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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2622 Referred in Senate (RFS)]

  1st Session
                                H. R. 2622

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 11, 2003

Received; read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 AN ACT

 
  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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Fair and Accurate 
Credit Transactions Act of 2003''.
    (b) Table of Contents.--The table of contents for 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.
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.

SEC. 2. DEFINITIONS.

    Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is 
amended by adding at the end the following new subsections:
    ``(r) Reseller.--The term `reseller' means a consumer reporting 
agency that--
            ``(1) assembles and merges information contained in the 
        database of another consumer reporting agency or multiple 
        consumer reporting agencies concerning any consumer for 
        purposes of furnishing such information to any third party, to 
        the extent of such activities; and
            ``(2) does not maintain a database of the assembled or 
        merged information from which new consumer reports are 
        produced.
    ``(s) Other Definitions.--
            ``(1) Board; credit; creditor; credit card.--The terms 
        `Board', `credit', `creditor', and `credit card' have the same 
        meanings as in section 103 of the Truth in Lending Act.
            ``(2) Commission.--The term `Commission' means the Federal 
        Trade Commission.
            ``(3) Debit card.--The term `debit card' means any card 
        issued by a financial institution to a consumer for use in 
        initiating electronic fund transfers (as defined in section 
        903(6) of the Electronic Fund Transfer Act) from the account 
        (as defined in such Act) of the consumer at such financial 
        institution for the purpose of transferring money between 
        accounts or obtaining money, property, labor, or services.
            ``(4) Electronic fund transfer.--The term `electronic fund 
        transfer' has the same meaning as in section 903 of the 
        Electronic Fund Transfer Act.
            ``(5) Federal banking agency.--The term `Federal banking 
        agency' has the same meaning as in section 3 of the Federal 
        Deposit Insurance Act.
            ``(6) Identity theft.--The term `identity theft' means a 
        fraud committed using another person's identifying information, 
        subject to such further definition as the Commission and the 
        Board may prescribe, jointly, by regulation.
            ``(7) Police report.--The term `police report' means a copy 
        of any official valid report filed by a consumer with any 
        appropriate Federal, State, or local government law enforcement 
        agency, or any comparable official government document that the 
        Board and the Commission shall jointly prescribe in 
        regulations, that is subject to a criminal penalty for false 
        statements.''.

SEC. 3. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsections (b) and (c)--
            (1) before the end of the 2-month period beginning on the 
        date of the enactment of this Act, the Board of Governors of 
        the Federal Reserve System and the Federal Trade Commission 
        shall jointly prescribe regulations in final form establishing 
        effective dates for each provision of this Act (except as 
        otherwise specified); and
            (2) the regulations prescribed under paragraph (1) shall 
        establish effective dates that are as early as possible while 
        allowing a reasonable time for the implementation of the 
        provisions of this Act, but in no case shall the effective date 
        be later than 10 months after the date of issuance of such 
        regulations in final form.
    (b) Immediate Effective Date.--The following provisions shall take 
effect on the date of the enactment of this Act:
            (1) Title I.
            (2) Section 201.
            (3) Section 609(d)(1) of the Fair Credit Reporting Act (as 
        added by the amendment in section 204(a)).
            (4) Section 305.
            (5) Section 505.
            (6) Section 506.
            (7) Title VI.
    (c) Effective Date for Protection of Medical Information in the 
Financial System.--Section 701 shall take effect at the end of the 180-
day period beginning on the date of the enactment of this Act, except 
that paragraph (2) of section 604(g) of the Fair Credit Reporting Act 
(as added by section 701) shall take effect on the later of--
            (1) the end of the 90-day period beginning on the date the 
        regulations required under paragraph (5)(B) of such section 
        604(g) (as added by section 701) are prescribed in final form; 
        or
            (2) the date specified in the regulations referred to in 
        paragraph (1).
    (d) Criteria For Orderly Implementation of Free Annual Credit 
Report Provision.--
            (1) In general.--In developing the regulations and 
        effective dates under subsection (a) (and subject to the time 
        limits in paragraph (2) and subsection (a)), the Federal Trade 
        Commission and the Board of Governors of the Federal Reserve 
        System shall provide a systematic approach for implementing the 
        amendment made by section 501 that allows for an orderly 
        transition to the consumer report distribution system required 
        by the amendment in a manner that--
                    (A) does not temporarily overwhelm consumer 
                reporting agencies with requests for disclosures of 
                consumer reports beyond their capacity to deliver; and
                    (B) does not deny creditors, other users, and 
                consumers access to consumer credit reports on a time-
                sensitive basis for specific purposes, such as home 
                purchases or suspicions of identity theft, during the 
                transition period.
            (2) Prohibition on extension of effective date.--
                    (A) One-time authorization.--The Federal Trade 
                Commission and the Board of Governors of the Federal 
                Reserve System may exercise the authority provided 
                under paragraph (1) only once during the 2-month period 
                referred to in subsection (a)(1).
                    (B) Extension of effective date prohibited.--No 
                provision of this subsection shall be construed as 
                extending, or authorizing the Federal Trade Commission 
                or the Board of Governors of the Federal Reserve System 
                to extend, the 2-month period referred to in subsection 
                (a)(1) or the 10-month period referred to in subsection 
                (a)(2) relating to the requirements imposed on consumer 
                reporting agencies by the amendment made by section 
                501.

        TITLE I--UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS

SEC. 101. UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS MADE 
              PERMANENT.

    Section 624(d) of the Fair Credit Reporting Act (15 U.S.C. 
1681t(d)) is amended--
            (1) by striking ``Subsections (b) and (c)'' and all that 
        follows through ``do not affect any settlement,'' and inserting 
        ``Subsections (b) and (c) do not affect any settlement,''; and
            (2) by striking ``Consumer Credit Reporting Reform Act of 
        1996'' and all that follows through the period at the end of 
        paragraph (2) and inserting ``Consumer Credit Reporting Reform 
        Act of 1996.''.

                  TITLE II--IDENTITY THEFT PREVENTION

SEC. 201. INVESTIGATING CHANGES OF ADDRESS AND INACTIVE ACCOUNTS.

    (a) In General.--Section 605 of the Fair Credit Reporting Act (15 
U.S.C. 1681c) is amended by inserting after subsection (f), the 
following new subsection:
    ``(g) `Red Flag' Patterns of Possible Identity Theft.--
            ``(1) Investigation of changes of address.--The Federal 
        banking agencies and the National Credit Union Administration, 
        in carrying out the responsibilities of such agencies and 
        Administration under subsection (k), shall jointly prescribe 
        regulations for credit card and debit card issuers to ensure 
        that, if any such issuer receives a request for an additional 
        or replacement card for an existing account within a short 
        period of time after the issuer has received notification of a 
        change of address for the same account, the issuer will follow 
        reasonable policies and procedures that require, as 
        appropriate, that the issuer not issue the additional or 
        replacement card unless the issuer--
                    ``(A) notifies the cardholder of the request at the 
                former address of the cardholder and provides to the 
cardholder a means of promptly reporting incorrect address changes;
                    ``(B) notifies the cardholder of the request by 
                such other means of communication as the cardholder and 
                the card issuer previously agreed to; or
                    ``(C) uses other means of assessing the validity of 
                the change of address, in accordance with reasonable 
                policies and procedures established by the card issuer 
                in accordance with the regulations prescribed under 
                subsection (k).
            ``(2) Inactive accounts.--The Federal banking agencies and 
        the National Credit Union Administration, in carrying out the 
        responsibilities of such agencies and Administration under 
        subsection (k), shall consider including, as a possible `red 
        flag' pattern, reasonable guidelines providing that when a 
        transaction occurs with respect to a credit or deposit account 
        that has been inactive for more than 2 years, the creditor or 
        depository institution shall follow reasonable policies and 
        procedures that provide for notice to be given to a consumer in 
        a manner reasonably designed to reduce the likelihood of 
        identity theft with respect to such account.''.
    (b) Clerical Amendments.--
            (1) The heading for section 605 of the Fair Credit 
        Reporting Act is amended to read as follows:
``Sec. 605. Requirements relating to information contained in consumer 
              reports and to identity theft prevention''.
            (2) The table of sections for title VI of the Consumer 
        Credit Protection Act is amended by striking the item relating 
        to section 605 and inserting the following new item:

``605. Requirements relating to information contained in consumer 
                            reports and to identity theft 
                            prevention.''.
            (3) Section 624(b)(1)(E) of the Fair Credit Reporting Act 
        (15 U.S.C. 1681t(b)(1)(E)) is amended by inserting ``(and to 
        specific identity theft prevention subjects covered)'' after 
        ``consumer reports''.

SEC. 202. FRAUD ALERTS.

    Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is 
amended by adding at the end the following new subsection:
    ``(i) One-Call Fraud Alerts.--
            ``(1) Initial alerts.--Upon the direct request of a 
        consumer, or an individual acting on behalf of or as a personal 
        representative of a consumer, who asserts, in good faith, a 
        suspicion that the consumer has been or is about to become a 
        victim of fraud or related crime, including identity theft, a 
        consumer reporting agency described in section 603(p) shall, if 
        the agency maintains a file on the consumer who is making the 
        request and has a reasonable belief that the agency knows the 
        identity of the consumer--
                    ``(A) include a fraud alert in the file of that 
                consumer for a period of not less than 90 days 
                beginning on the date of such request, unless the 
                consumer specifically requests that such fraud alert be 
                removed before the end of such period;
                    ``(B) disclose to the consumer that the consumer 
                may request a free copy of the file of the consumer and 
                provide the consumer, upon request, a free disclosure 
                of the consumer's file (as described in section 609(a)) 
                within 3 business days after such request;
                    ``(C) for 2 years after the date of such request, 
                exclude the consumer from any list of consumers 
                prepared by the agency and provided to any third party 
                to offer credit or insurance to the consumer as part of 
                a transaction that was not initiated by the consumer, 
                unless the consumer subsequently requests that such 
                exclusion be rescinded before the end of such period; 
                and
                    ``(D) refer the information regarding the fraud 
                alert to each of the other consumer reporting agencies 
                described in section 603(p), as required under section 
                621(f)(1).
            ``(2) Extended alerts.--Upon the direct request of a 
        consumer, or an individual acting on behalf of or as a personal 
        representative of a consumer, who contacts a consumer reporting 
        agency described in section 603(p) to report details of an 
        identity theft and submits evidence that provides the agency 
        with reasonable cause to believe that such identity theft has 
        occurred, the agency shall, if the agency maintains a file on 
        the consumer who is making the request and has a reasonable 
        belief that the agency knows the identity of the consumer--
                    ``(A) include a fraud alert in the file of that 
                consumer and provide an opportunity for the consumer to 
                extend the alert for a period of up to 7 years from the 
                date of such request, unless the consumer subsequently 
                requests that such fraud alert be removed before the 
                end of such period;
                    ``(B) provide the consumer with the option of 
                including more complete information in the consumer's 
                file, including a telephone number or some other 
                reasonable means of communication that any person who 
                requests the consumer's report may utilize for 
                authorization before establishing a new credit plan in 
                the name of the consumer; and
                    ``(C) provide the consumer with at least 2 free 
                disclosures of the information described in section 
                609(a) during the 12-month period beginning on the date 
                of such request.
            ``(3) Active duty alerts.--Upon the direct request of an 
        active duty military consumer, or an individual acting on 
        behalf of or as a personal representative of an active duty 
        military consumer, who contacts a consumer reporting agency 
        described in section 603(p), the agency shall, if the agency 
        maintains a file on the consumer who is making the request and 
        has a reasonable belief that the agency knows the identity of 
        the consumer--
                    ``(A) include an active duty alert in the file of 
                that consumer during a period of not less than 12 
                months beginning on the date of the request, unless the 
                consumer requests that such active duty alert be 
                removed before the end of such period;
                    ``(B) for 2 years after the date of such request, 
                exclude the consumer from any list of consumers 
                prepared by the agency and provided to any third party 
                to offer credit or insurance to the consumer as part of 
                a transaction that was not initiated by the consumer, 
                unless the consumer subsequently requests that such 
                exclusion be rescinded before the end of such period; 
                and
                    ``(C) refer the information regarding the active 
                duty alert to each of the other consumer reporting 
                agencies described in section 603(p), as required under 
                section 621(f)(1).
            ``(4) Procedures.--Each consumer reporting agency described 
        in section 603(p) shall establish policies and procedures to 
        comply with the obligations of paragraphs (1), (2), and (3), 
        including procedures that allow consumers to request initial, 
        extended, or active duty alerts in a simple and easy manner, 
        including by telephone.
            ``(5) Notice to users.--No person who obtains any 
        information that includes a fraud alert under this section from 
        a file of any consumer from a consumer reporting agency may 
        establish a new credit plan in the name of the consumer for a 
        person other than the consumer without utilizing reasonable 
        policies and procedures described in paragraph (9).
            ``(6) Referrals of fraud alerts.--Each consumer reporting 
        agency described in section 603(p) that receives a referral of 
a fraud alert from another such agency pursuant to paragraph (1)(D) or 
(3)(C) shall follow the procedures required under subparagraphs (A), 
(B), and (C) of paragraph (1), in the case of a referral under 
paragraph (1)(D), and subparagraphs (A) and (B), in the case of a 
referral under paragraph (3)(C), as if the agency received the request 
from the consumer directly.
            ``(7) Duty of reseller to reconvey alert.--A reseller that 
        is notified of the existence of a fraud alert in a consumer's 
        consumer report shall communicate to each person procuring a 
        consumer report with respect to such consumer the existence of 
        a fraud alert in effect for such consumer.
            ``(8) Duty of other consumer reporting agencies to provide 
        contact information.--If a consumer contacts any consumer 
        reporting agency that is not a consumer reporting agency 
        described in section 603(p) to communicate a suspicion that the 
        consumer has been or is about to become a victim of fraud or 
        related crime, including identity theft, the agency shall 
        provide the consumer with information on how to contact the 
        Commission and the consumer reporting agencies described in 
        section 603(p) to obtain more detailed information and request 
        alerts under this subsection.
            ``(9) Fraud alert.--
                    ``(A) Definition.--For purposes of this subsection, 
                the term `fraud alert' means, at a minimum, a 
                statement--
                            ``(i) in the file of a consumer that the 
                        consumer may be a victim of fraud, including 
                        identity theft, or is a consumer described in 
                        paragraph (3); and
                            ``(ii) that is transmitted in a manner that 
                        facilitates a clear and conspicuous view of the 
                        statement by any person requesting such file.
                    ``(B) Other information.--A fraud alert shall 
                include information that notifies all prospective users 
                of a consumer report on the consumer to which the alert 
                relates that the consumer does not authorize 
                establishing any new credit plan in the name of the 
                consumer, unless the user utilizes reasonable policies 
                and procedures to form a reasonable belief that the 
                user knows the identity of the person for whom such new 
                plan is established, which may include obtaining 
                authorization or preauthorization of the consumer at a 
                telephone number designated by the consumer or by such 
                other reasonable means agreed to.
            ``(10) Other definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                    ``(A) Active duty military consumer.--The term 
                `active duty military consumer' means a consumer in 
                military service who--
                            ``(i) is on active duty (as defined in 
                        section 101(d)(1) of title 10, United States 
                        Code) or is a reservist performing duty under a 
                        call or order to active duty under a provision 
                        of law referred to in section 101(a)(13) of 
                        title 10, United States Code; and
                            ``(ii) is assigned to service away from the 
                        consumer's usual duty station.
                    ``(B) New credit plan.--The term `new credit plan' 
                means a new account under an open end credit plan (as 
                defined in section 103(i) of this Act) or a new credit 
                transaction not under an open end credit plan.''.

SEC. 203. TRUNCATION OF CREDIT CARD AND DEBIT CARD ACCOUNT NUMBERS.

    (a) In General.--Section 605 of the Fair Credit Reporting Act (15 
U.S.C. 1681c) is amended by inserting after subsection (k) (as added by 
section 206 of this title) the following new subsection:
    ``(l) Truncation of Credit Card and Debit Card Account Numbers.--
            ``(1) In general.--Except as provided in this subsection, 
        no person that accepts credit cards or debit cards for the 
        transaction of business shall print the expiration date or more 
        than the last 5 digits of the card number upon any receipt 
        provided to the cardholder at the point of the sale or 
        transaction.
            ``(2) Limitation.--This section shall apply only to 
        receipts that are electronically printed, and shall not apply 
        to transactions in which the sole means of recording the 
        person's credit card or debit card number is by handwriting or 
        by an imprint or copy of the card.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply after the end of--
            (1) the 3-year period beginning on the date of the 
        enactment of this Act, with respect to any cash register or 
        other machine or device that electronically prints receipts for 
credit card or debit card transactions that is in use before January 1, 
2005; and
            (2) the 1-year period beginning on the date of the 
        enactment of this Act, with respect to any cash register or 
        other machine or device that electronically prints receipts for 
        credit card or debit card transactions that is first put into 
        use on or after January 1, 2005.

SEC. 204. SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS.

    (a) In General.--Section 609 of the Fair Credit Reporting Act (15 
U.S.C. 1681g) is amended by adding at the end the following new 
subsection:
    ``(d) Summary of Rights of Identity Theft Victims.--
            ``(1) In general.--The Commission, in consultation with the 
        Federal banking agencies and the National Credit Union 
        Administration, shall prepare a model summary of the rights of 
        consumers under this title with respect to the procedures for 
        remedying the effects of fraud or identity theft involving 
        credit, electronic fund transfers, or accounts or transactions 
        at or with a financial institution.
            ``(2) Summary of rights and contact information.--If any 
        consumer contacts a consumer reporting agency and expresses a 
        belief that the consumer is a victim of fraud or identity theft 
        involving credit, electronic fund transfers, or accounts or 
        transactions at or with a financial institution, the consumer 
        reporting agency shall, in addition to any other action the 
        agency may take, provide the consumer with a summary of rights, 
        or other disclosure, that is the same as or substantially 
        similar to the model summary of rights prepared by the 
        Commission under paragraph (1) and information on how to 
        contact the Commission to obtain more detailed information.''.
    (b) Technical and Conforming Amendment.--Section 624(b)(3) of the 
Fair Credit Reporting Act (15 U.S.C. 1681t(b)(3)) is amended by 
striking ``section 609(c)'' and inserting ``subsection (c) or (d) of 
section 609''.
    (c) Effective Date.--Paragraph (2) of section 609(d) of the Fair 
Credit Reporting Act (as added by subsection (a) of this section) shall 
apply after the end of the 60-day period beginning on the date the 
model summary of rights is prescribed in final form by the Federal 
Trade Commission pursuant to paragraph (1) of such section and in 
accordance with section 3(a) of this Act.

SEC. 205. BLOCKING OF INFORMATION RESULTING FROM IDENTITY THEFT.

    Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is 
amended by inserting after subsection (i) (as added by section 202 of 
this title) the following new subsection:
    ``(j) Block of Information Resulting From Identity Theft.--
            ``(1) Block.--Except as provided in paragraph (3), a 
        consumer reporting agency shall block the reporting of any 
        information in the file of a consumer that the consumer 
        identifies as information that resulted from an alleged 
        identity theft and confirms is not information relating to any 
        transaction by the consumer not later than 5 business days 
        after the date of receipt by such agency of--
                    ``(A) appropriate proof of the identity of a 
                consumer;
                    ``(B) a police report evidencing the claim of the 
                consumer of identity theft;
                    ``(C) the identification of the information by the 
                consumer; and
                    ``(D) confirmation by the consumer that the 
                information is not information relating to any 
                transaction by the consumer.
            ``(2) Notification.--A consumer reporting agency shall 
        promptly notify the furnisher of information identified by the 
        consumer under paragraph (1)--
                    ``(A) that the information may be a result of 
                identity theft;
                    ``(B) that a police report has been filed;
                    ``(C) that a block has been requested under this 
                subsection; and
                    ``(D) of the effective date of the block.
            ``(3) Authority to decline or rescind.--
                    ``(A) In general.--A consumer reporting agency may 
                decline to block, or may rescind any block, of consumer 
                information under this subsection if the consumer 
                reporting agency reasonably determines that--
                            ``(i) the information was blocked in error 
                        or a block was requested by the consumer in 
                        error;
                            ``(ii) the information was blocked, or a 
                        block was requested by the consumer, on the 
                        basis of a misrepresentation of fact by the 
                        consumer relevant to the request to block; or
                            ``(iii) the consumer knowingly obtained 
                        possession of goods, services, or moneys as a 
                        result of the blocked transaction or 
                        transactions, or the consumer should have known 
                        that the consumer obtained possession of goods, 
                        services, or moneys as a result of the blocked 
                        transaction or transactions.
                    ``(B) Notification to consumer.--If the block of 
                information is declined or rescinded under this 
                paragraph, the affected consumer shall be notified 
                promptly, in the same manner as consumers are notified 
                of the reinsertion of information under section 
                611(a)(5)(B).
                    ``(C) Significance of block.--For purposes of this 
                paragraph, if a consumer reporting agency rescinds a 
                block, the presence of information in the file of a 
                consumer prior to the blocking of such information is 
                not evidence of whether the consumer knew or should 
                have known that the consumer obtained possession of any 
                goods, services, or monies as a result of the block.
            ``(4) Exceptions.--
                    ``(A) Verification companies.--This subsection 
                shall not apply to--
                            ``(i) a check services company, which 
                        issues authorizations for the purpose of 
                        approving or processing negotiable instruments, 
                        electronic funds transfers, or similar methods 
                        of payments; or
                            ``(ii) a deposit account information 
                        service company, which issues reports regarding 
                        account closures due to fraud, substantial 
                        overdrafts, automated teller machine abuse, or 
                        similar negative information regarding a 
                        consumer, to inquiring banks or other financial 
                        institutions for use only in reviewing a 
                        consumer request for a deposit account at the 
                        inquiring bank or financial institution.
                    ``(B) Resellers.--
                            ``(i) No reseller file.--This subsection 
                        shall not apply to a consumer reporting agency 
                        if the consumer reporting agency--
                                    ``(I) is a reseller;
                                    ``(II) is not, at the time of the 
                                request of the consumer under paragraph 
                                (1), otherwise furnishing or reselling 
                                a consumer report concerning the 
                                information identified by the consumer; 
                                and
                                    ``(III) informs the consumer, by 
                                any means, that the consumer may report 
                                the identity theft to the Commission to 
                                obtain consumer information regarding 
                                identity theft.
                            ``(ii) Reseller with file.--The sole 
                        obligation of the consumer reporting agency 
                        under this subsection, with regard to any 
                        request of a consumer under this subsection, 
                        shall be to block the consumer report 
                        maintained by the consumer reporting agency 
                        from any subsequent use if--
                                    ``(I) the consumer, in accordance 
                                with the provisions of paragraph (1), 
                                identifies, to a consumer reporting 
                                agency, information in the file of the 
                                consumer that resulted from identity 
                                theft; and
                                    ``(II) the consumer reporting 
                                agency is a reseller of the identified 
                                information.
                            ``(iii) Notice.--In carrying out its 
                        obligation under clause (ii), the reseller 
                        shall promptly provide a notice to the consumer 
                        of the decision to block the file. Such notice 
                        shall contain the name, address, and telephone 
                        number of each consumer reporting agency from 
                        which the consumer information was obtained for 
resale.
            ``(5) Access to blocked information by law enforcement 
        agencies.--No provision of this subsection shall be construed 
        as requiring a consumer reporting agency to prevent a Federal, 
        State, or local law enforcement agency from accessing blocked 
        information in a consumer file to which the agency could 
        otherwise obtain access under this title.''.

SEC. 206. ESTABLISHMENT OF PROCEDURES FOR DEPOSITORY INSTITUTIONS TO 
              IDENTIFY POSSIBLE INSTANCES OF IDENTITY THEFT.

    (a) In General.--Section 605 of the Fair Credit Reporting Act (15 
U.S.C. 1681c) is amended by inserting after subsection (j) (as added by 
section 205 of this title) the following new subsection:
    ``(k) `Red Flag' Guidelines Required.--
            ``(1) In general.--The Federal banking agencies and the 
        National Credit Union Administration, in consultation with the 
        Commission, shall jointly establish and maintain guidelines for 
        use by insured depository institutions in identifying patterns, 
        practices, and specific forms of activity that indicate the 
        possible existence of identity theft with respect to accounts, 
        and update such guidelines as often as necessary.
            ``(2) Regulations.--The Federal banking agencies and the 
        National Credit Union Administration, in consultation with the 
        Commission, shall jointly prescribe regulations requiring 
        insured depository institutions to establish and adhere to 
        reasonable policies and procedures for implementing the 
        guidelines established pursuant to paragraph (1) to identify 
        possible risks to customer accounts or to the safety and 
        soundness of the institutions.
            ``(3) Consistency with verification requirements.--Policies 
        and procedures established pursuant to paragraph (2) shall not 
        be inconsistent with the policies and procedures required under 
        section 5318(l) of title 31, United States Code.
            ``(4) Insured depository institution defined.--For purposes 
        of this subsection, the term `insured depository institution'--
                    ``(A) has the meaning given to such term in section 
                3 of the Federal Deposit Insurance Act; and
                    ``(B) includes an insured credit union (as defined 
                in section 101 of the Federal Credit Union Act).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the end of the 1-year period beginning on the date of 
the enactment of this Act.

SEC. 207. STUDY ON THE USE OF TECHNOLOGY TO COMBAT IDENTITY THEFT.

    (a) Study Required.--The Secretary of the Treasury shall conduct a 
study of the use of biometrics and other similar technologies to reduce 
the incidence and costs of identity theft by providing convincing 
evidence of who actually performed a given financial transaction.
    (b) Consultation.--The Secretary of the Treasury shall consult with 
Federal banking agencies, the Federal Trade Commission, and 
representatives of financial institutions, consumer reporting agencies, 
Federal, State, and local government agencies that issue official forms 
or means of identification, State prosecutors, law enforcement 
agencies, the biometric industry, and the general public in formulating 
and conducting the study required by subsection (a).
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of the Treasury for fiscal year 2004 such 
sums as may be necessary to carry out the provisions of this section.
    (d) Report Required.--Before the end of the 180-day period 
beginning on the date of the enactment of this Act, the Secretary shall 
submit a report to Congress containing the findings and conclusions of 
the study required under subsection (a), together with such 
recommendations for legislative or administrative actions as may be 
appropriate.

          TITLE III--IMPROVING RESOLUTION OF CONSUMER DISPUTES

SEC. 301. COORDINATION OF CONSUMER COMPLAINT INVESTIGATIONS.

    Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is 
amended by adding at the end the following new subsection:
    ``(f) Coordination of Consumer Complaint Investigations.--
            ``(1) In general.--The consumer reporting agencies 
        described in section 603(p) shall develop and maintain 
        procedures for the referral, to each such agency, of any 
        consumer complaint received by any such agency alleging any 
        identity theft or requesting a block or a fraud alert.
            ``(2) Model form and procedure for reporting identity 
        theft.--The Commission, in consultation with the Federal 
        banking agencies and the National Credit Union Administration, 
        shall develop a model form and model procedures to be used by 
        consumers who are victims of identity theft for contacting and 
        informing creditors and consumer reporting agencies of the 
        fraud.
            ``(3) Annual summary reports.--Each consumer reporting 
        agency described in section 603(p) shall submit an annual 
        summary report to the Commission on consumer complaints 
        received by the agency on identity theft or fraud alerts.''.

SEC. 302. NOTICE OF DISPUTE THROUGH RESELLER.

    (a) Requirement for Reinvestigation of Disputed Information Upon 
Notice From a Reseller.--Section 611(a) of the Fair Credit Reporting 
Act (15 U.S.C. 1681i(a)(1)(A)) is amended--
            (1) in subparagraph (A) of paragraph (1)--
                    (A) by striking ``If the completeness'' and 
                inserting ``Subject to subsection (e), if the 
                completeness'';
                    (B) by inserting ``, or indirectly through a 
                reseller,'' after ``notifies the agency directly''; and
                    (C) by inserting ``or reseller'' before the period 
                at the end of such subparagraph;
            (2) in subparagraph (A) of paragraph (2)--
                    (A) by inserting ``or a reseller'' after ``dispute 
                from any consumer''; and
                    (B) by inserting ``or reseller'' before the period 
                at the end of such subparagraph; and
            (3) in subparagraph (B) of paragraph (2), by inserting ``or 
        the reseller'' after ``from the consumer''.
    (b) Reinvestigation Requirement Applicable to Resellers.--Section 
611 of the Fair Credit Reporting Act (15 U.S.C. 1681i) is amended by 
adding at the end the following new subsection:
    ``(e) Reinvestigation Requirement Applicable to Resellers.--
            ``(1) Exemption from general reinvestigation requirement.--
        Except as provided in paragraph (2), a reseller shall be exempt 
        from the requirements of this section.
            ``(2) Action required upon receiving notice of a dispute.--
        If a reseller receives a notice from a consumer of a dispute 
        concerning the completeness or accuracy of any item of 
        information contained in a consumer report on such consumer 
        produced by the reseller, the reseller shall, within 5 business 
        days of receiving the notice and free of charge--
                    ``(A) determine whether the item of information is 
                incomplete or inaccurate as a result of an act or 
                omission of the reseller; and
                    ``(B) if--
                            ``(i) the reseller determines that the item 
                        of information is incomplete or inaccurate as a 
                        result of an act or omission of the reseller, 
                        correct the information in the consumer report 
                        or delete it; or
                            ``(ii) if the reseller determines that the 
                        item of information is not incomplete or 
                        inaccurate as a result of an act or omission of 
                        the reseller, convey the notice of the dispute, 
                        together with all relevant information provided 
                        by the consumer, to each consumer reporting 
                        agency that provided the reseller with the 
                        information that is the subject of the dispute, 
                        using an address or a notification mechanism 
                        specified by the consumer reporting agency for 
                        such notices.
            ``(3) Reseller reinvestigations.--No provision of this 
        subsection shall be construed as prohibiting a reseller from 
        conducting a reinvestigation of a consumer dispute directly.''.
    (c) Technical and Conforming Amendment.--The heading for paragraph 
(2)(B) of section 611(a) of the Fair Credit Reporting Act (15 U.S.C. 
1681i(a)(2)(B)) is amended by striking ``from consumer''.

SEC. 303. REASONABLE REINVESTIGATION REQUIRED.

    Section 611(a)(1)(A) of the Fair Credit Reporting Act (15 U.S.C. 
1681i(a)(1)(A)) is amended by striking ``shall reinvestigate free of 
charge'' and inserting ``shall, free of charge, conduct a reasonable 
reinvestigation to determine whether the disputed information is 
inaccurate''.

SEC. 304. DUTIES OF FURNISHERS OF INFORMATION.

    (a) In General.--Section 623(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681s-2(a)) is amended--
            (1) in paragraph (1)(A), by striking ``knows or consciously 
        avoids knowing that the information is inaccurate'' and 
        inserting ``knows or has reasonable cause to believe that the 
        information is inaccurate'';
            (2) in paragraph (1)--
                    (A) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (D), respectively;
                    (B) by inserting after subparagraph (A), the 
                following new subparagraph:
                    ``(B) Reasonable procedures to ensure accuracy.--A 
                person that regularly furnishes information relating to 
                consumers to a consumer reporting agency described in 
                section 603(p) shall maintain reasonable procedures 
                designed to ensure that the information furnished is 
                accurate.''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) Definition.--For purposes of subparagraph 
                (A), the term `reasonable cause to believe that the 
                information is inaccurate' means, based on the 
                procedures described in subparagraph (B), has 
                knowledge, other than solely allegations by the 
                consumer, that would cause a reasonable person to have 
                substantial doubts about the accuracy of the 
                information.''; and
            (3) by adding at the end the following new paragraph:
            ``(6) Ability of consumer to dispute information directly 
        with furnisher.--
                    ``(A) In general.--A consumer may dispute directly 
                with a person the accuracy of information that--
                            ``(i) is contained in a consumer report on 
                        the consumer prepared by a consumer reporting 
                        agency described in section 603(p); and
                            ``(ii) was provided by the person to that 
                        consumer reporting agency in accordance with 
                        paragraph (1)(B).
                    ``(B) Submitting a notice of dispute.--A consumer 
                who seeks to dispute the accuracy of information with a 
                person under subparagraph (A) shall provide a dispute 
                notice directly to such person at the address specified 
                by the person for such notices that--
                            ``(i) identifies the specific information 
                        that is being disputed; and
                            ``(ii) explains the basis for the dispute.
                    ``(C) Duty of person after receiving notice of 
                dispute.--After receiving a notice of dispute from a 
                consumer pursuant to subparagraph (B), the person that 
                provided the information in dispute to a consumer 
                reporting agency referred to in subparagraph (A) 
                shall--
                            ``(i) conduct an investigation with respect 
                        to the disputed information;
                            ``(ii) review all relevant information 
                        provided by the consumer with the notice;
                            ``(iii) complete such person's 
                        investigation of the dispute and report the 
                        results of the investigation to the consumer 
                        before the expiration of the period under 
                        section 611(a)(1) within which a consumer 
                        reporting agency would be required to complete 
                        its action if the consumer had elected to 
                        dispute the information under that section; and
                            ``(iv) if the investigation finds that the 
                        information reported was inaccurate, promptly 
                        notify each consumer reporting agency described 
                        in section 603(p) to which the person furnished 
                        the inaccurate information of that 
                        determination and provide to the agency any 
                        correction to that information that is 
                        necessary to make the information provided by 
                        the person accurate.
                    ``(D) Frivolous or irrelevant dispute.--
                            ``(i) In general.--The requirements of this 
                        paragraph shall not apply if the person 
                        receiving a notice of a dispute from a consumer 
                        reasonably determines that the dispute is 
                        frivolous or irrelevant, including--
                                    ``(I) by reason of the failure of a 
                                consumer to provide sufficient 
                                information to investigate the disputed 
                                information; or
                                    ``(II) the submission by a consumer 
                                of a dispute that is substantially the 
                                same as a dispute previously submitted 
                                by or for the consumer, either directly 
                                to the person under this paragraph or 
                                through a consumer reporting agency 
                                under subsection (b), with respect to 
                                which the person has already performed 
                                the person's duties under this 
                                paragraph or subsection (b), as 
                                applicable.
                            ``(ii) Notice of determination.--Upon 
                        making any determination under clause (i) that 
                        a dispute is frivolous or irrelevant, the 
                        person shall notify the consumer of such 
                        determination not later than 5 business days 
                        after making such determination, by mail or, if 
                        authorized by the consumer for that purpose, by 
                        any other means available to the person.
                            ``(iii) Contents of notice.--A notice under 
                        clause (ii) shall include--
                                    ``(I) the reasons for the 
                                determination under clause (i); and
                                    ``(II) identification of any 
                                information required to investigate the 
                                disputed information, which may consist 
                                of a standardized form describing the 
                                general nature of such information.''.
    (b) Technical and Conforming Amendments.--
            (1) Section 621(c)(5)(A) of the Fair Credit Reporting Act 
        (15 U.S.C. 1681s(c)(5)(A)) is amended by striking ``section 
        623(a)(1)'' and inserting ``paragraph (1) or (6) of section 
        623(a)''.
            (2) The heading for section 621(c)(5) of the Fair Credit 
        Reporting Act (15 U.S.C. 1681s(c)(5)) is amended by striking 
        ``violation of section 623(a)(1)'' and inserting ``certain 
        violations of section 623(a)''.

SEC. 305. PROMPT INVESTIGATION OF DISPUTED CONSUMER INFORMATION.

    (a) Study Required.--The Board of Governors of the Federal Reserve 
System and the Federal Trade Commission shall jointly study the extent 
to which, and the manner in which, consumer reporting agencies and 
furnishers of consumer information to consumer reporting agencies are 
complying with the procedures, time lines, and requirements under the 
Fair Credit Reporting Act for the prompt investigation of the disputed 
accuracy of any consumer information, the completeness of the 
information provided to consumer reporting agencies, and the prompt 
correction or deletion, in accordance with such Act, of any inaccurate 
or incomplete information or information that cannot be verified.
    (b) Report Required.--Before the end of the 6-month period 
beginning on the date of the enactment of this Act, the Board of 
Governors of the Federal Reserve System and the Federal Trade 
Commission shall jointly submit a progress report to the Congress on 
the results of the study required under subsection (a).
    (c) Recommendations.--The report under subsection (b) shall include 
such recommendations as the Board and the Commission jointly determine 
to be appropriate for legislative or administrative action to ensure 
that--
            (1) consumer disputes with consumer reporting agencies over 
        the accuracy or completeness of information in a consumer's 
        file are promptly and fully investigated and any incorrect, 
        incomplete, or unverifiable information is corrected or deleted 
        immediately thereafter;
            (2) furnishers of information to consumer reporting 
        agencies maintain full and prompt compliance with the duties 
        and responsibilities established under section 623 of the Fair 
        Credit Reporting Act; and
            (3) consumer reporting agencies establish and maintain 
        appropriate internal controls and management review procedures 
        for maintaining full and continuous compliance with the 
        procedures, time lines, and requirements under the Fair Credit 
        Reporting Act for the prompt investigation of the disputed 
        accuracy of any consumer information and the prompt correction 
        or deletion, in accordance with such Act, of any inaccurate or 
        incomplete information or information that cannot be verified.
    (d) Definitions.--For purposes of this section, the terms 
``consumer'', ``consumer report'', and ``consumer reporting agency'' 
have the same meaning as in the Fair Credit Reporting Act.

            TITLE IV--IMPROVING ACCURACY OF CONSUMER RECORDS

SEC. 401. RECONCILING ADDRESSES.

    Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is 
amended by inserting after subsection (g) (as added by section 201 of 
this Act) the following new subsection.
    ``(h) Notice of Discrepancy.--
            ``(1) In general.--If a person has requested a consumer 
        report relating to a consumer from a consumer reporting agency 
        described in section 603(p), the request includes an address 
        for the consumer that substantially differs from the addresses 
in the file of the consumer, and the agency provides a consumer report 
in response to the request, the consumer reporting agency shall notify 
the requester of the existence of the discrepancy.
            ``(2) Regulations.--
                    ``(A) Regulations required.--The Federal banking 
                agencies and the National Credit Union Administration 
                shall jointly prescribe regulations providing guidance 
                regarding reasonable policies and procedures a user of 
                a consumer report should employ when such user has 
                received a notice of discrepancy under paragraph (1).
                    ``(B) Policies and procedures to be included.--The 
                regulations prescribed under subparagraph (A) shall 
                describe reasonable policies and procedures for use by 
                a user of a consumer report--
                            ``(i) to form a reasonable belief that the 
                        user knows the identity of the person to whom 
                        the consumer report pertains; and
                            ``(ii) if the user establishes a continuing 
                        relationship with the consumer, and the user 
                        regularly and in the ordinary course of 
                        business furnishes information to the consumer 
                        reporting agency from which the notice of 
                        discrepancy pertaining to the consumer was 
                        obtained, to reconcile the consumer's address 
                        with the consumer reporting agency by 
                        furnishing such address to such consumer 
                        reporting agency as part of information 
                        regularly furnished by the user for the period 
                        in which the relationship is established.''.

SEC. 402. PREVENTION OF REPOLLUTION OF CONSUMER REPORTS.

    Section 623(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 
1681s-2(a)(1)) is amended by inserting after subparagraph (D) (as so 
redesignated by section 304(2)(A)) the following new subparagraph:
                    ``(E) Information alleged to result from identity 
                theft.--If a consumer submits a police report to a 
                person who furnishes information to a consumer 
                reporting agency that states that information 
                maintained by such person that purports to relate to 
                the consumer resulted from identity theft, the person 
                may not furnish such information that purports to 
                relate to the consumer to any consumer reporting 
                agency, unless the person subsequently knows or is 
                informed by the consumer that the information is 
                correct.''.

SEC. 403. NOTICE BY USERS WITH RESPECT TO FRAUDULENT INFORMATION.

    Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is 
amended by adding at the end the following new subsection:
    ``(e) Notice of Fraudulent Information Relating to Identity 
Theft.--If an agent acting as a debt collector (as defined in title 
VIII) of a person who furnishes information to any consumer reporting 
agency uses information contained in a consumer report on any consumer 
and learns that any such information so used is the result of identity 
theft or otherwise is fraudulent, the agent shall--
            ``(1) if such information--
                    ``(A) originated from the person for whom the debt 
                collector is acting as agent, notify the person of the 
                fraudulent information; or
                    ``(B) originated from a person other than the 
                person for whom the debt collector is acting as agent, 
                notify the consumer reporting agency (that provided the 
                consumer report) of the fraudulent information, either 
                directly or through the person for whom the debt 
                collector is acting as agent; and
            ``(2) upon the request of the consumer, provide the 
        consumer with all information which the consumer would be 
        entitled to receive if the information related to the consumer 
        other than by reason of identity theft.''.

SEC. 404. DISCLOSURE TO CONSUMERS OF CONTACT INFORMATION FOR USERS AND 
              FURNISHERS OF INFORMATION IN CONSUMER REPORTS.

    Section 609(a) of the Fair Credit Reporting Act (15 U.S.C. 
1681g(a)) is amended--
            (1) in paragraph (2), by inserting ``, including addresses 
        of the sources, and (if provided by the sources of information) 
        the telephone numbers identified for customer service for the 
        sources of information'' after ``sources of information'' the 
        1st place such term appears in such paragraph; and
            (2) in paragraph (3)(B) by striking clause (ii) and 
        inserting the following new clause:
                            ``(ii) the address and (if provided) the 
                        telephone numbers identified for customer 
                        service of the person.''.

SEC. 405. FTC STUDY OF THE ACCURACY OF CONSUMER REPORTS.

    (a) Study Required.--Until the final report is submitted under 
subsection (b)(2), the Federal Trade Commission shall conduct an 
ongoing study of the accuracy and completeness of information contained 
in consumer reports prepared or maintained by consumer reporting 
agencies and methods for improving the accuracy and completeness of 
such information.
    (b) Biennial Reports Required.--
            (1) Interim reports.--The Federal Trade Commission shall 
        submit an interim report to the Congress on the study conducted 
        under subsection (a) at the end of the 6-month period beginning 
        on the date of the enactment of this Act and biennially 
        thereafter for 8 years.
            (2) Final report.--The Federal Trade Commission shall 
        submit a final report to the Congress on the study conducted 
        under subsection (a) at the end of the 2-year period beginning 
        on the date the final interim report is submitted to the 
        Congress under paragraph (1).
            (3) Contents.--Each report submitted under this subsection 
        shall contain a detailed summary of the findings and 
        conclusions of the Commission with respect to the study 
        required under subsection (a) and such recommendations for 
        legislative and administrative action as the Commission may 
        determine to be appropriate.

     TITLE V--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT 
                              INFORMATION

SEC. 501. FREE REPORTS ANNUALLY.

    Section 612 of the Fair Credit Reporting Act (15 U.S.C. 1681j) is 
amended by adding at the end the following new subsection:
    ``(e) Free Annual Disclosure.--Upon the direct request of the 
consumer, a consumer reporting agency that compiles and maintains files 
on consumers on a nationwide or regional basis shall make all 
disclosures pursuant to section 609 once during any 12-month period 
without charge to the consumer.''.

SEC. 502. DISCLOSURE OF CREDIT SCORES.

    (a) Statement on Availability of Credit Scores.--Section 609(a) of 
the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is amended by adding 
at the end the following new paragraph:
            ``(6) If the consumer requests the credit file and not the 
        credit score, a statement that the consumer may request and 
        obtain a credit score.''.
    (b) Disclosure of Credit Scores.--Section 609 of the Fair Credit 
Reporting Act (15 U.S.C. 1681g) is amended by inserting after 
subsection (d) (as added by section 204 of this Act) the following new 
subsection:
    ``(e) Disclosure of Credit Scores.--
            ``(1) In general.--Upon the consumer's request for a credit 
        score, a consumer reporting agency shall supply to a consumer a 
        statement indicating that the information and credit scoring 
        model may be different than the credit score that may be used 
        by the lender, and a notice which shall include the following 
        information:
                    ``(A) The consumer's current credit score or the 
                consumer's most recent credit score that was previously 
                calculated by the credit reporting agency for a purpose 
                related to the extension of credit.
                    ``(B) The range of possible credit scores under the 
                model used.
                    ``(C) All the key factors that adversely affected 
                the consumer's credit score in the model used, the 
                total number of which shall not exceed four, subject to 
                paragraph (9).
                    ``(D) The date the credit score was created.
                    ``(E) The name of the person or entity that 
                provided the credit score or credit file upon which the 
                credit score was created.
            ``(2) Definitions.--For purposes of this section, the 
        following definitions shall apply:
                    ``(A) Credit score.--The term `credit score'--
                            ``(i) means a numerical value or a 
                        categorization derived from a statistical tool 
                        or modeling system used by a person who makes 
                        or arranges a loan to predict the likelihood of 
                        certain credit behaviors, including default 
                        (and the numerical value or the categorization 
                        derived from this analysis may also be referred 
                        to as a `risk predictor' or `risk score'); and
                            ``(ii) does not include--
                                    ``(I) any mortgage score or rating 
                                of an automated underwriting system 
                                that considers one or more factors 
in addition to credit information, including the loan to value ratio, 
the amount of down payment, or a consumer's financial assets; or
                                    ``(II) any other elements of the 
                                underwriting process or underwriting 
                                decision.
                    ``(B) Key factors.--The term `key factors' means 
                all relevant elements or reasons adversely affecting 
                the credit score for the particular individual listed 
                in the order of their importance based on their effect 
                on the credit score.
            ``(3) Timeframe and manner of disclosure.--The information 
        required by this subsection shall be provided in the same 
        timeframe and manner as the information described in subsection 
        (a).
            ``(4) Applicability to certain uses.--This subsection shall 
        not be construed so as to compel a consumer reporting agency to 
        develop or disclose a score if the agency does not--
                    ``(A) distribute scores that are used in connection 
                with residential real property loans; or
                    ``(B) develop scores that assist credit providers 
                in understanding a consumer's general credit behavior 
                and predicting the future credit behavior of the 
                consumer.
            ``(5) Applicability to credit scores developed by another 
        person.--
                    ``(A) In general.--This subsection shall not be 
                construed to require a consumer reporting agency that 
                distributes credit scores developed by another person 
                or entity to provide a further explanation of them, or 
                to process a dispute arising pursuant to section 611, 
                except that the consumer reporting agency shall provide 
                the consumer with the name and address and website for 
                contacting the person or entity who developed the score 
                or developed the methodology of the score.
                    ``(B) Exception.--This paragraph shall not apply to 
                a consumer reporting agency that develops or modifies 
                scores that are developed by another person or entity.
            ``(6) Maintenance of credit scores not required.--This 
        subsection shall not be construed to require a consumer 
        reporting agency to maintain credit scores in its files.
            ``(7) Compliance in certain cases.--In complying with this 
        subsection, a consumer reporting agency shall--
                    ``(A) supply the consumer with a credit score that 
                is derived from a credit scoring model that is widely 
                distributed to users by that consumer reporting agency 
                in connection with residential real property loans or 
                with a credit score that assists the consumer in 
                understanding the credit scoring assessment of the 
                credit behavior of the consumer and predictions about 
                the future credit behavior of the consumer; and
                    ``(B) a statement indicating that the information 
                and credit scoring model may be different than that 
                used by the lender.
            ``(8) Reasonable fee.--A consumer reporting agency may 
        charge a reasonable fee for providing the information required 
        under this subsection.
            ``(9) Use of enquiries as a key factor.--If a key factor 
        that adversely affects a consumer's credit score consists of 
        the number of enquiries made with respect to a consumer report, 
        that factor shall be included in the disclosure pursuant to 
        paragraph (1)(C) without regard to the numerical limitation in 
        such paragraph.''.
    (c) Disclosure of Credit Scores by Certain Mortgage Lenders.--
Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g) is 
amended by inserting after subsection (e) (as added by subsection (b) 
of this section) the following new subsection:
    ``(f) Disclosure of Credit Scores by Certain Mortgage Lenders.--
            ``(1) In general.--Any person who makes or arranges loans 
        and who uses a consumer credit score as defined in subsection 
        (e) in connection with an application initiated or sought by a 
        consumer for a closed end loan or establishment of an open end 
        loan for a consumer purpose that is secured by 1 to 4 units of 
        residential real property (hereafter in this subsection 
        referred to as the `lender') shall provide the following to the 
        consumer as soon as reasonably practicable:
                    ``(A) Information required under subsection (e).--
                            ``(i) In general.--A copy of the 
                        information identified in subsection (e) that 
                        was obtained from a consumer reporting agency 
                        or was developed and used by the user of the 
                        information.
                            ``(ii) Notice under subparagraph (D).--In 
                        addition to the information provided to it by a 
                        third party that provided the credit score or 
                        scores, a lender is only required to provide 
                        the notice contained in subparagraph (D).
                    ``(B) Disclosures in case of automated underwriting 
                system.--
                            ``(i) In general.--If a person who is 
                        subject to this section uses an automated 
                        underwriting system to underwrite a loan, that 
                        person may satisfy the obligation to provide a 
                        credit score by disclosing a credit score and 
                        associated key factors supplied by a consumer 
                        reporting agency.
                            ``(ii) Numerical credit score.--However, if 
                        a numerical credit score is generated by an 
                        automated underwriting system used by an 
                        enterprise, and that score is disclosed to the 
                        person, the score shall be disclosed to the 
                        consumer consistent with subparagraph (C).
                            ``(iii) Enterprise defined.--For purposes 
                        of this subparagraph, the term `enterprise' 
                        shall have the same meaning as in paragraph (6) 
                        of section 1303 of the Federal Housing 
                        Enterprises Financial Safety and Soundness Act 
                        of 1992.
                    ``(C) Disclosures of credit scores not obtained 
                from a consumer reporting agency.--A person subject to 
                the provisions of this subsection who uses a credit 
                score other than a credit score provided by a consumer 
                reporting agency may satisfy the obligation to provide 
                a credit score by disclosing a credit score and 
                associated key factors supplied by a consumer reporting 
                agency.
                    ``(D) Notice to home loan applicants.--A copy of 
                the following notice, which shall include the name, 
                address, and telephone number of each consumer 
                reporting agency providing a credit score that was 
                used:

                  ```notice to the home loan applicant

    ```In connection with your application for a home loan, the lender 
must disclose to you the score that a consumer reporting agency 
distributed to users and the lender used in connection with your home 
loan, and the key factors affecting your credit scores.
    ```The credit score is a computer generated summary calculated at 
the time of the request and based on information a consumer reporting 
agency or lender has on file. The scores are based on data about your 
credit history and payment patterns. Credit scores are important 
because they are used to assist the lender in determining whether you 
will obtain a loan. They may also be used to determine what interest 
rate you may be offered on the mortgage. Credit scores can change over 
time, depending on your conduct, how your credit history and payment 
patterns change, and how credit scoring technologies change.
    ```Because the score is based on information in your credit 
history, it is very important that you review the credit-related 
information that is being furnished to make sure it is accurate. Credit 
records may vary from one company to another.
    ```If you have questions about your credit score or the credit 
information that is furnished to you, contact the consumer reporting 
agency at the address and telephone number provided with this notice, 
or contact the lender, if the lender developed or generated the credit 
score. The consumer reporting agency plays no part in the decision to 
take any action on the loan application and is unable to provide you 
with specific reasons for the decision on a loan application.
            ```If you have questions concerning the terms of the loan, 
        contact the lender.'.
                    ``(E) Actions not required under this subsection.--
                This subsection shall not require any person to do any 
                of the following:
                            ``(i) Explain the information provided 
                        pursuant to subsection (e).
                            ``(ii) Disclose any information other than 
                        a credit score or key factor, as defined in 
                        subsection (e).
                            ``(iii) Disclose any credit score or 
                        related information obtained by the user after 
                        a loan has closed.
                            ``(iv) Provide more than 1 disclosure per 
                        loan transaction.
                            ``(v) Provide the disclosure required by 
                        this subsection when another person has made 
                        the disclosure to the consumer for that loan 
                        transaction.
                    ``(F) No obligation for content.--
                            ``(i) In general.--Any person's obligation 
                        pursuant to this subsection shall be limited 
                        solely to providing a copy of the information 
                        that was received from the consumer reporting 
                        agency.
                            ``(ii) Limit on liability.--No person has 
                        liability under this subsection for the content 
of that information or for the omission of any information within the 
report provided by the consumer reporting agency.
                    ``(G) Person defined as excluding enterprise.--As 
                used in this subsection, the term `person' does not 
                include an enterprise (as defined in paragraph (6) of 
                section 1303 of the Federal Housing Enterprises 
                Financial Safety and Soundness Act of 1992).
            ``(2) Prohibition on disclosure clauses null and void.--
                    ``(A) In general.--Any provision in a contract that 
                prohibits the disclosure of a credit score by a person 
                who makes or arranges loans or a consumer reporting 
                agency is void.
                    ``(B) No liability for disclosure under this 
                subsection.--A lender shall not have liability under 
                any contractual provision for disclosure of a credit 
                score pursuant to this subsection.''.
    (d) Inclusion of Key Factor in Credit Score Information in Consumer 
Report.--Section 605(d) of the Fair Credit Reporting Act (15 U.S.C. 
1681c(d)) is amended--
            (1) by striking ``Disclosed.--Any consumer reporting 
        agency'' and inserting ``Disclosed.--
            ``(1) Title 11 information.--Any consumer reporting 
        agency''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Key factor in credit score information.--Any consumer 
        reporting agency that furnishes a consumer report that contains 
        any credit score or any other risk score or predictor on any 
        consumer shall include in the report a clear and conspicuous 
        statement that a key factor (as defined in section 
        609(e)(2)(B)) that adversely affected such score or predictor 
        was the number of enquiries, if such a predictor was in fact a 
        key factor that adversely affected such score. This paragraph 
        shall not apply to a person described in subsection 
        (j)(4)(A)(i), but only to the extent that such person is 
        engaged in activities described in such subsection.''.
    (e) Technical and Conforming Amendment.--Section 624(b) of the Fair 
Credit Reporting Act (15 U.S.C. 1681t(b)(3)) (as amended by section 
204(b) of this Act) is amended--
            (1) by striking ``or'' at the end of paragraph (2); and
            (2) by striking paragraph (3) and inserting the following 
        new paragraphs:
            ``(3) with respect to the form and content of any 
        disclosure required to be made under subsection (c), (d), (e), 
        or (f) of section 609, except that this paragraph shall not 
        apply--
                    ``(A) with respect to sections 1785.10, 1785.16 and 
                1785.20.2 of the California Civil Code (as in effect on 
                the date of enactment of the Fair and Accurate Credit 
                Transactions Act of 2003) and section 1785.15 through 
                section 1785.15.2 of such Code (as in effect on such 
                date) and
                    ``(B) with respect to section 12-14.3-104.3 of the 
                Colorado Revised Statutes (as in effect on the date of 
                enactment of the Fair and Accurate Credit Transactions 
                Act of 2003); and
            ``(4) with respect to the frequency of any disclosure under 
        section 612(e), except that this paragraph shall not apply--
                    ``(A) with respect to section 12-14.3-105(1)(d) of 
                the Colorado Revised Statutes (as in effect on the date 
                of enactment of the Fair and Accurate Credit 
                Transactions Act of 2003);
                    ``(B) with respect to section 10-1-393(29)(C) of 
                the Georgia Code (as in effect on the date of enactment 
                of the Fair and Accurate Credit Transactions Act of 
                2003);
                    ``(C) with respect to section 1316.2-B of title 10 
                of the Maine Revised Statutes (as in effect on the date 
                of enactment of the Fair and Accurate Credit 
                Transactions Act of 2003);
                    ``(D) with respect to sections 14-1209(a)(1) and 
                14-1209(b)(1)(i) of the Commercial Law Article of the 
                Code of Maryland (as in effect on the date of enactment 
                of the Fair and Accurate Credit Transactions Act of 
                2003);
                    ``(E) with respect to section 59(d) and section 
                59(e) of chapter 93 of the General Laws of 
                Massachusetts (as in effect on the date of enactment of 
                the Fair and Accurate Credit Transactions Act of 2003);
                    ``(F) with respect to section 56:11-37.10(a)(1) of 
                the New Jersey Revised Statutes (as in effect on the 
                date of enactment of the Fair and Accurate Credit 
                Transactions Act of 2003); and
                    ``(G) with respect to section 2480c(a)(1) of the 
                Vermont Statutes Annotated (as in effect on the date of 
                enactment of the Fair and Accurate Credit Transactions 
                Act of 2003).''.

SEC. 503. SIMPLER AND EASIER METHOD FOR CONSUMERS TO USE NOTIFICATION 
              SYSTEM.

    (a) In General.--Section 604(e)(5)(A)(i) of the Fair Credit 
Reporting Act (15 U.S.C. 1681b(e)(5)(A)(i)) is amended by inserting 
``in a simple and easy manner and'' after ``notify the agency,''.
    (b) Simplified Notice and Response Format for Users.--Section 
615(d) of the Fair Credit Reporting Act (15 U.S.C. 1681m(d)) is 
amended--
            (1) by redesignating paragraphs (2), (3), and (4), as 
        paragraphs (3), (4) and (5); and
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Simple and easy notification.--Any statement given 
        the consumer under paragraph (1)(E) shall be in a simple and 
        easy to understand format and shall describe the simple and 
        easy method established under section 604(e)(5)(A)(i) for the 
        consumer to respond.''.

SEC. 504. REQUIREMENT TO DISCLOSE COMMUNICATIONS TO A CONSUMER 
              REPORTING AGENCY.

    (a) In General.--Section 623(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681s-2(a)) is amended by inserting after paragraph (6) (as 
added by section 304(3)) the following new paragraph:
            ``(7) Negative Information.--
                    ``(A) Notice to consumer required.--
                            ``(i) In general.--If any financial 
                        institution that extends credit and regularly 
                        and in the ordinary course of business 
                        furnishes information to a consumer reporting 
                        agency described in section 603(p) furnishes 
                        negative information to such an agency 
                        regarding credit extended to a customer, the 
                        financial institution shall provide a notice of 
                        such furnishing of negative information, in 
                        writing, to the customer.
                            ``(ii) Notice effective for subsequent 
                        submissions.--After providing such notice, the 
                        financial institution may submit additional 
                        negative information to a consumer reporting 
                        agency described in section 603(p) with respect 
                        to the same transaction, extension of credit, 
                        account, or customer without providing 
                        additional notice to the customer.
                    ``(B) Time of notice.--
                            ``(i) In general.--The notice required 
                        under subparagraph (A) shall be provided to the 
                        customer prior to, or no later than 30 days 
                        after, furnishing the negative information to a 
                        consumer reporting agency described in section 
                        603(p).
                            ``(ii) Coordination with new account 
                        disclosures.--If the notice is provided to the 
                        customer prior to furnishing the negative 
                        information to a consumer reporting agency, the 
                        notice may not be included in the initial 
                        disclosures provided under section 127(a) of 
the Truth in Lending Act.
                    ``(C) Coordination with other disclosures.--The 
                notice required under subparagraph (A)--
                            ``(i) may be included on or with any notice 
                        of default, any billing statement, or any other 
                        materials provided to the customer; and
                            ``(ii) must be clear and conspicuous.
                    ``(D) Model disclosure.--
                            ``(i) Duty of board to prepare.--The Board 
                        shall prescribe a brief model disclosure a 
                        financial institution may use to comply with 
                        subparagraph (A), which shall not exceed 30 
                        words.
                            ``(ii) Use of model not required.--No 
                        provision of this paragraph shall be construed 
                        as requiring a financial institution to use any 
                        such model form prescribed by the Board.
                            ``(iii) Compliance using model.--A 
                        financial institution shall be deemed to be in 
                        compliance with subparagraph (A) if the 
                        financial institution uses any such model form 
                        prescribed by the Board, or the financial 
                        institution uses any such model form and 
                        rearranges its format.
                    ``(E) Use of notice without submitting negative 
                information.--No provision of this paragraph shall be 
                construed as requiring a financial institution that has 
                provided a customer with a notice described in 
                subparagraph (A) to furnish negative information about 
                the customer to a consumer reporting agency.
                    ``(F) Safe harbor.--A financial institution shall 
                not be liable for failure to perform the duties 
                required by this paragraph if, at the time of the 
                failure, the financial institution maintained 
                reasonable policies and procedures to comply with this 
                paragraph or the financial institution reasonably 
                believed that the institution is prohibited, by law, 
                from contacting the consumer.
                    ``(G) Definitions.--For purposes of this paragraph, 
                the following definitions shall apply:
                            ``(i) Negative information.--The term 
                        `negative information' means information 
                        concerning a customer's delinquencies, late 
                        payments, insolvency, or any form of default.
                            ``(ii) Customer; financial institution.--
                        The terms `customer' and `financial 
                        institution' have the same meaning as in 
                        section 509 of the Gramm-Leach-Bliley Act.''.
    (b) Model Disclosure Form.--Before the end of the 6-month period 
beginning on the date of the enactment of this Act, the Board of 
Governors of the Federal Reserve System shall adopt the model 
disclosure required under the amendment made by subsection (a) after 
notice duly given in the Federal Register and an opportunity for public 
comment in accordance with section 553 of title 5, United States Code.

SEC. 505. STUDY OF EFFECTS OF CREDIT SCORES AND CREDIT-BASED INSURANCE 
              SCORES ON AVAILABILITY AND AFFORDABILITY OF FINANCIAL 
              PRODUCTS.

    (a) Study Required.--The Federal Trade Commission, in consultation 
with the Office of Fair Housing and Equal Opportunity of the Department 
of Housing and Urban Development, shall conduct a study of--
            (1) the effects of the use of credit scores and credit-
        based insurance scores on the availability and affordability of 
        financial products and services, including credit cards, 
        mortgages, auto loans, and property and casualty insurance;
            (2) the degree of causality between the factors considered 
        by credit score systems and the quantifiable risks and actual 
        losses experienced by businesses, including the extent to 
        which, if any, each of the factors considered or otherwise 
        taken into account by such systems are accurate predictors of 
        risk or loss, and where the means square error of a scoring 
        model's predictions are considered in the evaluation of 
        accuracy;
            (3) the extent to which, if any, the use of credit scoring 
        models, credit scores and credit-based insurance scores result 
        in disparate impact by geography, income, ethnicity, race, 
        color, religion, national origin, age, sex or marital status, 
        and creed, including the extent to which the consideration or 
        lack of consideration of certain factors by credit scoring 
        systems could result in disparate effects and the extent to 
        which, if any, the use of underwriting systems relying on these 
        models could achieve comparable results through the use of 
        factors with less disparate impact; and
            (4) the extent to which credit scoring systems are used by 
        businesses, the factors considered by such systems, and the 
        effects of variables which are not considered by such systems.
    (b) Public Participation.--The Commission shall seek public input 
about the prescribed methodology and research design of the study 
required in subsection (a).
    (c) Report Required.--
            (1) In general.--Before the end of the 18-month period 
        beginning on the date of the enactment of this Act, the Federal 
        Trade Commission shall submit a detailed report on the study 
        conducted pursuant to subsection (a) to the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate.
            (2) Contents of report.--The report submitted under 
        paragraph (1) shall include the findings and conclusions of the 
        Commission, together with such recommendations for legislative 
        or administrative action as the Commission may determine to be 
        necessary to ensure that credit and credit-based insurances 
        score are used appropriately and fairly to avoid disparate 
        effects.
    (d) Credit Score Defined.--For purposes of this section, the term 
``credit score'' means a numerical value or a categorization derived 
from a statistical tool or modeling system used to predict the 
likelihood of certain credit or insurance behaviors, including default.

SEC. 506. GAO STUDY ON DISPARATE IMPACT OF CREDIT SYSTEM.

    (a) Study Required.--The Comptroller General shall conduct a study 
of the credit system to determine the extent to which, if any, 
discrimination exists with regard to the availability and the terms of 
credit which has a disparate impact on the basis of race, color, income 
and education level, geographic location, age, sex, sexual orientation, 
national origin, or marital status and the nature of any such 
discriminatory effect.
    (b) Report Required.--Before the end of the 2-year period beginning 
on the date of the enactment of this Act, the Comptroller General shall 
submit a report to the Congress on the findings and conclusions of the 
Comptroller General pursuant to the study conducted under subsection 
(a), together with such recommendations for legislative or 
administrative action as the Comptroller General may determine to be 
appropriate.

SEC. 507. ANALYSIS OF FURTHER RESTRICTIONS ON OFFERS OF CREDIT OR 
              INSURANCE.

    (a) In General.--The Board of Governors of the Federal Reserve 
System shall conduct a study of--
            (1) the ability of consumers to avoid receiving written 
        offers of credit or insurance in connection with transactions 
        not initiated by the consumer; and
            (2) the potential impact any further restrictions on 
        providing consumers with such written offers of credit or 
        insurance would have on consumers.
    (b) Report.--The Board of Governors of the Federal Reserve System 
shall submit a report summarizing the results of the study required 
under subsection (a) to the Congress no later than 12 months after the 
date of the enactment of this Act, together with such recommendatioons 
for legislative or administrative action as the Board may determine to 
be appropriate.
    (c) Content of Report.--The report described in subsection (b) 
shall address the following issues:
            (1) The current statutory or voluntary mechanisms that are 
        available to a consumer to notify lenders and insurance 
        providers that the consumer does not wish to receive written 
        offers of credit or insurance.
            (2) The extent to which consumers are currently utilizing 
        existing statutory and voluntary mechanisms to avoid receiving 
        offers of credit or insurance.
            (3) The benefits provided to consumers as a result of 
        receiving written offers of credit or insurance.
            (4) Whether consumers incur significant costs or are 
        otherwise adversely affected by the receipt of written offers 
        of credit or insurance.
            (5) Whether further restricting the ability of lenders and 
        insurers to provide written offers of credit or insurance to 
        consumers would affect--
                    (A) the cost consumers pay to obtain credit or 
                insurance;
                    (B) the availability of credit or insurance;
                    (C) consumers' knowledge about new or alternative 
                products and services;
                    (D) the ability of lenders or insurers to compete 
                with one another; and
                    (E) the ability to offer credit or insurance 
                products to consumers who have been traditionally 
                underserved.

SEC. 508. STUDY ON THE NEED AND THE MEANS FOR IMPROVING FINANCIAL 
              LITERACY AMONG CONSUMERS.

    (a) Study Required.--The Comptroller General shall conduct a study 
to assess the extent of consumers' knowledge and awareness of credit 
reports, credit scores, and the dispute resolution process, and on 
methods for improving financial literacy among consumers.
    (b) Factors To Be Included.--The study required under subsection 
(a) shall include the following issues:
            (1) The number of consumers who view their credit reports.
            (2) Under what conditions and for what purposes do 
        consumers primarily obtain a copy of their consumer report 
        (such as for the purpose of ensuring the completeness and 
        accuracy of the contents, to protect against fraud, in response 
        to an adverse action based on the report, or in response to 
        suspected identity theft) and approximately what percentage of 
        the total number of consumers who obtain a copy of their 
        consumer report do so for each such primary purpose.
            (3) The extent of consumers' knowledge of the data 
        collection process.
            (4) The extent to which consumers know how to get a copy of 
        a consumer report.
            (5) The extent to which consumers know and understand the 
        factors that positively or negatively impact credit scores.
    (c) Report Required.--Before the end of the 9-month period 
beginning on the date of the enactment of this Act, the Comptroller 
General shall submit a report to the Congress on the findings and 
conclusions of the Comptroller General pursuant to the study conducted 
under subsection (a), together with such recommendations for 
legislative or administrative action as the Comptroller General may 
determine to be appropriate, including recommendations on methods for 
improving financial literacy among consumers.

SEC. 509. DISCLOSURE OF INCREASE IN APR UNDER CERTAIN CIRCUMSTANCES.

    Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is 
amended by inserting after subsection (f) (as added by section 502(c) 
of this title) the following new subsection:
    ``(g) Disclosure to Consumer.--
            ``(1) In general.--The ability of a credit card issuer to 
        increase any annual percentage rate applicable to a credit card 
        account, or to remove or increase any introductory annual 
        percentage rate of interest applicable to such account, for 
        reasons other than actions or omissions of the card holder that 
        are directly related to such account shall be clearly and 
        conspicuously disclosed to the consumer by the credit card 
        issuer in any disclosure or statement required to be made to 
        the consumer under this title in connection with a credit card 
        solicitation that is not initiated by the consumer.
            ``(2) Regulations and model statements.--The Board, in 
        consultation with the Federal banking agencies and the National 
        Credit Union Administration, shall develop such guidelines in 
        regulations as necessary to assure that the information to be 
        disclosed to consumers pursuant to paragraph (1) is clearly and 
        conspicuously provided in a prominent location in any credit 
        card solicitation that is not initiated by the consumer, and 
        shall include model disclosure statements to be used by credit 
        card issuers in making the disclosures required to be provided 
        to the consumer by paragraph (1).''.

        TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS

SEC. 601. CERTAIN EMPLOYEE INVESTIGATION COMMUNICATIONS EXCLUDED FROM 
              DEFINITION OF CONSUMER REPORT.

    (a) In General.--Section 603 of the Fair Credit Reporting Act (15 
U.S.C. 1681a) is amended by inserting after subsection (p) the 
following new subsection:
    ``(q) Exclusion of Certain Communications for Employee 
Investigations.--
            ``(1) Communications described in this subsection.--A 
        communication is described in this subsection if--
                    ``(A) but for subsection (d)(2)(D), the 
                communication would be a consumer report;
                    ``(B) the communication is made to an employer in 
                connection with an investigation of--
                            ``(i) suspected misconduct relating to 
                        employment; or
                            ``(ii) compliance with Federal, State, or 
                        local laws and regulations, the rules of a 
                        self-regulatory organization, or any 
                        preexisting written policies of the employer;
                    ``(C) the communication is not made for the purpose 
                of investigating a consumer's credit worthiness, credit 
                standing, or credit capacity; and
                    ``(D) the communication is not provided to any 
                person except--
                            ``(i) to the employer or an agent of the 
                        employer;
                            ``(ii) to any Federal or State officer, 
                        agency, or department, or any officer, agency, 
                        or department of a unit of general local 
                        government;
                            ``(iii) to any self-regulatory organization 
                        with regulatory authority over the activities 
                        of the employer or employee;
                            ``(iv) as otherwise required by law; or
                            ``(v) pursuant to section 608.
            ``(2) Subsequent disclosure.--After taking any adverse 
        action based in whole or in part on a communication described 
        in paragraph (1), the employer shall disclose to the consumer a 
        summary containing the nature and substance of the 
        communication upon which the adverse action is based, except 
        that the sources of information acquired solely for use in 
        preparing what would be but for subsection (d)(2)(D) an 
        investigative consumer report need not be disclosed.
            ``(3) Self-regulatory organization defined.--For purposes 
        of this subsection, the term `self-regulatory organization' 
        includes any self-regulatory organization (as defined in 
        section 3(a)(26) of the Securities Exchange Act of 1934), any 
        entity established under title I of the Sarbanes-Oxley Act of 
        2002, any board of trade designated by the Commodity Futures 
        Trading Commission, and any futures association registered with 
        such Commission.''.
    (b) Technical and Conforming Amendment.--Section 603(d)(2)(D) of 
the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(D)) is amended by 
inserting ``or (q)'' after ``subsection (o)''.

 TITLE VII--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE 
                            FINANCIAL SYSTEM

SEC. 701. PROTECTION OF MEDICAL INFORMATION IN THE FINANCIAL SYSTEM.

    (a) In General.--Section 604(g) of the Fair Credit Reporting Act 
(15 U.S.C. 1681b(g)) is amended to read as follows:
    ``(g) Protection of Medical Information.--
            ``(1) Limitation on consumer reporting agencies.--A 
        consumer reporting agency shall not furnish for employment 
        purposes, or in connection with a credit or insurance 
        transaction, a consumer report that contains medical 
        information about a consumer, unless--
                    ``(A) if furnished in connection with an insurance 
                transaction, the consumer affirmatively consents to the 
                furnishing of the report;
                    ``(B) if furnished for employment purposes or in 
                connection with a credit transaction--
                            ``(i) the information to be furnished is 
                        relevant to process or effect the employment or 
                        credit transaction; and
                            ``(ii) the consumer provides specific 
                        written consent for the furnishing of the 
                        report that describes in clear and conspicuous 
                        language the use for which the information will 
                        be furnished; or
                    ``(C) the information to be furnished pertains 
                solely to transactions, accounts, or balances relating 
                to debts arising from the receipt of medical services, 
                products, or devices, where such information, other 
                than account status or amounts, is restricted or 
                reported using codes that do not identify, or do not 
                provide information sufficient to infer, the specific 
                provider or the nature of such services, products, or 
                devices, as provided in section 605(a)(6)).
            ``(2) Limitation on creditors.--Except as permitted 
        pursuant to paragraph (3)(C) or regulations prescribed under 
        paragraph (5)(A), a creditor shall not obtain or use medical 
        information pertaining to a consumer in connection with any 
        determination of the consumer's eligibility, or continued 
        eligibility, for credit.
            ``(3) Actions authorized by federal law, insurance 
        activities and regulatory determinations.--Section 603(d)(3) 
        shall not be construed so as to treat information or any 
        communication of information as a consumer report if the 
        information or communication is disclosed--
                    ``(A) in connection with the business of insurance 
                or annuities, including the activities described in 
                section 18B of the model Privacy of Consumer Financial 
                and Health Information Regulation issued by the 
                National Association of Insurance Commissioners (as in 
                effect on January 1, 2003);
                    ``(B) for any purpose permitted without 
                authorization under the Standards for Individually 
                Identifiable Health Information promulgated by the 
                Department of Health and Human Services pursuant to the 
                Health Insurance Portability and Accountability Act of 
                1996, or referred to under section 1179 of such Act, or 
                described in section 502(e) of Public Law 106-102; or
                    ``(C) as otherwise determined to be necessary and 
                appropriate, by regulation or order and subject to 
                paragraph (6), by the Commission, any Federal banking 
                agency or the National Credit Union Administration 
                (with respect to any financial institution subject to 
                the jurisdiction of such agency or Administration under 
                paragraph (1), (2), or (3) of section 621(b), or the 
                applicable State insurance authority (with respect to 
                any person engaged in providing insurance or 
                annuities).
            ``(4) Limitation on redisclosure of medical information.--
        Any person that receives medical information pursuant to 
        paragraphs (1) or (3) shall not disclose such information to 
        any other person except as necessary to carry out the purposes 
        for which the information was initially disclosed, or as 
        otherwise permitted by statute, regulation, or order.
            ``(5) Regulations and effective date for paragraph (2).--
                    ``(A) Regulations required.--Each Federal banking 
                agency and the National Credit Union Administration 
                shall, subject to paragraph (6) and after notice and 
                opportunity for comment, prescribe regulations that 
                permit transactions under paragraph (2) that are 
                determined to be necessary and appropriate to protect 
                legitimate operational, transactional, risk, consumer, 
                and other needs (and which shall include permitting 
                actions necessary for administrative verification 
                purposes), consistent with the intent of paragraph (2) 
                to restrict the use of medical information for 
                inappropriate purposes.
                    ``(B) Final regulations required.--The Federal 
                banking agencies and the National Credit Union 
                Administration shall prescribe the regulations required 
                under subparagraph (A) in final form before the end of 
                the 6-month period beginning on the date of the 
                enactment of the Fair and Accurate Credit Transactions 
                Act of 2003.
            ``(6) Coordination with other laws.--No provision of this 
        subsection shall be construed as altering, affecting, or 
        superseding the applicability of any other provision of Federal 
        law relating to medical confidentiality.''.
    (b) Restriction on Sharing of Medical Information.--Section 603(d) 
of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)) is amended--
            (1) in paragraph (2), by striking ``The term'' and 
        inserting ``Except as provided in paragraph (3), the term''; 
        and
            (2) by adding at the end the following new paragraph:
            ``(3) Restriction on sharing of medical information.--
        Except for information or any communication of information 
        disclosed as provided in section 604(g)(3), the exclusions in 
        paragraph (2) shall not apply with respect to information 
        disclosed to any person related by common ownership or 
affiliated by corporate control if--
                    ``(A) the information is medical information; or
                    ``(B) the information is an individualized list or 
                description based on a consumer's payment transactions 
                for medical products or services, or an aggregate list 
                of identified consumers based on payment transactions 
                for medical products or services.''.

SEC. 702. CONFIDENTIALITY OF MEDICAL CONTACT INFORMATION IN CREDIT 
              REPORTS.

    (a) Duties of Medical Information Furnishers.--Section 623(a) of 
the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)) is amended by 
inserting after paragraph (7) (as added by section 504(a)) the 
following new paragraph:
            ``(8) Duty to provide notice of status as medical 
        information furnisher.--A person whose primary business is 
        providing medical services, products, or devices, or the 
        person's agent or assignee, who furnishes information to a 
        consumer reporting agency on a consumer shall be considered a 
        medical information furnisher for the purposes of this title 
        and shall notify the agency of such status.''.
    (b) Restriction of Dissemination of Medical Contact Information.--
Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is 
amended by adding the following new paragraph:
            ``(6) The name, address, and telephone number of any 
        medical information furnisher that has notified the agency of 
        its status, unless--
                    ``(A) such name, address, and telephone number are 
                restricted or reported using codes that do not 
                identify, or provide information sufficient to infer, 
                the specific provider or the nature of such services, 
                products, or devices to a person other than the 
                consumer; or
                    ``(B) the report is being provided to an insurance 
                company for a purpose relating to engaging in the 
                business of insurance other than property and casualty 
                insurance.''.
    (c) No Exceptions Allowed for Dollar Amounts.--Section 605(b) of 
the Fair Credit Reporting Act (15 U.S.C. 1681c(b)) is amended by 
striking ``The provisions of subsection (a)'' and inserting ``The 
provisions of paragraphs (1) through (5) of subsection (a)''.
    (d) Coordination With Other Laws.--No provision of any amendment 
made by this section shall be construed as altering, affecting, or 
superseding the applicability of any other provision of Federal law 
relating to medical confidentiality.
    (e) FTC Regulation of Coding of Trade Names.--Section 621 of the 
Fair Credit Reporting Act (15 U.S.C. 1681s) is amended by inserting 
after subsection (f) (as added by section 301 of this Act) the 
following new subsection:
    ``(g) FTC Regulation of Coding of Trade Names.--If the Commission 
determines that a person described in paragraph (8) of section 623(a) 
has not met the requirements of such paragraph, the Commission shall 
take action to ensure the person's compliance with such paragraph, 
which may include issuing model guidance or prescribing reasonable 
policies and procedures as necessary to ensure that such person 
complies with such paragraph.''.
    (f) Technical and Conforming Amendments.--Section 604(g) of the 
Fair Credit Reporting Act (15 U.S.C. 1681b(g)) (as amended by section 
701) is amended--
            (1) in paragraph (1) by inserting ``(other than medical 
        contact information treated in the manner required under 
        section 605(a)(6))'' after ``a consumer report that contains 
        medical information''; and
            (2) in paragraph (2) by inserting ``(other than medical 
        information treated in the manner required under section 
        605(a)(6))'' after ``a creditor shall not obtain or use medical 
        information''.
    (g) Effective Date.--The amendments made by this section shall take 
effect at the end of the 15-month period beginning on the date of the 
enactment of this Act.

            Passed the House of Representatives September 10, 2003.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.
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