Rental Services, Inc. 2019 April Newsletter


In this month’s newsletter we will review the Fair Credit Reporting Act and how it applies to you, the client. You’ll also receive an update on a few of the legal issues discussed last month and a great resource for Colorado clients who want to make sure their voice is heard.

Recently, while speaking with a private landlord, they told me they conduct their own background checks using Google and asked if that's how RSl does it. Since RSI is monitored by the credit bureaus, we are held to a higher standard when reporting information that is used in making a credit decision.

Rental Services, lnc. is a Consumer Reporting Agency (CRA) and must follow set legal guidelines. As a CRA, Rental Services, lnc. must navigate federal, state and local laws when conducting a background check. The main law that impacts each report we provide, to you the client, is the Fair Credit Reporting Act (FCRA). Violations of the FCRA are enforced by the Federal Trade Commission and the Consumer Financial Protection Bureau.

Each client who uses services provided by RSl are bound to follow the FCRA. Here are several requirements that must be addressed to stay compliant with the FCRA.

Each client working with RSl must provide a certification of compliance with the FCRA. Part of the certification includes the client stating why they want to conduct a background check in the form of a permissible purpose. Most RSl client, use the permissible purpose of tenant screening or employment screening. The agreement to follow the FCRA and declaration of permissible purpose was part of the RSI Membership Packet completed during the account credentialing process. Clients can violate the FCRA if they use their account for anything other than the stated permissible purpose given to RSI.

The FCRA requires a client to obtain written permission in the form of an authorization and disclosure before conducting a background check. Rental Services, lnc. provides all its clients with access to rental and employment forms that contain the required authorization and disclosure verbiage and comply with FCRA requirements. If you don't have a signed release and you order a background screening report, you will be in direct violation of the FCRA.

Another requirement is the delivery of an adverse action notice when denying an applicant. Depending on the permissible purpose used by the client this can be a one or two step process. If you are declining an applicant for employment you will be required to give the applicant a Pre-Adverse Action Notice along with a copy of the background screening report and state/federal summary of rights. This gives the applicant five days to dispute the negative information. If the report contained an error, it would be corrected by RSl and a new report is sent to the client. If the negative information in the report is correct the client is notified and move on to stage two. Stage two is the delivery of an Adverse Action Notice to the applicant resending the job offer.

If the applicant is being screened under the permissible purpose of tenant screening, they should be given an Adverse Action Notice if the client has decided not to rent to the applicant based on information in the background screening report. The use of a Pre-Adverse Action Notice is not required.

Rental Services, lnc. provides Pre-Adverse and Adverse Action Notices on the RSl website. Simply login to your account and on the Result page clients can print the notifications with the applicant's information already included on the form.

 At Rental Services, lnc. we work hard to make sure clients can easily comply with the FCRA.

Legal Update:

Colorado HB19-1106 has passed and is waiting to be signed. It should take effect August 2, 2019.

Visit https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a 1106 enr.pdf to read the final version.

Colorado HB19-1118 is still under review. The good news is the 14-day requirement has been changed to 10-days. I'm guessing that this bill will pass with the 10-day requirement.

The Senate committee on Business, Labor and Technology will meet on Monday April 8th to hear testimony on this proposed law. It's not too late to contact your Senator and let them know how HB19-1118 will impact your business. Use this great resource link https://leg.colorado.gov/find-my-legislator to find your legislator.

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