[Federal Register Volume 87, Number 68 (Friday, April 8, 2022)]
[Proposed Rules]
[Pages 20771-20781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07528]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 87, No. 68 / Friday, April 8, 2022 / Proposed 
Rules

[[Page 20771]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1022

[Docket No. CFPB-2022-0023]
RIN 3170-AB12


Prohibition on Inclusion of Adverse Information in Consumer 
Reporting in Cases of Human Trafficking (Regulation V)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Consumer Financial Protection Bureau (Bureau) seeks 
comment on regulations implementing amendments to the Fair Credit 
Reporting Act (FCRA) that assist consumers who are victims of 
trafficking. The proposed rule, which would implement a recent 
amendment to the FCRA, would establish a method for a victim of 
trafficking to submit documentation to consumer reporting agencies, 
including information identifying any adverse item of information about 
the consumer that resulted from certain types of human trafficking, and 
prohibit the consumer reporting agencies from furnishing a consumer 
report containing the adverse item(s) of information. The Bureau is 
taking this action as mandated by the National Defense Authorization 
Act for Fiscal Year 2022 and to assist consumers who are victims of 
trafficking in building or rebuilding financial stability and personal 
independence.

DATES: Comments on the proposed rule must be received on or before May 
9, 2022.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2022-
0023 or RIN 3170-AB12, by any of the following methods:
    <bullet> Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#12202220203f5c42405f3f5451405346607374747b71797b7c7552717462703c757d64"><span class="__cf_email__" data-cfemail="bc8e8c8e8e91f2eceef191faffeefde8cedddadad5dfd7d5d2dbfcdfdaccde92dbd3ca">[email protected]</span></a>. Include Docket 
No. CFPB-2022-0023 or RIN 3170-AB12 in the subject line of the message.
    <bullet> Mail/Hand Delivery/Courier: Comment Intake--FCRA 
Trafficking, Bureau of Consumer Financial Protection, 1700 G Street NW, 
Washington, DC 20552. Please note that due to circumstances associated 
with the COVID-19 pandemic, the Bureau discourages the submission of 
comments by hand delivery, mail, or courier.
    Instructions: The Bureau encourages the early submission of 
comments. All submissions should include the agency name and docket 
number or Regulatory Information Number (RIN) for this rulemaking. 
Because paper mail in the Washington, DC area and at the Bureau is 
subject to delay, commenters are encouraged to submit comments 
electronically. In general, comments received will be posted without 
change to https://www.regulations.gov. In addition, once the Bureau's 
headquarters reopens, comments will be available for public inspection 
and copying at 1700 G Street NW, Washington, DC 20552, on official 
business days between the hours of 10 a.m. and 5 p.m. Eastern Time. At 
that time, you can make an appointment to inspect the documents by 
telephoning 202-435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Proprietary information or sensitive personal information, such as 
account numbers or Social Security numbers, or names of other 
individuals, should not be included. Comments will not be edited to 
remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Daniel Tingley, Counsel, or Lanique 
Eubanks, Senior Counsel, Office of Regulations, at 202-435-7700 or 
https://reginquiries.consumerfinance.gov/. If you require this document 
in an alternative electronic format, please contact 
<a href="/cdn-cgi/l/email-protection#c6858096849987a5a5a3b5b5afa4afaaafb2bf86a5a0b6a4e8a1a9b0"><span class="__cf_email__" data-cfemail="2665607664796745454355554f444f4a4f525f664540564408414950">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Summary of the Proposed Rule

    The Bureau is proposing several amendments to Regulation V to 
implement new section 605C of the Fair Credit Reporting Act (FCRA),\1\ 
added by the National Defense Authorization Act for Fiscal Year 2022 
(2022 NDAA).\2\ In brief, section 605C provides that a consumer 
reporting agency may not furnish a consumer report containing any 
adverse item of information concerning a consumer that resulted from a 
severe form of trafficking in persons or sex trafficking if the 
consumer has provided trafficking documentation to the consumer 
reporting agency.\3\ Under section 605C, the Bureau is required to 
issue implementing regulations within 180 days of the enactment of the 
2022 NDAA. Section 605C is effective 30 days after the Bureau issues 
its final implementing regulations.
---------------------------------------------------------------------------

    \1\ Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.
    \2\ National Defense Authorization Act for Fiscal Year 2022 
(2022 NDAA), Public Law 117-81, section 6102, 135 Stat. 2383-84 
(2021) (to be codified at 15 U.S.C. 1681c-3), https://www.congress.gov/117/plaws/publ81/PLAW-117publ81.pdf (last visited 
Mar. 28, 2022). The sponsors of this section of the 2022 NDAA and 
some advocates refer to this law as the ``Debt Bondage Repair Act,'' 
in reference to H.R. 2332 (introduced in the 117th Cong. on Apr. 1, 
2021).
    \3\ For purposes of this rule, the terms ``severe forms of 
trafficking in persons'' and ``sex trafficking'' will be referred to 
individually (as defined in the Section-by-Section Analysis of 
section 1022.142(b)) or collectively as ``trafficking.''
---------------------------------------------------------------------------

    The Bureau is proposing to amend Regulation V as follows:
    <bullet> Create a new section in subpart O, the subpart on 
miscellaneous duties of consumer reporting agencies, to add the 
provisions implementing section 605C of the FCRA;
    <bullet> Apply the proposed regulations to any ``consumer reporting 
agency'' as defined in section 603(f) of the FCRA, namely nationwide 
consumer reporting agencies, nationwide specialty consumer reporting 
agencies, and all other consumer reporting agencies;
    <bullet> Define terms including, in particular, ``trafficking 
documentation,'' ``severe forms of trafficking in persons,'' ``sex 
trafficking,'' and ``victim of trafficking''; and
    <bullet> Establish procedures for implementation of the new 
prohibition, including establishing how affected consumers should 
submit the required documentation to consumer reporting agencies and 
recordkeeping requirements to ensure compliance.

[[Page 20772]]

II. Background

A. Introduction

    According to the United States Department of State, in the United 
States human traffickers compel victims to engage in commercial sex and 
to work in legal and non-legal industries and sectors, including, for 
example, agriculture, janitorial services, construction, landscaping, 
restaurants, factories, child care, care for persons with disabilities, 
domestic work, salon services, massage parlors, peddling and begging, 
and drug smuggling and distribution.\4\ As the State Department has 
noted, it is difficult to find reliable statistics related to human 
trafficking for a number of reasons, including the hidden nature of the 
crime and barriers to identifying victims of trafficking and sharing 
information about them.\5\
---------------------------------------------------------------------------

    \4\ U.S. Dep't of State, About Human Trafficking, https://www.state.gov/humantrafficking-about-human-trafficking (last visited 
Mar. 16, 2022).
    \5\ Id.
---------------------------------------------------------------------------

    U.S. Government efforts to respond to the needs of victims of 
trafficking recognize that victims need both immediate and longer-term 
services, including services to improve financial stability to support 
their long-term independence.\6\ Accurate consumer reporting that does 
not disadvantage victims \7\ with adverse information resulting from 
them having been trafficked is critical to the ability of victims to be 
able to take basic steps such as obtaining housing and employment and 
to move toward greater financial stability and independence.
---------------------------------------------------------------------------

    \6\ Coordination Collaboration Capacity, Federal Strategic 
Action Plan on Services for Victims of Human Trafficking in the 
United States 2013-2017, at 9, (Jan. 2014), https://ovc.ojp.gov/sites/g/files/xyckuh226/files/media/document/FederalHumanTraffickingStrategicPlan.pdf.
    \7\ The Bureau recognizes that some individuals and advocates 
prefer the term ``survivor'' to ``victim.'' As the State Department 
explained, ``[b]oth terms are important and have different 
implications when used in the context of victim advocacy and service 
provision. For example, the term `victim' has legal implications 
within the criminal justice process and refers to an individual who 
suffered harm as a result of criminal conduct. The laws that give 
individuals particular rights and legal standing within the criminal 
justice system use the term `victim.' . . . `Survivor' is a term 
used widely in service providing organizations to recognize the 
strength and courage it takes to overcome victimization.'' See Off. 
for Victims of Crime, Training & Tech. Assistance Ctr., U.S. Dep't 
of Justice, Human Trafficking Task Force e-Guide, https://www.ovcttac.gov/taskforceguide/eguide/1-understanding-human-trafficking/13-victim-centered-approach/ (last visited Mar. 21, 
2022). In this proposed rule, we have used the term ``victim'' 
because that is the wording of section 6102 of the 2022 NDAA.
---------------------------------------------------------------------------

B. The Fair Credit Reporting Act

    The FCRA, enacted in 1970 and significantly amended in 1996, 2003, 
2010, and 2018, regulates consumer reporting. It was enacted to protect 
consumers by preventing the transmission of inaccurate information in 
consumer reports and establishing confidential and responsible credit 
reporting practices.\8\ The FCRA's statutory scheme was designed to 
ensure that consumer reporting agencies adopt reasonable procedures for 
meeting the needs of commerce in a manner which is fair and equitable 
to consumers and protects the confidentiality, accuracy, relevancy, and 
proper utilization of consumer information.\9\
---------------------------------------------------------------------------

    \8\ Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 
(9th Cir. 1995).
    \9\ 15 U.S.C. 1681(b).
---------------------------------------------------------------------------

    Together with its implementing regulation, Regulation V,\10\ the 
FCRA creates a regulatory framework for furnishing, using, and 
disclosing information in reports associated with credit, insurance, 
employment, and other decisions made about consumers. In doing so, the 
FCRA and Regulation V impose obligations on entities that qualify as 
``consumer reporting agencies.'' They also impose obligations on those 
who use consumer report information or furnish information to consumer 
reporting agencies (furnishers).
---------------------------------------------------------------------------

    \10\ 12 CFR part 1022.
---------------------------------------------------------------------------

C. The National Defense Authorization Act for Fiscal Year 2022

    Section 6102 of the 2022 NDAA amended the FCRA by inserting a new 
section 605C, which provides at section 605C(b) that a consumer 
reporting agency may not furnish a consumer report containing any 
adverse item of information concerning a consumer that resulted from a 
severe form of trafficking in persons or sex trafficking if the 
consumer has provided trafficking documentation to the consumer 
reporting agency. As described in more detail in the Section-by-Section 
Analysis parts of this proposed rule, section 605C(a) provides 
statutory definitions for a number of the terms used therein. Section 
605C(c)(1) directs the Bureau to issue implementing rules within 180 
days of enactment, and section 605C(c)(2) mandates that the rules must 
establish a method by which consumers must submit trafficking 
documentation to consumer reporting agencies.

III. Legal Authority

    The Bureau is issuing this proposal pursuant to its authority under 
the FCRA, the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act),\11\ and section 6102 of the 2022 NDAA.
---------------------------------------------------------------------------

    \11\ Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act), Public Law 111-203, 124 Stat. 1376 (2010).
---------------------------------------------------------------------------

A. Dodd-Frank Act Section 1022(b) and the FCRA

    Section 1022(b)(1) of the Dodd-Frank Act authorizes the Bureau to 
prescribe rules as may be necessary or appropriate to enable the Bureau 
to administer and carry out the purposes and objectives of the Federal 
consumer financial laws, and to prevent evasions thereof.\12\ Effective 
July 21, 2011, section 1061 of the Dodd-Frank Act transferred to the 
Bureau the rulemaking and certain other authorities of the Federal 
Trade Commission (FTC) and the prudential banking regulators (i.e., the 
Board of Governors of the Federal Reserve System (FRB), the Federal 
Deposit Insurance Corporation (FDIC), the National Credit Union 
Administration (NCUA), and the Office of the Comptroller of the 
Currency (OCC)) relating to specific ``enumerated consumer laws'' 
listed in the Dodd-Frank Act, including most rulemaking authority under 
the FCRA.\13\ Likewise, section 1088 of the Dodd-Frank Act made 
conforming amendments to the FCRA, transferring rulemaking authority 
under much of the FCRA to the Bureau.\14\ As amended by the Dodd-Frank 
Act, section 621(e) of the FCRA authorizes the Bureau to issue 
regulations as may be necessary or appropriate to administer and carry 
out the purposes and objectives of the FCRA, and to prevent evasions 
thereof or to facilitate compliance therewith.\15\ The Bureau is 
issuing this proposed rule pursuant to its authority under section 
1022(b)(1) of the Dodd-Frank Act and section 621(e) of the FCRA.
---------------------------------------------------------------------------

    \12\ Dodd-Frank Act section 1022(b)(1), 124 Stat. 1980.
    \13\ Dodd-Frank Act section 1002(12)(F), 124 Stat. 1957. Section 
1002(12)(F) of the Dodd-Frank Act designates most of the FCRA as an 
``enumerated consumer law.''
    \14\ Dodd-Frank Act section 1061, 124 Stat. 2037.
    \15\ Dodd-Frank Act section 1088(a)(10)(E), 124 Stat. 2090 
(codified at 15 U.S.C. 1681s(e)).
---------------------------------------------------------------------------

B. The National Defense Authorization Act for Fiscal Year 2022

    Section 6102(a) of the 2022 NDAA directs the Bureau to issue a rule 
implementing the new section 605C of the FCRA. Section 6102(c) provides 
that the rule issued to implement section 605C shall be limited to 
preventing a consumer reporting agency from furnishing a consumer 
report containing any adverse item of information about a consumer (as 
such terms are defined, respectively, in section 603 of the FCRA

[[Page 20773]]

(15 U.S.C. 1681a)) that resulted from trafficking.

IV. Section-by-Section Analysis

Section 1022.142 Prohibition on Inclusion of Adverse Information in 
Consumer Reporting in Cases of Human Trafficking

142(a) Scope
    The Bureau is proposing to apply the requirement to prohibit the 
furnishing of adverse items of information about victims of trafficking 
to any ``consumer reporting agency'' as defined in section 603(f), as 
directed by section 6102(c) of the 2022 NDAA. Thus, consistent with 
section 603(f) of the FCRA, the Bureau is proposing to define 
``consumer reporting agency'' to apply to all consumer reporting 
agencies. This means that the nationwide consumer reporting agencies, 
nationwide specialty consumer reporting agencies, and all other 
consumer reporting agencies such as those focused on employment 
screening, tenant screening, check and bank screening, personal 
property insurance, medical, low-income and subprime, supplementary 
reports, utilities, retail, and gaming would be covered.\16\
---------------------------------------------------------------------------

    \16\ A list of many self-identified consumer reporting companies 
is available on the Bureau's website at https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/consumer-reporting-companies/companies-list/(last visited Mar. 21, 
2022).
---------------------------------------------------------------------------

142(b) Definitions
142(b)(1) Appropriate Proof of Identity
    Proposed section 1022.142(b)(1) defines the term ``appropriate 
proof of identity'' as meaning proof of identity that meets the 
requirements in section 1022.123. This section, which concerns proof of 
identify for consumers regarding identity theft, provides that consumer 
reporting agencies must develop and implement reasonable requirements 
specifying what information consumers must provide to constitute proof 
of identity. The requirements of proposed section 1022.142(b)(1) are 
not prescriptive; the Bureau is proposing this approach in light of the 
challenges commonly faced by victims of trafficking. For instance, 
certain victims may have been displaced, may live at an address not 
reported to consumer reporting agencies, or may lack access to 
information or documentation commonly used for proof of identity. While 
a consumer reporting agency would need to take reasonable steps to 
ensure that the required information in the context of human 
trafficking is sufficient to enable it to match the consumer with a 
credit file and commensurate with an identifiable risk of harm arising 
from misidentifying the consumer, the requirements to establish proof 
of identity should be sensitive to the particular needs of victims of 
trafficking. For example, consumer reporting agencies could include 
methods of validation of a person's identity such as the consumer's 
ability to answer questions to which only the consumer might be 
expected to know the answer.
142(b)(2) Consumer Report
    Proposed section 1022.142(b)(2) defines the term ``consumer 
report'' to have the same meaning as that provided in section 603(d) of 
the FCRA. The use of this definition is directed by section 6102(c) of 
the 2022 NDAA (which provides that the Bureau's rule shall be limited 
to preventing a consumer reporting agency from furnishing a consumer 
report containing any adverse item of information about a consumer that 
resulted from trafficking as the terms used in that provision are 
defined in section 603 of the FCRA).
142(b)(3) Consumer Reporting Agency
    Proposed section 1022.142(b)(3) defines ``consumer reporting 
agency'' to have the meaning provided in section 603(f) of the FCRA. 
The use of this definition is directed by section 6102(c) of the 2022 
NDAA.
142(b)(4) Severe Forms of Trafficking in Persons
    Section 605C(a)(2) provides that the term ``severe forms of 
trafficking in persons'' has the meaning given in section 103 of the 
Trafficking Victims Protection Act of 2000 (22 U.S.C. 7102). Proposed 
section 1022.142(b)(4) accordingly adopts the definition set forth in 
that statute, which defines ``severe forms of trafficking in persons'' 
as:
    (i) Sex trafficking in which a commercial sex act is induced by 
force, fraud, or coercion, or in which the person induced to perform 
such act has not attained 18 years of age; or
    (ii) The recruitment, harboring, transportation, provision, or 
obtaining of a person for labor or services, through the use of force, 
fraud, or coercion for the purpose of subjection to involuntary 
servitude, peonage, debt bondage, or slavery.
142(b)(5) Sex Trafficking
    Section 605C(a)(2) provides that the term ``sex trafficking'' has 
the meaning given in section 103 of the Trafficking Victims Protection 
Act of 2000 (22 U.S.C. 7102). Section 103 of the Trafficking Victims 
Protection Act of 2000 was amended by section 108 of the Justice for 
Victims of Trafficking Act of 2015, 22 U.S.C. 7102(12). Proposed 
section 1022.142(b)(5) adopts the definition in section 103 as amended 
in 2015. Under that definition, the term means the recruitment, 
harboring, transportation, provision, obtaining, patronizing, or 
soliciting of a person for the purpose of a commercial sex act.
142(b)(6) Trafficking Documentation
142(b)(6)(i)(A) and (B)
    Section 605C(a)(1) defines ``trafficking documentation'' as 
documentation of a determination that a consumer is a victim of 
trafficking, made by a Federal, State, or Tribal governmental entity, 
or by a court of competent jurisdiction; and documentation that 
identifies items of adverse information that should not be furnished by 
a consumer reporting agency because the items resulted from a severe 
form of trafficking in persons or sex trafficking of which the a 
consumer is the victim. The Bureau is proposing to incorporate this 
statutory definition with certain clarifying interpretations regarding 
documentation identifying a consumer who is a victim of trafficking 
involving a ``court of a competent jurisdiction,'' to clarify that the 
documentation may consist of one or more documents as long as the 
collective documentation satisfies the definition. As discussed in 
detail below, the proposed rule would define ``trafficking 
documentation'' to include documents filed in a court of competent 
jurisdiction indicating that a consumer is a victim of trafficking.
    As provided above, the proposed definition of ``trafficking 
documentation'' applies to a ``Federal governmental entity.'' In 
drafting the proposed rule, the Bureau sought information from other 
Federal agencies and consumer and industry groups about the types of 
documentation issued by various governmental entities that consumers 
may be able to provide to consumer reporting agencies as trafficking 
documentation.\17\ The Bureau found that documentation

[[Page 20774]]

directly identifying a person as a victim of trafficking is scarce and 
is primarily limited to foreign-born persons.\18\ The Bureau has also 
learned that victims of trafficking are often not identified and thus 
many victims will not have documentation determining that they are a 
victim of trafficking. One reason victims are not identified is because 
persons in the best position to identify people who may be victims of 
trafficking are not properly trained to do so.\19\ Another possible 
reason may be because some victims do not self-identify as a victim of 
trafficking even if they meet the definition.\20\ To the extent a 
person self-identifies as a victim of trafficking (or is so identified 
by others such as health care or social service providers, law 
enforcement officials, or judges), the victim's names, addresses, phone 
numbers, and any other identifying information are often protected for 
confidentiality and privacy reasons.
---------------------------------------------------------------------------

    \17\ For purposes of discussing the documentation requirements 
and options identifying victims of trafficking, the Bureau held 
meetings with: (1) Bureau of Indian Affairs (BIA); (2) Department of 
Health and Human Services (HHS): Office of Trafficking in Persons 
(OTIP); (3) Department of Homeland Security (DHS): Center for 
Countering Human Trafficking; (4) Department of Justice: Money 
Laundering and Asset Forfeiture Section, Office for Victims of Crime 
(OVC), Human Trafficking Prosecution Unit, Executive Office of the 
United States Attorneys; and the (5) Federal Trade Commission. The 
Bureau separately held meetings with industry and consumer advocacy 
groups for input on section 6102 of NDAA.
    \18\ For example, HHS issues certification letters to foreign 
national adults who have experienced a severe form of trafficking in 
persons after receiving notification that DHS has granted the person 
a continued presence, a T visa, or that a bona fide T visa 
application has not been denied. This certification letter provides 
that foreign national adult victims of trafficking are eligible for 
certain Federal and state benefits (health insurance, housing, food 
assistance, cash assistance, Federal student financial aid). 
Whereas, U.S. citizens and lawful permanent residents do not need a 
Certification Letter to access services and benefits available to 
victims of trafficking and such as a letter identifying persons as 
victims of trafficking is generally not provided to U.S. citizens or 
permanent residents. This information is available at https://www.acf.hhs.gov/otip/victim-assistance/certification (last visited 
Mar. 2, 2022).
    \19\ Off. for Victims of Crime, U.S. Dep't of Justice, Faces of 
Human Trafficking Video 2: An Introduction to Sex Trafficking, 
YouTube (Jan. 15, 2016) https://youtu.be/JygGZH0cGV4.
    \20\ Id.
---------------------------------------------------------------------------

    The Bureau is aware of programs in which government agencies grant 
money to certain organizations to assist victims of trafficking.\21\ 
For instance, the Department of Justice's Office for Victims of Crime 
(OVC) is the largest Federal funder of services for human trafficking 
victims in the United States.\22\ The Bureau understands this office 
does not make or document determinations as to who is a victim of 
trafficking. However, grantees that are non-governmental organizations 
who receive funding from the OVC to provide trafficking services to 
clients do make determinations that individuals are victims of 
trafficking, even when the person does not self-identify as a 
victim.\23\ The Bureau anticipates that these non-governmental 
organizations may be able to provide documentation that would support a 
determination that an individual is a victim of trafficking comparable 
to the documentation that might be available from governmental sources. 
The Bureau is interested in comments about whether and how such non-
governmental sources of information might be considered in making a 
determination under section 605C. For example, might entities that 
receive funding from a governmental entity, and are subject to the 
terms and conditions of a government program, provide documentation in 
the form of a determination identifying a person as a victim of 
trafficking that would satisfy section 605C(a)(1)(A)? Could an 
attestation or documentation submitted to a Federal, State, or Tribal 
governmental entity by a person who self-identifies as a victim of 
trafficking, or by another person or entity acting on that person's 
behalf, constitute a documented determination under section 
605C(a)(1)(A)?
---------------------------------------------------------------------------

    \21\ A map and list of OVC-funded human trafficking services and 
task forces is available on OVC's website at https://ovc.ojp.gov/program/human-trafficking/map. (last visited Mar. 21, 2022). HHS 
also provides funding to various organizations offering trafficking 
assistance to victims. A list of the grantees is available at 
https://www.acf.hhs.gov/otip/grants (last visited Mar. 21, 2022).
    \22\ Off. for Victims of Crime, U.S. Dep't of Justice, Matrix of 
OVC-Funded Human Trafficking Services Grantees and Task Forces, 
https://ovc.ojp.gov/matrix-ovc-funded-human-trafficking-services-grantees-and-task-forces (last visited Mar. 14, 2022).
    \23\ Off. for Victims of Crime, U.S. Dept of Justice, OVC Human 
Trafficking Program FAQs, at comment 33 ``Can I provide services to 
a client who does not self-identify as a victim of human 
trafficking?'', https://ovc.ojp.gov/program/human-trafficking/ovc-human-trafficking-program-faqs (last visited Mar. 16, 2022).
---------------------------------------------------------------------------

    The Bureau is proposing to treat documentation of a determination 
that a consumer is a victim of trafficking by a ``State governmental 
entity'' as including documentation created at both the state and local 
level. Local law enforcement, as part of a local government, may have 
documentation of a determination identifying victims of trafficking, 
including but not limited to items in a police report. The Bureau 
understands that there are Federal and State victims' rights acts in 
addition to Tribal codes that depend on a determination that a victim 
has been identified as such, including by Federal, State, Tribal, or 
local jurisdictions.\24\ In fact, some state laws explicitly 
contemplate local entities making this determination for sex 
trafficking victims which triggers various rights for the victim and 
obligations for the government under State and Federal law.\25\ While 
sometimes documentation determining that a person is a victim may be 
shared with State, Federal, or Tribal governmental entities, it is 
likely that sometimes it is not, and that as a result some victims of 
trafficking would not be able to take steps under section 605C to 
prohibit the furnishing by consumer reporting agencies of adverse 
information about them that results from their having been trafficked 
under too narrow a definition. For these reasons, the Bureau is 
proposing to include local governmental entities, such as local law 
enforcement, as entities that may make determinations of someone's 
status as a victim under state law. The Bureau is concerned that a 
narrower definition could substantially limit the availability of 
documentation for victims of trafficking to submit to consumer 
reporting agencies. By proposing to interpret documentation of a 
determination that a consumer is a victim of trafficking by a ``State 
governmental entity'' as discussed above, the Bureau is making clear 
that trafficking documentation consumers are to use will prevent 
consumer reporting agencies from furnishing consumer reports containing 
adverse items of information about a consumer that resulted from 
trafficking. This provision of the rule is also supported by the 
Bureau's regulatory authority under section 621(e) of the FCRA, which 
authorizes the Bureau to prescribe regulations that promote accuracy 
and fairness in credit reporting, and on the general rulemaking 
authority granted the Bureau under section 1022(b)(1) of the Dodd-Frank 
Act. Therefore, the Bureau is proposing that documentation generated by 
both statewide and local entities should be understood as having been 
generated by a ``State governmental entity'' for the purposes of this 
rule.
---------------------------------------------------------------------------

    \24\ See, e.g., Victims' Rights & Restitution Act of 1990, 42 
U.S.C. 10607; Crime Victims' Rights Act, 18 U.S.C. 3771. In these 
Federal statutes and in some state laws, victims' rights attach 
during an investigation (and independent of trial) and therefore 
rely on a law-enforcement determination, which is quite often made 
by a local governmental entity.
    \25\ See, e.g., 23 Pa. Cons. Stat. Sec.  5702(a) (requiring 
county agencies to report to law enforcement children whom they 
``identif[y] as being a sex trafficking victim'' within 24 hours); 
Va. Code Ann. Sec.  9.1-116.5 (creating a statewide Sex Trafficking 
Response Coordinator who is responsible for ``creat[ing] a statewide 
plan for local and state agencies to identify and respond to victims 
of sex trafficking'').
---------------------------------------------------------------------------

    The Bureau is soliciting comments on whether it should interpret 
the phrase ``a determination that a consumer is a victim of trafficking 
made by a Federal, State, or Tribal governmental entity'' to mean any 
determination, including those made by local government officials, 
where a Federal, State or Tribal governmental entity could reasonably 
be construed as making a determination

[[Page 20775]]

that a consumer is a victim of trafficking. For example, determinations 
made by local governments, including local law enforcement, may qualify 
a trafficking victim to avail themselves of Federal, State or Tribal 
victims' rights laws. The Bureau is also interested in comments 
concerning the nature of information on trafficking in the possession 
of local governments, the extent to which such information is or might 
usefully be shared with Federal, State, and Tribal governmental 
entities, and the sort of documentation generated by these governmental 
entities.
    The Bureau is proposing to include two categories of documentation 
involving a ``court of competent jurisdiction'' in the definition of 
``trafficking documentation.'' The first category of documents 
concerning a ``court of competent jurisdiction,'' is documentation, in 
the form of a determination, that the consumer is a victim of 
trafficking made by a court of competent jurisdiction.\26\ The second 
category is documentation consisting of documents filed in a court of 
competent jurisdiction indicating that a consumer is a victim of 
trafficking.\27\ The Bureau is also interested in comments on whether 
it should clarify in the regulation what documents filed in a court of 
competent jurisdiction indicating that a consumer is a victim of 
trafficking means. For example, can or should a filing in a court or a 
court opinion in which a consumer's status as a victim of trafficking 
is an accepted fact, but not the central issue in the case, be 
considered a ``determination'' sufficient to satisfy section 
605C(a)(1)(A)? Would such an interpretation allow more victims of 
trafficking to make use of the procedure created by section 605C?
---------------------------------------------------------------------------

    \26\ Examples of court documents made by a court of competent 
jurisdiction could be a restitution order that provides a victim of 
trafficking with restitution after a criminal conviction or a 
criminal record relief court order (such as a vacatur, expungement, 
or sealing of records) where victims of trafficking may obtain an 
order to clear convictions of criminal offenses the victims were 
forced to commit.
    \27\ An example of a document filed in a court of competent 
jurisdiction indicating a consumer is a victim of trafficking could 
be where victims of trafficking file suit against their traffickers 
where they identify as a victim of trafficking. A prior iteration of 
section 6102 of the 2022 NDAA in H.R. 2332 (introduced in the 117th 
Cong.) and S. 2040 (introduced in the 117th Cong.) provided that 
``trafficking documentation'' included ``documentation of . . . a 
determination by a court of competent jurisdiction that a consumer 
is a victim of trafficking.'' This language was subsequently changed 
and enacted into law to instead read ``documentation of . . . by a 
court of competent jurisdiction.''
---------------------------------------------------------------------------

    As discussed above, the proposed ``trafficking documentation'' 
definition does not contain a description or example of what is a 
``determination that a consumer is a victim of trafficking.'' 
Furthermore, the Bureau has not identified any standard 
``determination'' procedures or forms in use by any governmental 
entities or courts concerning human trafficking for persons who are not 
foreign national adults (i.e., U.S. citizens or lawful permanent 
residents). Accordingly, rather than propose to prescribe a specific 
form of determination, the Bureau is proposing to adopt the statutory 
definition with the proposed changes discussed in this section above. 
This approach affords the greatest flexibility to victims of 
trafficking seeking to gather and submit to consumer reporting agencies 
the documentation of determinations specified in section 605C(a)(1)(A). 
The Bureau may consider issuing interpretations in the future that 
provide specific examples to provide clarity on the types of 
``determinations'' that establish a consumer is a ``victim of 
trafficking.'' The Bureau seeks comment on this issue and solicits 
feedback on the types of documents that could serve as a 
``determination.''
142(b)(6)(ii)
    In addition to specifying that the source of trafficking 
documentation be a Federal, State, or Tribal governmental entity or a 
court of competent jurisdiction, section 605(C)(a)(1)(B) provides that 
``trafficking documentation'' is documentation that identifies items of 
adverse information that should not be furnished by a consumer 
reporting agency because the items resulted from a severe form of 
trafficking in persons or sex trafficking of which the consumer is a 
victim. The Bureau has incorporated the statutory provision into 
proposed section 1022.142(b)(6)(ii) with a clarification that this 
documentation may consist of a statement by the consumer identifying 
such information. This part of the definition is significant because it 
identifies for victims information that must be provided to consumer 
reporting agencies in order to prohibit them from furnishing adverse 
information in their consumer report when the information results from 
human trafficking.
    The Bureau is not proposing to prescribe what an ``adverse item of 
information'' in a ``consumer report'' is, because it may vary 
depending on the weight each individual user of a consumer report gives 
to certain items of information as well as the consumer's individual 
circumstances. This information could include the evaluation of factors 
enumerated in section 603(d) of the FCRA on consumer reports such as: 
Credit worthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living. In addition, 
victims of trafficking may wish to have items of information blocked 
from their consumer report that are the result trafficking because they 
do not believe those items accurately reflect them even if the item 
does not result in, for example, a lower credit score or less favorable 
evaluation by a user. Examples of adverse items of information include 
records containing derogatory information, such as payment 
delinquencies or defaults, reported to a consumer reporting agency on a 
loan or large purchase, records of coerced debt where a loan is taken 
out by a trafficking victim under force or threat, records of criminal 
arrests and convictions, and records of evictions or non-payment of 
rent.
142(b)(7) Victim of Trafficking
    Section 605C(a)(3) defines ``victim of trafficking'' as a person 
who is a victim of a severe form of trafficking in persons or sex 
trafficking. Proposed section 1022.142(b)(7) adopts this definition.
142(c) Prohibition on Inclusion of Adverse Information of Trafficking 
Victims
    Section 605C(b) provides that a consumer reporting agency may not 
furnish a consumer report containing any adverse item of information 
about a consumer that resulted from a severe form of trafficking in 
persons or sex trafficking if the consumer has provided trafficking 
documentation to the consumer reporting agency. The Bureau is proposing 
to interpret this provision to mean a consumer reporting agency may not 
furnish any adverse item of information in a consumer report to the 
extent such information resulted from the consumer's involvement in a 
severe form of trafficking or sex trafficking and the consumer 
submitted trafficking documentation to the consumer reporting agency. 
Proposed section 1022.142(c) adopts this statutory language. The Bureau 
is interested in comments on whether this provision warrants further 
clarification.
142(d) Method of Submission to Consumer Reporting Agencies
142(d)(1)-(d)(3)
    Section 605C(c) requires that the Bureau's implementing rules 
establish a method by which consumers shall submit trafficking 
documentation to consumer reporting agencies. The information to be 
provided by the consumer to a consumer reporting

[[Page 20776]]

agency is by nature highly sensitive and confidential. Under proposed 
section 1022.142(d)(1), consumer reporting agencies would provide a 
mailing address or website address if the consumer reporting agency 
allows for electronic submissions, for a consumer to submit trafficking 
documentation. To facilitate this, proposed section 1022.142(d)(2) 
provides that a consumer reporting agency must add information on the 
publicly available website stating how submissions for the blocking of 
adverse items of information resulting from trafficking can be 
submitted. Consumer reporting agencies must accept submissions of 
trafficking documentation at the mailing address used for disputes 
under section 611 of the FCRA. Also, if the consumer reporting agency 
takes disputes under section 611 of the FCRA through a website, it must 
also accept submission of trafficking documentation at that same 
website by establishing a secure online portal. Further, a consumer 
reporting agency must maintain another mailing address and, if the 
consumer reporting agency accepts electronic submissions of trafficking 
documentation, another website address dedicated to blocking adverse 
items of information resulting from trafficking.
    In addition, proposed section 1022.142(d)(3) provides that consumer 
reporting agencies must allocate a reasonable amount of personnel to 
respond to inquiries about the process for and status of trafficking 
documentation submissions at the toll-free number for disputes and 
establish a toll-free telephone number dedicated to blocking adverse 
items of information resulting from trafficking.
    The Bureau proposes these requirements under its authority in 
sections 605C(c) and 621(e) of the FCRA as necessary to assist victims 
in their efforts to prevent a consumer reporting agency from furnishing 
a consumer report containing an adverse item of information that 
resulted from trafficking. Trafficking victims seeking to block adverse 
items of information may have difficulty receiving communications from 
consumer reporting agencies because, for example, they may be in the 
process of establishing new permanent residence or may have 
inconsistent or no access to the internet. To ensure that consumer 
reporting agencies are not furnishing adverse items of information for 
which the consumer has provided the necessary trafficking 
documentation, consumers need to be able to understand where and how to 
submit trafficking documentation and to be able to verify that a 
consumer reporting agency has received and acted upon such 
documentation. The reason the Bureau is proposing that a consumer 
reporting agency needs to accept submissions of trafficking 
documentation at both the specific address(es) the consumer reporting 
agency uses for FCRA section 611 disputes and at separate address(es) 
the consumer reporting agency uses only for submission of trafficking 
documentation is to maximize the chances of consumers being able to 
find an address to which to submit documentation. Some consumers may 
use the address for disputes as that may be the most widely known and 
available address, while other consumers may seek a specific address 
for trafficking documentation and may not understand that they can 
submit to the address for disputes. The Bureau solicits comment on 
these proposed provisions.
142(e)-(h) Overview
    In order to fully implement the consumer protection provisions of 
section 605C, the Bureau looked at pre-existing statutory and 
regulatory requirements concerning the procedures used by consumers in 
reporting identity theft and in disputing the accuracy of information 
in consumer files and consumer reports and the obligations those 
regulations place on consumer reporting agencies to identify what 
aspects of those regulations might be useful in helping a consumer 
seeking to report items of adverse information that result from a 
severe form of trafficking or sex trafficking of which the consumer is 
a victim. Proposed paragraphs 142(e)-(h) set forth: (1) Provisions to 
address limited situations in which the consumer reporting agency may 
decline or rescind a block pursuant to section 605C; (2) the 
obligations on consumer reporting agencies to notify the consumer of 
the outcome of its actions with respect to the submission; (3) a record 
retention requirement of seven years from the date the submission is 
received by consumer reporting agencies; and (4) a requirement that 
consumer reporting agencies establish and maintain written policies and 
procedures to ensure and monitor compliance with section 605C and these 
implementing regulations.
    The Bureau is proposing these procedural requirements under its 
authority in FCRA section 621(e) to prescribe regulations that are 
necessary and appropriate to administer and carry out the purposes and 
objectives of the FCRA, and to prevent evasions or to facilitate 
compliance. If the consumer is not notified of the outcome by the 
consumer reporting agency, the consumer would either have to separately 
request a copy of their credit report, perhaps incurring a fee, or wait 
to see if they are subject to an adverse action the next time their 
consumer report is used which may mean missing out on credit, 
employment, or housing opportunities. Many victims of trafficking will 
be in particularly urgent need of housing, employment, or credit, and 
knowing within a reasonable time that a consumer reporting agency has 
blocked adverse items of information may facilitate a victim's ability 
to obtain these vital services. The Bureau also believes that these 
requirements are necessary for preventing a consumer reporting agency 
from furnishing a consumer report containing any adverse item of 
information about a consumer that resulted from trafficking because it 
provides consumers with the opportunity to review the outcome and if 
the consumer reporting agency incorrectly rejected a submission to 
dispute that outcome.
    Section 605C of the FCRA does not expressly address the development 
of written policies and procedures or notification by consumer 
reporting agencies to furnishers of the adverse items of information 
blocked for a victim of trafficking. Notifying the furnisher of the 
block could give a furnisher the opportunity to cease furnishing the 
blocked information to the consumer reporting agency that provided the 
notification, which can help ensure that blocked information is not 
refurnished and reinserted in a consumer report. If the furnisher stops 
furnishing to other consumer reporting agencies it may also help to 
prevent the adverse items of information from being furnished by those 
consumer reporting agencies. The Bureau is seeking comment on whether a 
consumer reporting agency should be required to notify a furnisher 
about the consumer's submission to prevent a consumer reporting agency 
from furnishing a consumer report containing any adverse item of 
information about a consumer that resulted from trafficking.
142(e) Authority To Decline or Rescind a Block
    The Bureau understands consumer reporting agencies may encounter 
difficulty confirming certain information submitted by consumers. Under 
proposed section 1022.142(e), the Bureau is proposing to provide 
consumer reporting agencies with the authority to decline to act, or to 
rescind action (if applicable) on a submission. This provision is 
similar to section 605B(c) of the FCRA, which allows a consumer 
reporting agency to decline to

[[Page 20777]]

block information relating to a consumer, or to rescind any block, if 
the consumer reporting agency makes certain reasonable 
determinations.\28\
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 1681c-2(c).
---------------------------------------------------------------------------

    Proposed section 1022.142(e) provides that a consumer reporting 
agency may decline to block, or may rescind any block, of adverse items 
of information resulting from a severe form of trafficking in persons 
or sex trafficking where: (1) The consumer reporting agency requests 
and cannot reasonably confirm the appropriate proof of identity under 
paragraph (b)(1); (2) the consumer cannot provide documentation under 
paragraph (b)(6)(i); or (3) the consumer reporting agency cannot 
properly identify the adverse items of information under paragraph 
(b)(6)(ii).
    The Bureau is not proposing to interpret section 605C as giving the 
consumer reporting agency the discretion to contest the merits of the 
submitted trafficking documentation, if it meets the definition in 
section 605C(a) and in proposed 1022.142(b)(6)(i), and is interested in 
comments on this approach. The Bureau also is not proposing to 
interpret the statute as giving a consumer reporting agency the 
discretion to challenge a consumer's determination that an adverse item 
of information resulted from a severe form of trafficking in persons or 
sex trafficking under 1022.142(b)(6)(ii), and is interested in comments 
on this approach.
    The Bureau is proposing to clarify in paragraph (e) that consumer 
reporting agencies can request appropriate proof of identity of the 
consumer who is a victim of trafficking as defined in paragraph (b)(1) 
and that consumer reporting agencies can decline or rescind a block if 
it cannot reasonably confirm the appropriate proof of identity. In 
order for consumer reporting agencies to prevent the furnishing of 
consumer reports that contain adverse items of information about a 
consumer who is a victim of trafficking, the consumer reporting agency 
must be able to identify the specific consumer to whom the report 
relates. The Bureau is relying on its regulatory authority under 
section 621(e) of the FCRA, which authorizes the Bureau to prescribe 
regulations that promote accuracy and fairness in credit reporting, and 
on the general rulemaking authority granted the Bureau under section 
1022(b)(1) of the Dodd-Frank Act. Proposed section 1022.142(e) also 
requires a consumer reporting agency, prior to exercising its authority 
to decline or rescind a block, notify the consumer and attempt to 
resolve any deficiency in the consumer's submission. Requiring consumer 
reporting agencies to notify the consumer and attempt to resolve any 
deficiencies in the consumer's submission will facilitate compliance 
and is appropriate to prevent a consumer reporting agency from 
furnishing a consumer report containing any adverse item of information 
about a consumer that resulted from trafficking by providing consumers 
an opportunity to complete their submission or correct mistakes with 
respect to information or documentation they provide initially, and 
making it less likely that a consumer reporting agency will decline to 
block or a rescind a block in error.
    The Bureau requests comment on whether additional clarification on 
the manner in which a consumer reporting agency must notify the 
consumer and attempt to resolve any deficiencies in the submission is 
warranted. For example, should the Bureau use or adapt the procedures 
in the existing process in Regulation V for consumer reporting agencies 
to make reasonable requests for additional information for the purpose 
of determining the validity of alleged identity theft? \29\ The Bureau 
also seeks comment on whether the adverse items of information should 
simply be blocked from being reported as proposed, or should be deleted 
from the consumer's file (or the file be modified as appropriate).\30\
---------------------------------------------------------------------------

    \29\ See 12 CFR 1022.3(i)(1)(iii).
    \30\ Section 611(a)(5) of the FCRA takes the latter approach 
with respect to successfully disputed information. 15 U.S.C. 
1681i(a)(5).
---------------------------------------------------------------------------

142(f) Notification to Consumer of Actions Taken in Response to 
Trafficking Documentation Submission
    The Bureau is proposing in section 1022.142(f)(1) to require a 
consumer reporting agency to provide written notice to a consumer of 
the results of a submission within five calendar days of receipt of the 
submission (or, if rescinding a previously applied block, five calendar 
days after rescinding). The notification to the consumer may be sent by 
mail or by other means available to the consumer reporting agency, if 
authorized by the consumer.
    Proposed section 1022.142(f)(2) would require a consumer reporting 
agency to provide notice in writing informing the consumer that the 
review of the submission is completed, a statement explaining the 
outcome, a consumer report provided at no cost to the consumer that is 
based upon the consumer's revised file (if applicable), a description 
of the procedures used to determine the outcome, a method for 
contacting the consumer reporting agency to appeal the determination or 
revise the submission to cure any of the noted reasons for declining to 
block the requested adverse information, and the web page consumers can 
use to submit complaints to the Consumer Financial Protection Bureau. 
Requiring a notice to the consumer of the outcome of the consumer 
reporting agency's review of the submission and providing the consumer 
with information on how to appeal or cure and how to submit a complaint 
to the Bureau will facilitate compliance and is appropriate to prevent 
a consumer reporting agency from furnishing a consumer report 
containing any adverse item of information about a consumer that 
resulted from trafficking by providing consumers with the information 
they need to determine if a consumer reporting agency declined to block 
or a rescind a block in error and with information about how to get any 
such error corrected. The Bureau is soliciting comments on whether, 
similar to section 611(a)(6)(B) of the FCRA, a consumer reporting 
agency should provide the consumer with a consumer report that is based 
upon the consumer's revised file (if applicable) or a consumer 
reporting agency should be required to provide the consumer with 
instructions for how to obtain a copy of the revised report in order to 
protect the consumer's privacy.
142(g) Record Retention
    Proposed section 1022.142(g) requires a consumer reporting agency 
to retain evidence of submissions under section 605C. The proposal 
would also require a consumer reporting agency to maintain 
documentation concerning the outcome of the submissions, reasons for 
declining or rescinding to act (if applicable), and compliance with 
section 1022.142. Consumer reporting agencies would need to retain this 
information for a period of seven years after the date the submission 
by the consumer is received. Under section 605 of the FCRA, most 
adverse information would be excluded from consumer reports after seven 
years automatically. Requiring consumer reporting agencies to maintain 
records of compliance is appropriate to administer the rule by enabling 
the Bureau to assess consumer reporting agencies' compliance with the 
rules and to facilitate compliance by supporting effective and 
efficient enforcement of the rule in order to prevent a consumer 
reporting agency from furnishing a consumer report containing any 
adverse item of information about a consumer that resulted from human 
trafficking. The

[[Page 20778]]

Bureau requests comment on the record retention requirement, 
particularly with respect to the proposed seven-year retention period.
142(h) Policies and Procedures To Ensure and Maintain Compliance
    Proposed section 1022.142(h) would require consumer reporting 
agencies to establish and maintain written policies and procedures 
reasonably designed to ensure and monitor the compliance of the 
consumer reporting agency and its employees with the requirements of 
this section. Rather than proposing a one-size-fits-all approach, 
proposed section 1022.142(h) specifies that these written policies and 
procedures must be appropriate to the nature, size, complexity, and 
scope of the activities of the consumer reporting agency and its 
employees. For example, consumer reporting agencies must develop 
policies and procedures that address how requests are evaluated and 
processed, and the limited circumstances a consumer reporting agency 
may decline or rescind a block under section 1022.142(e). Requiring 
consumer reporting agencies to maintain written policies and procedures 
is appropriate to administer the rule by enabling the Bureau to assess 
consumer reporting agencies' compliance with the rules and to 
facilitate compliance in order to prevent a consumer reporting agency 
from furnishing a consumer report containing any adverse item of 
information about a consumer that resulted from human trafficking.

V. Proposed Effective Date for Final Rule

    Pursuant to section 6102 of the 2022 NDAA, the amendments to the 
FCRA shall apply 30 days after the Bureau issues a final rule. The 
Bureau proposes that the amendments included in this proposal take 
effect 30 days after the date of the final rule's publication in the 
Federal Register. Under section 553(d) of the Administrative Procedure 
Act, the required publication or service of a substantive rule must be 
made not less than 30 days before its effective date, with certain 
exceptions not applicable here.\31\ Thus, the final rule would take 
effect at the same time as section 605C, which would avoid uncertainty 
for consumers who are victims of trafficking as well as for consumer 
reporting agencies. The Bureau seeks comment on the proposed effective 
date.
---------------------------------------------------------------------------

    \31\ 5 U.S.C. 553(d).
---------------------------------------------------------------------------

VI. Dodd-Frank Act Section 1022(b)(2) Analysis

    In developing this proposed rule, the Bureau has considered the 
proposed rule's potential benefits, costs, and impacts in accordance 
with section 1022(b)(2)(A) of the Consumer Financial Protection Act of 
2010 (CFPA).\32\ The Bureau requests comment on the preliminary 
analysis presented below as well as submissions of additional data that 
could inform the Bureau's analysis of the benefits, costs, and impacts. 
In developing the proposed rule, the Bureau has consulted or offered to 
consult with the prudential banking regulators (the FDIC, FRB, NCUA, 
and OCC) and the Bureau of Indian Affairs, several offices in the 
Department of Justice, Department of Health and Human Services, 
Department of Homeland Security, and the FTC, including regarding 
consistency of this rule with any prudential, market, or systemic 
objectives administered by those agencies, in accordance with section 
1022(b)(2)(B) of the CFPA.
---------------------------------------------------------------------------

    \32\ 12 U.S.C. 5512(b)(2)(A).
---------------------------------------------------------------------------

    The Bureau expects that the proposed rule would benefit consumers 
who are victims of a severe form of trafficking in persons or sex 
trafficking and have adverse information on file with a consumer 
reporting agency as a result of that trafficking. The potential 
benefits to individual consumers who are victims of trafficking could 
be considerable--adverse information from consumer reporting agencies 
could negatively affect a consumer's ability to obtain housing, 
employment, credit or other immediate and longer-term services 
necessary to support long-term independence and financial stability.
    Conversely, the proposed rule would impose costs on consumer 
reporting agencies in the form of compliance costs associated with 
processing requests from consumers to block adverse information and 
effecting the necessary blocks. While the Bureau does not have data to 
quantify these costs, the Bureau expects the costs of complying with 
the requirements of the proposed rule to be small in magnitude. 
Consumer reporting agencies are already required by 15 U.S.C. 1681c-2 
to have systems in place to accept reports of identity theft, and to 
respond to those reports by suppressing information on any consumer 
reports. Consumer reporting agencies also have systems in place to 
address treatment of inaccurate and unverifiable information as 
required by 15 U.S.C. 1681i(a)(5) and concerning the notice of results 
of reinvestigation under 15 U.S.C. 1681i(a)(6). This proposed rule's 
procedural requirements are modeled on these requirements.
    Although the Bureau characterizes qualitatively the nature of the 
benefits to consumers and the costs to firms above, it is not able to 
quantify the overall magnitude of the likely costs and benefits of the 
proposed rule. Quantifying these costs and benefits would require an 
estimate of the number of consumers likely to submit information to 
support a block under the proposed rule in a typical year. Not all 
victims of trafficking will necessarily have adverse information with a 
consumer reporting agency, and among those who do, not all will make a 
submission or be able to provide the required documentation.\33\ The 
Bureau does not have a way to estimate the number of trafficking 
victims who will make a request, and according to the State Department, 
there is no reliable estimate of the annual number of trafficking 
victims in the United States.
---------------------------------------------------------------------------

    \33\ This may occur if the consumer is not aware of the adverse 
information, or is not seeking any product or service that might 
rely on a consumer report including that information (e.g., if the 
adverse information relates to credit and the consumer is not 
currently seeking new credit). In addition, although the proposed 
rule is intended to make the submission process as straightforward 
as possible for victims of trafficking and intends to conduct 
outreach to ensure that victims are aware of their rights, consumers 
may not utilize the reporting process if they do not know their 
right to make a request, because they lack the required 
documentation, or because they believe the process to be more costly 
in time and effort than the potential benefits of blocking the 
adverse information.
---------------------------------------------------------------------------

    To provide a rough sense of scale, the Bureau compares available 
statistics on human trafficking in the United States to statistics on 
identity theft, which have a similar treatment under the FCRA as under 
the proposed rule. In 2020, the National Human Trafficking Hotline made 
8,701 referrals for potential victims of trafficking.\34\ For 
comparison, the FTC received nearly 1.4 million complaints related to 
identity theft in 2020.\35\ Both the number of referrals from the 
National Human Trafficking Hotline and the number of identity theft 
complaints to the FTC likely undercount the true incidence of 
trafficking and identity theft, respectively. However, given that not 
all victims of trafficking will have adverse information with a 
consumer reporting agency, it seems reasonable to assume

[[Page 20779]]

that the annual number of consumer submissions to consumer reporting 
agencies under the proposed rule would be at least two orders of 
magnitude less than the volume similar requests related to identity 
theft. As a result, the Bureau expects that although the potential 
benefits of the proposed rule to individual consumers who are victims 
of trafficking may be considerable, the aggregate benefits to consumers 
and the aggregate costs to consumer reporting agencies are likely to be 
small.\36\
---------------------------------------------------------------------------

    \34\ Off. to Monitor and Combat Trafficking in Persons, U.S. 
Dep't of State, 2021 Trafficking in Persons Report 591, https://www.state.gov/reports/2021-trafficking-in-persons-report/ (last 
visited Mar. 21, 2022).
    \35\ Fed. Trade Comm'n, Consumer Sentinel Network Data Book 
2020, at 7 (Feb. 2021), https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf.
    \36\ It is possible that consumer reporting agencies may incur 
some costs associated with submissions from individuals who claim 
fraudulently that adverse items of information in their consumer 
reports result from a severe form of trafficking or sex trafficking 
of which they allege to be a victim. Given the documentation 
requirements in the proposed rule, the Bureau does not expect this 
would happen often. The Bureau seeks comment on this assessment.
---------------------------------------------------------------------------

    The proposed rule may increase consumer access to credit, to the 
extent that consumers who are victims of trafficking and have adverse 
information related to that trafficking present on a credit report, and 
blocking that adverse information makes it easier for those consumers 
to obtain credit.
    The proposed rule would not have a unique impact on insured 
depository institutions or insured credit unions with less than $10 
billion in assets described in section 1026(a) of the Dodd-Frank Act. 
Finally, the proposed rule would not have a unique impact on rural 
consumers.

VII. Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct an initial regulatory flexibility analysis (IRFA) and a 
final regulatory flexibility analysis (FRFA) of any rule subject to 
notice-and-comment rulemaking requirements, unless the head of the 
agency certifies that the rule will not, if promulgated, have a 
significant economic impact on a substantial number of small 
entities.\37\ The Bureau also is subject to certain additional 
procedures under the RFA involving the convening of a panel to consult 
with small business representatives prior to proposing a rule for which 
an IRFA is required.\38\ The proposed rule would apply to all consumer 
reporting agencies, including all those that are small businesses under 
the RFA. However, it is unlikely that any small business will 
experience a significant economic impact as a result of the proposal. 
As discussed in section VI above, the number of submissions for 
blocking adverse information each year are likely to be small, and 
consumer reporting agencies are already required to have processes in 
place for processing similar requests due to existing requirements 
related to identity theft and dispute procedures under section 611 of 
the FCRA. Accordingly, the Director of the Bureau certifies that this 
proposal, if adopted, would not have a significant economic impact on a 
substantial number of small entities. Thus, neither an IRFA nor a small 
business review panel is required for this proposal. The Bureau 
requests comment on the analysis above and requests any relevant data.
---------------------------------------------------------------------------

    \37\ 5 U.S.C. 601 through 612.
    \38\ 5 U.S.C. 609.
---------------------------------------------------------------------------

VIII. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA),\39\ Federal 
agencies are generally required to seek approval from the Office of 
Management and Budget (OMB) for data collection, disclosure, and 
recordkeeping requirements (collectively, information collection 
requirements) prior to implementation. Under the PRA, the Bureau may 
not conduct or sponsor, and, notwithstanding any other provision of 
law, a person is not required to respond to, an information collection 
unless the information collection displays a valid control number 
assigned by OMB. As part of its continuing effort to reduce paperwork 
and respondent burden, the Bureau conducts a preclearance consultation 
program to provide the general public and Federal agencies with an 
opportunity to comment on the information collection requirements in 
accordance with the PRA. This helps ensure that the public understands 
the Bureau's requirements or instructions, respondents can provide the 
requested data in the desired format, reporting burden (time and 
financial resources) is minimized, information collection instruments 
are clearly understood, and the Bureau can properly assess the impact 
of information collection requirements on respondents.
---------------------------------------------------------------------------

    \39\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    This proposed rule would amend 12 CFR part 1022 (Regulation V). The 
Bureau's OMB control number for Regulation V is 3170. As described 
below, the proposed rule would create the following new information 
collection requirements in Regulation V:
    <bullet> The proposed rule would require consumer reporting 
agencies to accept trafficking and other documentation from consumers, 
process the submissions, and block any adverse item of information 
identified by the consumer that resulted from a severe form of 
trafficking in persons or sex trafficking under proposed section 
1022.142(d)-(e). Consumer reporting agencies would be required to 
inform consumers of their decision and actions with respect to the 
submission under proposed section 1022.142(f).
    <bullet> The proposed rule would require consumer reporting 
agencies to retain evidence of all submissions by consumers pursuant to 
these regulations, including actions taken in response to the 
submissions, reasons for declining or rescinding the block requests, 
and compliance with this section for a seven-year period under proposed 
section 1022.142(g).
    <bullet> The proposed rule would require consumer reporting 
agencies to establish and maintain written policies and procedures 
reasonably designed to ensure and monitor the compliance of the 
consumer reporting agency and its employees with the requirements of 
this rule under proposed section 1022.142(h).
    The collections of information contained in this proposed rule, and 
identified as such, have been submitted to OMB for review under section 
3507(d) of the PRA. A complete description of the information 
collection requirements (including the burden estimate methods) is 
provided in the information collection request (ICR) that the Bureau 
has submitted to OMB under the requirements of the PRA. Please send 
your comments to the Office of Information and Regulatory Affairs, OMB, 
Attention: Desk Officer for the Bureau of Consumer Financial 
Protection. Send these comments by email to <a href="/cdn-cgi/l/email-protection#c3acaab1a29cb0b6a1aeaab0b0aaacad83acaea1eda6acb3eda4acb5"><span class="__cf_email__" data-cfemail="5d32342f3c022e283f30342e2e3432331d32303f7338322d733a322b">[email protected]</span></a> 
or by fax to 202- 395-6974. If you wish to share your comments with the 
Bureau, please send a copy of these comments as described in the 
ADDRESSES section above. The ICR submitted to OMB requesting approval 
under the PRA for the information collection requirements contained 
herein is available at www.regulations.gov as well as on OMB's public-
facing docket at www.reginfo.gov.
    Title of Collection: Regulation V: Fair Credit Reporting Act.
    OMB Control Number: 3170-0002.
    Type of Review: Revision of a currently approved collection.
    Affected Public: Private Sector; Federal, State, and Tribal 
Governments.
    Estimated Number of Respondents: The Bureau does not have enough 
information to estimate the number of respondents and is assuming de 
minimis. The Bureau invites comment on this assumption.
    Estimated Total Annual Burden Hours: The Bureau does not have 
enough information to know how frequently this collection will occur or

[[Page 20780]]

the burden it will impose. The Bureau invites comment on this 
collection.
    Comments are invited on: (a) Whether the collection of information 
is necessary for the proper performance of the functions of the Bureau, 
including whether the information will have practical utility; (b) The 
accuracy of the Bureau's estimate of the burden of the collection of 
information, including the validity of the methods and the assumptions 
used; (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and (d) Ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques or other forms of information 
technology. Comments submitted in response to this notification will be 
summarized and/or included in the request for Office of Management and 
Budget (OMB) approval. All comments will become a matter of public 
record.
    If applicable, the final rule will inform the public of OMB's 
approval of the new information collection requirements proposed herein 
and adopted in the final rule. If OMB has not approved the new 
information collection requirements prior to publication of the final 
rule in the Federal Register, the Bureau will publish a separate 
notification in the Federal Register announcing OMB's approval prior to 
the effective date of the final rule.

List of Subjects in 12 CFR Part 1022

    Banks, Banking, Consumer protection, Credit unions, Holding 
companies, National banks, Privacy, Reporting and recordkeeping 
requirements, Savings associations.

Authority and Issuance

    For the reasons set forth above, the Bureau proposes to amend 
Regulation V, 12 CFR part 1022, as set forth below:

PART 1022--FAIR CREDIT REPORTING ACT (REGULATION V)

0
1. Revise the authority citation for part 1022 to read as follows:

    Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1681a, 1681b, 1681c, 
1681c-1, 1681c-3, 1681e, 1681g, 1681i, 1681j, 1681m, 1681s, 1681s-2, 
1681s-3, and 1681t; Sec. 214, Public Law 108-159, 117 Stat. 1952.

Subpart O--Miscellaneous Duties of Consumer Reporting Agencies

0
2. Add Sec.  1022.142 to read as follows:


Sec.  1022.142  Prohibition on inclusion of adverse information in 
consumer reporting in cases of human trafficking.

    (a) Scope. This section applies to any consumer reporting agency as 
defined in section 603(f) of the FCRA, 15 U.S.C. 1681a(f).
    (b) Definitions. For purposes of this section:
    (1) Appropriate proof of identity means proof of identity that 
meets the requirements in section 1022.123.
    (2) Consumer report has the meaning provided in section 603(d) of 
the FCRA, 15 U.S.C. 1681a(d).
    (3) Consumer reporting agency has the meaning provided in section 
603(f) of the FCRA, 15 U.S.C. 1681a(f).
    (4) Severe forms of trafficking in persons has the meaning provided 
in section 103 of the Trafficking Victims Protection Act of 2000, 22 
U.S.C. 7102(11).
    (5) Sex trafficking has the meaning provided in section 103 of the 
Trafficking Victims Protection Act of 2000, as amended by section 108 
of the Justice for Victims of Trafficking Act of 2015, 22 U.S.C. 
7102(12).
    (6) Trafficking documentation means one or more documents that 
satisfy paragraph (b)(6)(i) and (ii) of this section:
    (i) Documentation that:
    (A) Is of a determination that a consumer is a victim of 
trafficking made by a Federal, State, or Tribal governmental entity or 
a court of competent jurisdiction; or
    (B) Consists of documents filed in a court of competent 
jurisdiction indicating that a consumer is a victim of trafficking; and
    (ii) Documentation, which may consist of a statement by the 
consumer, that identifies items of adverse information that should not 
be furnished by a consumer reporting agency because the items resulted 
from a severe form of trafficking in persons or sex trafficking of 
which the consumer is a victim.
    (7) Victim of trafficking means a person who is a victim of a 
severe form of trafficking in persons or sex trafficking.
    (c) Prohibition on inclusion of adverse information of trafficking 
victims. A consumer reporting agency may not furnish a consumer report 
containing any adverse item of information about a consumer that 
resulted from a severe form of trafficking in persons or sex 
trafficking if the consumer has provided trafficking documentation to 
the consumer reporting agency.
    (d) Method of submission to consumer reporting agencies. (1) 
Mailing and website address. A consumer reporting agency must provide a 
mailing address for a consumer to submit required documentation and may 
also establish a secure online portal for submissions. A consumer 
reporting agency must accept trafficking documentation sent to the 
mailing and, if applicable, website addresses used for disputes under 
section 611 of the FCRA, and a consumer reporting agency must maintain 
a dedicated mailing and, if applicable, website address for blocking 
adverse items of information resulting from trafficking.
    (2) Disclosing methods for submission. A consumer reporting agency 
must add information on the publicly available website stating how 
submissions for the blocking of adverse items of information resulting 
from trafficking can be submitted.
    (3) Toll-free telephone number. A consumer reporting agency must:
    (i) Allocate a reasonable amount of personnel to respond to 
consumer inquiries about the process for and status of trafficking 
documentation submissions at the toll-free telephone number used for 
disputes under section 611 of the FCRA; and
    (ii) Establish a toll-free telephone number dedicated to addressing 
submissions from consumers seeking to block adverse items of 
information resulting from trafficking.
    (e) Authority to decline or rescind a block. A consumer reporting 
agency may decline to block, or may rescind any block, of adverse items 
of information resulting from a severe form of trafficking in persons 
or sex trafficking only where the consumer reporting agency requests 
and cannot reasonably confirm the appropriate proof of identity under 
paragraph (b)(1) of this section, the consumer cannot provide 
documentation under paragraph (b)(6)(i) of this section, or the 
consumer reporting agency cannot properly identify the adverse items of 
information under paragraph (b)(6)(ii) of this section. A consumer 
reporting agency may decline or rescind a block only after notifying 
the consumer and attempting to resolve any deficiency in the consumer's 
submission.
    (f) Notification to consumer of actions taken in response to 
trafficking documentation submission--(1) In general. A consumer 
reporting agency must provide written notice to a consumer of actions 
it has taken in response to a submission of trafficking documentation 
not later than five calendar days after the receipt of the submission 
(or, if rescinding a previously applied block, five calendar days after 
rescinding), by mail or, if authorized by the consumer for that

[[Page 20781]]

purpose, by other means available to the consumer reporting agency.
    (2) Contents. The notice must include the following:
    (i) A statement that the review of the submission is completed;
    (ii) A statement of the outcome of the review of the submission, 
including the reason(s) if the consumer reporting agency declined or 
rescinded to block the requested adverse information under paragraph 
(d) of this section;
    (iii) A consumer report, provided at no cost to the consumer, that 
is based upon the consumer's revised file (if applicable) as a result 
of the consumer's submission;
    (iv) A description of the procedure used to determine the outcome;
    (v) A method for contacting the consumer reporting agency to appeal 
the determination or revise the submission to cure any of the noted 
reasons for declining to block the requested adverse information; and
    (vi) The web page consumers can use to submit complaints to the 
Consumer Financial Protection Bureau.
    (g) Record retention. For a period of seven years after the date 
the submission by the consumer is received under paragraph (d)(2) of 
this section, a consumer reporting agency must retain evidence of all 
such submissions, including the actions taken by the consumer reporting 
agency, reasons for declining or rescinding the block requests, and 
compliance with this section.
    (h) Policies and procedures to ensure and maintain compliance. A 
consumer reporting agency must establish and maintain written policies 
and procedures reasonably designed to ensure and monitor the compliance 
of the consumer reporting agency and its employees with the 
requirements of paragraphs in this section. These written policies and 
procedures must be appropriate to the nature, size, complexity, and 
scope of the activities of the consumer reporting agency and its 
employees.

Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2022-07528 Filed 4-7-22; 8:45 am]
BILLING CODE P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>