Legal Memorandum: General Provisions and Scope of FCRA

Issue: What are the general provisions and scope of the federal Fair Credit Reporting Act as it relates to consumer credit reporting agencies?

tc "Introduction " l 3The Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681a et seq., was the product of congressional concern over abuses in the credit reporting industry.  Enacted in 1970, the FCRA requires that "consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information."  Id. § 1681b.  The statute imposes significant responsibilities on credit reporting agencies.  It limits the uses for which a consumer credit report may be released and provides a flow chart for challenging the accuracy of a report.  Id. §§ 1681b, 1681i.  A consumer may, by written notice to the reporting agency, challenge any information contained in his file.  If he does so, the agency must reinvestigate the credit report.  Id. § 1681i(a).  If the information is then confirmed, the consumer may file a statement of a dispute, and any disputed information must be noted as such in forthcoming reports.  Id. § 1681i(b), (c).  The agency must also inform the consumer of any information deleted from his report.  Id. § 1681i(d).  See Hyde v. Hibernia Nat’l Bank, 861 F.2d 446, 447 (5th Cir. 1988).    The legislative history of the FCRA reveals that it was crafted to "protect an individual from inaccurate or arbitrary information . . . in a consumer report," Pinner v. Schmidt, 805 F.2d 1258, 1261 (5th Cir. 1986) and "to establish credit reporting […]