When examining banks and companies subject to CFPB supervisory authority for FCRA compliance, CFPB examiners will look at whether the bank or company has followed FCRA requirements for use of background checks on employees and job applicants.

Those requirements were the subject of a recent letter by FTC staff to a California company.  The FCRA requirements for employers using background checks include exceptions for certain communications for employee investigations.  FCRA Section 603(y) excludes from the FCRA’s definition of a “consumer report” communications made to an employer “in connection with an investigation of (i) suspected misconduct relating to employment; or
(ii) compliance with Federal, State, or local laws and regulations, the rules of a self-regulatory organization, or any preexisting written policies of the employer.”

In the letter, the FTC staff indicates that such exceptions only apply to an employer’s investigation of current employees and do not apply to investigations of job applicants.