NCRA’s Resident Screening
e- Newsletter

FEATURE ARTICLE
NCRA Creates New Resident Screening Committees
to meet the growing needs of its members and the growing needs of Resident Screening companies

The National Credit Reporting Association (NCRA), a trade association founded in 1992 to serve the consumer reporting industry, has recently formed a new committee structure with several new committees to serve residential tenant screening agencies.  Since its inception, NCRA has been the trade association to represent the independent consumer reporting industry witha special focus on serving housing credit needs.  Being the primary trade association for the mortgage credit reporting industry, made this a natural expansion for the association to embrace this group of tenant focused firms.

Terry Clemans, Executive Director of NCRA, states that, "Many NCRA members have been serving the tenant screening industry for years.  We have a few members that service that industry niche exclusively and with this expansion we are responding to their requests and that particular industry's need for representation."

Heading up the new committees are longtime resident screening industry veterans with decades of experience in meeting the needs of landlords and apartment management companies.  Daphne Large, President of DataFacts, Inc. in Memphis, TN, is a member of NCRA's Board of Directors and will be supporting the Resident Screening Committee's leadership of Caryl McMains and Barton Taylor.

Ms. McMains, the Committee Chair, is the vice President of Business Development at ClearStar.  Mr. Taylor is the President of Tazworks and will serve as the Committee's Co-Chair.  Taylor has been a member of NCRA since the association's founding in 1992 and served as NCRA President in 2001.  Both McMains and Taylor have been part of background screening since the mid-1980's, making them each a natural selection for the association's board to tap into their rich history knowledge and eagerness to help serve the residential screening industry.

Robert Krone, Vice President of Merchants Association of Florida, and Janet Curtis, Vice President of San Antonio Retail Merchants Association, will be leading the Compliance sub-committees to address the requirements needed for best practices based on regional laws as well as educationl information for this group.  Both of these individuals have been heavily involved in the compliance for each of their respective resident screeing services.  Additional sub-committees have been established for Vendor Relations to be headed by Paul Feyereiser of Tazworks, and for Media Relations headed by Tedis Baboumian of Rapid Credit Reports, Inc.

"The board looks forward to the resident screeing expansion of NCRA, making new things happen inside the association.  I know that we have put the right team in place for these new committees," said Kroll Factual Data's Judy Ryan, NCRA's 2009 President.  Mr. Clemans added that, "NCRA has been working with the Federal Trade Commission (FTC), Housing Urban Development (HUD), and many other housing groups in Wasington very closely; its seemed natural to merge the mortgage and resident screening needs under one association as these firms have so many common issues."

The resident screening committee of NCRA has already made great strides in just the organizational stage over the last few months.  Beginning in April, in coordination with the 40th anniversary of the passing of the Fair Housing Act, NCRA is conducting a resident screening membership drive to welcome new resident screening companies to the association.  To find out more about how you can be a part of these new committees of NCRA, contact Jan Gerber at 630-539-1525 or jgerber@ncrainc.org.  Additional information is available at www.ncrainc.org.

Barton Taylor began Tazworks (based in Draper Utah) in 2002, as a solution to his awareness of a lack of user-friendly platforms available for Consumer Reporting Agencies to support background screening transactions with their clients.  That year, Tazworks was born as an easy-to-use interface providing maximum system flexibility to clients.  Designed to accommodate the specialized needs of Credit Reporting Agencies in the Tenant and Employment Screening business, it provides the tools to manage, dispatch, and retrieve search data from a variety of selected sources.

Barton’s foray into the CRA world, however, actually came a few years earlier, when he started Far West/Consumer Credentials in 1994.  He operated primarily as a credit reporting company, but expanded into Tenant Screening services and employment screening during the last mortgage crisis meltdown in the late 1990’s.  Then as now, due to stringent credit requirements, availability of funds, and tighter regulations, branching out into similar but related services to the consumer information industry proved timely and fortuitous

Barton, the consummate professional, also understands that balance is the key to overall success…not just business success.  Playwright and Poet Christopher Morley once said, “There is only one success, to be able to spend life in your own way”.   Barton’s way can be seen by his dedication to his family and his involvement in outside interests.  His dedication is evident in his relationship with and support of his family, which includes his wife and 5 children (1 set of twins).  Barton can regularly be seen attending their sporting events, or even participating in outdoor activities.  Recently, Barton participated in a 5-mile race with his daughter, Ayden, who finished 1st in her division.

Specific to the Tenant Screening market sector, Tazworks developed The InstaScreen Tenant Scorecard as a simple, powerful recommendation tool for property managers and landlords. It provides an automated means to efficiently and impartially analyze the credit, criminal, and eviction history of applicants and then generate a "pass", "fail", or "conditional" recommendation based on customizable screening criteria. The InstaScreen Tenant Scorecard can help improve decision turnaround time, reduce delinquency rates, and increase bottom line margins.

As a CRA and Tenant Screening organization, Tazworks InstaScreen product line allows you to confidently grow your business and support that increase in volume with automated billing, better management of your vendor network and information sources, and merging information from multiple data sources into one easy to read format.  In addition, it allows you to offer to your clients a simple, fast, and customized decision-making tool to score applicants.

 ATTENTION:     
THE RED FLAG COMPLIANCE DEADLINE HAS BEEN MOVE UP TO AUGUST 1, 2009

   Compliance Committee

New "Red Flag" Requirements and Do They Apply to Landlords

Identity thieves use people's personal identifying information to open new accounts and misuse existing account, creating havoc for consumers and businesses. Financial institutions and creditors soon will be required to implement a program to detect, prevent, and mitigate instances of identity theft.

The Federal Trade Commission (FTC), the federal bank regulatory agencies and the National Credit Union Administration have issued regulations (The Red Flags Rules) requiring financial institutions and creditors to develop and implement written identity theft prevention programs, as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003. The program must be in place by May 1, 2009 and must provide for the identification, detection, and response to patterns, practices , or specific activities- known as "red flags"- that could indicate identity theft.

Since Landlords are neither financial institutions nor creditors, it appears that the "Red Flag" requirements do not apply. In a conversation with FTC staff attorneys a confirmation was obtained that most of "Red Flag" rules do not apply under "normal" Landlord tenant transaction.  If there are variations to the standard rental relationship they may trigger a need for "Red Flag" compliance.  As always if there are concerns about specific legal issues, it is suggested a legal opinion be obtained

§ 41.82 Duties of users regarding address discrepancies.

(a) Scope. This section of FACTA applies to a user of consumer reports (user) that receives a notice of address discrepancy from a consumer reporting agency, and that is a national bank, Federal branch or agency of a foreign bank, or any of their operating subsidiaries that are not functionally regulated within the meaning of section 5(c) (5) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1844(c) (5)).

(b) Definition. For purposes of this section, a notice of address discrepancy means a notice sent to a user by a consumer reporting agency pursuant to 15 U.S.C. 1681c (h) (1), that informs the user of a substantial difference between the address for the consumer that the user provided to request the consumer report and the address (es) in the agency's file for the consumer.

(c) Reasonable belief. (1) Requirement to form a reasonable belief. A user must develop and implement reasonable policies and procedures designed to enable the user to form a reasonable belief that a consumer report relates to the consumer about whom it has requested the report, when the user receives a notice of address discrepancy.

(2) Examples of reasonable policies and procedures. (i) Comparing the information in the consumer report provided by the consumer reporting agency with information the user:

(A) Obtains and uses to verify the consumer's identity in accordance with the requirements of the Customer Information Program (CIP) rules implementing 31 U.S.C. 5318(l) (31 CFR 103.121);

(B) Maintains in its own records, such as applications, change of address notifications, other customer account records, or retained CIP documentation; or

(C) Obtains from third-party sources; or

(ii) Verifying the information in the consumer report provided by the consumer reporting agency with the consumer.

(d) Consumer's address. (1) Requirement to furnish consumer's address to a consumer reporting agency. A user must develop and implement reasonable policies and procedures for furnishing an address for the consumer that the user has reasonably confirmed is accurate to the consumer reporting agency from whom it received the notice of address discrepancy when the user:

(i) Can form a reasonable belief that the consumer report relates to the consumer about whom the user requested the report;

(ii) Establishes a continuing relationship with the consumer; and

(iii) Regularly and in the ordinary course of business furnishes information to the consumer reporting agency from which the notice of address discrepancy relating to the consumer was obtained.

(2) Examples of confirmation methods. The user may reasonably confirm an address is accurate by:

(i) Verifying the address with the consumer about whom it has requested the report;

(ii) Reviewing its own records to verify the address of the consumer;

(iii) Verifying the address through third-party sources; or

(iv) Using other reasonable means.

(3) Timing. The policies and procedures developed in accordance with paragraph (d)(1) of this section must provide that the user will furnish the consumer's address that the user has reasonably confirmed is accurate to the consumer reporting agency as part of the information it regularly furnishes for the reporting period in which it establishes a relationship with the consumer.

If a landlord thinks the above portions of the regulations applies, then best practices created for the end users of credit reports should include, the procedures outlined for Creditors and Financial Institutions for Red Flags compliance.  When it comes to identity authentication and fraud prevention it is far better to be safe than to deal with problems that could have been avoided with proper due diligence.     

 Robert Krone
VP MAF Background Screening
Compliance Chair of NCRA's Resident Screening Committee

Best Practices & Tips
Albert Einstein said, "Know where to find the information and how to use it - That's the secret of success!

Ask the Professional Screening Panel:

You wanted to know, “how is a tenant scoring different then FICO scoring?”

We went to the panel of experts and found out! Resident scoring was first used by Secure Rent out of Colorado, who claimed to have a special unique scoring model that could intuitively determine an applicants risk based on, Income, Debt and Rent amount. All information other than the rent amount was located on the credit report.

Can you give us information on how to help clients in the bad housing market?

What we found is that the housing market rates are getting lower, companies are giving incentives for long term leases.  Rental rates are tracked by HUD and the information is located at the huduser website.  This will give your customers valuable information and get them pointed in the right direction to ensure they are charging fair rent amounts.

CONTACT NCRA