This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

88875 

Vol. 89, No. 218 

Tuesday, November 12, 2024 

1 Veena Dubal, On Algorithmic Wage 

Discrimination, UC San Francisco Research Paper 

No. Forthcoming (2023) https://papers.ssrn.com/ 

sol3/papers.cfm?abstract_id=4331080 (hereinafter 

Algorithmic Wage Discrimination); Merve Hickok & 

Nestor Maslej, A Policy Primer And Roadmap On 

AI Worker Surveillance And Productivity Scoring 

Tools (2023) AI Ethics 3, 673–687 (2023) 

(hereinafter Policy Primer) https://

link.springer.com/article/10.1007/s43681-023- 

00275-8. 

2 Id. 

3See, e.g., Diego Areas Munhoz, ‘‘Robot Bosses’’ 

Spur Lawmaker Push to Police AI Job Surveillance, 

Bloomberg Law (Sept. 8, 2023) https://

news.bloomberglaw.com/daily-labor-report/robotbosses-spur-lawmaker-push-to-police-ai-jobsurveillance; Remarks of Benjamin Wiseman at the 

Harvard Journal of Law & Technology on Worker 

Surveillance and AI, FTC.gov (Feb. 8, 2024), Jolt-2- 

8-24-final.pdf (ftc.gov). 

4Companies may engage in such analysis by 

making inferences and determinations about worker 

behavior and performance using algorithms, or sets 

of rules in computer programming code for solving 

a problem or performing a task based on input data. 

The algorithmic models used may also include 

‘‘artificial intelligence’’ or ‘‘AI’’ models, which 

often develop and train algorithms using ‘‘machine 

learning,’’ which is the process of gathering data 

and supplying it to the computer program to train 

the algorithm to find patterns or make predictions. 

Conventional algorithms and AI models may also 

set performance goals or other parameters based on 

external data—for instance, by comparing a 

worker’s output to an industry standard. 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Chapter X 

Consumer Financial Protection 

Circular 2024–06: Background 

Dossiers and Algorithmic Scores for 

Hiring, Promotion, and Other 

Employment Decisions 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Consumer financial protection 

circular. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) has issued 

Consumer Financial Protection Circular 

2024–06, titled, ‘‘Background Dossiers 

and Algorithmic Scores for Hiring, 

Promotion, and Other Employment 

Decisions.’’ In this circular, the CFPB 

responds to the question, ‘‘Can an 

employer make employment decisions 

utilizing background dossiers, 

algorithmic scores, and other third-party 

consumer reports about workers without 

adhering to the Fair Credit Reporting 

Act (FCRA)?’’ 

DATES: The CFPB released this circular 

on its website on October 24, 2024. 

ADDRESSES: Enforcers, and the broader 

public, can provide feedback and 

comments to Circulars@cfpb.gov. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

Question Presented 

Can an employer make employment 

decisions utilizing background dossiers, 

algorithmic scores, and other third-party 

consumer reports about workers without 

adhering to the Fair Credit Reporting 

Act (FCRA)? 

Response 

No. Similar to credit reports and 

credit scores used by lenders to make 

lending decisions, background 

dossiers—such as those that convey 

scores about workers—that are obtained 

from third parties and used by 

employers to make hiring, promotion, 

reassignment, or retention decisions are 

often governed by the FCRA. Many 

background dossiers that are compiled 

from databases collecting public 

records, employment history, collectivebargaining activity, or other information 

about a worker are ‘‘consumer reports’’ 

under the FCRA. Other types of 

consumer reports may include, for 

example, reports that convey scores 

assessing a current worker’s risk level or 

performance. 

Employers that use consumer 

reports—both initially when hiring 

workers and for subsequent 

employment purposes—must comply 

with FCRA obligations, including the 

requirement to obtain a worker’s 

permission to procure a consumer 

report, the obligation to provide notices 

before and upon taking adverse actions, 

and a prohibition on using consumer 

reports for purposes other than the 

permissible purposes described in the 

FCRA. 

The third-party providers furnishing 

these reports are ‘‘consumer reporting 

agencies’’ regulated by the FCRA, which 

(among other things) imposes an 

obligation to follow reasonable 

procedures to assure maximum possible 

accuracy, a requirement to disclose 

information in a worker’s file to the 

worker upon request, and a requirement 

to investigate worker disputes alleging 

inaccuracies. 

Consumer Reports for Employment 

Purposes 

Similar to how credit reports and 

credit scores are commonly used by 

lenders, employers commonly purchase 

consumer reports to make employment 

decisions about workers. The most 

traditional form of consumer report in 

use in the United States for employment 

purposes is a background dossier that 

checks a worker’s public records, 

including criminal history. 

Recent technological advances have 

resulted in a rapid increase in the 

monitoring of workers across many 

sectors.1 This has been compounded by 

an increase in remote work. Together, 

these phenomena have resulted in an 

increase in third-party technology 

companies that have made it easier and 

more cost effective to track, assess, and 

evaluate workers.2

Consumer reporting agencies and 

other background screening companies 

now offer a range of reports to 

employers, including those that record 

current workers’ activities, personal 

habits and attributes, and even their 

biometric information. For example, 

some employers now use third parties to 

monitor workers’ sales interactions, to 

track workers’ driving habits, to 

measure the time that workers take to 

complete tasks, to record the number of 

messages workers send and the quantity 

and duration of meetings they attend, 

and to calculate workers’ time spent offtask through documenting their web 

browsing, taking screenshots of 

computers, and measuring keystroke 

frequency.3 In some circumstances, this 

information might be sold by ‘‘consumer 

reporting agencies’’ to prospective or 

current employers. 

Some companies may analyze worker 

data 4 in order to provide reports 

containing assessments or scores of 


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88876 Federal Register / Vol. 89, No. 218 / Tuesday, November 12, 2024 / Rules and Regulations 

5See, e.g., Policy Primer; Diego Areas Munhoz, 

‘‘Robot Bosses’’ Spur Lawmaker Push to Police AI 

Job Surveillance, Bloomberg Law (Sept. 8, 2023) 

https://news.bloomberglaw.com/daily-labor-report/ 

robot-bosses-spur-lawmaker-push-to-police-ai-jobsurveillance. 

6See, e.g., Algorithmic Wage Discrimination; 

Theara Coleman, The (ongoing) fight against 

workplace AI surveillance, The Week (Jan. 15, 2024) 

https://theweek.com/tech/workplace-aisurveillance. 

7See generally 115 Cong. Rec. S2410–11 (daily 

ed. Jan. 31, 1969) (statement of Sen. William 

Proxmire). 

8S. Rep. 91–517, at 4 (1970). 

9 15 U.S.C. 1681(d)(1)(B). Under the FCRA, the 

‘‘term ‘consumer’ means an individual.’’ 15 U.S.C. 

1681a(c). Among other things, the FCRA excludes 

from the definition of ‘‘consumer report’’ certain 

communications made to employers in connection 

with investigations of ‘‘suspected misconduct 

relating to employment’’ or ‘‘compliance with 

Federal, State, or local laws and regulations, the 

rules of a self-regulatory organization, or any preexisting written policies of the employer.’’ 15 U.S.C. 

1681a(d)(2)(D), (y). This Circular does not focus on 

such communications. 

10 15 U.S.C. 1681b(b)(1) (2). The issue of whether 

an employer can use dossiers, scores, or other 

surveillance on workers may also be a topic of 

negotiation at the individual or collective 

bargaining level. 

11 15 U.S.C. 1681b(3)(A). But see 15 U.S.C. 

1681b(b)(3)(B) (C), (4) (exceptions from 

§ 1681b(b)(3)(A) for workers in the transportation 

industry in certain circumstances and for consumer 

reports relevant to national security investigations 

in certain circumstances). 

12 15 U.S.C. 1681g(a)(3)(A)(i). 

13 15 U.S.C. 1681k. Subject to an exemption for 

national security investigations, CRAs that compile 

and report for employment purposes public record 

information that is likely to have an adverse effect 

on a consumer’s ability to obtain employment must 

(1) notify the consumer that the information is 

being reported and of the name and address of the 

recipient, or (2) maintain ‘‘strict procedures’’ to 

ensure that the public record information is 

complete and up to date. Id. 

14 15 U.S.C. 1681g(a); 15 U.S.C. 1681i(a)(1). 

15 15 U.S.C. 1681i(a)(5). 

16 15 U.S.C. 1681c. 

17 15 U.S.C. 1681b(b)(3)(A), 1681m(a). 

18See 15 U.S.C. 1681b(a). 

19For example, courts have held that consumer 

reporting agencies generally cannot furnish 

consumer reports for targeted marketing. See Trans 

Union Corp. v. FTC, 81 F.3d 228, 233–34 (D.C. Cir. 

1996). 

20 15 U.S.C. 1681a(h). 

21The FCRA’s application to both prospective 

and current workers is confirmed by FCRA section 

603(k), which provides that an ‘‘adverse action’’ 

under FCRA includes ‘‘a denial of employment or 

any other decision for employment purposes that 

adversely affects any current or prospective 

employee.’’ 15 U.S.C. 1681a(k)(1)(B)(ii) (emphasis 

added). See also Ernst v. Dish Network, LLC, 49 F. 

Supp. 3d 377, 383 (S.D.N.Y. 2014) (background 

report was collected, expected to be used, and used 

for the employment purposes of ‘‘evaluat[ing] [the] 

Plaintiff for reassignment or retention as an 

employee’’). 

22The FCRA regulates consumer reports as 

furnished by ‘‘consumer reporting agencies,’’ which 

it defines as: ‘‘any person which, for monetary fees, 

dues, or on a cooperative nonprofit basis, regularly 

engages in whole or in part in the practice of 

assembling or evaluating consumer credit 

information or other information on consumers for 

the purpose of furnishing consumer reports to third 

parties, and which uses any means or facility of 

interstate commerce for the purpose of preparing or 

furnishing consumer reports.’’ 15 U.S.C. 1681a(f). 

worker productivity or risk to 

employers.5 Today, such scores are used 

to make automated recommendations or 

determinations related to worker pay; 

predict worker behavior, including 

potential union organizing activity and 

likelihood that a worker will leave their 

job; schedule shifts or job 

responsibilities; or issue warnings or 

other disciplinary actions.6

Analysis 

Congress passed the FCRA in 

response to concerns about companies 

that assemble detailed dossiers about 

consumers and sell this information.7 In 

doing so, Congress was particularly 

cognizant of the impact of so-called 

‘‘credit reporting’’ on consumers’ 

employment. Indeed, the Senate Report 

accompanying the bill that would be 

enacted as the FCRA noted in particular 

how ‘‘a consumer’s future employment 

career could be jeopardized because of 

an incomplete credit report.’’ 8 To 

address those concerns, the FCRA 

regulates information in the form of 

‘‘consumer reports,’’ a term defined to 

include ‘‘any written, oral, or other 

communication of any information by a 

consumer reporting agency bearing on a 

consumer’s credit worthiness, credit 

standing, credit capacity, character, 

general reputation, personal 

characteristics, or mode of living which 

is used or expected to be used or 

collected in whole or in part for the 

purpose of serving as a factor in 

establishing the consumer’s eligibility 

for’’ certain purposes, including 

‘‘employment purposes.’’ 9

While all of the general obligations of 

the FCRA apply to consumer reports 

provided for employment purposes, 

there are a few additional obligations 

that apply only to this kind of consumer 

report. For example, section 604(b) 

includes additional requirements when 

a consumer report is used for 

employment purposes, including a 

requirement to get permission from the 

worker.10 It also generally requires 

employers to provide notice to workers 

and a copy of their report before taking 

adverse action.11 In addition, upon 

request by a worker, ‘‘consumer 

reporting agencies’’ must disclose the 

identity of anyone who has used a 

consumer report for employment 

purposes in the two-year period 

preceding the date the request is made, 

which is longer than the one-year period 

used for other purposes.12 And 

‘‘consumer reporting agencies’’ must 

follow certain procedures when 

reporting public record information for 

employment purposes.13

Beyond the obligations that apply 

only to consumer reports used for 

employment purposes, the FCRA’s 

general obligations also provide 

important protections for workers. 

Among other things, the FCRA provides 

workers the right to know what is in 

their file at a ‘‘consumer reporting 

agency’’ and dispute incomplete or 

inaccurate information,14 requires such 

entities, in response to a consumer’s 

dispute, to correct or delete inaccurate, 

incomplete, or unverifiable 

information,15 and generally prohibits 

reporting of outdated negative 

information.16 In addition to requiring 

that most employers give workers notice 

before taking an adverse action, the 

FCRA also generally requires that any 

person taking adverse action based on a 

consumer report provide notice to the 

consumer upon taking the adverse 

action.17 Finally, the FCRA strictly 

limits ‘‘consumer reporting agencies’’ to 

providing consumer reports only for 

certain specified permissible 

purposes.18 That means the background 

screener could not share consumer 

reports containing workers’ data with 

employers or others, absent a FCRA 

permissible purpose.19

When looking at whether an employer 

that makes employment decisions based 

on a report from a third party is 

regulated by the FCRA, enforcers should 

consider two key questions: 

1. Does the employer’s use of data 

qualify as a use for ‘‘employment 

purposes’’ under the FCRA? 

2. Is the report obtained from a 

‘‘consumer reporting agency,’’ meaning 

that the report-maker ‘‘assembled’’ or 

‘‘evaluated’’ consumer information to 

produce the report? 

On the first question, the FCRA 

defines ‘‘employment purposes’’ to 

mean ‘‘a report used for the purpose of 

evaluating a consumer for employment, 

promotion, reassignment or retention as 

an employee.’’ 20 The FCRA thus applies 

both to information used for the purpose 

of evaluating a consumer for 

employment initially, and to 

information used for ongoing 

employment purposes—i.e., promotion, 

reassignment, or retention.21

On the second question, a third party 

could be a ‘‘consumer reporting agency’’ 

that assembles or evaluates consumer 

information if they collect consumer 

information in order to furnish reports 

to employers.22 A company that 

employers use to help make 

employment decisions could meet this 

standard in a number of ways. For 

example, similar to a ‘‘nationwide 

consumer reporting agency,’’ like 


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Federal Register / Vol. 89, No. 218 / Tuesday, November 12, 2024 / Rules and Regulations 88877 

23That may be true even when the assessment is 

performed through a software program licensed to 

employers, because the software provider furnishes 

the reports. Federal Trade Commission (FTC) staff 

opined more than two decades ago that a seller of 

particular software that allowed users to compile 

and de-duplicate credit report information from the 

three major nationwide consumer reporting 

agencies was not itself a consumer reporting 

agency, reasoning that the software seller was not 

‘‘assembling or evaluating’’ any information itself. 

FTC Advisory Opinion (Oct. 27, 1997), https://

www.ftc.gov/legal-library/browse/advisoryopinions/advisory-opinion-cast-10-27-97; see also 

FTC, 40 Years of Experience with the Fair Credit 

Reporting Act: An FTC Staff Report with Summary 

of Interpretations at 12–13, 29 (July 2011). The 

FTC’s guidance, however, focused on technology 

that was in existence at the time the guidance was 

drafted. Significant changes in the software and 

general technological landscape have taken place in 

the years since, rendering the FTC’s prior guidance 

inapplicable to many of the kinds of technology 

used today. For example, software developers today 

often take a more active role in providing ongoing 

services to clients, such as by performing ongoing 

maintenance of the software, or by licensing 

services to clients instead of selling software as a 

point-in-time product. Accordingly, a third-party 

software provider could meet the definition of a 

consumer reporting agency where it assembles or 

evaluates consumer information to develop 

software that produces reports used to evaluate a 

worker ‘‘for employment, promotion, reassignment 

or retention,’’ or where the software itself assembles 

or evaluates information about a worker to produce 

reports used for those purposes. Judicial decisions 

declining to find software providers to be CRAs are 

likewise distinguishable. For instance, in Zabriskie 

v. Fed. Nat’l Mortg. Ass’n, 940 F.3d 1022, 1029 (9th 

Cir. 2019), the court determined that Fannie Mae 

did not act as a CRA by licensing a proprietary 

software that allowed lenders to determine whether 

their loans met requirements for Fannie Mae to 

purchase, but relied on reasoning inapplicable to 

third-party software developers that analyze worker 

data that companies use for employment purposes. 

Id. (reasoning that Congress intended to exclude 

Fannie Mae from the definition of a ‘‘consumer 

reporting agency’’ and that Fannie Mae did not have 

the purpose of furnishing consumer reports to a 

third party, but rather to determine the loans’ 

eligibility for purchase). 

Equifax, Experian, or TransUnion, some 

companies collect consumer data from 

third parties for dissemination to 

employers in background reports. 

Traditional background screening 

companies ‘‘assemble’’ or ‘‘evaluate’’ 

information about workers, often from 

public sources, such as criminal history 

records. Other firms might collect 

information from employers about 

workers’ collective bargaining activity, 

or job performance, and then sell it to 

other employers to make hiring 

decisions. 

In addition, an entity could 

‘‘assemble’’ or ‘‘evaluate’’ consumer 

information within the meaning of the 

term ‘‘consumer reporting agency’’ if the 

entity collects consumer data in order to 

train an algorithm that produces scores 

or other assessments about workers for 

employers. For example, the developer 

of a phone app that monitors a 

transportation worker’s driving activity 

and provides driving scores to 

companies for employment purposes 

could ‘‘assemble’’ or ‘‘evaluate’’ 

consumer information if the developer 

obtains or uses data from sources other 

than an employer receiving the report, 

including from other employercustomers or public data sources, to 

generate the scores.23

Not all third parties that assemble or 

evaluate data will qualify as ‘‘consumer 

reporting agencies.’’ For example, 

section 603(d)(2)(A)(i) of the FCRA 

excludes from the definition of 

‘‘consumer report’’ any ‘‘report 

containing information solely as to 

transactions or experiences between the 

consumer and the person making the 

report.’’ But this exception applies only 

to reports containing information solely 

about transactions or experiences 

between the consumer and the reportmaker. The exception by its own terms 

does not apply to a report containing 

information not about transactions or 

experiences between the report-maker 

and the consumer, such as when the 

report includes algorithmic scores, as 

described above. 

About Consumer Financial Protection 

Circulars 

Consumer Financial Protection 

Circulars are intended to promote 

consistency in approach across the 

various enforcement agencies and 

parties, pursuant to the CFPB’s statutory 

objective to ensure Federal consumer 

financial law is enforced consistently. 

12 U.S.C. 5511(b)(4). 

Consumer Financial Protection 

Circulars are also intended to provide 

transparency to partner agencies 

regarding the CFPB’s intended approach 

when cooperating in enforcement 

actions. See, e.g., 12 U.S.C. 5552(b) 

(consultation with CFPB by State 

attorneys general and regulators); 12 

U.S.C. 5562(a) (joint investigatory work 

between CFPB and other agencies). 

Consumer Financial Protection 

Circulars are general statements of 

policy under the Administrative 

Procedure Act. 5 U.S.C. 553(b). They 

provide background information about 

applicable law, articulate considerations 

relevant to the Bureau’s exercise of its 

authorities, and, in the interest of 

maintaining consistency, advise other 

parties with authority to enforce Federal 

consumer financial law. They do not 

restrict the Bureau’s exercise of its 

authorities, impose any legal 

requirements on external parties, or 

create or confer any rights on external 

parties that could be enforceable in any 

administrative or civil proceeding. The 

CFPB Director is instructing CFPB staff 

as described herein, and the CFPB will 

then make final decisions on individual 

matters based on an assessment of the 

factual record, applicable law, and 

factors relevant to prosecutorial 

discretion. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–26099 Filed 11–8–24; 8:45 am] 

BILLING CODE 4810–AM–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 209 

[Regulation I; Docket No. R–1844] 

RIN 7100—AG 85 

Federal Reserve Bank Capital Stock 

AGENCIES: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule. 

SUMMARY: The Board of Governors 

(Board) is publishing a final rule that 

applies an inflation adjustment to the 

threshold for total consolidated assets in 

Regulation I. Federal Reserve Bank 

(Reserve Bank) stockholders that have 

total consolidated assets above the 

threshold receive a different dividend 

rate on their Reserve Bank stock than 

stockholders with total consolidated 

assets at or below the threshold. The 

Federal Reserve Act requires that the 

Board annually adjust the total 

consolidated asset threshold to reflect 

the change in the Gross Domestic 

Product Price Index, published by the 

Bureau of Economic Analysis (BEA). 

Based on the change in the Gross 

Domestic Product Price Index as of 

September 26, 2024, the total 

consolidated asset threshold will be 

$12,841,000,000 through December 31, 

2025. 

DATES: 

Effective date: December 12, 2024. 

Applicability date: The adjusted 

threshold for total consolidated assets 

will apply beginning on January 1, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Snodgrass, Senior Counsel 

(202/263–4877), Legal Division; or 

Kelsey Cassidy, Senior Financial 

Institutions Policy Analyst (202/465– 

6817), Reserve Bank Operations and 

Payments Systems Division. For users of 

TTY–TRS, please contact 711 from any 

telephone, anywhere in the United 

States or (202) 263–4869. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Regulation I governs the issuance and 

cancellation of capital stock by the 


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