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On February 28, 2023, the FTC and the CFPB issued a joint request for information (“RFI”) seeking public comment on background checks used to screen potential tenants for rental housing. As part of the RFI, the FTC and the CFPB are asking current tenants, prospective tenants, advocacy groups, commercial and individual landlords, property managers, background screening companies, other consumer reporting agencies, and others to weigh in on a wide array of issues that affect tenant screening, such as:

  • how criminal and eviction records are used by landlords and property managers in making housing decisions;
  • how potential inaccuracies in criminal and other records affect rental housing decisions;
  • whether consumers are informed about the criteria used in tenant screening or notified about what information in their background check led to their rejection;
  • how landlords and property managers are setting application and screening fees;
  • how algorithms, automated decision-making, artificial intelligence, or similar technology are used in the tenant screening process; and
  • whether there are ways to improve the current tenant screening process.

In a press release announcing the RFI, the CFPB and FTC stated that they are focused on identifying practices that may unfairly prevent consumers form obtaining and retaining housing and that they hope public comments will help to inform enforcement and policy actions under each agency’s jurisdiction.

Putting it into Practice: The RFI highlights the growing regulatory concern regarding the potential for latent discriminatory effects of current tenant screening practices. The CFPB has recently taken a number of steps to gather information on and address the potentially discriminatory impacts of tenant screening practices. The CFPB has also stated that it is working closely with the Department of Housing and Urban Development, the Federal Housing Finance Agency, and Department of Agriculture to address allegedly problematic practices by tenant screening companies. Given this growing regulatory focus, companies engaged in administering or otherwise utilizing tenant screening practices should review their programs and work to ensure their accuracy.