IB 

Union Calendar No. 150

108TH CONGRESS 

1ST SESSION H. R. 2622

[Report No. 108–263] 

To amend the Fair Credit Reporting Act, to prevent identity theft, improve 

resolution of consumer disputes, improve the accuracy of consumer 

records, make improvements in the use of, and consumer access to, 

credit information, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 26, 2003

Mr. BACHUS (for himself, Ms. HOOLEY of Oregon, Mrs. BIGGERT, Mr. 

MOORE, Mr. LATOURETTE, Mr. KANJORSKI, Mr. CASTLE, Mrs. 

MALONEY, Mr. SHADEGG, Mr. FORD, Mr. TIBERI, Mr. HINOJOSA, Mr. 

HENSARLING, Mr. CROWLEY, Mr. SESSIONS, Mr. ROSS, Mr. MATHESON, 

Mr. DAVIS of Alabama, Mr. BAKER, Mr. KING of New York, Mr. LUCAS

of Oklahoma, Mr. LUCAS of Kentucky, Mr. NEY, Mrs. KELLY, Mr. 

JONES of North Carolina, Mr. ISRAEL, Ms. HART, Mr. MILLER of North 

Carolina, Mrs. CAPITO, Mrs. MCCARTHY of New York, Mr. BARRETT of 

South Carolina, Mr. FEENEY, and Ms. HARRIS) introduced the following 

bill; which was referred to the Committee on Financial Services 

SEPTEMBER 4, 2003

Additional sponsors: Mr. KENNEDY of Minnesota, Mr. SCOTT of Georgia, Mr. 

BOYD, Mr. WELDON of Florida, Mr. ROGERS of Michigan, Mr. FROST, 

Mr. RAMSTAD, Mr. MURPHY, Mr. SMITH of Washington, Mr. CANTOR, 

Mr. BLUNT, Mr. ADERHOLT, Mr. TERRY, Mr. DAVIS of Florida, Mr. 

MICA, Mr. SHAYS, Mr. STRICKLAND, Mr. BURTON of Indiana, Mr. KIND, 

Mr. DEAL of Georgia, Mr. SCHROCK, Mr. REYNOLDS, Ms. PRYCE of 

Ohio, Mr. EMANUEL, Mr. BEAUPREZ, and Mr. BOEHLERT

SEPTEMBER 4, 2003 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 
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[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on June 26, 2003] 

A BILL

To amend the Fair Credit Reporting Act, to prevent identity 

theft, improve resolution of consumer disputes, improve 

the accuracy of consumer records, make improvements 

in the use of, and consumer access to, credit information, 

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Fair and Accurate Credit Transactions Act of 2003’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act are as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. Effective dates. 

TITLE I—UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS 

Sec. 101. Uniform national consumer protection standards made permanent. 

TITLE II—IDENTITY THEFT PREVENTION 

Sec. 201. Investigating changes of address and inactive accounts. 

Sec. 202. Fraud alerts. 

Sec. 203. Truncation of credit card and debit card account numbers. 

Sec. 204. Summary of rights of identity theft victims. 

Sec. 205. Blocking of information resulting from identity theft. 

Sec. 206. Establishment of procedures for depository institutions to identify possible instances of identity theft. 

Sec. 207. Study on the use of technology to combat identity theft. 

TITLE III—IMPROVING RESOLUTION OF CONSUMER DISPUTES 

Sec. 301. Coordination of consumer complaint investigations. 
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Sec. 302. Notice of dispute through reseller. 

Sec. 303. Reasonable investigation required. 

Sec. 304. Duties of furnishers of information. 

Sec. 305. Prompt investigation of disputed consumer information. 

TITLE IV—IMPROVING ACCURACY OF CONSUMER RECORDS 

Sec. 401. Reconciling addresses. 

Sec. 402. Prevention of repollution of consumer reports. 

Sec. 403. Notice by users with respect to fraudulent information. 

Sec. 404. Disclosure to consumers of contact information for users and furnishers 

of information in consumer reports. 

Sec. 405. FTC study of the accuracy of consumer reports. 

TITLE V—IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO 

CREDIT INFORMATION 

Sec. 501. Free reports annually. 

Sec. 502. Disclosure of credit scores. 

Sec. 503. Simpler and easier method for consumers to use notification system. 

Sec. 504. Requirement to disclose communications to a consumer reporting agency. 

Sec. 505. Study of effects of credit scores and credit-based insurance scores on 

availability and affordability of financial products. 

Sec. 506. GAO study on disparate impact of credit system. 

Sec. 507. Analysis of further restrictions on offers of credit or insurance. 

Sec. 508. Study on the need and the means for improving financial literacy 

among consumers. 

Sec. 509. Disclosure of increase in APR under certain circumstances. 

TITLE VI—PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS 

Sec. 601. Certain employee investigation communications excluded from definition of consumer report. 

TITLE VII—LIMITING THE USE AND SHARING OF MEDICAL 

INFORMATION IN THE FINANCIAL SYSTEM 

Sec. 701. Protection of medical information in the financial system. 

Sec. 702. Confidentiality of medical information in credit reports.

1 SEC. 2. DEFINITIONS. 

2 Section 603 of the Fair Credit Reporting Act (15 

3 U.S.C. 1681a) is amended by adding at the end the fol4 lowing new subsections: 

5 ‘‘(r) RESELLER.—The term ‘reseller’ means a con6 sumer reporting agency that—

7 ‘‘(1) assembles and merges information contained 

8 in the database of another consumer reporting agency 
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1 or multiple consumer reporting agencies concerning 

2 any consumer for purposes of furnishing such infor3 mation to any third party, to the extent of such ac4 tivities; and 

5 ‘‘(2) does not maintain a database of the assem6 bled or merged information from which new consumer 

7 reports are produced. 

8 ‘‘(s) OTHER DEFINITIONS.—

9 ‘‘(1) BOARD; CREDIT; CREDITOR; CREDIT

10 CARD.—The terms ‘Board’, ‘credit’, ‘creditor’, and 

11 ‘credit card’ have the same meanings as in section 

12 103 of the Truth in Lending Act. 

13 ‘‘(2) COMMISSION.—The term ‘Commission’ 

14 means the Federal Trade Commission. 

15 ‘‘(3) DEBIT CARD.—The term ‘debit card’ means 

16 any card issued by a financial institution to a con17 sumer for use in initiating electronic fund transfers 

18 (as defined in section 903(6) of the Electronic Fund 

19 Transfer Act) from the account (as defined in such 

20 Act) of the consumer at such financial institution for 

21 the purpose of transferring money between accounts 

22 or obtaining money, property, labor, or services. 

23 ‘‘(4) ELECTRONIC FUND TRANSFER.—The term 

24 ‘electronic fund transfer’ has the same meaning as in 

25 section 903 of the Electronic Fund Transfer Act. 
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1 ‘‘(5) FEDERAL BANKING AGENCY.—The term 

2 ‘Federal banking agency’ has the same meaning as in 

3 section 3 of the Federal Deposit Insurance Act.

4 ‘‘(6) IDENTITY THEFT.—The term ‘identity theft’ 

5 means a fraud committed using another person’s 

6 identifying information, subject to such further defi7 nition as the Commission and the Board may pre8 scribe, jointly, by regulation. 

9 ‘‘(7) POLICE REPORT.—The term ‘police report’ 

10 means a copy of any official valid report filed by a 

11 consumer with any appropriate Federal, State, or 

12 local government law enforcement agency, or any 

13 comparable official government document that the 

14 Board and the Commission shall jointly prescribe in 

15 regulations, that is subject to a criminal penalty for 

16 false statements.’’.

17 SEC. 3. EFFECTIVE DATES. 

18 (a) IN GENERAL.—Except as provided in subsections 

19 (b) and (c)—

20 (1) before the end of the 2-month period begin21 ning on the date of the enactment of this Act, the 

22 Board of Governors of the Federal Reserve System 

23 and the Federal Trade Commission shall jointly pre24 scribe regulations in final form establishing effective 
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1 dates for each provision of this Act (except as other2 wise specified); and 

3 (2) the regulations prescribed under paragraph 

4 (1) shall establish effective dates that are as early as 

5 possible while allowing a reasonable time for the im6 plementation of the provisions of this Act, but in no 

7 case shall the effective date be later than 10 months 

8 after the date of issuance of such regulations in final 

9 form. 

10 (b) IMMEDIATE EFFECTIVE DATE.—The following pro11 visions shall take effect on the date of the enactment of this 

12 Act: 

13 (1) Title I. 

14 (2) Section 201. 

15 (3) Section 609(d)(1) of the Fair Credit Report16 ing Act (as added by the amendment in section 

17 204(a)). 

18 (4) Section 305. 

19 (5) Section 505. 

20 (6) Section 506. 

21 (7) Title VI. 

22 (c) EFFECTIVE DATE FOR PROTECTION OF MEDICAL

23 INFORMATION IN THE FINANCIAL SYSTEM.—Section 701 

24 shall take effect at the end of the 180-day period beginning 

25 on the date of the enactment of this Act, except that para-
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1 graph (2) of section 604(g) of the Fair Credit Reporting 

2 Act (as added by section 701) shall take effect on the later 

3 of—

4 (1) the end of the 90-day period beginning on the 

5 date the regulations required under paragraph (5)(B) 

6 of such section 604(g) (as added by section 701) are 

7 prescribed in final form; or 

8 (2) the date specified in the regulations referred 

9 to in paragraph (1). 

10 TITLE I—UNIFORM NATIONAL 

11 CONSUMER PROTECTION 

12 STANDARDS 

13 SEC. 101. UNIFORM NATIONAL CONSUMER PROTECTION 

14 STANDARDS MADE PERMANENT. 

15 Section 624(d) of the Fair Credit Reporting Act (15 

16 U.S.C. 1681t(d)) is amended—

17 (1) by striking ‘‘Subsections (b) and (c)’’ and all 

18 that follows through ‘‘do not affect any settlement,’’ 

19 and inserting ‘‘Subsections (b) and (c) do not affect 

20 any settlement,’’; and 

21 (2) by striking ‘‘Consumer Credit Reporting Re22 form Act of 1996’’ and all that follows through the pe23 riod at the end of paragraph (2) and inserting ‘‘Con24 sumer Credit Reporting Reform Act of 1996.’’. 
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1 TITLE II—IDENTITY THEFT 

2 PREVENTION 

3 SEC. 201. INVESTIGATING CHANGES OF ADDRESS AND IN4 ACTIVE ACCOUNTS. 

5 (a) IN GENERAL.—Section 605 of the Fair Credit Re6 porting Act (15 U.S.C. 1681c) is amended by inserting after 

7 subsection (f), the following new subsection: 

8 ‘‘(g) ‘RED FLAG’ PATTERNS OF POSSIBLE IDENTITY

9 THEFT.—

10 ‘‘(1) INVESTIGATION OF CHANGES OF AD11 DRESS.—The Federal banking agencies and the Na12 tional Credit Union Administration, in carrying out 

13 the responsibilities of such agencies and Administra14 tion under subsection (k), shall jointly prescribe regu15 lations for credit card and debit card issuers to en16 sure that, if any such issuer receives a request for an 

17 additional or replacement card for an existing ac18 count within a short period of time after the issuer 

19 has received notification of a change of address for the 

20 same account, the issuer will follow reasonable poli21 cies and procedures that require, as appropriate, that 

22 the issuer not issue the additional or replacement 

23 card unless the issuer—

24 ‘‘(A) notifies the cardholder of the request at 

25 the former address of the cardholder and provides
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1 to the cardholder a means of promptly reporting 

2 incorrect address changes; 

3 ‘‘(B) notifies the cardholder of the request 

4 by such other means of communication as the 

5 cardholder and the card issuer previously agreed 

6 to; or 

7 ‘‘(C) uses other means of assessing the valid8 ity of the change of address, in accordance with 

9 reasonable policies and procedures established by 

10 the card issuer in accordance with the regula11 tions prescribed under subsection (k). 

12 ‘‘(2) INACTIVE ACCOUNTS.—The Federal banking 

13 agencies and the National Credit Union Administra14 tion, in carrying out the responsibilities of such agen15 cies and Administration under subsection (k), shall 

16 consider including, as a possible ‘red flag’ pattern, 

17 reasonable guidelines providing that when a trans18 action occurs with respect to a credit or deposit ac19 count that has been inactive for more than 2 years, 

20 the creditor or depository institution shall follow rea21 sonable policies and procedures that provide for notice 

22 to be given to a consumer in a manner reasonably de23 signed to reduce the likelihood of identity theft with 

24 respect to such account.’’. 

25 (b) CLERICAL AMENDMENTS.—
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1 (1) The heading for section 605 of the Fair Cred2 it Reporting Act is amended to read as follows: 

3 ‘‘§ 605. Requirements relating to information con4 tained in consumer reports and to identity 

5 theft prevention.’’. 

6 (2) The table of sections for title VI of the Con7 sumer Credit Protection Act is amended by striking 

8 the item relating to section 605 and inserting the fol9 lowing new item:

‘‘605. Requirements relating to information contained in consumer reports and to 

identity theft prevention.’’.

10 (3) Section 624(b)(1)(E) of the Fair Credit Re11 porting Act (15 U.S.C. 1681t(b)(1)(E)) is amended by 

12 inserting ‘‘and to identity theft prevention’’ after 

13 ‘‘consumer reports’’. 

14 SEC. 202. FRAUD ALERTS. 

15 Section 605 of the Fair Credit Reporting Act (15 

16 U.S.C. 1681c) is amended by adding at the end the fol17 lowing new subsection: 

18 ‘‘(i) ONE-CALL FRAUD ALERTS.—

19 ‘‘(1) INITIAL ALERTS.—Upon the direct request 

20 of a consumer, or an individual acting on behalf of 

21 or as a personal representative of a consumer, who as22 serts, in good faith, a suspicion that the consumer has 

23 been or is about to become a victim of fraud or re24 lated crime, including identity theft, a consumer re-
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1 porting agency described in section 603(p) shall, if 

2 the agency maintains a file on the consumer who is 

3 making the request and has a reasonable belief that 

4 the agency knows the identity of the consumer—

5 ‘‘(A) include a fraud alert in the file of that 

6 consumer for a period of not less than 90 days 

7 beginning on the date of such request, unless the 

8 consumer specifically requests that such fraud 

9 alert be removed before the end of such period; 

10 ‘‘(B) disclose to the consumer that the con11 sumer may request a free copy of the file of the 

12 consumer and provide the consumer, upon re13 quest, a free disclosure of the consumer’s file (as 

14 described in section 609(a)) within 3 business 

15 days after such request; 

16 ‘‘(C) for 2 years after the date of such re17 quest, exclude the consumer from any list of con18 sumers prepared by the agency and provided to 

19 any third party to offer credit or insurance to 

20 the consumer as part of a transaction that was 

21 not initiated by the consumer, unless the con22 sumer subsequently requests that such exclusion 

23 be rescinded before the end of such period; and 

24 ‘‘(D) refer the information regarding the 

25 fraud alert to each of the other consumer report-
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1 ing agencies described in section 603(p), as re2 quired under section 621(f)(1). 

3 ‘‘(2) EXTENDED ALERTS.—Upon the direct re4 quest of a consumer, or an individual acting on be5 half of or as a personal representative of a consumer, 

6 who contacts a consumer reporting agency described 

7 in section 603(p) to report details of an identity theft 

8 and submits evidence that provides the agency with 

9 reasonable cause to believe that such identity theft has 

10 occurred, the agency shall, if the agency maintains a 

11 file on the consumer who is making the request and 

12 has a reasonable belief that the agency knows the 

13 identity of the consumer—

14 ‘‘(A) include a fraud alert in the file of that 

15 consumer and provide an opportunity for the 

16 consumer to extend the alert for a period of up 

17 to 7 years from the date of such request, unless 

18 the consumer subsequently requests that such 

19 fraud alert be removed before the end of such pe20 riod; 

21 ‘‘(B) provide the consumer with the option 

22 of including more complete information in the 

23 consumer’s file, including a telephone number or 

24 some other reasonable means of communication 

25 that any person who requests the consumer’s re-
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1 port may utilize for authorization before estab2 lishing a new credit plan in the name of the con3 sumer; and 

4 ‘‘(C) provide the consumer with at least 2 

5 free disclosures of the information described in 

6 section 609(a) during the 12-month period begin7 ning on the date of such request. 

8 ‘‘(3) ACTIVE DUTY ALERTS.—Upon the direct re9 quest of an active duty military consumer, or an in10 dividual acting on behalf of or as a personal rep11 resentative of an active duty military consumer, who 

12 contacts a consumer reporting agency described in 

13 section 603(p), the agency shall, if the agency main14 tains a file on the consumer who is making the re15 quest and has a reasonable belief that the agency 

16 knows the identity of the consumer—

17 ‘‘(A) include an active duty alert in the file 

18 of that consumer during a period of not less than 

19 12 months beginning on the date of the request, 

20 unless the consumer requests that such active 

21 duty alert be removed before the end of such pe22 riod; 

23 ‘‘(B) for 2 years after the date of such re24 quest, exclude the consumer from any list of con25 sumers prepared by the agency and provided to 
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1 any third party to offer credit or insurance to 

2 the consumer as part of a transaction that was 

3 not initiated by the consumer, unless the con4 sumer subsequently requests that such exclusion 

5 be rescinded before the end of such period; and 

6 ‘‘(C) refer the information regarding the ac7 tive duty alert to each of the other consumer re8 porting agencies described in section 603(p), as 

9 required under section 621(f)(1). 

10 ‘‘(4) PROCEDURES.—Each consumer reporting 

11 agency described in section 603(p) shall establish poli12 cies and procedures to comply with the obligations of 

13 paragraphs (1), (2), and (3), including procedures 

14 that allow consumers to request initial, extended, or 

15 active duty alerts in a simple and easy manner, in16 cluding by telephone. 

17 ‘‘(5) NOTICE TO USERS.—No person who obtains 

18 any information that includes a fraud alert under 

19 this section from a file of any consumer from a con20 sumer reporting agency may establish a new credit 

21 plan in the name of the consumer for a person other 

22 than the consumer without utilizing reasonable poli23 cies and procedures described in paragraph (9). 

24 ‘‘(6) REFERRALS OF FRAUD ALERTS.—Each con25 sumer reporting agency described in section 603(p)
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1 that receives a referral of a fraud alert from another 

2 such agency pursuant to paragraph (1)(D) or (3)(C) 

3 shall follow the procedures required under subpara4 graphs (A), (B), and (C) of paragraph (1), in the 

5 case of a referral under paragraph (1)(D), and sub6 paragraphs (A) and (B), in the case of a referral 

7 under paragraph (3)(C), as if the agency received the 

8 request from the consumer directly. 

9 ‘‘(7) DUTY OF RESELLER TO RECONVEY

10 ALERT.—A reseller that is notified of the existence of 

11 a fraud alert in a consumer’s consumer report shall 

12 communicate to each person procuring a consumer re13 port with respect to such consumer the existence of a 

14 fraud alert in effect for such consumer. 

15 ‘‘(8) DUTY OF OTHER CONSUMER REPORTING

16 AGENCIES TO PROVIDE CONTACT INFORMATION.—If a 

17 consumer contacts any consumer reporting agency 

18 that is not a consumer reporting agency described in 

19 section 603(p) to communicate a suspicion that the 

20 consumer has been or is about to become a victim of 

21 fraud or related crime, including identity theft, the 

22 agency shall provide the consumer with information 

23 on how to contact the Commission and the consumer 

24 reporting agencies described in section 603(p) to ob-
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1 tain more detailed information and request alerts 

2 under this subsection. 

3 ‘‘(9) FRAUD ALERT.—

4 ‘‘(A) DEFINITION.—For purposes of this 

5 subsection, the term ‘fraud alert’ means, at a 

6 minimum, a statement—

7 ‘‘(i) in the file of a consumer that the 

8 consumer may be a victim of fraud, includ9 ing identity theft, or is a consumer de10 scribed in paragraph (3); and 

11 ‘‘(ii) that is transmitted in a manner 

12 that facilitates a clear and conspicuous view 

13 of the statement by any person requesting 

14 such file. 

15 ‘‘(B) OTHER INFORMATION.—A fraud alert 

16 shall include information that notifies all pro17 spective users of a consumer report on the con18 sumer to which the alert relates that the con19 sumer does not authorize establishing any new 

20 credit plan in the name of the consumer, unless 

21 the user utilizes reasonable policies and proce22 dures to form a reasonable belief that the user 

23 knows the identity of the person for whom such 

24 new plan is established, which may include ob25 taining authorization or preauthorization of the 
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1 consumer at a telephone number designated by 

2 the consumer or by such other reasonable means 

3 agreed to. 

4 ‘‘(10) OTHER DEFINITIONS.—For purposes of 

5 this subsection, the following definitions shall apply: 

6 ‘‘(A) ACTIVE DUTY MILITARY CONSUMER.—

7 The term ‘active duty military consumer’ means 

8 a consumer in military service who—

9 ‘‘(i) is on active duty (as defined in 

10 section 101(d)(1) of title 10, United States 

11 Code) or is a reservist performing duty 

12 under a call or order to active duty under 

13 a provision of law referred to in section 

14 101(a)(13) of title 10, United States Code; 

15 and 

16 ‘‘(ii) is assigned to service away from 

17 the consumer’s usual duty station. 

18 ‘‘(B) NEW CREDIT PLAN.—The term ‘new 

19 credit plan’ means a new account under an open 

20 end credit plan (as defined in section 103(i) of 

21 this Act) or a new credit transaction not under 

22 an open end credit plan.’’. 
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1 SEC. 203. TRUNCATION OF CREDIT CARD AND DEBIT CARD 

2 ACCOUNT NUMBERS. 

3 (a) IN GENERAL.—Section 605 of the Fair Credit Re4 porting Act (15 U.S.C. 1681c) is amended by inserting after 

5 subsection (k) (as added by section 206 of this title) the 

6 following new subsection: 

7 ‘‘(l) TRUNCATION OF CREDIT CARD AND DEBIT CARD

8 ACCOUNT NUMBERS.—

9 ‘‘(1) IN GENERAL.—Except as provided in this 

10 subsection, no person that accepts credit cards or 

11 debit cards for the transaction of business shall print 

12 the expiration date or more than the last 5 digits of 

13 the card number upon any receipt provided to the 

14 cardholder at the point of the sale or transaction. 

15 ‘‘(2) LIMITATION.—This section shall apply only 

16 to receipts that are electronically printed, and shall 

17 not apply to transactions in which the sole means of 

18 recording the person’s credit card or debit card num19 ber is by handwriting or by an imprint or copy of 

20 the card.’’. 

21 (b) EFFECTIVE DATE.—The amendments made by sub22 section (a) shall apply after the end of—

23 (1) the 3-year period beginning on the date of 

24 the enactment of this Act, with respect to any cash 

25 register or other machine or device that electronically
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1 prints receipts for credit card or debit card trans2 actions that is in use before January 1, 2005; and 

3 (2) the 1-year period beginning on the date of 

4 the enactment of this Act, with respect to any cash 

5 register or other machine or device that electronically 

6 prints receipts for credit card or debit card trans7 actions that is first put into use on or after January 

8 1, 2005. 

9 SEC. 204. SUMMARY OF RIGHTS OF IDENTITY THEFT VIC10 TIMS. 

11 (a) IN GENERAL.—Section 609 of the Fair Credit Re12 porting Act (15 U.S.C. 1681g) is amended by adding at 

13 the end the following new subsection: 

14 ‘‘(d) SUMMARY OF RIGHTS OF IDENTITY THEFT VIC15 TIMS.—

16 ‘‘(1) IN GENERAL.—The Commission, in con17 sultation with the Federal banking agencies and the 

18 National Credit Union Administration, shall prepare 

19 a model summary of the rights of consumers under 

20 this title with respect to the procedures for remedying 

21 the effects of fraud or identity theft involving credit, 

22 electronic fund transfers, or accounts or transactions 

23 at or with a financial institution. 

24 ‘‘(2) SUMMARY OF RIGHTS AND CONTACT INFOR25 MATION.—If any consumer contacts a consumer re-
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1 porting agency and expresses a belief that the con2 sumer is a victim of fraud or identity theft involving 

3 credit, electronic fund transfers, or accounts or trans4 actions at or with a financial institution, the con5 sumer reporting agency shall, in addition to any 

6 other action the agency may take, provide the con7 sumer with the model summary of rights prepared by 

8 the Commission under paragraph (1) and informa9 tion on how to contact the Commission to obtain more 

10 detailed information.’’. 

11 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec12 tion 624(b)(3) of the Fair Credit Reporting Act (15 U.S.C. 

13 1681t(b)(3)) is amended by striking ‘‘section 609(c)’’ and 

14 inserting ‘‘subsection (c) or (d) of section 609’’. 

15 SEC. 205. BLOCKING OF INFORMATION RESULTING FROM 

16 IDENTITY THEFT. 

17 Section 605 of the Fair Credit Reporting Act (15 

18 U.S.C. 1681c) is amended by inserting after subsection (i) 

19 (as added by section 202 of this title) the following new 

20 subsection: 

21 ‘‘(j) BLOCK OF INFORMATION RESULTING FROM IDEN22 TITY THEFT.—

23 ‘‘(1) BLOCK.—Except as provided in paragraph 

24 (3), a consumer reporting agency shall block the re25 porting of any information in the file of a consumer 
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1 that the consumer identifies as information that re2 sulted from an alleged identity theft and confirms is 

3 not information relating to any transaction by the 

4 consumer not later than 5 business days after the date 

5 of receipt by such agency of—

6 ‘‘(A) appropriate proof of the identity of a 

7 consumer; 

8 ‘‘(B) a police report evidencing the claim of 

9 the consumer of identity theft; 

10 ‘‘(C) the identification of the information 

11 by the consumer; and 

12 ‘‘(D) confirmation by the consumer that the 

13 information is not information relating to any 

14 transaction by the consumer. 

15 ‘‘(2) NOTIFICATION.—A consumer reporting 

16 agency shall promptly notify the furnisher of infor17 mation identified by the consumer under paragraph 

18 (1)—

19 ‘‘(A) that the information may be a result 

20 of identity theft; 

21 ‘‘(B) that a police report has been filed; 

22 ‘‘(C) that a block has been requested under 

23 this subsection; and 

24 ‘‘(D) of the effective date of the block. 

25 ‘‘(3) AUTHORITY TO DECLINE OR RESCIND.—
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1 ‘‘(A) IN GENERAL.—A consumer reporting 

2 agency may decline to block, or may rescind any 

3 block, of consumer information under this sub4 section if the consumer reporting agency reason5 ably determines that—

6 ‘‘(i) the information was blocked in 

7 error or a block was requested by the con8 sumer in error; 

9 ‘‘(ii) the information was blocked, or a 

10 block was requested by the consumer, on the 

11 basis of a misrepresentation of fact by the 

12 consumer relevant to the request to block; or 

13 ‘‘(iii) the consumer knowingly obtained 

14 possession of goods, services, or moneys as a 

15 result of the blocked transaction or trans16 actions, or the consumer should have known 

17 that the consumer obtained possession of 

18 goods, services, or moneys as a result of the 

19 blocked transaction or transactions. 

20 ‘‘(B) NOTIFICATION TO CONSUMER.—If the 

21 block of information is declined or rescinded 

22 under this paragraph, the affected consumer 

23 shall be notified promptly, in the same manner 

24 as consumers are notified of the reinsertion of in25 formation under section 611(a)(5)(B).
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1 ‘‘(C) SIGNIFICANCE OF BLOCK.—For pur2 poses of this paragraph, if a consumer reporting 

3 agency rescinds a block, the presence of informa4 tion in the file of a consumer prior to the block5 ing of such information is not evidence of wheth6 er the consumer knew or should have known that 

7 the consumer obtained possession of any goods, 

8 services, or monies as a result of the block. 

9 ‘‘(4) EXCEPTIONS.—

10 ‘‘(A) VERIFICATION COMPANIES.—This sub11 section shall not apply to—

12 ‘‘(i) a check services company, which 

13 issues authorizations for the purpose of ap14 proving or processing negotiable instru15 ments, electronic funds transfers, or similar 

16 methods of payments; or 

17 ‘‘(ii) a deposit account information 

18 service company, which issues reports re19 garding account closures due to fraud, sub20 stantial overdrafts, automated teller ma21 chine abuse, or similar negative informa22 tion regarding a consumer, to inquiring 

23 banks or other financial institutions for use 

24 only in reviewing a consumer request for a 
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1 deposit account at the inquiring bank or fi2 nancial institution. 

3 ‘‘(B) RESELLERS.—

4 ‘‘(i) NO RESELLER FILE.—This sub5 section shall not apply to a consumer re6 porting agency if the consumer reporting 

7 agency—

8 ‘‘(I) is a reseller; 

9 ‘‘(II) is not, at the time of the re10 quest of the consumer under paragraph 

11 (1), otherwise furnishing or reselling a 

12 consumer report concerning the infor13 mation identified by the consumer; and 

14 ‘‘(III) informs the consumer, by 

15 any means, that the consumer may re16 port the identity theft to the Commis17 sion to obtain consumer information 

18 regarding identity theft. 

19 ‘‘(ii) RESELLER WITH FILE.—The sole 

20 obligation of the consumer reporting agency 

21 under this subsection, with regard to any 

22 request of a consumer under this subsection, 

23 shall be to block the consumer report main24 tained by the consumer reporting agency 

25 from any subsequent use if—
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1 ‘‘(I) the consumer, in accordance 

2 with the provisions of paragraph (1), 

3 identifies, to a consumer reporting 

4 agency, information in the file of the 

5 consumer that resulted from identity 

6 theft; and 

7 ‘‘(II) the consumer reporting 

8 agency is a reseller of the identified in9 formation. 

10 ‘‘(iii) NOTICE.—In carrying out its ob11 ligation under clause (ii), the reseller shall 

12 promptly provide a notice to the consumer 

13 of the decision to block the file. Such notice 

14 shall contain the name, address, and tele15 phone number of each consumer reporting 

16 agency from which the consumer informa17 tion was obtained for resale. 

18 ‘‘(5) ACCESS TO BLOCKED INFORMATION BY LAW

19 ENFORCEMENT AGENCIES.—No provision of this sub20 section shall be construed as requiring a consumer re21 porting agency to prevent a Federal, State, or local 

22 law enforcement agency from accessing blocked infor23 mation in a consumer file to which the agency could 

24 otherwise obtain access under this title.’’. 
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1 SEC. 206. ESTABLISHMENT OF PROCEDURES FOR DEPOSI2 TORY INSTITUTIONS TO IDENTIFY POSSIBLE 

3 INSTANCES OF IDENTITY THEFT. 

4 (a) IN GENERAL.—Section 605 of the Fair Credit Re5 porting Act (15 U.S.C. 1681c) is amended by inserting after 

6 subsection (j) (as added by section 205 of this title) the fol7 lowing new subsection: 

8 ‘‘(k) ‘RED FLAG’ GUIDELINES REQUIRED.—

9 ‘‘(1) IN GENERAL.—The Federal banking agen10 cies and the National Credit Union Administration, 

11 in consultation with the Commission, shall jointly es12 tablish and maintain guidelines for use by insured 

13 depository institutions in identifying patterns, prac14 tices, and specific forms of activity that indicate the 

15 possible existence of identity theft with respect to ac16 counts, and update such guidelines as often as nec17 essary. 

18 ‘‘(2) REGULATIONS.—The Federal banking agen19 cies and the National Credit Union Administration, 

20 in consultation with the Commission, shall jointly 

21 prescribe regulations requiring insured depository in22 stitutions to establish and adhere to reasonable poli23 cies and procedures for implementing the guidelines 

24 established pursuant to paragraph (1) to identify pos25 sible risks to customer accounts or to the safety and 

26 soundness of the institutions.
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1 ‘‘(3) CONSISTENCY WITH VERIFICATION RE2 QUIREMENTS.—Policies and procedures established 

3 pursuant to paragraph (2) shall not be inconsistent 

4 with, or duplicative of, the policies and procedures re5 quired under section 5318(l) of title 31, United States 

6 Code. 

7 ‘‘(4) INSURED DEPOSITORY INSTITUTION DE8 FINED.—For purposes of this subsection, the term ‘in9 sured depository institution’—

10 ‘‘(A) has the meaning given to such term in 

11 section 3 of the Federal Deposit Insurance Act; 

12 and 

13 ‘‘(B) includes an insured credit union (as 

14 defined in section 101 of the Federal Credit 

15 Union Act).’’. 

16 (b) EFFECTIVE DATE.—The amendment made by sub17 section (a) shall take effect at the end of the 1-year period 

18 beginning on the date of the enactment of this Act. 

19 SEC. 207. STUDY ON THE USE OF TECHNOLOGY TO COMBAT 

20 IDENTITY THEFT. 

21 (a) STUDY REQUIRED.—The Secretary of the Treasury 

22 shall conduct a study of the use of biometrics and other 

23 similar technologies to reduce the incidence and costs of 

24 identity theft by providing convincing evidence of who actu25 ally performed a given financial transaction. 
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1 (b) CONSULTATION.—The Secretary of the Treasury 

2 shall consult with Federal banking agencies, the Federal 

3 Trade Commission, and representatives of financial institu4 tions, credit reporting agencies, Federal, State, and local 

5 government agencies that issue official forms or means of 

6 identification, State prosecutors, law enforcement agencies, 

7 and the biometric industry and other representatives of the 

8 general public, in formulating and conducting the study re9 quired by subsection (a). 

10 (c) AUTHORIZATION OF APPROPRIATIONS.—There are 

11 authorized to be appropriated to the Secretary of the Treas12 ury for fiscal year 2004 such sums as may be necessary 

13 to carry out the provisions of this section. 

14 (d) REPORT REQUIRED.—Before the end of the 180-

15 day period beginning on the date of the enactment of this 

16 Act, the Secretary shall submit a report to Congress con17 taining the findings and conclusions of the study required 

18 under subsection (a), together with such recommendations 

19 for legislative or administrative actions as may be appro20 priate. 
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1 TITLE III—IMPROVING RESOLU2 TION OF CONSUMER DIS3 PUTES 

4 SEC. 301. COORDINATION OF CONSUMER COMPLAINT IN5 VESTIGATIONS. 

6 Section 621 of the Fair Credit Reporting Act (15 

7 U.S.C. 1681s) is amended by adding at the end the fol8 lowing new subsection: 

9 ‘‘(f) COORDINATION OF CONSUMER COMPLAINT INVES10 TIGATIONS.—

11 ‘‘(1) IN GENERAL.—The consumer reporting 

12 agencies described in section 603(p) shall develop and 

13 maintain procedures for the referral, to each such 

14 agency, of any consumer complaint received by any 

15 such agency alleging any identity theft or requesting 

16 a block or a fraud alert. 

17 ‘‘(2) MODEL FORM AND PROCEDURE FOR RE18 PORTING IDENTITY THEFT.—The Commission, in con19 sultation with the Federal banking agencies and the 

20 National Credit Union Administration, shall develop 

21 a model form and model procedures to be used by con22 sumers who are victims of identity theft for con23 tacting and informing creditors and consumer report24 ing agencies of the fraud. 
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1 ‘‘(3) ANNUAL SUMMARY REPORTS.—Each con2 sumer reporting agency described in section 603(p) 

3 shall submit an annual summary report to the Com4 mission on consumer complaints received by the agen5 cy on identity theft or fraud alerts.’’. 

6 SEC. 302. NOTICE OF DISPUTE THROUGH RESELLER. 

7 (a) REQUIREMENT FOR REINVESTIGATION OF DIS8 PUTED INFORMATION UPON NOTICE FROM A RESELLER.—

9 Section 611(a) of the Fair Credit Reporting Act (15 U.S.C. 

10 1681i(a)(1)(A)) is amended—

11 (1) in subparagraph (A) of paragraph (1)—

12 (A) by striking ‘‘If the completeness’’ and 

13 inserting ‘‘Subject to subsection (e), if the com14 pleteness’’; 

15 (B) by inserting ‘‘, or indirectly through a 

16 reseller,’’ after ‘‘notifies the agency directly’’; and 

17 (C) by inserting ‘‘or reseller’’ before the pe18 riod at the end of such subparagraph; 

19 (2) in subparagraph (A) of paragraph (2)—

20 (A) by inserting ‘‘or a reseller’’ after ‘‘dis21 pute from any consumer’’; and 

22 (B) by inserting ‘‘or reseller’’ before the pe23 riod at the end of such subparagraph; and 

24 (3) in subparagraph (B) of paragraph (2), by 

25 inserting ‘‘or the reseller’’ after ‘‘from the consumer’’.
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1 (b) REINVESTIGATION REQUIREMENT APPLICABLE TO

2 RESELLERS.—Section 611 of the Fair Credit Reporting Act 

3 (15 U.S.C. 1681i) is amended by adding at the end the fol4 lowing new subsection: 

5 ‘‘(e) REINVESTIGATION REQUIREMENT APPLICABLE TO

6 RESELLERS.—

7 ‘‘(1) EXEMPTION FROM GENERAL REINVESTIGA8 TION REQUIREMENT.—Except as provided in para9 graph (2), a reseller shall be exempt from the require10 ments of this section. 

11 ‘‘(2) ACTION REQUIRED UPON RECEIVING NOTICE

12 OF A DISPUTE.—If a reseller receives a notice from a 

13 consumer of a dispute concerning the completeness or 

14 accuracy of any item of information contained in a 

15 consumer report on such consumer produced by the 

16 reseller, the reseller shall, within 5 business days of 

17 receiving the notice and free of charge—

18 ‘‘(A) determine whether the item of informa19 tion is incomplete or inaccurate as a result of an 

20 act or omission of the reseller; and 

21 ‘‘(B) if—

22 ‘‘(i) the reseller determines that the 

23 item of information is incomplete or inac24 curate as a result of an act or omission of 
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1 the reseller, correct the information in the 

2 consumer report or delete it; or 

3 ‘‘(ii) if the reseller determines that the 

4 item of information is not incomplete or in5 accurate as a result of an act or omission 

6 of the reseller, convey the notice of the dis7 pute, together with all relevant information 

8 provided by the consumer, to each consumer 

9 reporting agency that provided the reseller 

10 with the information that is the subject of 

11 the dispute. 

12 ‘‘(3) RESELLER REINVESTIGATIONS.—No provi13 sion of this subsection shall be construed as prohib14 iting a reseller from conducting a reinvestigation of 

15 a consumer dispute directly.’’. 

16 (c) TECHNICAL AND CONFORMING AMENDMENT.—The 

17 heading for paragraph (2)(B) of section 611(a) of the Fair 

18 Credit Reporting Act (15 U.S.C. 1681i(a)(2)(B)) is amend19 ed by striking ‘‘FROM CONSUMER’’. 

20 SEC. 303. REASONABLE REINVESTIGATION REQUIRED. 

21 Section 611(a)(1)(A) of the Fair Credit Reporting Act 

22 (15 U.S.C. 1681i(a)(1)(A)) is amended by striking ‘‘shall 

23 reinvestigate free of charge’’ and inserting ‘‘shall, free of 

24 charge, conduct a reasonable reinvestigation to determine 

25 whether the disputed information is inaccurate’’. 
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1 SEC. 304. DUTIES OF FURNISHERS OF INFORMATION. 

2 (a) IN GENERAL.—Section 623(a) of the Fair Credit 

3 Reporting Act (15 U.S.C. 1681s–2(a)) is amended—

4 (1) in paragraph (1)(A), by striking ‘‘knows or 

5 consciously avoids knowing that the information is 

6 inaccurate’’ and inserting ‘‘knows or has reasonable 

7 cause to believe that the information is inaccurate’’; 

8 (2) in paragraph (1)—

9 (A) by redesignating subparagraphs (B) 

10 and (C) as subparagraphs (C) and (D), respec11 tively; 

12 (B) by inserting after subparagraph (A), 

13 the following new subparagraph: 

14 ‘‘(B) REASONABLE PROCEDURES TO EN15 SURE ACCURACY.—A person that regularly fur16 nishes information relating to consumers to a 

17 consumer reporting agency described in section 

18 603(p) shall maintain reasonable procedures de19 signed to ensure that the information furnished 

20 is accurate.’’; and 

21 (C) by adding at the end the following new 

22 subparagraph: 

23 ‘‘(F) DEFINITION.—For purposes of sub24 paragraph (A), the term ‘reasonable cause to be25 lieve that the information is inaccurate’ means, 

26 based on the procedures described in subpara-
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1 graph (B), has knowledge, other than solely alle2 gations by the consumer, that would cause a rea3 sonable person to have substantial doubts about 

4 the accuracy of the information.’’; and 

5 (3) by adding at the end the following new para6 graph: 

7 ‘‘(6) ABILITY OF CONSUMER TO DISPUTE INFOR8 MATION DIRECTLY WITH FURNISHER.—

9 ‘‘(A) IN GENERAL.—A consumer may dis10 pute directly with a person the accuracy of in11 formation that—

12 ‘‘(i) is contained in a consumer report 

13 on the consumer prepared by a consumer 

14 reporting agency described in section 

15 603(p); and 

16 ‘‘(ii) was provided by the person to 

17 that consumer reporting agency in accord18 ance with paragraph (1)(B). 

19 ‘‘(B) SUBMITTING A NOTICE OF DISPUTE.—

20 A consumer who seeks to dispute the accuracy of 

21 information with a person under subparagraph 

22 (A) shall provide a dispute notice directly to 

23 such person at the address specified by the per24 son for such notices that—
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1 ‘‘(i) identifies the specific information 

2 that is being disputed; and 

3 ‘‘(ii) explains the basis for the dispute. 

4 ‘‘(C) DUTY OF PERSON AFTER RECEIVING

5 NOTICE OF DISPUTE.—After receiving a notice of 

6 dispute from a consumer pursuant to subpara7 graph (B), the person that provided the informa8 tion in dispute to a consumer reporting agency 

9 referred to in subparagraph (A) shall—

10 ‘‘(i) conduct an investigation with re11 spect to the disputed information; 

12 ‘‘(ii) review all relevant information 

13 provided by the consumer with the notice; 

14 ‘‘(iii) complete such person’s investiga15 tion of the dispute and report the results of 

16 the investigation to the consumer before the 

17 expiration of the period under section 

18 611(a)(1) within which a consumer report19 ing agency would be required to complete 

20 its action if the consumer had elected to dis21 pute the information under that section; 

22 and 

23 ‘‘(iv) if the investigation finds that the 

24 information reported was inaccurate, 

25 promptly thereafter report correct informa-
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1 tion to each consumer reporting agency de2 scribed in section 603(p) to which the per3 son furnished the inaccurate information.’’. 

4 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

5 (1) Section 621(c)(5)(A) of the Fair Credit Re6 porting Act (15 U.S.C. 1681s(c)(5)(A)) is amended by 

7 striking ‘‘section 623(a)(1)’’ and inserting ‘‘para8 graph (1) or (6) of section 623(a)’’. 

9 (2) The heading for section 621(c)(5) of the Fair 

10 Credit Reporting Act (15 U.S.C. 1681s(c)(5)) is 

11 amended by striking ‘‘VIOLATION OF SECTION

12 623(a)(1)’’ and inserting ‘‘CERTAIN VIOLATIONS OF

13 SECTION 623(a)’’. 

14 SEC. 305. PROMPT INVESTIGATION OF DISPUTED CON15 SUMER INFORMATION. 

16 (a) STUDY REQUIRED.—The Board of Governors of the 

17 Federal Reserve System and the Federal Trade Commission 

18 shall jointly study the extent to which, and the manner in 

19 which, consumer reporting agencies and furnishers of con20 sumer information to consumer reporting agencies are com21 plying with the procedures, time lines, and requirements 

22 under the Fair Credit Reporting Act for the prompt inves23 tigation of the disputed accuracy of any consumer informa24 tion, the completeness of the information provided to con25 sumer reporting agencies, and the prompt correction or de-
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1 letion, in accordance with such Act, of any inaccurate or 

2 incomplete information or information that cannot be 

3 verified. 

4 (b) REPORT REQUIRED.—Before the end of the 6-

5 month period beginning on the date of the enactment of this 

6 Act, the Board of Governors of the Federal Reserve System 

7 and the Federal Trade Commission shall jointly submit a 

8 progress report to the Congress on the results of the study 

9 required under subsection (a). 

10 (c) RECOMMENDATIONS.—The report under subsection 

11 (b) shall include such recommendations as the Board and 

12 the Commission jointly determine to be appropriate for leg13 islative or administrative action to ensure that—

14 (1) consumer disputes with consumer reporting 

15 agencies over the accuracy or completeness of infor16 mation in a consumer’s file are promptly and fully 

17 investigated and any incorrect, incomplete, or unveri18 fiable information is corrected or deleted immediately 

19 thereafter; 

20 (2) furnishers of information to consumer report21 ing agencies maintain full and prompt compliance 

22 with the duties and responsibilities established under 

23 section 623 of the Fair Credit Reporting Act; and 

24 (3) consumer reporting agencies establish and 

25 maintain appropriate internal controls and manage-
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1 ment review procedures for maintaining full and con2 tinuous compliance with the procedures, time lines, 

3 and requirements under the Fair Credit Reporting 

4 Act for the prompt investigation of the disputed accu5 racy of any consumer information and the prompt 

6 correction or deletion, in accordance with such Act, of 

7 any inaccurate or incomplete information or infor8 mation that cannot be verified. 

9 (d) DEFINITIONS.—For purposes of this section, the 

10 terms ‘‘consumer’’, ‘‘consumer report’’, and ‘‘consumer re11 porting agency’’ have the same meaning as in the Fair 

12 Credit Reporting Act. 

13 TITLE IV—IMPROVING ACCU14 RACY OF CONSUMER 

15 RECORDS

16 SEC. 401. RECONCILING ADDRESSES. 

17 Section 605 of the Fair Credit Reporting Act (15 

18 U.S.C. 1681c) is amended by inserting after subsection (g) 

19 (as added by section 201 of this Act) the following new sub20 section. 

21 ‘‘(h) NOTICE OF DISCREPANCY.—

22 ‘‘(1) IN GENERAL.—If a person has requested a 

23 consumer report relating to a consumer from a con24 sumer reporting agency described in section 603(p), 

25 the request includes an address for the consumer that
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1 substantially differs from the addresses in the file of 

2 the consumer, and the agency provides a consumer re3 port in response to the request, the consumer report4 ing agency shall notify the requester of the existence 

5 of the discrepancy. 

6 ‘‘(2) REGULATIONS.—

7 ‘‘(A) REGULATIONS REQUIRED.—The Fed8 eral banking agencies and the National Credit 

9 Union Administration shall jointly prescribe 

10 regulations providing guidance regarding rea11 sonable policies and procedures a user of a con12 sumer report should employ when such user has 

13 received a notice of discrepancy under paragraph 

14 (1). 

15 ‘‘(B) POLICIES AND PROCEDURES TO BE IN16 CLUDED.—The regulations prescribed under sub17 paragraph (A) shall describe reasonable policies 

18 and procedures for use by a user of a consumer 

19 report—

20 ‘‘(i) to form a reasonable belief that the 

21 user knows the identity of the person to 

22 whom the consumer report pertains; and 

23 ‘‘(ii) if the user establishes a con24 tinuing relationship with the consumer, and 

25 the user regularly and in the ordinary 
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1 course of business furnishes information to 

2 the consumer reporting agency from which 

3 the notice of discrepancy pertaining to the 

4 consumer was obtained, to reconcile the con5 sumer’s address with the consumer report6 ing agency by furnishing such address to 

7 such consumer reporting agency as part of 

8 information regularly furnished by the user 

9 for the period in which the relationship is 

10 established.’’.

11 SEC. 402. PREVENTION OF REPOLLUTION OF CONSUMER 

12 REPORTS. 

13 Section 623(a)(1) of the Fair Credit Reporting Act (15 

14 U.S.C. 1681s–2(a)(1)) is amended by inserting after sub15 paragraph (D) (as so redesignated by section 304(2)(A)) the 

16 following new subparagraph: 

17 ‘‘(E) INFORMATION ALLEGED TO RESULT

18 FROM IDENTITY THEFT.—If a consumer submits 

19 a police report to a person who furnishes infor20 mation to a consumer reporting agency that 

21 states that information maintained by such per22 son that purports to relate to the consumer re23 sulted from identity theft, the person may not 

24 furnish such information that purports to relate 

25 to the consumer to any consumer reporting agen-
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1 cy, unless the person subsequently knows or is 

2 informed by the consumer that the information 

3 is correct.’’. 

4 SEC. 403. NOTICE BY USERS WITH RESPECT TO FRAUDU5 LENT INFORMATION. 

6 Section 615 of the Fair Credit Reporting Act (15 

7 U.S.C. 1681m) is amended by adding at the end the fol8 lowing new subsection: 

9 ‘‘(e) NOTICE OF FRAUDULENT INFORMATION RELAT10 ING TO IDENTITY THEFT.—If an agent acting as a debt 

11 collector (as defined in title VIII) of a person who furnishes 

12 information to any consumer reporting agency uses infor13 mation contained in a consumer report on any consumer 

14 and learns that any such information so used is the result 

15 of identity theft or otherwise is fraudulent, the agent shall—

16 ‘‘(1) if such information—

17 ‘‘(A) originated from the person for whom 

18 the debt collector is acting as agent, notify the 

19 person of the fraudulent information; or 

20 ‘‘(B) originated from a person other than 

21 the person for whom the debt collector is acting 

22 as agent, notify the consumer reporting agency 

23 (that provided the consumer report) of the fraud24 ulent information, either directly or through the 
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1 person for whom the debt collector is acting as 

2 agent; and 

3 ‘‘(2) upon the request of the consumer, provide 

4 the consumer with all information which the con5 sumer would be entitled to receive if the information 

6 related to the consumer other than by reason of iden7 tity theft.’’.

8 SEC. 404. DISCLOSURE TO CONSUMERS OF CONTACT IN9 FORMATION FOR USERS AND FURNISHERS OF 

10 INFORMATION IN CONSUMER REPORTS. 

11 Section 609(a) of the Fair Credit Reporting Act (15 

12 U.S.C. 1681g(a)) is amended—

13 (1) in paragraph (2), by inserting ‘‘, including 

14 addresses of the sources, and (if provided by the 

15 sources of information) the telephone numbers identi16 fied for customer service for the sources of informa17 tion’’ after ‘‘sources of information’’ the 1st place such 

18 term appears in such paragraph; and 

19 (2) in paragraph (3)(B) by striking clause (ii) 

20 and inserting the following new clause: 

21 ‘‘(ii) the address and (if provided) the 

22 telephone numbers identified for customer 

23 service of the person.’’.
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1 SEC. 405. FTC STUDY OF THE ACCURACY OF CONSUMER RE2 PORTS. 

3 (a) STUDY REQUIRED.—Until the final report is sub4 mitted under subsection (b)(2), the Federal Trade Commis5 sion shall conduct an ongoing study of the accuracy and 

6 completeness of information contained in consumer reports 

7 prepared or maintained by consumer reporting agencies 

8 and methods for improving the accuracy and completeness 

9 of such information. 

10 (b) BIENNIAL REPORTS REQUIRED.—

11 (1) INTERIM REPORTS.—The Federal Trade 

12 Commission shall submit an interim report to the 

13 Congress on the study conducted under subsection (a) 

14 at the end of the 6-month period beginning on the 

15 date of the enactment of this Act and biennially there16 after for 8 years. 

17 (2) FINAL REPORT.—The Federal Trade Com18 mission shall submit a final report to the Congress on 

19 the study conducted under subsection (a) at the end 

20 of the 2-year period beginning on the date the final 

21 interim report is submitted to the Congress under 

22 paragraph (1). 

23 (3) CONTENTS.—Each report submitted under 

24 this subsection shall contain a detailed summary of 

25 the findings and conclusions of the Commission with 

26 respect to the study required under subsection (a) and 
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1 such recommendations for legislative and administra2 tive action as the Commission may determine to be 

3 appropriate. 

4 TITLE V—IMPROVEMENTS IN 

5 USE OF AND CONSUMER AC6 CESS TO CREDIT INFORMA7 TION 

8 SEC. 501. FREE REPORTS ANNUALLY. 

9 (a) FREE REPORTS ANNUALLY FROM NATIONWIDE

10 CONSUMER REPORTING AGENCIES.—Section 612 of the 

11 Fair Credit Reporting Act (15 U.S.C. 1681j) is amended 

12 by adding at the end the following new subsection: 

13 ‘‘(e) FREE ANNUAL DISCLOSURE.—Upon the direct re14 quest of the consumer, a consumer reporting agency de15 scribed in section 603(p) shall make all disclosures pursu16 ant to section 609 once during any 12-month period with17 out charge to the consumer.’’. 

18 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec19 tion 612(c) of the Fair Credit Reporting Act (15 U.S.C. 

20 1681j(c)) is amended by inserting ‘‘that is not a consumer 

21 reporting agency described in section 603(p)’’ after ‘‘con22 sumer reporting agency’’.

23 SEC. 502. DISCLOSURE OF CREDIT SCORES. 

24 (a) STATEMENT ON AVAILABILITY OF CREDIT

25 SCORES.—Section 609(a) of the Fair Credit Reporting Act 
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1 (15 U.S.C. 1681g(a)) is amended by adding at the end the 

2 following new paragraph: 

3 ‘‘(6) If the consumer requests the credit file and 

4 not the credit score, a statement that the consumer 

5 may request and obtain a credit score.’’. 

6 (b) DISCLOSURE OF CREDIT SCORES.—Section 609 of 

7 the Fair Credit Reporting Act (15 U.S.C. 1681g) is amend8 ed by inserting after subsection (d) (as added by section 

9 204 of this Act) the following new subsection: 

10 ‘‘(e) DISCLOSURE OF CREDIT SCORES.—

11 ‘‘(1) IN GENERAL.—Upon the consumer’s request 

12 for a credit score, a consumer reporting agency shall 

13 supply to a consumer a statement indicating that the 

14 information and credit scoring model may be dif15 ferent than the credit score that may be used by the 

16 lender, and a notice which shall include the following 

17 information: 

18 ‘‘(A) The consumer’s current credit score or 

19 the consumer’s most recent credit score that was 

20 previously calculated by the credit reporting 

21 agency for a purpose related to the extension of 

22 credit. 

23 ‘‘(B) The range of possible credit scores 

24 under the model used. 
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1 ‘‘(C) All the key factors that adversely af2 fected the consumer’s credit score in the model 

3 used, the total number of which shall not exceed 

4 four, subject to paragraph (9). 

5 ‘‘(D) The date the credit score was created. 

6 ‘‘(E) The name of the person or entity that 

7 provided the credit score or credit file upon 

8 which the credit score was created. 

9 ‘‘(2) DEFINITIONS.—For purposes of this section, 

10 the following definitions shall apply: 

11 ‘‘(A) CREDIT SCORE.—The term ‘credit 

12 score’—

13 ‘‘(i) means a numerical value or a cat14 egorization derived from a statistical tool or 

15 modeling system used by a person who 

16 makes or arranges a loan to predict the 

17 likelihood of certain credit behaviors, in18 cluding default (and the numerical value or 

19 the categorization derived from this analysis 

20 may also be referred to as a ‘risk predictor’ 

21 or ‘risk score’); and 

22 ‘‘(ii) does not include—

23 ‘‘(I) any mortgage score or rating 

24 of an automated underwriting system 

25 that considers one or more factors in
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1 addition to credit information, includ2 ing the loan to value ratio, the amount 

3 of down payment, or a consumer’s fi4 nancial assets; or 

5 ‘‘(II) any other elements of the 

6 underwriting process or underwriting 

7 decision. 

8 ‘‘(B) KEY FACTORS.—The term ‘key factors’ 

9 means all relevant elements or reasons adversely 

10 affecting the credit score for the particular indi11 vidual listed in the order of their importance 

12 based on their effect on the credit score. 

13 ‘‘(3) TIMEFRAME AND MANNER OF DISCLO14 SURE.—The information required by this subsection 

15 shall be provided in the same timeframe and manner 

16 as the information described in subsection (a). 

17 ‘‘(4) APPLICABILITY TO CERTAIN USES.—This 

18 subsection shall not be construed so as to compel a 

19 consumer reporting agency to develop or disclose a 

20 score if the agency does not—

21 ‘‘(A) distribute scores that are used in con22 nection with residential real property loans; or 

23 ‘‘(B) develop scores that assist credit pro24 viders in understanding a consumer’s general 
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1 credit behavior and predicting the future credit 

2 behavior of the consumer. 

3 ‘‘(5) APPLICABILITY TO CREDIT SCORES DEVEL4 OPED BY ANOTHER PERSON.—

5 ‘‘(A) IN GENERAL.—This subsection shall 

6 not be construed to require a consumer reporting 

7 agency that distributes credit scores developed by 

8 another person or entity to provide a further ex9 planation of them, or to process a dispute aris10 ing pursuant to section 611, except that the con11 sumer reporting agency shall provide the con12 sumer with the name and address and website 

13 for contacting the person or entity who developed 

14 the score or developed the methodology of the 

15 score. 

16 ‘‘(B) EXCEPTION.—This paragraph shall 

17 not apply to a consumer reporting agency that 

18 develops or modifies scores that are developed by 

19 another person or entity. 

20 ‘‘(6) MAINTENANCE OF CREDIT SCORES NOT RE21 QUIRED.—This subsection shall not be construed to re22 quire a consumer reporting agency to maintain credit 

23 scores in its files. 
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1 ‘‘(7) COMPLIANCE IN CERTAIN CASES.—In com2 plying with this subsection, a consumer reporting 

3 agency shall—

4 ‘‘(A) supply the consumer with a credit 

5 score that is derived from a credit scoring model 

6 that is widely distributed to users by that con7 sumer reporting agency in connection with resi8 dential real property loans or with a credit score 

9 that assists the consumer in understanding the 

10 credit scoring assessment of the credit behavior of 

11 the consumer and predictions about the future 

12 credit behavior of the consumer; and 

13 ‘‘(B) a statement indicating that the infor14 mation and credit scoring model may be dif15 ferent than that used by the lender. 

16 ‘‘(8) REASONABLE FEE.—A consumer reporting 

17 agency may charge a reasonable fee for providing the 

18 information required under this subsection. 

19 ‘‘(9) USE OF ENQUIRIES AS A KEY FACTOR.—If 

20 a key factor that adversely affects a consumer’s credit 

21 score consists of the number of enquiries made with 

22 respect to a consumer report, that factor shall be in23 cluded in the disclosure pursuant to paragraph (1)(C) 

24 without regard to the numerical limitation in such 

25 paragraph.’’. 
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1 (c) DISCLOSURE OF CREDIT SCORES BY CERTAIN

2 MORTGAGE LENDERS.—Section 609 of the Fair Credit Re3 porting Act (15 U.S.C. 1681g) is amended by inserting 

4 after subsection (e) (as added by subsection (b) of this sec5 tion) the following new subsection: 

6 ‘‘(f) DISCLOSURE OF CREDIT SCORES BY CERTAIN

7 MORTGAGE LENDERS.—

8 ‘‘(1) IN GENERAL.—Any person who makes or 

9 arranges loans and who uses a consumer credit score 

10 as defined in subsection (e) in connection with an ap11 plication initiated or sought by a consumer for a 

12 closed end loan or establishment of an open end loan 

13 for a consumer purpose that is secured by 1 to 4 units 

14 of residential real property (hereafter in this sub15 section referred to as the ‘lender’) shall provide the 

16 following to the consumer as soon as reasonably prac17 ticable:

18 ‘‘(A) INFORMATION REQUIRED UNDER SUB19 SECTION(e).—

20 ‘‘(i) IN GENERAL.—A copy of the infor21 mation identified in subsection (e) that was 

22 obtained from a consumer reporting agency 

23 or was developed and used by the user of the 

24 information.
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1 ‘‘(ii) NOTICE UNDER SUBPARAGRAPH

2 (D).—In addition to the information pro3 vided to it by a third party that provided 

4 the credit score or scores, a lender is only 

5 required to provide the notice contained in 

6 subparagraph (D). 

7 ‘‘(B) DISCLOSURES IN CASE OF AUTOMATED

8 UNDERWRITING SYSTEM.—

9 ‘‘(i) IN GENERAL.—If a person who is 

10 subject to this section uses an automated 

11 underwriting system to underwrite a loan, 

12 that person may satisfy the obligation to 

13 provide a credit score by disclosing a credit 

14 score and associated key factors supplied by 

15 a consumer reporting agency. 

16 ‘‘(ii) NUMERICAL CREDIT SCORE.—

17 However, if a numerical credit score is gen18 erated by an automated underwriting sys19 tem used by an enterprise, and that score is 

20 disclosed to the person, the score shall be 

21 disclosed to the consumer consistent with 

22 subparagraph (C). 

23 ‘‘(iii) ENTERPRISE DEFINED.—For 

24 purposes of this subparagraph, the term ‘en25 terprise’ shall have the same meaning as in 
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1 paragraph (6) of section 1303 of the Federal 

2 Housing Enterprises Financial Safety and 

3 Soundness Act of 1992. 

4 ‘‘(C) DISCLOSURES OF CREDIT SCORES NOT

5 OBTAINED FROM A CONSUMER REPORTING AGEN6 CY.—A person subject to the provisions of this 

7 subsection who uses a credit score other than a 

8 credit score provided by a consumer reporting 

9 agency may satisfy the obligation to provide a 

10 credit score by disclosing a credit score and asso11 ciated key factors supplied by a consumer report12 ing agency. 

13 ‘‘(D) NOTICE TO HOME LOAN APPLI14 CANTS.—A copy of the following notice, which 

15 shall include the name, address, and telephone 

16 number of each consumer reporting agency pro17 viding a credit score that was used: 

18 ‘‘ ‘NOTICE TO THE HOME LOAN APPLICANT

19 ‘‘ ‘In connection with your application for a home 

20 loan, the lender must disclose to you the score that a con21 sumer reporting agency distributed to users and the lender 

22 used in connection with your home loan, and the key factors 

23 affecting your credit scores. 

24 ‘‘ ‘The credit score is a computer generated summary 

25 calculated at the time of the request and based on informa-
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1 tion a consumer reporting agency or lender has on file. The 

2 scores are based on data about your credit history and pay3 ment patterns. Credit scores are important because they are 

4 used to assist the lender in determining whether you will 

5 obtain a loan. They may also be used to determine what 

6 interest rate you may be offered on the mortgage. Credit 

7 scores can change over time, depending on your conduct, 

8 how your credit history and payment patterns change, and 

9 how credit scoring technologies change. 

10 ‘‘ ‘Because the score is based on information in your 

11 credit history, it is very important that you review the cred12 it-related information that is being furnished to make sure 

13 it is accurate. Credit records may vary from one company 

14 to another. 

15 ‘‘ ‘If you have questions about your credit score or the 

16 credit information that is furnished to you, contact the con17 sumer reporting agency at the address and telephone num18 ber provided with this notice, or contact the lender, if the 

19 lender developed or generated the credit score. The consumer 

20 reporting agency plays no part in the decision to take any 

21 action on the loan application and is unable to provide you 

22 with specific reasons for the decision on a loan application. 

23 ‘‘ ‘If you have questions concerning the terms of 

24 the loan, contact the lender.’. 
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1 ‘‘(E) ACTIONS NOT REQUIRED UNDER THIS

2 SUBSECTION.—This subsection shall not require 

3 any person to do any of the following: 

4 ‘‘(i) Explain the information provided 

5 pursuant to subsection (e). 

6 ‘‘(ii) Disclose any information other 

7 than a credit score or key factor, as defined 

8 in subsection (e). 

9 ‘‘(iii) Disclose any credit score or re10 lated information obtained by the user after 

11 a loan has closed. 

12 ‘‘(iv) Provide more than 1 disclosure 

13 per loan transaction. 

14 ‘‘(v) Provide the disclosure required by 

15 this subsection when another person has 

16 made the disclosure to the consumer for that 

17 loan transaction. 

18 ‘‘(F) NO OBLIGATION FOR CONTENT.—

19 ‘‘(i) IN GENERAL.—Any person’s obli20 gation pursuant to this subsection shall be 

21 limited solely to providing a copy of the in22 formation that was received from the con23 sumer reporting agency. 

24 ‘‘(ii) LIMIT ON LIABILITY.—No person 

25 has liability under this subsection for the
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1 content of that information or for the omis2 sion of any information within the report 

3 provided by the consumer reporting agency. 

4 ‘‘(G) PERSON DEFINED AS EXCLUDING EN5 TERPRISE.—As used in this subsection, the term 

6 ‘person’ does not include an enterprise (as de7 fined in paragraph (6) of section 1303 of the 

8 Federal Housing Enterprises Financial Safety 

9 and Soundness Act of 1992). 

10 ‘‘(2) PROHIBITION ON DISCLOSURE CLAUSES

11 NULL AND VOID.—

12 ‘‘(A) IN GENERAL.—Any provision in a 

13 contract that prohibits the disclosure of a credit 

14 score by a person who makes or arranges loans 

15 or a consumer reporting agency is void. 

16 ‘‘(B) NO LIABILITY FOR DISCLOSURE UNDER

17 THIS SUBSECTION.—A lender shall not have li18 ability under any contractual provision for dis19 closure of a credit score pursuant to this sub20 section.’’. 

21 (d) INCLUSION OF KEY FACTOR IN CREDIT SCORE IN22 FORMATION IN CONSUMER REPORT.—Section 605(d) of the 

23 Fair Credit Reporting Act (15 U.S.C. 1681c(d)) is amend24 ed—
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1 (1) by striking ‘‘DISCLOSED.—Any consumer re2 porting agency’’ and inserting ‘‘DISCLOSED.—

3 ‘‘(1) TITLE 11 INFORMATION.—Any consumer re4 porting agency’’; and 

5 (2) by adding at the end the following new para6 graph: 

7 ‘‘(2) KEY FACTOR IN CREDIT SCORE INFORMA8 TION.—Any consumer reporting agency that furnishes 

9 a consumer report that contains any credit score or 

10 any other risk score or predictor on any consumer 

11 shall include in the report a clear and conspicuous 

12 statement that a key factor (as defined in section 

13 609(e)(2)(B)) that adversely affected such score or 

14 predictor was the number of enquiries, if such a pre15 dictor was in fact a key factor that adversely affected 

16 such score.’’. 

17 SEC. 503. SIMPLER AND EASIER METHOD FOR CONSUMERS 

18 TO USE NOTIFICATION SYSTEM. 

19 (a) IN GENERAL.—Section 604(e)(5)(A)(i) of the Fair 

20 Credit Reporting Act (15 U.S.C. 1681b(e)(5)(A)(i)) is 

21 amended by inserting ‘‘in a simple and easy manner and’’ 

22 after ‘‘notify the agency,’’. 

23 (b) SIMPLIFIED NOTICE AND RESPONSE FORMAT FOR

24 USERS.—Section 615(d) of the Fair Credit Reporting Act 

25 (15 U.S.C. 1681m(d)) is amended—
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1 (1) by redesignating paragraphs (2), (3), and 

2 (4), as paragraphs (3), (4) and (5); and 

3 (2) by inserting after paragraph (1) the fol4 lowing new paragraph: 

5 ‘‘(2) SIMPLE AND EASY NOTIFICATION.—Any 

6 statement given the consumer under paragraph (1)(E) 

7 shall be in a simple and easy to understand format 

8 and shall describe the simple and easy method estab9 lished under section 604(e)(5)(A)(i) for the consumer 

10 to respond.’’.

11 SEC. 504. REQUIREMENT TO DISCLOSE COMMUNICATIONS 

12 TO A CONSUMER REPORTING AGENCY. 

13 (a) IN GENERAL.—Section 623(a) of the Fair Credit 

14 Reporting Act (15 U.S.C. 1681s–2(a)) is amended by in15 serting after paragraph (6) (as added by section 304(3)) 

16 the following new paragraph: 

17 ‘‘(7) NEGATIVE INFORMATION.—

18 ‘‘(A) NOTICE TO CONSUMER REQUIRED.—

19 ‘‘(i) IN GENERAL.—If any financial 

20 institution that extends credit and regularly 

21 and in the ordinary course of business fur22 nishes information to a consumer reporting 

23 agency described in section 603(p) furnishes 

24 negative information to such an agency re25 garding credit extended to a customer, the 
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1 financial institution shall provide a notice 

2 of such furnishing of negative information, 

3 in writing, to the customer. 

4 ‘‘(ii) NOTICE EFFECTIVE FOR SUBSE5 QUENT SUBMISSIONS.—After providing such 

6 notice, the financial institution may submit 

7 additional negative information to a con8 sumer reporting agency described in section 

9 603(p) with respect to the same transaction, 

10 extension of credit, account, or customer 

11 without providing additional notice to the 

12 customer. 

13 ‘‘(B) TIME OF NOTICE.—

14 ‘‘(i) IN GENERAL.—The notice required 

15 under subparagraph (A) shall be provided 

16 to the customer prior to, or no later than 30 

17 days after, furnishing the negative informa18 tion to a consumer reporting agency de19 scribed in section 603(p). 

20 ‘‘(ii) COORDINATION WITH NEW AC21 COUNT DISCLOSURES.—If the notice is pro22 vided to the customer prior to furnishing 

23 the negative information to a consumer re24 porting agency, the notice may not be in25 cluded in the initial disclosures provided
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1 under section 127(a) of the Truth in Lend2 ing Act. 

3 ‘‘(C) COORDINATION WITH OTHER DISCLO4 SURES.—The notice required under subpara5 graph (A)—

6 ‘‘(i) may be included on or with any 

7 notice of default, any billing statement, or 

8 any other materials provided to the cus9 tomer; and 

10 ‘‘(ii) must be clear and conspicuous. 

11 ‘‘(D) MODEL DISCLOSURE.—

12 ‘‘(i) DUTY OF BOARD TO PREPARE.—

13 The Board shall prescribe a brief model dis14 closure a financial institution may use to 

15 comply with subparagraph (A), which shall 

16 not exceed 30 words. 

17 ‘‘(ii) USE OF MODEL NOT RE18 QUIRED.—No provision of this paragraph 

19 shall be construed as requiring a financial 

20 institution to use any such model form pre21 scribed by the Board. 

22 ‘‘(iii) COMPLIANCE USING MODEL.—A 

23 financial institution shall be deemed to be 

24 in compliance with subparagraph (A) if the 

25 financial institution uses any such model 
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1 form prescribed by the Board, or the finan2 cial institution uses any such model form 

3 and rearranges its format. 

4 ‘‘(E) USE OF NOTICE WITHOUT SUBMITTING

5 NEGATIVE INFORMATION.—No provision of this 

6 paragraph shall be construed as requiring a fi7 nancial institution that has provided a customer 

8 with a notice described in subparagraph (A) to 

9 furnish negative information about the customer 

10 to a consumer reporting agency. 

11 ‘‘(F) SAFE HARBOR.—A financial institu12 tion shall not be liable for failure to perform the 

13 duties required by this paragraph if, at the time 

14 of the failure, the financial institution main15 tained reasonable policies and procedures to 

16 comply with this paragraph. 

17 ‘‘(G) DEFINITIONS.—For purposes of this 

18 paragraph, the following definitions shall apply: 

19 ‘‘(i) NEGATIVE INFORMATION.—The 

20 term ‘negative information’ means informa21 tion concerning a customer’s delinquencies, 

22 late payments, insolvency, or any form of 

23 default. 

24 ‘‘(ii) CUSTOMER; FINANCIAL INSTITU25 TION.—The terms ‘customer’ and ‘financial 
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1 institution’ have the same meaning as in 

2 section 509 of the Gramm-Leach-Bliley 

3 Act.’’. 

4 (b) MODEL DISCLOSURE FORM.—Before the end of the 

5 6-month period beginning on the date of the enactment of 

6 this Act, the Board of Governors of the Federal Reserve Sys7 tem shall adopt the model disclosure required under the 

8 amendment made by subsection (a) after notice duly given 

9 in the Federal Register and an opportunity for public com10 ment in accordance with section 553 of title 5, United 

11 States Code.

12 SEC. 505. STUDY OF EFFECTS OF CREDIT SCORES AND 

13 CREDIT-BASED INSURANCE SCORES ON 

14 AVAILABILITY AND AFFORDABILITY OF FI15 NANCIAL PRODUCTS. 

16 (a) STUDY REQUIRED.—The Federal Trade Commis17 sion, in consultation with the Office of Fair Housing and 

18 Equal Opportunity of the Department of Housing and 

19 Urban Development, shall conduct a study of—

20 (1) the effects of the use of credit scores and cred21 it-based insurance scores on the availability and af22 fordability of financial products and services, includ23 ing credit cards, mortgages, auto loans, and property 

24 and casualty insurance; 
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1 (2) the degree of causality between the factors 

2 considered by credit score systems and the quantifi3 able risks and actual losses experienced by businesses, 

4 including the extent to which, if any, each of the fac5 tors considered or otherwise taken into account by 

6 such systems are accurate predictors of risk or loss, 

7 and where the means square error of a scoring model’s 

8 predictions are considered in the evaluation of accu9 racy; 

10 (3) the extent to which, if any, the use of credit 

11 scoring models, credit scores and credit-based insur12 ance scores result in disparate impact by geography, 

13 income, ethnicity, race, color, religion, national ori14 gin, age, sex or marital status, and creed, including 

15 the extent to which the consideration or lack of con16 sideration of certain factors by credit scoring systems 

17 could result in disparate effects and the extent to 

18 which, if any, the use of underwriting systems relying 

19 on these models could achieve comparable results 

20 through the use of factors with less disparate impact; 

21 and 

22 (4) the extent to which credit scoring systems are 

23 used by businesses, the factors considered by such sys24 tems, and the effects of variables which are not con25 sidered by such systems.
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1 (b) PUBLIC PARTICIPATION.—The Commission shall 

2 seek public input about the prescribed methodology and re3 search design of the study required in subsection (a). 

4 (c) REPORT REQUIRED.—

5 (1) IN GENERAL.—Before the end of the 18-

6 month period beginning on the date of the enactment 

7 of this Act, the Federal Trade Commission shall sub8 mit a detailed report on the study conducted pursu9 ant to subsection (a) to the Committee on Financial 

10 Services of the House of Representatives and the Com11 mittee on Banking, Housing, and Urban Affairs of 

12 the Senate. 

13 (2) CONTENTS OF REPORT.—The report sub14 mitted under paragraph (1) shall include the findings 

15 and conclusions of the Commission, together with such 

16 recommendations for legislative or administrative ac17 tion as the Commission may determine to be nec18 essary to ensure that credit and credit-based insur19 ances score are used appropriately and fairly to avoid 

20 disparate effects. 

21 (d) CREDIT SCORE DEFINED.—For purposes of this 

22 section, the term ‘‘credit score’’ means a numerical value 

23 or a categorization derived from a statistical tool or mod24 eling system used to predict the likelihood of certain credit 

25 or insurance behaviors, including default. 
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1 SEC. 506. GAO STUDY ON DISPARATE IMPACT OF CREDIT 

2 SYSTEM. 

3 (a) STUDY REQUIRED.—The Comptroller General 

4 shall conduct a study of the credit system to determine the 

5 extent to which, if any, discrimination exists with regard 

6 to the availability and the terms of credit which has a dis7 parate impact on the basis of race, color, income and edu8 cation level, geographic location, age, sex, sexual orienta9 tion, national origin, or marital status and the nature of 

10 any such discriminatory effect. 

11 (b) REPORT REQUIRED.—Before the end of the 2-year 

12 period beginning on the date of the enactment of this Act, 

13 the Comptroller General shall submit a report to the Con14 gress on the findings and conclusions of the Comptroller 

15 General pursuant to the study conducted under subsection 

16 (a), together with such recommendations for legislative or 

17 administrative action as the Comptroller General may de18 termine to be appropriate. 

19 SEC. 507. ANALYSIS OF FURTHER RESTRICTIONS ON OF20 FERS OF CREDIT OR INSURANCE. 

21 (a) IN GENERAL.—The Board of Governors of the Fed22 eral Reserve System shall conduct a study of—

23 (1) the ability of consumers to avoid receiving 

24 written offers of credit or insurance in connection 

25 with transactions not initiated by the consumer; and 
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1 (2) the potential impact any further restrictions 

2 on providing consumers with such written offers of 

3 credit or insurance would have on consumers. 

4 (b) REPORT.—The Board of Governors of the Federal 

5 Reserve System shall submit a report summarizing the re6 sults of the study required under subsection (a) to the Con7 gress no later than 12 months after the date of the enact8 ment of this Act, together with such recommendatioons for 

9 legislative or administrative action as the Board may deter10 mine to be appropriate. 

11 (c) CONTENT OF REPORT.—The report described in 

12 subsection (b) shall address the following issues: 

13 (1) The current statutory or voluntary mecha14 nisms that are available to a consumer to notify lend15 ers and insurance providers that the consumer does 

16 not wish to receive written offers of credit or insur17 ance. 

18 (2) The extent to which consumers are currently 

19 utilizing existing statutory and voluntary mecha20 nisms to avoid receiving offers of credit or insurance. 

21 (3) The benefits provided to consumers as a re22 sult of receiving written offers of credit or insurance. 

23 (4) Whether consumers incur significant costs or 

24 are otherwise adversely affected by the receipt of writ25 ten offers of credit or insurance. 
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1 (5) Whether further restricting the ability of 

2 lenders and insurers to provide written offers of credit 

3 or insurance to consumers would affect—

4 (A) the cost consumers pay to obtain credit 

5 or insurance; 

6 (B) the availability of credit or insurance; 

7 (C) consumers’ knowledge about new or al8 ternative products and services; 

9 (D) the ability of lenders or insurers to 

10 compete with one another; and 

11 (E) the ability to offer credit or insurance 

12 products to consumers who have been tradition13 ally underserved. 

14 SEC. 508. STUDY ON THE NEED AND THE MEANS FOR IM15 PROVING FINANCIAL LITERACY AMONG CON16 SUMERS. 

17 (a) STUDY REQUIRED.—The Comptroller General 

18 shall conduct a study to assess the extent of consumers’ 

19 knowledge and awareness of credit reports, credit scores, 

20 and the dispute resolution process, and on methods for im21 proving financial literacy among consumers. 

22 (b) FACTORS TO BE INCLUDED.—The study required 

23 under subsection (a) shall include the following issues: 

24 (1) The number of consumers who view their 

25 credit reports.
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1 (2) Under what conditions and for what pur2 poses do consumers primarily obtain a copy of their 

3 consumer report (such as for the purpose of ensuring 

4 the completeness and accuracy of the contents, to pro5 tect against fraud, in response to an adverse action 

6 based on the report, or in response to suspected iden7 tity theft) and approximately what percentage of the 

8 total number of consumers who obtain a copy of their 

9 consumer report do so for each such primary purpose. 

10 (3) The extent of consumers’ knowledge of the 

11 data collection process. 

12 (4) The extent to which consumers know how to 

13 get a copy of a consumer report. 

14 (5) The extent to which consumers know and un15 derstand the factors that positively or negatively im16 pact credit scores. 

17 (c) REPORT REQUIRED.—Before the end of the 9-

18 month period beginning on the date of the enactment of this 

19 Act, the Comptroller General shall submit a report to the 

20 Congress on the findings and conclusions of the Comptroller 

21 General pursuant to the study conducted under subsection 

22 (a), together with such recommendations for legislative or 

23 administrative action as the Comptroller General may de24 termine to be appropriate, including recommendations on 

25 methods for improving financial literacy among consumers. 
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1 SEC. 509. DISCLOSURE OF INCREASE IN APR UNDER CER2 TAIN CIRCUMSTANCES. 

3 Section 609 of the Fair Credit Reporting Act (15 

4 U.S.C. 1681m) is amended by inserting after subsection (f) 

5 (as added by section 502(c) of this title) the following new 

6 subsection: 

7 ‘‘(g) DISCLOSURE TO CONSUMER.—

8 ‘‘(1) IN GENERAL.—The ability of a credit card 

9 issuer to increase any annual percentage rate appli10 cable to a credit card account, or to remove or in11 crease any introductory annual percentage rate of in12 terest applicable to such account, for reasons other 

13 than actions or omissions of the card holder that are 

14 directly related to such account shall be clearly and 

15 conspicuously disclosed to the consumer by the credit 

16 card issuer in any disclosure or statement required to 

17 be made to the consumer under this title in connec18 tion with a credit card solicitation that is not initi19 ated by the consumer. 

20 ‘‘(2) REGULATIONS AND MODEL STATEMENTS.—

21 The Board, in consultation with the Federal banking 

22 agencies and the National Credit Union Administra23 tion, shall develop such guidelines in regulations as 

24 necessary to assure that the information to be dis25 closed to consumers pursuant to paragraph (1) is 

26 clearly and conspicuously provided in a prominent 
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1 location in any credit card solicitation that is not 

2 initiated by the consumer, and shall include model 

3 disclosure statements to be used by credit card issuers 

4 in making the disclosures required to be provided to 

5 the consumer by paragraph (1).’’. 

6 TITLE VI—PROTECTING EM7 PLOYEE MISCONDUCT INVES8 TIGATIONS 

9 SEC. 601. CERTAIN EMPLOYEE INVESTIGATION COMMU10 NICATIONS EXCLUDED FROM DEFINITION OF 

11 CONSUMER REPORT. 

12 (a) IN GENERAL.—Section 603 of the Fair Credit Re13 porting Act (15 U.S.C. 1681a) is amended by inserting 

14 after subsection (p) the following new subsection: 

15 ‘‘(q) EXCLUSION OF CERTAIN COMMUNICATIONS FOR

16 EMPLOYEE INVESTIGATIONS.—

17 ‘‘(1) COMMUNICATIONS DESCRIBED IN THIS SUB18 SECTION.—A communication is described in this sub19 section if—

20 ‘‘(A) but for subsection (d)(2)(D), the com21 munication would be a consumer report; 

22 ‘‘(B) the communication is made to an em23 ployer in connection with an investigation of—

24 ‘‘(i) suspected misconduct relating to 

25 employment; or 
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1 ‘‘(ii) compliance with Federal, State, 

2 or local laws and regulations, the rules of a 

3 self-regulatory organization, or any pre4 existing written policies of the employer; 

5 ‘‘(C) the communication is not made for the 

6 purpose of investigating a consumer’s credit wor7 thiness, credit standing, or credit capacity; and 

8 ‘‘(D) the communication is not provided to 

9 any person except—

10 ‘‘(i) to the employer or an agent of the 

11 employer; 

12 ‘‘(ii) to any Federal or State officer, 

13 agency, or department, or any officer, agen14 cy, or department of a unit of general local 

15 government; 

16 ‘‘(iii) to any self-regulatory organiza17 tion with regulatory authority over the ac18 tivities of the employer or employee; 

19 ‘‘(iv) as otherwise required by law; or 

20 ‘‘(v) pursuant to section 608. 

21 ‘‘(2) SUBSEQUENT DISCLOSURE.—After taking 

22 any adverse action based in whole or in part on a 

23 communication described in paragraph (1), the em24 ployer shall disclose to the consumer a summary con25 taining the nature and substance of the communica-
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1 tion upon which the adverse action is based, except 

2 that the sources of information acquired solely for use 

3 in preparing what would be but for subsection 

4 (d)(2)(D) an investigative consumer report need not 

5 be disclosed. 

6 ‘‘(3) SELF-REGULATORY ORGANIZATION DE7 FINED.—For purposes of this subsection, the term 

8 ‘self-regulatory organization’ includes any self-regu9 latory organization (as defined in section 3(a)(26) of 

10 the Securities Exchange Act of 1934), any entity es11 tablished under title I of the Sarbanes-Oxley Act of 

12 2002, any board of trade designated by the Com13 modity Futures Trading Commission, and any fu14 tures association registered with such Commission.’’. 

15 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec16 tion 603(d)(2)(D) of the Fair Credit Reporting Act (15 

17 U.S.C. 1681a(d)(2)(D)) is amended by inserting ‘‘or (q)’’ 

18 after ‘‘subsection (o)’’. 
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1 TITLE VII—LIMITING THE USE 

2 AND SHARING OF MEDICAL 

3 INFORMATION IN THE FINAN4 CIAL SYSTEM 

5 SEC. 701. PROTECTION OF MEDICAL INFORMATION IN THE 

6 FINANCIAL SYSTEM 

7 (a) IN GENERAL.—Section 604(g) of the Fair Credit 

8 Reporting Act (15 U.S.C. 1681b(g)) is amended to read as 

9 follows: 

10 ‘‘(g) PROTECTION OF MEDICAL INFORMATION.—

11 ‘‘(1) LIMITATION ON CONSUMER REPORTING

12 AGENCIES.—A consumer reporting agency shall not 

13 furnish for employment purposes, or in connection 

14 with a credit or insurance transaction, a consumer 

15 report that contains medical information about a con16 sumer, unless—

17 ‘‘(A) if furnished in connection with an in18 surance transaction, the consumer affirmatively 

19 consents to the furnishing of the report; 

20 ‘‘(B) if furnished for employment purposes 

21 or in connection with a credit transaction—

22 ‘‘(i) the information to be furnished is 

23 relevant to process or effect the employment 

24 or credit transaction; and
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1 ‘‘(ii) the consumer provides specific 

2 written consent for the furnishing of the re3 port that describes in clear and conspicuous 

4 language the use for which the information 

5 will be furnished; or 

6 ‘‘(C) such information is restricted or re7 ported using codes that do not identify, or pro8 vide information sufficient to infer, the specific 

9 provider or the nature of such services, products, 

10 or devices to a person other than the consumer, 

11 unless the report is being provided to an insur12 ance company for a purpose relating to engaging 

13 in the business of insurance other than property 

14 and casualty insurance. 

15 ‘‘(2) LIMITATION ON CREDITORS.—Except as 

16 permitted pursuant to paragraph (3)(C) or regula17 tions prescribed under paragraph (5)(A), a creditor 

18 shall not obtain or use medical information per19 taining to a consumer in connection with any deter20 mination of the consumer’s eligibility, or continued 

21 eligibility, for credit. 

22 ‘‘(3) ACTIONS AUTHORIZED BY FEDERAL LAW, 

23 INSURANCE ACTIVITIES AND REGULATORY DETER24 MINATIONS.—Section 603(d)(3) shall not be construed 

25 so as to treat information or any communication of 
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1 information as a consumer report if the information 

2 or communication is disclosed—

3 ‘‘(A) in connection with the business of in4 surance or annuities, including the activities de5 scribed in section 18B of the model Privacy of 

6 Consumer Financial and Health Information 

7 Regulation issued by the National Association of 

8 Insurance Commissioners (as in effect on Janu9 ary 1, 2003); 

10 ‘‘(B) for any purpose permitted without au11 thorization under the Standards for Individually 

12 Identifiable Health Information promulgated by 

13 the Department of Health and Human Services 

14 pursuant to the Health Insurance Portability 

15 and Accountability Act of 1996, or referred to 

16 under section 1179 of such Act, or described in 

17 section 502(e) of Public Law 106–102; or 

18 ‘‘(C) as otherwise determined to be nec19 essary and appropriate, by regulation or order 

20 and subject to paragraph (6), by the Commis21 sion, any Federal banking agency or the Na22 tional Credit Union Administration (with re23 spect to any financial institution subject to the 

24 jurisdiction of such agency or Administration 

25 under paragraph (1), (2), or (3) of section 
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1 621(b), or the applicable State insurance author2 ity (with respect to any person engaged in pro3 viding insurance or annuities). 

4 ‘‘(4) LIMITATION ON REDISCLOSURE OF MEDICAL

5 INFORMATION.—Any person that receives medical in6 formation pursuant to paragraphs (1) or (3) shall not 

7 disclose such information to any other person except 

8 as necessary to carry out the purpose for which the 

9 information was initially disclosed, or as otherwise 

10 permitted by statute, regulation, or order. 

11 ‘‘(5) REGULATIONS AND EFFECTIVE DATE FOR

12 PARAGRAPH (2).—

13 ‘‘(A) REGULATIONS REQUIRED.—Each Fed14 eral banking agency and the National Credit 

15 Union Administration shall, subject to para16 graph (6) and after notice and opportunity for 

17 comment, prescribe regulations that permit 

18 transactions under paragraph (2) that are deter19 mined to be necessary and appropriate to protect 

20 legitimate operational, transactional, risk, con21 sumer, and other needs, consistent with the in22 tent of paragraph (2) to restrict the use of med23 ical information for inappropriate purposes. 

24 ‘‘(B) FINAL REGULATIONS REQUIRED.—The 

25 Federal banking agencies and the National Cred-
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1 it Union Administration shall prescribe the reg2 ulations required under subparagraph (A) in 

3 final form before the end of the 6-month period 

4 beginning on the date of the enactment of the 

5 Fair and Accurate Credit Transactions Act of 

6 2003. 

7 ‘‘(6) COORDINATION WITH OTHER LAWS.—No 

8 provision of this subsection shall be construed as al9 tering, affecting, or superseding the applicability of 

10 any other provision of Federal law relating to med11 ical confidentiality.’’. 

12 (b) RESTRICTION ON SHARING OF MEDICAL INFORMA13 TION.—Section 603(d) of the Fair Credit Reporting Act (15 

14 U.S.C. 1681a(d)) is amended—

15 (1) in paragraph (2), by striking ‘‘The term’’ 

16 and inserting ‘‘Except as provided in paragraph (3), 

17 the term’’; and 

18 (2) by adding at the end the following new para19 graph: 

20 ‘‘(3) RESTRICTION ON SHARING OF MEDICAL IN21 FORMATION.—Except for information or any commu22 nication of information disclosed as provided in sec23 tion 604(g)(3), the exclusions in paragraph (2) shall 

24 not apply with respect to information disclosed to
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1 any person related by common ownership or affiliated 

2 by corporate control if—

3 ‘‘(A) the information is medical informa4 tion; or 

5 ‘‘(B) the information is an individualized 

6 list or description based on a consumer’s pay7 ment transactions for medical products or serv8 ices, or an aggregate list of identified consumers 

9 based on payment transactions for medical prod10 ucts or services.’’. 

11 SEC. 702. CONFIDENTIALITY OF MEDICAL CONTACT INFOR12 MATION IN CREDIT REPORTS. 

13 (a) DUTIES OF MEDICAL INFORMATION FUR14 NISHERS.—Section 623(a) of the Fair Credit Reporting Act 

15 (15 U.S.C. 1681s–2(a)) is amended by inserting after para16 graph (7) (as added by section 504(a)) the following new 

17 paragraph: 

18 ‘‘(8) DUTY TO PROVIDE NOTICE OF STATUS AS

19 MEDICAL INFORMATION FURNISHER.—A person whose 

20 primary business is providing medical services, prod21 ucts, or devices, or the person’s agent or assignee, who 

22 furnishes information to a consumer reporting agency 

23 on a consumer shall be considered a medical informa24 tion furnisher for the purposes of this title and shall 

25 notify the agency of such status.’’. 
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1 (b) RESTRICTION OF DISSEMINATION OF MEDICAL

2 CONTACT INFORMATION.—Section 605(a) of the Fair Credit 

3 Reporting Act (15 U.S.C. 1681c(a)) is amended by adding 

4 the following new paragraph: 

5 ‘‘(6) The name, address, and telephone number of 

6 any medical information furnisher that has notified 

7 the agency of its status, unless—

8 ‘‘(A) such name, address, and telephone 

9 number are restricted or reported using codes 

10 that do not identify, or provide information suf11 ficient to infer, the specific provider or the na12 ture of such services, products, or devices to a 

13 person other than the consumer; or 

14 ‘‘(B) the report is being provided to an in15 surance company for a purpose relating to en16 gaging in the business of insurance other than 

17 property and casualty insurance.’’. 

18 (c) NO EXCEPTIONS ALLOWED FOR DOLLAR

19 AMOUNTS.—Section 605(b) of the Fair Credit Reporting 

20 Act (15 U.S.C. 1681c(b)) is amended by striking ‘‘The pro21 visions of subsection (a)’’ and inserting ‘‘The provisions of 

22 paragraphs (1) through (5) of subsection (a)’’. 

23 (d) COORDINATION WITH OTHER LAWS.—No provi24 sion of any amendment made by this section shall be con25 strued as altering, affecting, or superseding the applica-
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1 bility of any other provision of Federal law relating to med2 ical confidentiality. 

3 (e) FTC REGULATION OF CODING OF TRADE

4 NAMES.—Section 621 of the Fair Credit Reporting Act (15 

5 U.S.C. 1681s) is amended by inserting after subsection (f) 

6 (as added by section 301 of this Act) the following new sub7 section: 

8 ‘‘(g) FTC REGULATION OF CODING OF TRADE

9 NAMES.—If the Commission determines that a person de10 scribed in paragraph (8) of section 623(a) has not met the 

11 requirements of such paragraph, the Commission shall take 

12 action to ensure the person’s compliance with such para13 graph, which may include issuing model guidance or pre14 scribing reasonable policies and procedures as necessary to 

15 ensure that such person complies with such paragraph.’’. 

16 (f) TECHNICAL AND CONFORMING AMENDMENTS.—

17 Section 604(g) of the Fair Credit Reporting Act (15 U.S.C. 

18 1681b(g)) (as amended by section 701) is amended—

19 (1) in paragraph (1) by inserting ‘‘(other than 

20 medical contact information treated in the manner 

21 required under section 605(a)(6))’’ after ‘‘a consumer 

22 report that contains medical information’’; and 

23 (2) in paragraph (2) by inserting ‘‘(other than 

24 medical information treated in the manner required 
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1 under section 605(a)(6))’’ after ‘‘a creditor shall not 

2 obtain or use medical information’’. 

3 (g) EFFECTIVE DATE.—The amendments made by this 

4 section shall take effect at the end of the 15-month period 

5 beginning on the date of the enactment of this Act.

Union Calendar No. 150

108TH CONGRESS 

1ST SESSION H. R. 2622

[Report No. 108–263] 

A BILL

To amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, 

and consumer access to, credit information, and for other purposes. 

SEPTEMBER 4, 2003

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, 

and ordered to be printed