The question arises, however, as to what “Permissible Purpose” applies and is relied upon to procure a screening report. Is it tenant screening, employment screening or both?
It is likely that this scenerio was not considered by the drafters of the Fair Credit Reporting Act (FCRA). Nor is there legal or regulatory precendent to guide us. So we are left to our own devices to determine which provisions apply.
Owners and managers generally take the position that resident managers and employees must qualify for tenancy – by meeting or exceeding their tenant screening criteria. Since the content and quality of tenant screening reports can equal or exceed that found in an employment background checks – few procure separate employment screening reports.
True or False?
The problem is that the FCRA imposes some additional requirements upon us (as a Consumer Reporting Agency (CRA) and End-users (landlords) when consumer reports are used for employment screening purposes. For example, the FCRA requires that End-users:
- Inform applicants that a consumer report may be obtained for employment purposes;
- Provide a summary of the consumer’s rights under the FCRA; and
- Obtain the applicant’s authorization to procure the report.
Further, the FCRA requires that “…before taking any adverse action based in whole or in part on the <consumer> report, the person intending to take such adverse action shall…” provide the consumer (applicant) with a copy of the report and a written summary of their rights under the FCRA.
Adding the following steps to the tenant screening process is in order when the tenant screening report will be relied upon for employment screening purposes.
- Have the applicant sign a separate employment screening disclosure & authorization form – in addition to the application to rent.
- At the same time, provide the prospective employee with the CFPB Summary of Rights document.
- Provide the applicant with notice that adverse action is contemplated (along with a copy of the screening report) prior to taking such action – and give them time ( day or two, at least) to dispute the content of the report or offer mitigating factors.
- Provide final notice if adverse action is ultimately taken.
Keep in mind that state and local law may impose additional requirements.
Imagine being tagged with something that is derogatory and untrue – that impacts your ability to secure housing and employment. Imagine further, being unaware of the fact. The FCRA exists to protect us all – primarily through transparency.
By knowing and believing in (the intend of) the law – by incorporating the above process – it is possible to thorougly vet prospective residents AND protect the rights of consumers.
Visit Moco Incorporated for more information on tenant and employment screening topics, links to useful resources and access to standard forms.
Categorised in: Tenant Screening