The FTC will soon propose changes it says are designed to align several existing rules under the federal Fair Credit Reporting Act with the Dodd-Frank Act. The impacted rules cover only “motor vehicle dealers” being persons “predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both.”
The impacted rules are:
- Address Discrepancy Rule, which imposes obligations on persons who use consumer credit reports when they receive “a notice of address discrepancy from a nationwide consumer reporting agency.”
- Affiliate Marketing Rule, which allows consumers to restrict information obtained from an affiliate for solicitation purposes.
- Furnisher Rule, which requires furnishers of information to credit reporting agencies to develop and implement “reasonable written policies and procedures regarding the accuracy and integrity of the information” they provide to CRAs concerning consumers.
- Prescreen Opt-Out Notice Rule, which imposes requirements on persons who use information from a consumer credit report to make unsolicited offers of credit or insurance to consumers.
- Risk-Based Pricing Rule, which requires those who use information from a consumer credit report “to offer less favorable terms” to a consumer to provide a notice to the consumer about the use of that information.
The proposed rules would clarify that the FTC’s rulemaking authority only extends to those who are a “motor vehicle dealer.” The FTC’s Notice of Proposed Rulemaking (NPRM) notes that the Dodd-Frank Act restricted its rulemaking authority with respect to each of these rules to “motor vehicle dealers” while other covered entities became subject to the Consumer Financial Protection Bureau’s rulemaking.
While the amendments impose no new substantive requirements, the FTC is seeking comments on a broad range of topics including whether there is even a need for the rules. Among the other topics for comments outlined by the FTC are:
- What benefits do the rules provide to consumers and businesses?
- Are there any significant costs imposed on consumers and businesses and what modifications can be made to reduce those costs?
- Are there significant compliance costs and what can be done to reduce those costs?
Although the amendments are technical, the scope of the comments suggests the FTC may be willing to revisit the rules to better tailor them to the motor vehicle industry. Comments are due 75 days after the date of publication in the Federal Register.