To amend the Fair Credit Reporting Act to prohibit the use of consumer credit history for any insurance purpose and to require the disclosure of consumer reports and the credit scoring procedure in order to prevent inaccuracies and mistakes in consumer credit reports, and for other purposes.

Summary: Consumer Credit Protection Act Amendments of 2003 - Amends the Fair Credit Reporting Act to set forth impermissible uses of consumer credit scores by an insurance provider with respect to a consumer or insurance applicant.

Mandates that any credit scoring system used to generate any risk or credit score be in compliance with the Equal Credit Opportunity Act.

Requires a consumer reporting agency, upon request, to disclose to the consumer clearly and accurately all information in the consumer's file, including: (1) credit consumer reports and any information concerning reports and credit scores; (2) any other risk scores or predictors, including any credit scores used; and (3) a clear, concise summary of how the scores and predictors are derived.

Cites circumstances that require a consumer reporting agency to furnish free disclosures upon request.

Requires every consumer reporting agency taking adverse action based upon a consumer report to: (1) provide a copy of such report, including other risk scores or predictors, and credit scores used; and (2) provide a written summary of all consumer rights and how to exercise them.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Credit Protection Act 
Amendments of 2003''.

SEC. 2. FINDINGS.

    Section 602(a) Fair Credit Reporting Act (15 U.S.C. 1681) is 
amended--
            (1) by redesignating paragraph (4) as paragraph (6);
            (2) by striking paragraphs (2) and (3) and inserting the 
        following new paragraphs:
            ``(2) Consumer credit reporting agencies have assumed a 
        dominant role in evaluating consumer credit and other 
        information on consumers.
            ``(3) Credit reports may report on as factors to establish 
        a consumer's eligibility for credit, insurance, and even 
        employment.
            ``(4) The automated calculation of credit scores has become 
        the primary way of quickly evaluating all of the subjective 
        factors taken into account in determining a consumer's 
        creditworthiness, credit standing, credit capacity, debts, 
        character, general reputation, or mode of living.
            ``(5) When a credit reporting agency undertakes a business 
        that has the potential to profoundly affect a consumer's life, 
        it is incumbent that these agencies ensure that the information 
        provided is accurate.''; and
            (3) by inserting after paragraph (6) (as so redesignated by 
        paragraph 1 of this section) the following new paragraph:
            ``(7) Due to the inequality of the rates of property and 
        casualty insurance, many State insurance commissioners have 
        concurred that prohibiting the use of credit history and credit 
        scores for personal lines of insurance and improving the 
        disclosure of credit information will provide greater 
        protection for the consumer.''.

SEC. 3. DEFINITIONS.

    (a) New Definitions.--Section 603 of the Fair Credit Reporting Act 
(15 U.S.C. 1681a) is amended by adding at the end the following new 
subsection:
    ``(q) Credit Score, Risk Predictor, and Risk Score.--The terms 
`credit score', `risk predictor', and `risk score' mean the numerical 
value or categorization derived from a statistical tool or modeling 
system used to predict the likelihood of certain credit behaviors, 
including default.''.
    (b) Amendments to Existing Definitions.--Subsection (m) of section 
603 of the Fair Credit Reporting Act (15 U.S.C. 1681a(m)) is amended to 
read as follows:
    ``(m) Credit Transaction That Is Not Initiated by the Consumer.--
The term `credit transaction that is not initiated by the consumer' 
does not include the use of a consumer report by a person with whom the 
consumer has a credit account for purposes of--
            ``(1) reviewing the account; or
            ``(2) collecting the account.''.

SEC. 4. IMPERMISSIBLE USES OF CREDIT SCORES IN CONSUMER INSURANCE 
              DETERMINATIONS; COMPLIANCE WITH EQUAL CREDIT OPPORTUNITY 
              ACT.

    (a) In General.--Section 604 of the Fair Credit Reporting Act (15 
U.S.C. 1681b) is amended by adding at the end the following new 
subsections:
    ``(h) Impermissible Uses of Consumer Credit Scores in Consumer 
Insurance Determinations.--With respect to all personal lines of 
insurance, including any auto, homeowners, dwelling fire, life, 
disability, and health insurance or annuity, intended for consumer, 
family, or household use, an insurance provider may not take any of the 
following actions on the basis, in whole or in part, of the consumer 
report obtained from a consumer reporting agency), or a credit score, 
of any consumer, including an applicant for such insurance:
            ``(1) Refuse to underwrite or renew any such insurance.
            ``(2) Cancel an existing policy of insurance.
            ``(3) Increase the premium for any such insurance, either 
        while the policy is in effect or at the time of renewal, or 
        fail to offer or provide any discount otherwise available.
            ``(4) Rate the risk of the occurrence of the event covered 
        by such insurance.
            ``(5) Assign the insured or applicant to a rating tier.
            ``(6) Place insurance for an insured consumer or applicant 
        with an affiliated company.
            ``(7) Require a particular payment plan under circumstances 
        where any additional payment plans are available for such 
        insurance.
    ``(i) Compliance With Equal Credit Opportunity Act.--Any credit 
scoring system used to generate any risk or credit score shall comply 
with the Equal Credit Opportunity Act.''.
    (b) Technical and Conforming Amendments.--
            (1) Section 604(a)(3) of the Fair Credit Reporting Act (15 
        U.S.C. 1681b) is amended--
                    (A) by striking subparagraph (C);
                    (B) by redesignating subparagraphs (D), (E), and 
                (F) as subparagraphs (C), (D), and (E), respectively; 
                and
                    (C) in subparagraph (D) (as so redesignated, by 
                striking ``or current insurer,''.
            (2) Section 604(c) of the Fair Credit Reporting Act (15 
        U.S.C. 1681b(c)) is amended--
                    (A) in paragraphs (1) and (3) by striking ``or 
                insurance'' each place such term appears; and
                    (B) in paragraph (1), by striking ``subparagraph 
                (A) or (C) of subsection (a)(3)'' and inserting 
                ``subsection (a)(3)(A)''.
            (3) Paragraphs (1) and (5) of section 604(e) of the Fair 
        Credit Reporting Act (15 U.S.C. 1681b(e)) are each amended by 
        striking ``or insurance'' each place such term appears.
            (4) Section 604(g) of the Fair Credit Reporting Act (15 
        U.S.C. 1681b(g)) is amended by striking ``or insurance''.
    (c) Clerical Amendments.--The heading for section 604(c) of the 
Fair Credit Reporting Act (15 U.S.C. 1681b(c)) is amended by striking 
``or Insurance''.
    (d) Compliance Study.--The Federal Trade Commission shall conduct a 
study of the compliance of insurance providers with the amendment made 
by this section and shall submit a report containing the findings and 
conclusions of the Commission to the Congress before the end of the 1-
year period beginning on the date of the enactment of this Act.

SEC. 5. AMENDMENTS TO THE DISCLOSURE OF CREDIT SCORES AND CREDIT 
              REPORTS TO CONSUMERS.

    (a) In General.--Section 609(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681g(a)) is amended by striking all of the provisions of 
such subsection that precede paragraph (2) and inserting the following:
    ``(a) Information on File; Sources; Report Recipients.--Every 
consumer reporting agency shall, upon request, and subject to section 
610(a)(1), clearly and accurately disclose to the consumer the 
following:
            ``(1) Information.--All information in the consumer's file 
        at the time of the request including credit consumer reports, 
        any information concerning credit scores and credit consumer 
        reports, and any other risk scores or predictors relating to 
        the consumer including any credit scores used, and a clear and 
        concise summary of how the scores and predictors are derived, 
        including--
                    ``(A) The factors taken into account in deriving a 
                score or predictor;
                    ``(B) How such factors are applied to the consumer;
                    ``(C) The relative weight given to each factor;
                    ``(D) The manner and extent to which such factors 
                raise or lower the score or predictor;
                    ``(E) The names of all persons that provided the 
                credit score or credit file upon which the credit score 
                was created; and
                    ``(F) A statement indicating that the information 
                and credit scoring model may be different from the 
                credit score that may be used by the lender.''.
    (b) Annual Disclosure of Rights Required.--Section 609 of the Fair 
Credit Reporting Act (15 U.S.C. 1681g) is amended by adding at the end 
the following new subsection:
    ``(d) Annual Disclosure of Rights Required.--
            ``(1) In general.--A credit reporting agency shall annually 
        provide a consumer with the written summary of rights required 
under section 609(c), by letter sent by first-class mail, whenever one 
of the following events occurs within any 12-month period:
                    ``(A) The credit reporting agency has received 3 
                credit inquiries pertaining to the consumer.
                    ``(B) The credit reporting agency has received a 
                report that would add negative information to the 
                consumer's file.
            ``(2) Format of letter.--Any letter mailed to a consumer 
        pursuant to this subsection may be a form letter, except that 
        each letter shall include a notice or separate form the 
        consumer may complete and return to the consumer reporting 
        agency to request a copy of the credit consumer report.
            ``(3) Additional contact information under certain 
        circumstances.--In the case of any consumer reporting agency 
        which compiles and maintains files on consumers on a nationwide 
        basis, the letter or notice shall include a toll-free telephone 
        number and worldwide web address established by the agency for 
        the consumer to request a free report under the terms of 
        section 612(c).''.
    (c) Free Disclosures Under Certain Circumstances.--Section 612(c) 
of the Fair Credit Reporting Act (15 U.S.C. 1681j(c)) is amended to 
read as follows:
    ``(c) Free Disclosure of Consumer Reports.--In addition to the 
disclosures required under subsection (b) or the law of any State, upon 
the request of a consumer, a consumer reporting agency shall make all 
disclosures pursuant to section 609 without charge to that consumer 
under the following circumstances:
            ``(1) Annually, upon the written, oral, or electronic 
        request of the consumer.
            ``(2) Up to 3 additional times a year, if a consumer 
        certifies in writing that the consumer--
                    ``(A) is unemployed and intends to apply for 
                employment in the 60-day period beginning on the date 
                on which the certification is made;
                    ``(B) is a recipient of public welfare assistance; 
                or
                    ``(C) has reason to believe that the file on the 
                consumer at the agency contains inaccurate information 
                due to fraud or identity theft.''.
    (d) Duties of Users Taking Adverse Actions on the Basis of 
Information Contained in Consumer Reports.--Section 615(a) of the Fair 
Credit Reporting Act (15 U.S.C. 1681m(a)) is amended to read as 
follows:
    ``(a) Duties of Users Taking Adverse Actions on the Basis of 
Information Contained in Consumer Reports.--
            ``(1) In general.--If any person takes any adverse action 
        with respect to any consumer that is based in whole or in part 
        on any information contained in a consumer report, the person 
        shall--
                    ``(A) provide oral, written, or electronic notice 
                of the adverse action to the consumer; and
                    ``(B) provide a copy of the consumer's complete 
                report that the consumer reporting agency provided to 
                the user, including any information concerning credit 
                scores and credit consumer reports, and any other risk 
                scores or predictors relating to the consumer including 
                any credit scores used; and
            ``(2) Summary of rights.--A user who provides a notice and 
        a copy of a consumer report and credit score to a consumer 
        under paragraph (1) shall also provide to the consumer--
                    ``(A) a written summary of all of the rights that 
                the consumer has under this title;
                    ``(B) an explanation of how the consumer may 
                exercise the rights of the consumer under this title;
                    ``(C) a list of all Federal agencies responsible 
                for enforcing any provision of this title and the 
                address and any appropriate phone number of each such 
                agency, in a form that will assist the consumer in 
                selecting the appropriate agency; and
                    ``(D) a statement that the consumer may have 
                additional rights under State law and that the consumer 
                may wish to contact a State or local consumer 
                protection agency or State attorney general to learn of 
                those rights.
            ``(3) Form of summary of rights.--
                    ``(A) In general.--The user shall provide a 
                description in writing of the rights of the consumer 
                under paragraph (2) using the form and content 
                prescribed by the Federal Trade Commission (after 
                consultation with each Federal agency referred to in 
                section 621(b).
                    ``(B) Compliance with substantially similar 
                format.--Any user shall be deemed to be in compliance 
                with this subsection if the user provides disclosures 
                under paragraph (2) that are substantially similar to 
                the model disclosure adopted by the Federal Trade 
                Commission under this paragraph.
                    ``(C) Effective date of summary of rights 
                disclosures.--No disclosures shall be required under 
                paragraph (2) before the date on which the Federal 
                Trade Commission prescribes the form and content of 
                such disclosures under subparagraph (A).''.

SEC. 6. EFFECTIVE DATE.

    The amendments made by this Act shall take effect at the end of the 
90-day period beginning on the date of the enactment of this Act.