Resident Screening in Multifamily Housing
Resident screening is a topic at the forefront of the rental housing market. The White House Blueprint for a Renters Bill of Rights, released in January 2023, names it as a primary component in addressing housing discrimination and exclusion. Previous U.S. Department of Housing and Urban and Development (HUD) guidance and additional implementation guidance addressed the standards of use for criminal screening, asserting the potential for disparate impact Fair Housing Act (FHA) claims. In November 2022, the Consumer Financial Protection Bureau (CFPB) released reports on the background check market and consumer complaints. These pieces serve as follow-up to the CFPB’s 2021 advisory report, and detail accuracy of reporting in compliance with the Fair Credit Reporting Act (FCRA). Both FHA and FCRA claims are the subject of many resident screening lawsuits. Most recently, on February 28, 2023, the Federal Trade Commission (FTC) and the CFPB began an open comment period regarding resident screening. A closer look at FHA and FCRA rules and case law provides a better understanding of current regulations on this issue.