The CFPB Withdrew Circular 2024-06. Here Is What Changed, and What Didn't.

On May 12, 2025, the Consumer Financial Protection Bureau withdrew 67 guidance documents in a single Federal Register notice.^[1] One of them was Circular 2024-06, Background Dossiers and Algorithmic Scores for Hiring, Promotion, and Other Employment Decisions, issued in October 2024.^[2] Earlier posts on this blog that cited it now carry an update note pointing here.

What the circular said

The circular answered one question: can an employer make employment decisions using third-party background dossiers, algorithmic scores, or similar products without following the Fair Credit Reporting Act? The Bureau's answer was no. Its reasoning was that these products are consumer reports when they are assembled by a third party and used for employment purposes, so the employer owes the FCRA's obligations: permission before procuring the report, notices before and after adverse action, and use only for a permissible purpose.

What the withdrawal changes

The Bureau no longer stands behind that reading as agency guidance. A circular is the CFPB's statement of how it interprets a law and how it intends to enforce it. Withdrawing it removes that signal. An employer or a vendor can no longer point to the circular as the regulator's position, and a court will not treat it as one.

That is the whole change. The withdrawal notice did not say the circular was wrong. It said the Bureau was reducing its stock of guidance documents and would decide later which, if any, to reissue.^[1]

What the withdrawal does not change

The Fair Credit Reporting Act is a statute. Its definitions of "consumer report" and "consumer reporting agency," and the employer obligations that follow from them, are exactly what they were before the circular was issued and after it was withdrawn.^[3] Whether a particular product is a consumer report was a question for courts before October 2024, and it is a question for courts again now.

State and local law did not move either. Fair chance laws that require an individualized assessment and a written explanation before an adverse decision were never built on the circular. Neither were the state laws now reaching automated tools in hiring, which regulate scores and classifications on their own terms regardless of how the FCRA labels them.

What it means for employers

Nothing about your obligations got lighter. If you procure a background report from a third party for a hiring decision, you owe permission, notice, and adverse action process under the FCRA, and you owe individualized assessment and written reasons wherever state or local law requires them. If you are using a newer product that scores or ranks candidates, the question of whether it is a consumer report is open rather than answered, which is a reason for more caution, not less.

This post is general information, not legal advice. Talk to your counsel about how these issues apply to your organization.

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