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[Federal Register Volume 86, Number 178 (Friday, September 17, 2021)]
[Rules and Regulations]
[Pages 51817-51819]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19918]

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FEDERAL TRADE COMMISSION

16 CFR Part 641

RIN 3084-AB63

Duties of Users of Consumer Reports Regarding Address 
Discrepancies

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
issuing a final rule (``Final Rule'') to amend its Duties of Users of 
Consumer Reports Regarding Address Discrepancies Rule (``Address 
Discrepancy Rule'') to correspond to changes made to the Fair Credit 
Reporting Act (``FCRA'') by the Dodd-Frank Act.

DATES: This rule is effective October 18, 2021.

FOR FURTHER INFORMATION CONTACT: David Lincicum (202-326-2773), 
Division of Privacy and Identity Protection, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Address Discrepancy Rule

    The Fair and Accurate Credit Transactions Act of 2003 (``FACT 
Act'') was signed into law on December 4, 2003. Public Law 108-159, 117 
Stat. 1952. The FACT Act added section 605(h) to the Fair Credit 
Reporting Act (``FCRA''), which requires a national consumer reporting 
agency (``CRA'') that receives a request for a consumer report that 
contains an address substantially different from the address on file 
for the consumer to notify the requester of the existence of the 
discrepancy.\1\ Section 605(h) also required federal banking agencies, 
the National Credit Union Administration and the Commission to issue 
regulations providing guidance regarding reasonable policies and 
procedures that a user of a consumer report should employ when the user 
receives a notice of address discrepancy.\2\ In 2007, the agencies 
issued the Address Discrepancy Rule to satisfy this requirement.\3\
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    \1\ Section 605 is codified at 15 U.S.C. 1681c.
    \2\ 15 U.S.C. 1681c(h)(2).
    \3\ 16 CFR part 641.
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    The Address Discrepancy Rule requires a user of consumer reports to 
develop and implement reasonable policies and procedures designed to 
enable the user to form a reasonable belief that a consumer report 
relates to the consumer about whom it has requested a consumer report, 
when the user receives a notice of address discrepancy.\4\ Users must 
also develop and implement reasonable policies and procedures for 
furnishing an address for the consumer that the user has reasonably 
confirmed as accurate to the CRA from whom it received the notice when 
the user (1) can confirm the consumer report relates to the consumer 
about whom the user requested the

[[Page 51818]]

report, (2) establishes a continuing relationship with the consumer, 
and (3) regularly furnishes information about the consumer to the 
CRA.\5\
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    \4\ 16 CFR 641.1(c).
    \5\ 16 CFR 641.1(d).
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B. Dodd-Frank Act

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``Dodd-Frank Act'') was signed into law in 2010.\6\ The Dodd-Frank Act 
substantially changed the federal legal framework for financial 
services providers. Among the changes, the Dodd-Frank Act transferred 
to the Consumer Financial Protection Bureau (``CFPB'') the Commission's 
rulemaking authority under portions of the FCRA.\7\ Accordingly, in 
2012, the Commission rescinded several of its FCRA rules, which had 
been replaced by rules issued by the CFPB.\8\ The FTC retains 
rulemaking authority for other rules promulgated under the FCRA to the 
extent the rules apply to motor vehicle dealers described in section 
1029(a) of the Dodd-Frank Act \9\ predominantly engaged in the sale and 
servicing of motor vehicles, the leasing and servicing of motor 
vehicles, or both (``motor vehicle dealers'').\10\ The rules for which 
the FTC retains rulemaking authority include the Address Discrepancy 
Rule, which now applies only to consumer report users that are motor 
vehicle dealers.\11\ Consumer report users that are not motor vehicle 
dealers are covered by the CFPB's rule.\12\
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    \6\ Public Law 111-203 (2010).
    \7\ 15 U.S.C. 1681 et seq. The Dodd-Frank Act does not transfer 
to the CFPB rulemaking authority for section 615(e) of the FCRA 
(``Red Flag Guidelines and Regulations Required'') and section 628 
of the FCRA (``Disposal of Records''). See 15 U.S.C. 1681s(e).
    \8\ 77 FR 22200 (April 13, 2012).
    \9\ 12 U.S.C. 5519.
    \10\ 77 FR 22200 (April 13, 2012).
    \11\ Id.
    \12\ 12 CFR 1022.82.
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II. Regulatory Review of the Address Discrepancy Rule

    On September 15, 2020, the Commission solicited comments on the 
Address Discrepancy Rule as part of its periodic review of its rules 
and guides.\13\ The Commission sought information about the costs and 
benefits of the Rule, and its regulatory and economic impact. In 
addition, the Commission proposed to narrow the scope of the Address 
Discrepancy Rule to motor vehicle dealers excluded from Consumer 
Financial Protection Bureau jurisdiction as described in the Dodd-Frank 
Act.\14\ The Commission received one comment.\15\
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    \13\ 85 FR 57172 (September 15, 2020).
    \14\ 12 U.S.C. 5519.
    \15\ The comment can be found at www.regulations.gov/document/FTC-2020-0065-0001.
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III. Overview of Final Rule

    The Commission adopted the Address Discrepancy Rule at a time when 
it had rulemaking authority for a broader group of consumer report 
users. While the Dodd-Frank Act did not change the Commission's 
enforcement authority for the Address Discrepancy Rule, it did narrow 
the Commission's rulemaking authority with respect to the Rule. It now 
covers only motor vehicle dealers.\16\ The amendments in the Dodd-Frank 
Act necessitate a technical revision to the Address Discrepancy Rule to 
ensure the regulation is consistent with the text of the amended FCRA. 
Accordingly, the Final Rule amends the Address Discrepancy Rule to 
properly reflect the Rule's scope.
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    \16\ 15 U.S.C. 1681s(e)(1); 12 U.S.C. 5519.
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    The sole commenter on the Rule stated the Address Discrepancy Rule 
allowed him to discover a case of identity theft involving the misuse 
of his Social Security number, and argued the Rule should not be 
changed.\17\ The Commission agrees no changes other than those required 
by the Dodd-Frank Act are necessary and the Final Rule makes no further 
amendments to the existing Rule. Although the Commission is revising 
the scope of the Rule so it is consistent with the applicable statute, 
the protections provided to consumers will not change: Users of 
consumer reports have the same obligations with respect to address 
discrepancies under the CFPB's corresponding rule as under the FTC's 
rule.
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    \17\ John Kahn (comment 1), www.regulations.gov/document/FTC-2020-0065-0001.
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IV. Paperwork Reduction Act

    The Address Discrepancy Rule contains information collection 
requirements as defined by 5 CFR 1320.3(c), the definitional provision 
within the Office of Management and Budget (``OMB'') regulations that 
implement the Paperwork Reduction Act (``PRA''). 44 U.S.C. 3501 et seq. 
OMB has approved the Rule's existing information collection 
requirements through December 31, 2021 (OMB Control No. 3084-0137).
    The Final Rule amends 16 CFR part 641. The amendments do not modify 
or add to information collection requirements previously approved by 
OMB. The amendments do not make any substantive changes to the Rule, 
other than to narrow the scope to motor vehicle dealers. The existing 
clearance already reflects that change in scope.
    Therefore, the Commission does not believe the amendments 
substantially or materially modify any ``collections of information'' 
as defined by the PRA.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires an 
agency to either provide an Initial Regulatory Flexibility Analysis 
(``IRFA'') with a proposed rule, or certify the proposed rule will not 
have a significant impact on a substantial number of small 
entities.\18\ The Commission published an Initial Regulatory 
Flexibility Analysis in order to inquire into the impact of the 
proposed Rule on small entities.\19\ The Commission received no 
responsive comments.
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    \18\ 5 U.S.C. 603-605.
    \19\ 85 FR 57172, 57174 (Sept. 15, 2020).
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    The Commission does not believe these amendments have the threshold 
impact on small entities. The amendments effectuate changes to the 
Dodd-Frank Act and will not impose costs on small motor vehicle dealers 
because the amendments are for clarification purposes and will not 
result in any increased burden on any motor vehicle dealer. Thus, a 
small entity that complies with current law need not take any different 
or additional action under the Final Rule. Therefore, the Commission 
certifies the rule will not have a significant economic impact on a 
substantial number of small businesses.
    Although the Commission certifies under the RFA the rule will not 
have a significant impact on a substantial number of small entities, 
and hereby provides notice of that certification to the Small Business 
Administration, the Commission nonetheless has determined that 
publishing a final regulatory flexibility analysis (``FRFA'') is 
appropriate to ensure the impact of the rule is fully addressed. 
Therefore, the Commission has prepared the following analysis:

A. Need for and Objectives of the Final Rule

    To address the Dodd-Frank Act's changes to the Commission's 
rulemaking authority the amendments change the scope of the Rule. With 
this action, the Commission makes the current scope of the Rule 
clearer.

[[Page 51819]]

B. Significant Issues Raised in Public Comments in Response to the IRFA

    The Commission did not receive any comments that addressed the 
burden on small entities. In addition, the Commission did not receive 
any comments filed by the Chief Counsel for Advocacy of the Small 
Business Administration (``SBA'').

C. Estimate of Number of Small Entities to Which the Final Rule Will 
Apply

    The Commission anticipates many covered motor vehicle dealers may 
qualify as small businesses according to the applicable SBA size 
standards.\20\ As explained in the IRFA, however, determining a precise 
estimate of the number of small entities is not readily feasible. No 
commenters addressed this issue. Nonetheless, as discussed above, these 
amendments do not add any additional burdens on any covered small 
businesses.
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    \20\ Table of Small Bus. Size Standards Matched to North 
American Indus. Classification System Codes, 13 CFR 121.201 
(available at: https://www.sba.gov/document/support--table-size-standards), updated Aug. 19, 2019. For example, used car dealers are 
classified as NAICS 441120 and new car dealers as NAICS 441110. 
Under those standards, the SBA would classify as small businesses 
independent used car dealers having annual receipts of less than $27 
million and new car dealers having fewer than 200 employees each.
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D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements, Including Classes of Covered Small Entities and 
Professional Skills Needed To Comply

    The amendments do not impose any new reporting, recordkeeping, or 
other compliance requirements.

E. Description of Steps Taken To Minimize Significant Economic Impact, 
if Any, on Small Entities, Including Alternatives

    The Commission did not propose any specific small entity exemption 
or other significant alternatives because the amendments will not 
increase reporting requirements and will not impose any new 
requirements or compliance costs.

VI. Other Matters

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

Final Rule Language

List of Subjects in 16 CFR Part 641

    Consumer protection, Credit, Trade Practices

    For the reasons stated above, the Federal Trade Commission amends 
part 641 of title 16 of the Code of Federal Regulations as follows:

0
1. Revise the authority section for part 641 to read as follows:

    Authority: Pub. L. 108-159, sec. 315; 15 U.S.C. 1681c(h); 12 
U.S.C. 5519(d).

0
2. In Sec.  641.1, revise paragraph (a) to read as follows:

Sec.  641.1  Duties of users of consumer reports regarding address 
discrepancies.

    (a) Scope. This section applies to users of consumer reports that 
are motor vehicle dealers excluded from Consumer Financial Protection 
Bureau jurisdiction as described in 12 U.S.C. 5519.
* * * * *

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-19918 Filed 9-16-21; 8:45 am]
BILLING CODE 6750-01-P
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