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Mortgage Servicing and Loan Modifications: 7.6.4 The FHFA Has Not Provided Clear Data on Performance of Loans After Sales

As noted above, since 2016 the GSEs have sold over 500,000 reperforming loans. Prior to June of 2023, the GSEs had not published any data describing how the borrowers fared after their loans were sold. In its June 2023 updated Fact Sheet, FHFA provided a brief analysis of the post-sale performance of reperforming loans and reported that only a limited number have faced foreclosure.

Fair Credit Reporting: 2.4.4.1 Employee Misconduct Investigation Reports

The FCRA excludes from the definition of “consumer report” certain communications made to an employer concerning investigations for employee misconduct or for compliance reasons.408 Under this exclusion, a communication that would otherwise qualify as a consumer report409 will be excluded from the definition if it meets certain additional tests.410 To be excluded, the communication must be made to an employer and must be in connection with an inves

Fair Credit Reporting: 2.3.4.1.3 Failure of some courts to consider full scope of definition

A number of courts have failed to consider the full scope of the seven factors. The Fifth Circuit, in a brief unpublished decision in a case brought by a pro se plaintiff, has held that a report about an employee’s previously filed worker’s compensation claims is not a consumer report because it does not bear on one of the seven FCRA factors.107 The claims, which the employee had denied making in his employment application, were discovered after the employer obtained his health records.

Fair Credit Reporting: 2.3.4.2.3 Prescreening lists

“Prescreening lists,” which reflect the creditworthiness of those on the list, are a series of consumer reports.142 Prescreening generally is a process by which a CRA, as a service, will compile lists of names of those fitting certain credit criteria supplied by the creditor. The creditor will then use the list to solicit consumers with a so-called firm offer of credit or other products and services.

Fair Credit Reporting: 2.3.5.2 Expected Use of Information

If a CRA provides a report with the expectation that the report will be used for one of the statute’s listed purposes, then the report is a consumer report under the Act; the ultimate use to which it is put is irrelevant.162 It is enough if one of the anticipated uses is covered by the FCRA, even if it is not the primary expected use.163

Fair Credit Reporting: 2.3.5.3 Purpose for Collecting Information

If information is originally collected for a purpose covered by the FCRA, a report containing that information is a consumer report, even if the report is later used exclusively for business purposes or other transactions not covered by the FCRA.175 The purpose for which the information is collected will be determined based on the reasonable expectations of the CRA at the time it collected the information.

Fair Credit Reporting: 2.3.5.4 Partial Use of a Prior Consumer Report Makes New Report a Consumer Report

If a new report contains just some of the information that was contained in a prior consumer report, the new report is also a consumer report, even if the new report was not used and not expected to be used for a listed purpose.183 In addition, once information from the consumer’s file is used as a “consumer report,” then any subsequent use of the same information becomes a consumer report, even if that later report is not for a listed purpose.184 For example, information that is actually used f

Fair Credit Reporting: 2.4.6 Conveying Decision to Party Who Requested That Creditor Extend Credit to Consumer

The Act defines “consumer report” to exclude:

[A]ny report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys his decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made and such person makes the disclosures to the consumer required under section 1681m of the title.437

Fair Credit Reporting: 2.3.6.6 Governmental Licenses and Benefits

Consumer reports include information used for “other purposes authorized under section 1681b,”306 and section 1681b permits CRAs to provide consumer reports when used in connection with a “determination of the consumer’s eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status.”307

Fair Credit Reporting: 2.4.4.2.1 Introduction

Certain common communications made by employment agencies are excluded from the definition of consumer report.413 Employment agencies are not exempted from the FCRA per se. The exclusion applies only if:

Fair Credit Reporting: 2.3.6.5.2 Insurance claims reports

Information collected, used, and expected to be used solely for purposes of considering insurance claims is not a consumer report.294 Both the definition of consumer report in section 1681a295 and the specific permissible insurance uses of consumer reports listed in section 1681b296 are limited to eligibility and underwriting issues.

Fair Credit Reporting: 2.3.6.7 Risk Assessment of Current Obligations

Another purpose incorporated into the definition of consumer report by the cross-reference to section 1681b is the use of reports by a person who “intends to use the information as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation.”311

Fair Credit Reporting: 2.4.3.2.2 Opt-out right for affiliate sharing of third-party information

Consumers must be notified of their right to opt out of affiliate sharing of third-party information, along with the fact that the affiliate sharing will occur.382 This disclosure is built into the definition of the affiliate-sharing exclusion for third-party information; failure to provide this notice will disqualify the shared information from the exclusion and render it a consumer report.383 The disclosure must be clear and conspicuous, and the opportunity to direct that the information not b

Fair Credit Reporting: 2.4.3.2.4 Preemption of state regulation of affiliate sharing

The states are preempted from regulating the sharing of information between affiliates405 or the use of information shared by affiliates for marketing purposes.406 However, the Ninth Circuit has held that the FCRA preempts state laws on affiliate sharing only to the extent that they apply to information that falls within the FCRA’s definition of “consumer report.”407 Preemption of state laws on affiliate sharing is more fully discussed at