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Financial Services Law Insights and Observations

FTC, CFPB examine discriminatory background screenings

Federal Issues CFPB FTC Consumer Finance Discrimination

Federal Issues

On February 28, the FTC and CFPB issued a request for information (RFI) on background screening issues affecting consumers seeking rental housing in the U.S., including ways criminal and eviction records and algorithms may lead to discriminatory screening outcomes. (See also CFPB blog post here.) According to the agencies, information used and collected in rental-screening checks may “unfairly prevent consumers from obtaining and retaining housing.” The announcement comes as part of an effort to identify practices that unfairly prevent applicants and tenants from accessing or staying in housing. As previously covered by InfoBytes, the Biden administration announced in January new actions for enhancing tenant protections and furthering fair housing principles. This marks the first time the FTC has issued an RFI that explores unfair practices in the rental market. Collected data will be used to inform enforcement and policy actions under each agency’s jurisdiction, the agencies said, adding that the FCRA (which both agencies enforce) also imposes requirements on several aspects of the tenant screening process. 

Seeking feedback from current and prospective tenants, advocacy groups, landlords, and others who use or are subject to rental-screening checks, the RFI requests information covering a wide array of issues, including: (i) how housing decisions are impacted when criminal and eviction records (which may contain potential inaccuracies) are used; (ii) whether consumers are made aware of the criteria used in the screening process or notified about the reasons leading to a rejection; (iii) how application and screening fees are set; (iv) how the screening process uses algorithms, automated decision-making, artificial intelligence, or similar technology; and (v) ways the current screening process can be improved. Comments on the RFI are due May 30.

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