House Financial Services Committee Advances FCRA Reform Legislation
On July 11, the House Financial Services Committee held a markup for a series of bills designed to reform the credit reporting system and the FCRA. Each bill passed on a party-line vote. Given the Republican control of the Senate, these may not pass into law, but we will be watching the situation attentively. You can read more, here.
Kidd v. Thompson Reuters Corp. Creates Uncertainty, Again
In Kidd v. Thompson Reuters Corp., a plaintiff sued the information firm under FCRA, alleging that she was denied employment as the result of a false criminal background check using the defendant’s platform. The defendant obtained summary judgment on the basis that it was not a consumer reporting agency (CRA) subject to FCRA. This dismissal, which the Second Circuit Court of Appeals has affirmed, meant that the hiring entity did not violate FCRA.
However, there was nothing in this decision that suggested all internet sources have blanket absolution regarding FCRA compliance. In this case, the defendant posted disclosures and took additional measures to try to avoid use of its database information for consumer reporting purposes. This decision was based on the specific facts surrounding the database service in question and may not apply to other online resources. We’ll be watching this situation to see how it is resolved.
Interestingly, an article we published in 2014 detailed a case with a similar outcome from the same court. In this instance, the firm being sued under FCRA was an internet subscription service that was used by an employer.As with Thompson Reuters Corp., the decision that this service was not a CRA left the employer potentially exposed to a lawsuit. Why? Because it had hired a firm (that was found not to be a CRA) that violated the law while working on the employer’s behalf. Click here to read our earlier article.