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Due the holidays, the next issue of the Compliance News Flash will be January 2019.

Have a Safe and Happy Holiday Season!

Compliance News Flash – December 21, 2018

Arnall Golden Gregory LLP is pleased to provide you with the Compliance News Flash. This weekly update is your source for timely background screening and immigration-related news that is important to your organization.

  • It wouldn’t be the holidays without a family squabble. And that’s what is happening in Washington, D.C. at the time this News Flash goes to press. The President and Congress are in a battle royal over funding the federal government passed midnight tonight. What could result is a partial government shutdown. Of note to readers is that the Department of Homeland Security (DHS) is one federal agency whose funding expires at midnight. The E-Verify program falls under DHS. No funding, no E-Verify. Which means that E-Verify will go offline as of 12:01 am Saturday and remain shut down until DHS is funded by Congress. This requires that Congress pass a continuing resolution to fund the government and the President signs it. With hours remaining, there is massive disagreement over funding for a border wall. Employers, Employer Agents, anyone who uses E-Verify should prepare for the system being offline starting tomorrow, December 22. Typically DHS issues instructions on holding cases until they are back online and does not penalize employers for not creating a case in E-Verify within three business days.

  • The Department of Justice Immigrant and Employee Rights Section (IER) announced a settlement with a Walmart store in Fort Worth, Texas for allegedly discriminating against non-U.S. citizens, in violation of the Immigration and Nationality Act (INA)—discrimination based on citizenship status. Walmart allegedly required work authorized non-U.S. citizens to produce unnecessary documentation and fired a lawful permanent resident who could not produce the specific documentation requested by Human Resources for purposes of completing the Form I-9. The INA prohibits employers from discriminating against work authorized non-U.S. citizens by rejecting valid work authorization documents, limiting employees’ choice of documentation, or subjecting workers to unnecessary documentation requirements. Walmart will pay $1,944 to the employee and reinstate her employment. Walmart also must pay a civil penalty to the IER, train staff on anti-discrimination laws, and will be subject to monitoring and reporting requirements.  

  • The new Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger changed the name of the agency back to CFPB. Former Acting Director Mick Mulvaney previously attempted to change the Bureau’s name to the Bureau of Consumer Financial Protection with the acronym BCFP. Kraninger announced that she is halting ongoing efforts to change the name and acronym on existing products and marketing materials. The Bureau will continue to use the BCFP name and acronym for reports, legal filings and other official business. My head is spinning. 

  • The CFPB announced a settlement with State Farm Bank for allegedly violating the Fair Credit Reporting Act (FCRA) and the Consumer Financial Protection Act. According to the CFPB, State Farm Bank allegedly:

    • Obtained consumer reports without a permissible purpose;

    • Furnished information to credit reporting agencies (CRAs) about consumers’ credit that the bank knew to be inaccurate;

    • Failed to correct inaccurate or incomplete information furnished to CRAs;

    • Furnished information to CRAs without notification that the information was disputed by the consumer; and

    • Failed to establish and implement policies and procedures to ensure accuracy of information that the bank provides to CRAs.

  • As a result, State Farm Bank must implement policies and procedures to comply with the FCRA. The CFPB did not issue a monetary fine against State Farm Bank but it reserved the right to impose the maximum civil penalty if the bank violates the terms of the Consent Order.

  • Although this is only one case, in one district court, it is worth mentioning here because it goes to the issue of who qualifies as an “employee” under the FCRA. The District Court for the Southern District of Iowa ruled that protections provided under the FCRA during the employment application process do not apply to independent contractors. The plaintiff alleged that he was not hired by Mutual of Omaha Insurance because of an inaccurate background check and that the Defendant failed to provide him with the necessary notices required under the FCRA. Mutual of Omaha Insurance argued that because the Plaintiff was an independent contractor, he did not have the same FCRA protections as “employees.” In an Order in response to Mutual of Omaha Insurance’s motion to dismiss, the Court stated that, “…the FCRA’s requirement of pre-adverse action notice only applies when an applicant applies to an employee.” (Smith v. Mutual of Omaha Insurance Company, No. 4:17-cv-00443 (S.D. Iowa, Oct. 4, 2018)).

If you have any questions or need assistance on any point raised in this Compliance News Flash please contact:

Montserrat Miller  

Montserrat C. Miller
Partner, DC Office



The information presented provides a general summary and/or recent legal and regulatory developments. It is not intended to be, and should not be relied upon as legal advice.
 ©2018. Arnall Golden Gregory LLP. All Rights Reserved. Atlanta | Washington DC

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