Fcra free credit report

President Bush signed the Fair and Accurate Credit Transactions (FACT) Act into law Dec. 4. The new law reauthorizes the Fair Credit Reporting Act (FCRA) and includes measures to amend the notification requirements for third-party investigations of employee misconduct.

This change of notification requirements for third-party investigations conducted by employers follows nearly four years of lobbying by a business coalition led by the Society for Human Resource Management (SHRM).

The provision amends the FCRA and removes obstacles to workplace investigations created in 1999 when the Federal Trade Commission issued what is now known as the "Vail Opinion Letter." The letter, responding to Portland, Ore., attorney Judy Vail, stated that the notification and disclosure requirements of the FCRA applied whenever employers hired third-party organizations to investigate allegations of workplace sexual harassment.

Business groups including SHRM objected to the opinion letter, claiming that the requirement to provide prior notification to employees severely compromised the ability of employers to conduct fair and unbiased investigations of misconduct. The new law still requires employers to notify employees but only after the investigation has concluded.

"This is not the total fix that we were looking for, but it's a vast improvement to a huge problem that employers have faced for four years now," said Sarah Pierce, manager of employment legislation with the SHRM governmental affairs department.

The FCRA, enacted in 1970, created a uniform system of rules and obligations for reporting on the credit activity and history of U.S. consumers. The FACT Act reauthorization gives consumers access to free annual credit reports, provides consumers with new protections against identify theft, and offers ways to ensure the accuracy of personal credit reports and shield medical information.

"There are few bills we will take up this session--or this Congress-that are as critically important to our economy as reauthorizing and making permanent the expiring protections contained in the Fair Credit Reporting Act," said Rep. Judy Biggert, R-III., who also worked to add language to the conference report that addresses the challenges of financial literacy.

Both houses of Congress passed the legislation by overwhelming margins-392-30 in the House and 95-2 in the Senate. The votes clearly indicated strong bipartisan support to update and improve the law, according to Pierce.

The new law takes effect on Jan. 1.

Online Resources

For updates and additional information, see the online version of HR News at www.shrm.org/hrnews.