The question on everyone’s mind appears to be, “Is the economy in a recession?” Within the property management industry, there are reports of higher renewal and rent rates. Has this impacted your resident selection criteria? Many companies are evaluating their criteria, including rent-to-income and debt-to-income ratios.
In addition, the industry is still adjusting to legislative changes that influence the resident screening process. Have you felt the impact? Are you adjusting? This topic has been covered many times; here are a few resources available to you on RentManager.com:
- September 25, 2019 – Ban the Box and Beyond: How to Comply with State Laws and Local Ordinances
- February 17, 2020 – Our Industry is Ever-Changing. Are you in the Know?
- October 20, 2021 – Regulations, Resident Screening, and You
Screening Process – Past and Present
Twenty years ago, the resident screening process looked very different. Back then, you may have used a typewriter or DOS (disk operating system). Also, it could have taken you a week or more to review and approve an application. Today, resident screening is more automated and faster than ever. The question we need to ask now is whether faster is truly better for the applicant. Recent legislation within the industry requires individualized assessment of an applicant before determining to accept or decline them.
An individualized assessment is a review of an applicant’s criminal record circumstances. Relevant evidence might include the facts or circumstances surrounding criminal conduct, the age of the individual at the time of the conduct, evidence that the person has maintained good tenant history before and/or after the conviction or conduct, and evidence of rehabilitation efforts.
Taking time to perform an individualized assessment will allow you to be more thorough and make fully informed decisions.
Understand the CFPB Interpretive Rule
Another legislative change involves the use of criminal records permitted under the Fair Credit Reporting Act (FCRA). On June 28, 2022, the Consumer Financial Protection Bureau (CFPB) released an interpretive rule that reminds states of their “substantial flexibility to pass laws involving consumer reporting.” According to an article from the National Apartment Association, entitled New CFPB Rule Backs Tougher Screening Restrictions: “The CFPB’s interpretive rule suggests that state lawmaking bodies can and should promote legislation that would bolster restrictions on screening practices. For example, the interpretive rule proposes that state law could ‘forbid consumer reporting agencies from including information about medical debt, evictions, arrest records, or rental arrears in a consumer report’ without triggering the preemption authority of the FCRA.”
Are you taking steps to prepare for such adjustments? Is your current screening provider discussing these changes with you?
As Rent Manager’s preferred screening partner, AmRent monitors laws and implements necessary system and report display restrictions for their customers.
Interested in learning more? Contact AmRent at email@example.com.
*This blog does not constitute legal advice and each customer should refer to their own counsel.
**If your screening service is not delivered through Rent Manager from AmRent, check with your current provider to learn how they are managing compliance obligations.