Time limit for adverse action notices

Question: When we turn down an employment applicant because of information in their credit report, is there a time limit by which we have to send the applicant an adverse action notice?

Answer: The Fair Credit Reporting Act requires you to send a notice to any applicant for employment under the circumstances you describe. However, unlike the Equal Credit Opportunity Act, the FCRA does not contain time limits or requirements for the notice. The Federal Trade Commission is the lead agency for interpreting the FCRA however that agency does not have authority to issue regulations for FCRA. They have issued a staff opinion that five days is a reasonable time for giving this notice. It is a good idea to follow that advice, even though it is not binding. If you are looking for an outside limit, the ECOA's 30-day requirement would be pertinent.

Copyright © 2002 Compliance Action. Originally appeared in Compliance Action, Vol. 7, No. 1, 2/02