FTC Proposes Changes to Scope of Prescreen Opt-Out Notice Rule

The FTC published a notice of proposed rulemaking that narrows the scope of the agency’s Prescreen Opt-Out Notice Rule to correspond to changes made to FCRA by the 2010 Dodd-Frank Act.  Specifically, the proposal would amend the Prescreen Opt-Out Notice Rule, which outlines requirements for the use of consumer report information to make unsolicited credit or insurance offers to consumers, to reflect that the rule applies only to entities that are predominantly engaged in the sale and servicing of motor vehicles, excluding those dealers that directly extend credit to consumers and do not routinely assign the extensions of credit to an unaffiliated third party (i.e., motor vehicle dealers).  The proposed amendment also reinstates the model prescreen opt-out notice, which is identical to the CFPB’s model notice, as Appendix C to Part 698.

Additionally, in connection with FTC’s periodic review of its rules and guides, the proposal contains a series of questions on which FTC seeks comments. Comments must be submitted by December 7, 2020.

As noted in the proposal, the Dodd-Frank Act transferred the FTC’s rulemaking authority under parts of FCRA to the CFPB in 2012.  It also narrowed the FTC’s rulemaking authority with respect to other FCRA rules to cover only motor vehicle dealers.  Consumer report users originally covered by the Prescreen Opt-Out Notice Rule that are not motor vehicle dealers are covered by the CFPB’s rules.