A new FTC blog post titled “Tenant background check reports: Put it in writing” reminds landlords, property managers, and other housing providers of their obligation under the Fair Credit Reporting Act to provide notice of adverse action when information in a consumer report leads them to deny housing to an applicant or require the applicant to pay a deposit that other applicants would not be required to pay.
The FTC notes in the blog post notes that an adverse action notice must be provided even if information in a consumer report is only a minor factor in a housing provider’s decision. It also recommends that, as a best practice, adverse action notices should be provided in writing even though the FCRA permits such notices to be provided orally. The FTC indicates that written notices serve as proof of compliance with the law and also better enable applicants to assert their rights to request a copy of the report from the consumer reporting agency and to dispute any mistakes in it.
The FTC’s issuance of the blog is part of series of actions announced last week by the White House that are directed at “[e]nsuring all renters have an opportunity to address incorrect tenant screening reports.” The White House indicated that such actions build on the framework set forth in the White House’s “Blueprint for a Renters Bill of Rights” released in January 2023 which set forth principles intended to “create a shared baseline for fairness for renters in the housing market.
Tenant background checks were the subject of a CFPB and FTC request for information issued in February 2023. The RFI sought comment on “background screening issues affecting individuals who seek rental housing in the United States, including how the use of criminal and eviction records and algorithms affect tenant screening decisions and may be driving discriminatory outcomes.” The CFPB previously issued two reports on tenant background checks, one discussing consumer complaints received by the CFPB that relate to tenant screening by landlords and the other discussing practices of the tenant screening industry.