procedure Act. 5 U.S.C. 553(b). They provide background information about applicable law, articulate considerations relevant to the Bureau's exercise of its authorities, and, in the interest of maintaining consistency, advise other parties with authority to enforce Federal consumer financial law. They do not restrict the Bureau's exercise of its authorities, impose any legal requirements on external parties, or create or confer any rights on external parties that could be enforceable in any administrative or civil proceeding. The CFPB Director is instructing CFPB staff as described herein, and the CFPB will then make final decisions on individual matters based on an assessment of the factual record, applicable law, and factors relevant to prosecutorial discretion. Rohit Chopra, Director, Consumer Financial Protection Bureau. [FR Doc. 2024-26099 Filed 11-8-24; 8:45 am]

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