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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9991 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                                H. R. 9991

    To amend the Credit Repair Organizations Act to add additional 
    protections against harmful practices within the credit repair 
             organization industry, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 15, 2024

  Mr. Nickel (for himself and Mrs. Kim of California) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL

 
    To amend the Credit Repair Organizations Act to add additional 
    protections against harmful practices within the credit repair 
             organization industry, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ending Scam Credit Repair Act'' or 
the ``ESCRA Act''.

SEC. 2. CREDIT REPAIR ORGANIZATION DEFINITION.

    Section 403(3) of the Credit Repair Organizations Act (15 U.S.C. 
1679a(3))--
            (1) in subparagraph (A), by inserting ``(not including 
        anything received in return for representing a consumer in 
        preparation for or during litigation)'' after 
        ``consideration''; and
            (2) in subparagraph (B)--
                    (A) by inserting ``an entity or individual that is, 
                in good faith and not for the purpose of evading this 
                title'' after ``include'';
                    (B) in clause (ii), by striking ``or'';
                    (C) in clause (iii), by striking the period and 
                inserting ``; or''; and
                    (D) by adding at the end the following:
                            ``(iv) any attorney that provides legal 
                        services rendered or to be rendered to a 
                        consumer in contemplation of or in connection 
                        with a case filed, or to be filed within 12 
                        months, under title 11 or title 15, United 
                        States Code, by an attorney within the same law 
                        firm.''.

SEC. 3. PROHIBITED PRACTICES.

    (a) Untrue or Misleading Statements.--
            (1) In general.--Section 404(a)(1) of the Credit Repair 
        Organizations Act (15 U.S.C. 1679b(a)(1)) is amended--
                    (A) by inserting ``knowingly'' before ``make any 
                statement, or'';
                    (B) in subparagraph (A), by striking ``or''; and
                    (C) by adding at the end the following:
                    ``(C) the Bureau of Consumer Financial Protection 
                directly or through an online portal established to 
                receive complaints, disputes, or reports of fraud;
                    ``(D) the Federal Trade Commission directly or 
                through an online portal established to receive 
                complaints, disputes, or reports of fraud; or
                    ``(E) any Federal, State, local, or Tribal law 
                enforcement agency, directly or through an online 
                portal established to receive complaints, disputes, or 
                reports of fraud;''.
            (2) Finding.--The Congress finds that it is already 
        unlawful to make materially false, fictitious, or fraudulent 
        statements or representations to the Bureau of Consumer 
        Financial Protection.
    (b) Additional Prohibited Practices.--Section 404 of the Credit 
Repair Organizations Act (15 U.S.C. 1679b) is amended--
            (1) in subsection (a)(2)--
                    (A) in subparagraph (B)(ii), by inserting ``or'' 
                after ``credit;''; and
                    (B) by adding at the end the following:
                    ``(C) the Bureau of Consumer Financial Protection 
                or the Federal Trade Commission;'';
            (2) by amending subsection (b) to read as follows:
    ``(b) Payment in Advance.--
            ``(1) In general.--No credit repair organization may 
        request or receive payment of any fee or consideration from a 
        consumer for services represented to remove derogatory or 
        inaccurate information from, or improve, such consumer's credit 
        history, credit record, or credit rating, or services related 
        to such a representation, until the credit repair organization 
        has provided such consumer with documentation in the form of a 
        consumer report, issued not less than 6 months after such 
        service, from a consumer reporting agency that demonstrates 
        that such representation has been achieved.
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed to alter the permissible purposes of 
        furnishing a consumer report described in section 604 of the 
        Fair Credit Reporting Act.''; and
            (3) by adding at the end the following:
    ``(c) Jamming.--A credit repair organization may not submit 
multiple disputes described in section 611 of the Fair Credit Reporting 
Act of the same information unless all of the following are true:
            ``(1) The consumer reporting agency or data furnisher has 
        had the time permitted under the Fair Credit Reporting Act to 
        conduct a reasonable investigation on the prior dispute.
            ``(2) The consumer reporting agency or data furnisher has 
        returned the results of its investigation to the consumer with 
        respect to such dispute, unless there are material changes to 
        the information submitted with the dispute.
            ``(3) The credit repair organization includes with the 
        resubmitted dispute a specific description of what information 
        is inaccurate.''.

SEC. 4. DISCLOSURES.

    Section 405 of the Credit Repair Organizations Act (15 U.S.C. 
1679c) is amended--
            (1) in subsection (a)--
                    (A) by striking ``due to fraud.'' and inserting 
                ``due to fraud. Credit repair organizations do not 
                provide any services that you cannot do yourself for 
                free.'';
                    (B) by striking ``regulates'' and inserting ``and 
                the Bureau of Consumer Financial Protection regulate''; 
                and
                    (C) by inserting ``The Bureau of Consumer Financial 
                Protection 1700 G St. NW, Washington, DC, 20552 Tel: 
                855-411-2372 TTY/TTD: 855-729-2372'' after ``20580''; 
                and
            (2) in subsection (c)--
                    (A) in paragraph (1), by striking the period at the 
                end and inserting ``and any recordings of telephone 
                communications with the consumer.''; and
                    (B) in paragraph (2)--
                            (i) by striking ``2'' in the heading and 
                        inserting ``5'';
                            (ii) by inserting ``and any telephone 
                        recordings with the consumer'' after 
                        ``consumer's statement'';
                            (iii) by striking ``2'' and inserting 
                        ``5''; and
                            (iv) by striking ``statement is signed by 
                        the consumer'' and inserting ``statement or the 
                        telephone recordings are created''.

SEC. 5. CONSUMER CONTRACT REQUIRED.

    (a) In General.--Section 407(c) of the Credit Repair Organizations 
Act (15 U.S.C. 1679e(c)) is amended by adding at the end the following:
            ``(3) copies of all communications sent on behalf of the 
        consumer, at the time the communication is sent.''.
    (b) Technical Amendment.--Section 407(c) of the Credit Repair 
Organizations Act (15 U.S.C. 1679e(c)) is amended--
            (1) by striking ``at the time the contract or the other 
        document is signed.'';
            (2) in paragraph (1), by striking ``; and'' inserting ``, 
        at the time the contract or the other document is signed;''; 
        and
            (3) in paragraph (2), by adding at the end ``at the time 
        the contract or the other document is signed; and''.

SEC. 6. NONCOMPLIANCE.

    Section 408 of the Credit Repair Organizations Act (15 U.S.C. 
1679f) is amended by adding at the end following:
    ``(d) Legal Services Within Credit Repair Organizations.--A credit 
repair organization shall be subject to this title regardless of 
whether the organization is, or employs, an attorney who also provides 
legal services to a consumer, except if such attorney is an attorney 
described in section 403(3)(B)(iv).
    ``(e) Credit Repair Organizations Without a State License.--On or 
after January 1, 2026, no person may act as a credit repair 
organization unless such person is licensed by a State.''.

SEC. 7. CREDIT REPAIR ORGANIZATION COMMUNICATIONS WITH FURNISHERS OF 
              INFORMATION.

    (a) In General.--The Credit Repair Organizations Act (15 U.S.C. 
1679 et seq.) is amended by inserting after section 408 the following 
new section:
``Sec. 408A. Credit repair organization communications with furnishers 
              of information
    ``Disputes submitted to a person who furnishes information to a 
consumer reporting agency by or on behalf of a credit repair 
organization shall meet the following requirements:
            ``(1) If sent by mail, the dispute shall be transmitted by 
        first class mail and list on the envelope the--
                    ``(A) name of the credit repair organization; and
                    ``(B) State license number of the credit repair 
                organization, if applicable.
            ``(2) The dispute shall list the--
                    ``(A) name of the credit repair organization;
                    ``(B) State license number of the credit repair 
                organization, if applicable; and
                    ``(C) name of the consumer on whose behalf the 
                dispute is submitted.
            ``(3) In the case of any additional communication after an 
        initial dispute, the additional communication shall clearly and 
        conspicuously identify any material changes to the information 
        provided in the initial written dispute and include the 
        information described in paragraphs (1) and (2).
            ``(4) In the case where a credit repair organization sells 
        or otherwise provides an online or paper blank dispute form to 
        be completed and filed by the consumer, such form must contain 
        the--
                    ``(A) name and address of such credit repair 
                organization; and
                    ``(B) State license number of such credit repair 
                organization, if applicable.
            ``(5) In the case where the person responds to a dispute 
        submitted by a credit repair organization seeking clarifying 
        information, verifying if the customer has actually engaged 
        with the credit repair organization, or denying the accuracy of 
        the underlying claim, the credit repair organization shall 
        respond in writing within 15 business days.
            ``(6) In the case where the credit repair organization is 
        an attorney, the attorney shall certify that any communication 
        is consistent with any information or documentation provided by 
        the consumer, confirmed based upon methods or means proven to 
        be historically reliable and accurate.
            ``(7) A credit repair organization, when sending a dispute, 
        shall disclose the fact that it is a credit repair organization 
        by placing the following disclosure on the dispute letter: 
        `This communication was submitted or prepared on behalf of the 
        consumer by a credit repair organization, as defined in section 
        403 of the Credit Repair Organizations Act (15 U.S.C. 
        1679a).'''.
    (b) Clerical Amendment.--The table of contents for the Credit 
Repair Organizations Act is amended by inserting after the item 
relating to section 408 the following:

``408A. Credit repair organization communications with furnishers of 
                            information.''.

SEC. 8. CIVIL LIABILITY.

    Section 409(a)(1) of the Credit Repair Organizations Act (15 U.S.C. 
1679g(a)(1)) is amended--
            (1) by striking ``Actual damages'' and inserting 
        ``Damages'';
            (2) in subparagraph (A), by striking ``or'';
            (3) in subparagraph (B), by striking the period at the end 
        and inserting ``; or''; and
            (4) by adding at the end the following:
                    ``(C) the amount of $500 in damages for each 
                violation of this title.''.
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