Fair Credit Reporting Act

Document Title: Fair Credit Reporting Act
Document Date: June 1999 Source: IREM

To: IREM Members

From: Robert O. Click, CPM®

Date: September 26, 1997

Re: Fair Credit Reporting Act

IREM has just learned of changes that were included in the 1996 Budget Bill that amend the Fair Credit Reporting Act (FCRA). These new provisions were just a small part of the bill, but are very important to what is required of property managers.

Up until now, property managers rejecting tenant applicants based on credit information have simply been required to advise the applicant against whom the adverse decision was taken of the name and address of the agency providing the information. Effective September 30, 1997, more detailed information must be provided to a rejected applicant. Also effective September 30, 1997, consumer credit reporting agencies are required to provide notice to persons who buy consumer information form the consumer reporting agency of the user's responsibility to notify applicants regarding the use of that information in making the adverse decision.

The following letter covers the additional information required to be provided by users of credit reports making adverse decisions. Please review it carefully and adapt it to cover any unique circumstance of your own tenant evaluation process. You may not rely on the letter as legal advice or as assurance of compliance with the FCRA; consult your own attorney.

MODEL LETTER

Dear Tenant Applicant:

Our decision to not (rent/lease space) to you was based wholly or in part on a credit report. We are hereby informing you of certain information pursuant to the Fair Credit Reporting Act, 15 U.S.C. 1681, et seq., as amended by the Consumer Credit Reporting Reform Act of 1996 (Public Law 104-208, the Omnibus Consolidated Appropriations Act for the Fiscal Year 1997, Title II, Subtitle D, Chapter 1).

1. We have denied your applications based on information contained in a consumer credit report obtained from the following consumer credit reporting agency(ies):

[Insert name, address and toll-free telephone number of all consumer credit reporting agencies that provided information]

2. Pursuant to Section 615 of the Fair Credit Reporting Act, we are notifying you that the above-noted agency(ies) only provided information about your credit history. It took no part in making the decision to reject your rental application, nor can it explain why the decision was made.

3. You have certain rights under federal law, as explained in more detail in paragraphs 4 and 5 below. Pursuant to the Fair Credit Reporting Act, you have a right to obtain a copy of your credit report, dispute its accuracy, and provide a consumer statement describing your position if you dispute the credit report. If you believe your report is inaccurate or incomplete, you may call the consumer credit reporting agency at its toll-free number listed above or write to it at the listed address.

4. Pursuant to Section 612 or the Fair Credit Reporting Act, you have the right to obtain a free copy of your consumer report from the consumer credit reporting agency(ies) listed above. You must request the copy within 60 days of the date you receive this letter.

5. Pursuant to Section 611 of the Fair Credit Reporting Act, if you dispute any of the information in your report, you have the right to put into your report a consumer statement of up to 100 words explaining your position on the item under dispute. Trained personnel are available at the consumer credit reporting agency to help prepare consumer statements.

Sincerely,
ABC Management Company.