CFPB Advisory Opinion on Protecting Consumer Credit Data Takes Effect

A CFPB advisory opinion on the obligations of consumer reporting agencies and consumer report users under the Fair Credit Reporting Act ("FCRA") became effective on July 12, 2022.

As previously covered, the CFPB reminded companies of their obligation to only use and share consumer credit reports and background reports when they have a "permissible purpose." The CFPB explained that the "permissible purpose standard" is intended to ensure that companies do not access private information of consumers without sufficient justification. The CFPB stated that the opinion will (i) protect consumers' private data and limit instances of accidental data sharing, (ii) establish a standard for permissible criteria for sharing consumer data and (iii) ensure protection of consumer data before, during and after its being shared among companies.