Conducting Background Checks - Criminal History Selection Criteria Best Practices (Part 2 of 4)

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What should you do in light of HUD's guidance? The first thing to realize is that the HUD guidance isn't intended only for HUD program housing providers, explained Richer.

Industry experts agree that the guidance provided by HUD applies to all housing providers, not just those receiving federal funding. The best practices are being recommended, so that any housing provider that uses criminal histories in its applicant screening process will consider disparate impact and review its criteria, adjusting as necessary, she said.

It's also important to realize that there isn'tone source for information on all federal and state criminal records, said Richer, explaining what she considers to be the "biggest myth in resident screening." There is no single "national" database of criminal records available to screening company providers. In fact, even the FBI database doesn'tcontain all criminal records from every court or state criminal repository in the country.

The way most professional screeners obtain data is either to use a third party or gather their own criminal records from state, county, and local sources, Richer explained. Either way, there are states that restrict the release of electronic criminal records, and some that omit personal identifiers, like full name or date of birth, which makes the process of matching records impossible.

The bottom line: It's difficult to gather criminal records because each source has a different way of cataloguing records. Those differences can make it challenging for both screening and housing providers to conduct criminal records screening.

Understand Key Terminology

Before getting started, you should understand some key terms used in criminal record screening. If you review criminal records as part of your application process, being able to clearly understand the disposition of the record is critical in how you evaluate prospects for housing, Richer said.

Arrest: This word can be confusing or misinterpreted in the context of resident screening. Records of "arrest" refer to when a person is "picked up" or "cuffed" for a criminal event. He or she may be taken into custody (typically to a local police station), but a case has yet to be filed in a court. Richer said that most screening companies don't include records of arrest in their criminal background service.

Pending case: Once sufficient evidence has been presented, typically the prosecutor will file charges. The charge filed opens a case at the appropriate court and the case remains pending until a final disposition, such as guilty or dismissed, has been rendered. HUD's new guidelines warn against making housing decisions based on arrests, so it's important to distinguish between arrests and charges filed (that is, pending cases).

Disposition: Disposition refers to how the case was resolved in the criminal justice system. Any criminal record that isn'tpending would have some type of disposition.

Deferred adjudication: Some states use the term "deferred adjudication," which is a criminal record showing conviction status, but the court had "deferred" the conviction to allow the offender to participate in some type of community service program. If completed, the conviction status would be removed; if not, the conviction status would stand.

Conviction: A record of conviction means the case resulted in the offender either pleading guilty or being found guilty.

Look-back period: This refers to the amount of time a company will consider when evaluating criminal histories. You may have different look-back periods, depending on the nature and seriousness of the crime.

Exit from incarceration: The date of exit from incarceration, parole, or release date if the sentence included jail time.


What You Should Know about the FCRA

The Fair Credit Reporting Act (FCRA) is the main compliance law for all screening providers (known as consumer reporting agencies), Richer explained. This federal law provides guidance and obligations for screening providers, users of consumer reports (including housing providers), and consumers (including housing applicants).

Once the criminal records are obtained, screening providers can only deliver the information in accordance with FCRA requirements. Here are some key things to keep in mind about the FCRA:

Permissible purpose: To gain access to any consumer report (including criminal records), companies must certify a permissible purpose under the FCRA. For housing providers, the one that typically applies is "a legitimate business transaction initiated by the consumer." You also may have the written consent of the consumer.

Obsolescence reporting standards: The FCRA defines how long a record can be delivered on a consumer report. The federal FCRA allows for records of conviction to display indefinitely; records of non-conviction (pending, deferred adjudications, and the like) are limited to seven years.

State law limitations: There are 11 states with different reporting standards from the federal FCRA. Most limit records of conviction to seven years, but some have different rules. For example, Kentucky limits records to only convictions, but keeps the time frame the same as the federal FCRA. And California, New Mexico, and New York only allow for records of conviction and limit the time to display to seven years.

Accuracy requirement: Consumer reporting agencies must have reasonable procedures to ensure maximum possible accuracy. For example, if a criminal record does not contain enough information to match to an appropriate consumer (typically full name and full date of birth), then it shouldn'tbe delivered in a consumer report.

Adverse action: If you determine that an applicant isn'tsuitable for housing, or you decide to offer housing with a conditional offer, based on the consumer report, then a "statement of adverse action" is required under the FCRA.

Disclosure and dispute: The statement of adverse action directs the applicant (the consumer) to the "source" of the consumer report (the screening company) to find out what information was delivered to the housing provider (the user) and dispute any inaccurate or non-updated information. This is a free service to consumers and is required under the FCRA.

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