103D CONGRESS

2D SESSION H. R. 5178

AN ACT

To amend the Fair Credit Reporting Act, and for other

purposes.

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

3 SECTION 1. TABLE OF CONTENTS.

4 The table of contents for this Act is as follows:

Sec. 1. Table of contents.

TITLE I—AMENDMENTS TO FAIR CREDIT REPORTING ACT

Sec. 101. Short title.

Sec. 102. Definitions.
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Sec. 103. Furnishing consumer reports; use for employment purposes.

Sec. 104. Amendments relating to use of consumer reports for prescreening;

prohibition on unauthorized or uncertified use of information.

Sec. 105. Consumer consent required to furnish consumer report containing

medical information.

Sec. 106. Amendments relating to obsolete information and information contained in consumer reports.

Sec. 107. Amendments relating to compliance procedures.

Sec. 108. Amendments relating to consumer disclosures.

Sec. 109. Amendments relating to procedures in case of the disputed accuracy

of any information in a consumer’s file.

Sec. 110. Amendment relating to charges for disclosure.

Sec. 111. Amendments relating to duties of users of consumer reports and duties of affiliates sharing certain information.

Sec. 112. Amendments relating to civil liability.

Sec. 113. Amendments relating to responsibilities of persons who furnish information to consumer reporting agencies.

Sec. 114. Investigative consumer reports.

Sec. 115. Increased criminal penalties for obtaining information under false

pretenses.

Sec. 116. Administrative enforcement.

Sec. 117. State enforcement of Fair Credit Reporting Act.

Sec. 118. Federal Reserve Board authority.

Sec. 119. Preemption of State law.

Sec. 120. Action by FTC and Federal Reserve Board.

Sec. 121. Amendment to Fair Debt Collection Practices Act.

Sec. 122. Furnishing consumer reports for purposes relating to child support.

Sec. 123. Disclosure of information and consumer reports to FBI for counterintelligence purposes.

Sec. 124. Effective dates.

Sec. 125. Relationship to other law.

Sec. 126. Sense of Senate.

Sec. 127. Technical correction to Depository Institutions Management Interlocks Act.

TITLE II—CREDIT REPAIR ORGANIZATIONS

Sec. 201. Regulation of credit repair organizations.

TITLE III—TRUTH IN LENDING ACT

Sec. 301. Treatment of delivery fees and intangibles taxes.

Sec. 302. Limitations on liability.

TITLE IV—DISASTER RELIEF

Sec. 401. Depository institutions disaster relief.
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1 TITLE I—AMENDMENTS TO FAIR

2 CREDIT REPORTING ACT

3 SEC. 101. SHORT TITLE.

4 This title may be cited as the ‘‘Consumer Reporting

5 Reform Act of 1994’’.

6 SEC. 102. DEFINITIONS.

7 (a) ADVERSE ACTION.—Section 603 of the Fair

8 Credit Reporting Act (15 U.S.C. 1681a) is amended by

9 adding at the end the following new subsection:

10 ‘‘(k)(1) The term ‘adverse action’ means the follow11 ing:

12 ‘‘(A) A denial or revocation of credit, a denial

13 of an application for an increase of an existing credit

14 limit, an unfavorable change in the terms of an ex15 isting credit arrangement, or a refusal to grant cred16 it in substantially the amount or on substantially the

17 terms requested; except that the term ‘adverse ac18 tion’ does not include—

19 ‘‘(i) a refusal to extend additional credit

20 under an existing credit arrangement if the ap21 plicant is delinquent or otherwise in default as

22 to that account, or

23 ‘‘(ii) a refusal or failure to authorize an ac24 count transaction at a point of sale which would

25 exceed a previously established credit limit.
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1 ‘‘(B) A denial or cancellation of, an increase in

2 any charge for, or a reduction or other adverse or

3 unfavorable change in the terms of coverage or

4 amount of, any insurance, existing or applied for, in

5 connection with the underwriting of insurance.

6 ‘‘(C) A denial of employment or any other deci7 sion for employment purposes which adversely af8 fects any current or prospective employee.

9 ‘‘(D) A denial or cancellation of, an increase in

10 any charge for, or any other adverse or unfavorable

11 change in the terms of, any license or benefit de12 scribed in section 604(a)(3)(D).

13 ‘‘(E) An action taken or determination made—

14 ‘‘(i) in connection with an application

15 which was made by, or a transaction which was

16 initiated by, any consumer, or in connection

17 with a review of account information under sec18 tion 604(a)(3)(E)(ii); and

19 ‘‘(ii) which is adverse to the interest of the

20 consumer.

21 ‘‘(2) For purposes of any determination of whether

22 an action is an adverse action under paragraph (1)(A),

23 all appropriate final findings, decisions, commentary, and

24 orders issued under section 701(d)(6) of the Equal Credit
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1 Opportunity Act by the Board of Governors of the Federal

2 Reserve System or any court shall apply.’’.

3 (b) FIRM OFFER OF CREDIT.—Section 603 of the

4 Fair Credit Reporting Act (15 U.S.C. 1681a) is further

5 amended by adding after subsection (k) (as added by sub6 section (a) of this section) the following:

7 ‘‘(l) The term ‘firm offer of credit’ means any offer

8 of credit to a consumer that will be honored if the

9 consumer is determined, based on information in a

10 consumer report on the consumer, to meet the specific cri11 teria used to select the consumer for the offer, except that

12 the offer may be further conditioned solely on any com13 bination of the following:

14 ‘‘(1) The consumer being determined, based on

15 information in the consumer’s application for the

16 credit, to meet specific criteria bearing on credit17 worthiness that are established—

18 ‘‘(A) before selection of the consumer for

19 the offer; and

20 ‘‘(B) for the purpose of determining

21 whether to extend credit pursuant to the offer.

22 ‘‘(2) Verification—

23 ‘‘(A) that the consumer continues to meet

24 the specific criteria used to select the consumer

25 for the offer, by using information in a
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1 consumer report on the consumer, information

2 in the consumer’s application for the credit, or

3 other information bearing on the creditworthi4 ness of the consumer; or

5 ‘‘(B) of the information in the consumer’s

6 application for the credit, to determine that the

7 consumer meets the specific criteria bearing on

8 creditworthiness.

9 ‘‘(3) The consumer furnishing any collateral

10 that is a requirement for the extension of the credit

11 that was—

12 ‘‘(A) established before selection of the

13 consumer for the offer of credit; and

14 ‘‘(B) described to the consumer in the

15 offer of credit.’’.

16 (c) CREDIT TRANSACTION WHICH IS NOT INITIATED

17 BY THE CONSUMER.—Section 603 of the Fair Credit Re18 porting Act (15 U.S.C. 1681a) is further amended by add19 ing after subsection (l) (as added by subsection (b) of this

20 section) the following:

21 ‘‘(m) The term ‘credit transaction which is not initi22 ated by the consumer’ does not include the use of a

23 consumer report by a person with which the consumer has

24 an account, for purposes of—

25 ‘‘(1) reviewing the account; or
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1 ‘‘(2) collecting the account.’’.

2 (d) STATE.—Section 603 of the Fair Credit Report3 ing Act (15 U.S.C. 1681a) is further amended by adding

4 after subsection (m) (as added by subsection (c) of this

5 section) the following:

6 ‘‘(n) The term ‘State’ means any State, the Common7 wealth of Puerto Rico, the District of Columbia, and any

8 territory or possession of the United States.’’.

9 (e) EXCLUSIONS FROM DEFINITION OF CONSUMER

10 REPORT.—Section 603(d) of the Fair Credit Reporting

11 Act (15 U.S.C. 1681a(d)) is amended in the second sen12 tence in clause (A)—

13 (1) by inserting ‘‘(i)’’ after ‘‘(A)’’;

14 (2) by inserting before the semicolon at the end

15 the following: ‘‘, (ii) any communication of that in16 formation among persons related by common owner17 ship or affiliated by corporate control, or (iii) any

18 communication of information from a credit applica19 tion by a consumer among persons related by com20 mon ownership or affiliated by corporate control if

21 it is clearly and conspicuously disclosed that the in22 formation may be communicated among such per23 sons and the consumer is given the opportunity,

24 prior to the time that the information is initially
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1 communicated, to direct that such information not

2 be communicated among such persons’’;

3 (3) in clause (B) by striking ‘‘or’’ after the

4 semicolon at the end;

5 (4) in clause (C) by striking the period and in6 serting a semicolon; and

7 (5) by adding at the end the following: ‘‘or (D)

8 any communication of information about a consumer

9 between persons who are affiliated by common own10 ership or common corporate control and in connec11 tion with a credit transaction which is not initiated

12 by the consumer, or an insurance transaction which

13 is not initiated by the consumer, if either of those

14 persons has complied with section 615(d)(4)(B) with

15 respect to a consumer report from which the infor16 mation is taken and the consumer has consented to

17 use of the report for the transaction, or with respect

18 to existing customers, the consumer has not directed

19 in writing that the report may not be used for the

20 transaction, in accordance with section

21 615(d)(4)(C).’’.

22 (f) EXCLUSION OF CERTAIN COMMUNICATIONS BY

23 EMPLOYMENT AGENCIES FROM DEFINITION OF

24 CONSUMER REPORT.—Section 603 of the Fair Credit Re25 porting Act (15 U.S.C. 1681(a)) is further amended—
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1 (1) in subsection (d), as amended by subsection

2 (e) of this section, by adding at the end the follow3 ing: ‘‘The term also does not include a communica4 tion described in subsection (o).’’; and

5 (2) by adding at the end the following:

6 ‘‘(o) A communication is described in this subsection

7 if it is a communication—

8 ‘‘(1) that, but for the 3rd sentence of sub9 section (d), would be an investigative consumer re10 port;

11 ‘‘(2) that is made to a prospective employer for

12 the purpose of—

13 ‘‘(A) procuring an employee for the em14 ployer, or

15 ‘‘(B) procuring an opportunity for a natu16 ral person to work for the employer;

17 ‘‘(3) that is made by a person that regularly

18 performs such procurement;

19 ‘‘(4) that is not used by any person for any

20 purpose other than a purpose described in para21 graph (2) (A) or (B);

22 ‘‘(5) with respect to which—

23 ‘‘(A) the consumer who is the subject of

24 the communication—
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1 ‘‘(i) consents orally or in writing to

2 the nature and scope of the communica3 tion, before the collection of any informa4 tion for the purpose of making the commu5 nication;

6 ‘‘(ii) consents orally or in writing to

7 the making of the communication to a pro8 spective employer, before the making of the

9 communication; and

10 ‘‘(iii) in the case of consent under

11 clause (i) or (ii) given orally, is provided

12 written confirmation of that consent by the

13 person making the communication, within

14 3 business days after the receipt of the

15 consent by that person;

16 ‘‘(B) the person that makes the commu17 nication does not, for the purpose of making

18 the communication, make any inquiry that if

19 made by a prospective employer of the

20 consumer who is the subject of the communica21 tion would violate any applicable Federal or

22 State equal employment opportunity law or reg23 ulation; and

24 ‘‘(C) the person that makes the commu25 nication—
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1 ‘‘(i) discloses in writing to the

2 consumer who is the subject of the commu3 nication, within 5 business days after re4 ceiving any request from the consumer for

5 such disclosure, the nature and substance

6 of all information in the consumer’s file at

7 the time of the request, except that the

8 sources of information that is acquired

9 solely for use in making the communica10 tion and actually used for no other purpose

11 need not be disclosed other than under ap12 propriate discovery procedures in the court

13 in which an action is brought; and

14 ‘‘(ii) notifies the consumer that is the

15 subject of the communication, in writing,

16 of the consumer’s right to request the in17 formation described in clause (i).’’.

18 (g) CONSUMER REPORTING AGENCY THAT COM19 PILES AND MAINTAINS FILES ON A NATIONWIDE

20 BASIS.—Section 603 of the Fair Credit Reporting Act (15

21 U.S.C. 1681a) is further amended by adding after sub22 section (o) (as added by subsection (f) of this section) the

23 following:

24 ‘‘(p) The term ‘consumer reporting agency that com25 piles and maintains files on consumers on a nationwide
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1 basis’ means a consumer reporting agency that regularly

2 engages in the practice of assembling or evaluating, and

3 maintaining, for the purpose of furnishing consumer re4 ports to third parties bearing on a consumer’s credit5 worthiness, credit standing, or credit capacity, each of the

6 following regarding consumers residing nationwide:

7 ‘‘(1) Public record information.

8 ‘‘(2) Credit account information from persons

9 who furnish that information regularly and in the

10 ordinary course of business.’’.

11 (h) CLERICAL AMENDMENT.—Section 603(d) of the

12 Fair Credit Reporting Act (15 U.S.C. 1681a(d)) is

13 amended in the first sentence—

14 (1) by inserting ‘‘(1)’’ after ‘‘in whole or in part

15 for’’; and

16 (2) by striking ‘‘(1)’’ before ‘‘credit or insur17 ance’’.

18 SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EM19 PLOYMENT PURPOSES.

20 (a) FURNISHING CONSUMER REPORTS FOR BUSI21 NESS TRANSACTIONS.—Section 604 of the Fair Credit Re22 porting Act (15 U.S.C. 1681b) is amended—

23 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

24 ‘‘A consumer reporting agency’’; and
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1 (2) in subsection (a)(3) (as designated by para2 graph (1) of this subsection) by striking subpara3 graph (E) and inserting the following:

4 ‘‘(E) otherwise has a legitimate business need

5 for the information—

6 ‘‘(i) in connection with a business trans7 action that is initiated by the consumer; or

8 ‘‘(ii) to review an account to determine

9 whether the consumer continues to meet the

10 terms of the account.’’.

11 (b) FURNISHING AND USING CONSUMER REPORTS

12 FOR EMPLOYMENT PURPOSES.—Section 604 of the Fair

13 Credit Reporting Act (15 U.S.C. 1681b) is further amend14 ed by adding at the end the following new subsection:

15 ‘‘(b) CONDITIONS FOR FURNISHING AND USING

16 CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—

17 ‘‘(1) CERTIFICATION FROM USER.—A consumer

18 reporting agency may furnish a consumer report for

19 employment purposes only if—

20 ‘‘(A) the person who obtains such report

21 from the agency certifies to the agency that—

22 ‘‘(i) the person has complied with

23 paragraph (2) with respect to the

24 consumer report, and the person will com25 ply with paragraph (3) with respect to the
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1 consumer report if paragraph (3) becomes

2 applicable; and

3 ‘‘(ii) information from the consumer

4 report will not be used in violation of any

5 applicable Federal or State equal employ6 ment opportunity law or regulation; and

7 ‘‘(B) the consumer reporting agency pro8 vides with the report a summary of the consum9 er’s rights under this title, as prescribed by the

10 Federal Trade Commission under section

11 609(c)(3).

12 ‘‘(2) DISCLOSURE TO CONSUMER.—A person

13 may not procure a consumer report, or cause a

14 consumer report to be procured, for employment

15 purposes with respect to any consumer unless—

16 ‘‘(A) a clear and conspicuous disclosure

17 has been made in writing to the consumer at

18 any time before the report is procured or

19 caused to be procured, in a document that con20 sists solely of the disclosure, that a consumer

21 report may be obtained for employment pur22 poses; and

23 ‘‘(B) the consumer has authorized in writ24 ing the procurement of the report by that per25 son.
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1 ‘‘(3) CONDITIONS ON USE FOR ADVERSE AC2 TIONS.—In using a consumer report for employment

3 purposes, before taking any adverse action based in

4 whole or in part on the report a person shall provide

5 to the consumer to whom the report relates—

6 ‘‘(A) a copy of the report;

7 ‘‘(B) a description in writing of the con8 sumer’s rights under this title, as prescribed by

9 the Federal Trade Commission under section

10 609(c)(3); and

11 ‘‘(C) a reasonable period (not required to

12 exceed 5 business days following receipt of the

13 report by the consumer) to respond to any in14 formation in the report that is disputed by the

15 consumer and notice in writing of the oppor16 tunity for the consumer to respond in that pe17 riod, except that such an opportunity to re18 spond and notice are not required if the person

19 takes the adverse action based on a reasonable

20 belief that the consumer has engaged in fraudu21 lent or criminal activity that is related to, or

22 that could affect, the consumer’s employment.

23 ‘‘(4) LIMITATION ON PURPOSES.—Subject to

24 paragraph (1), a consumer reporting agency may

25 furnish information bearing on the creditworthiness
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1 of a consumer, and a person may use such informa2 tion, for employment purposes that do not relate to

3 employment of an individual in an executive or ad4 ministrative position, only if—

5 ‘‘(A) the employment requires or is ex6 pected to require a security clearance issued by

7 an agency of the United States or any State as

8 a condition for employment;

9 ‘‘(B) the employment requires or is ex10 pected to require the individual to be covered by

11 a fidelity bond; or

12 ‘‘(C) the employment requires or is ex13 pected to require the individual, on a regular

14 basis and as part of the normal duties of em15 ployment—

16 ‘‘(i) to handle or otherwise have ac17 cess to substantial amounts of cash or

18 other things of value of the employer: or

19 ‘‘(ii) to engage in any conduct or ac20 tivity with respect to which the employee

21 has a fiduciary duty.

22 ‘‘(5) EXECUTIVE OR ADMINISTRATIVE POSITION

23 DEFINED.—
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1 ‘‘(A) IN GENERAL.—For purposes of para2 graph (4), the term ‘executive or administrative

3 position’ means any position—

4 ‘‘(i) for which compensation is on a

5 salary basis and not an hourly basis; and

6 ‘‘(ii) having policy making, manage7 rial, professional, or supervisory respon8 sibilities.

9 ‘‘(B) APPLICATION OF EXISTING FIND10 INGS, ETC.—For purposes of determining under

11 subparagraph (A)(ii) whether a position has

12 policy making, managerial, professional, or su13 pervisory responsibilities, all appropriate final

14 administrative and judicial findings, decisions,

15 commentary, and orders issued under the Fed16 eral Election Campaign Act of 1971, or the reg17 ulations issued under that Act, shall apply.’’.

18 SEC. 104. AMENDMENTS RELATING TO USE OF CONSUMER

19 REPORTS FOR PRESCREENING; PROHIBITION

20 ON UNAUTHORIZED OR UNCERTIFIED USE OF

21 INFORMATION.

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

23 Reporting Act (15 U.S.C. 1681b), as amended by section

24 103, is further amended—
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1 (1) in subsection (a) by striking ‘‘A consumer

2 reporting agency’’ and inserting ‘‘Subject to sub3 section (c), any consumer reporting agency’’; and

4 (2) by adding after subsection (b) (as added by

5 section 103(b)) the following new subsections:

6 ‘‘(c) FURNISHING REPORTS IN CONNECTION WITH

7 CREDIT TRANSACTIONS NOT INITIATED BY THE

8 CONSUMER.—

9 ‘‘(1) IN GENERAL.—A consumer reporting

10 agency may furnish a consumer report relating to

11 any consumer pursuant to subsection (a)(3)(A) in

12 connection with any credit transaction which is not

13 initiated by the consumer only if—

14 ‘‘(A) the consumer authorizes the agency

15 to provide such report to such person; or

16 ‘‘(B)(i) the transaction consists of a firm

17 offer of credit;

18 ‘‘(ii) the consumer reporting agency has

19 complied with subsection (d); and

20 ‘‘(iii) there is not in effect an election by

21 the consumer, made in accordance with sub22 section (d), to have the consumer’s name and

23 address excluded from lists of names provided

24 by the agency pursuant to this paragraph.
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1 ‘‘(2) LIMITS ON INFORMATION RECEIVED

2 UNDER PARAGRAPH (1)(B).—A person may receive

3 pursuant to paragraph (1)(B) only—

4 ‘‘(A) the name and address of a consumer;

5 ‘‘(B) an identifier that is not unique to the

6 consumer and is used by the person solely for

7 the purpose of verifying the identity of the

8 consumer; and

9 ‘‘(C) information pertaining to a consumer

10 that is not identified or identifiable with the

11 consumer.

12 ‘‘(3) INFORMATION REGARDING INQUIRIES.—

13 Except as provided in section 609(a)(5), a consumer

14 reporting agency shall not furnish to any person a

15 record of inquiries in connection with credit trans16 actions which are not initiated by a consumer.

17 ‘‘(d) ELECTION OF CONSUMER TO BE EXCLUDED

18 FROM LISTS.—

19 ‘‘(1) IN GENERAL.—A consumer may elect to

20 have the consumer’s name and address excluded

21 from any list provided by a consumer reporting

22 agency in connection with a credit transaction which

23 is not initiated by the consumer, by notifying the

24 agency in accordance with paragraph (2) that the

25 consumer does not consent to any use of consumer
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1 reports relating to the consumer in connection with

2 any credit transaction which is not initiated by the

3 consumer.

4 ‘‘(2) MANNER OF NOTIFICATION.—A consumer

5 shall notify a consumer reporting agency under

6 paragraph (1)—

7 ‘‘(A) through the notification system main8 tained by the agency under paragraph (5), or

9 ‘‘(B) by submitting to the agency a signed

10 notice of election form issued by the agency for

11 purposes of this subparagraph.

12 ‘‘(3) RESPONSE OF AGENCY AFTER NOTIFICA13 TION THROUGH SYSTEM.—Upon receipt of notifica14 tion of the election of a consumer under paragraph

15 (1) through the notification system maintained by

16 the agency under paragraph (5), a consumer report17 ing agency shall—

18 ‘‘(A) inform the consumer that the election

19 is effective only for a 2-year period if the

20 consumer does not submit to the agency a

21 signed notice of election form issued by the

22 agency for purposes of paragraph (2)(B); and

23 ‘‘(B) provide to the consumer such a form

24 if requested by the consumer, by not later than

25 5 business days after receiving the notification
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1 through the system in the case of a request

2 made at the time the consumer provides notifi3 cation through the system.

4 ‘‘(4) EFFECTIVENESS OF ELECTION.—An elec5 tion of a consumer under paragraph (1)—

6 ‘‘(A) shall be effective with respect to a

7 consumer reporting agency beginning on the

8 date the consumer notifies the agency in ac9 cordance with paragraph (2);

10 ‘‘(B) shall be effective with respect to a

11 consumer reporting agency—

12 ‘‘(i) subject to subparagraph (C), for

13 the 2-year period beginning on the date the

14 consumer notifies the agency of the elec15 tion, in the case of an election for which a

16 consumer notifies the agency only in ac17 cordance with paragraph (2)(A); or

18 ‘‘(ii) until the consumer notifies the

19 agency under subparagraph (C), in the

20 case of an election for which a consumer

21 notifies the agency in accordance with

22 paragraph (2)(B);

23 ‘‘(C) shall not be effective after the date on

24 which the consumer notifies the agency,

25 through the notification system established by
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1 the agency under paragraph (5), that the elec2 tion is no longer effective; and

3 ‘‘(D) shall be effective with respect to each

4 affiliate of the agency.

5 ‘‘(5) NOTIFICATION SYSTEM, GENERALLY.—

6 Each consumer reporting agency which furnishes a

7 consumer report in connection with any credit trans8 action which is not initiated by a consumer, shall—

9 ‘‘(A) establish and maintain a notification

10 system, including a toll-free telephone number,

11 which permits any consumer whose consumer

12 report is maintained by the agency to notify the

13 agency, with appropriate identification, of the

14 consumer’s election to have the consumer’s

15 name and address excluded from any list of

16 names and addresses provided by the agency for

17 such a transaction; and

18 ‘‘(B) publish by not later than 365 days

19 after the date of the enactment of the

20 Consumer Reporting Reform Act of 1994, and

21 at least annually thereafter, in a publication of

22 general circulation in the area served by the

23 agency—

24 ‘‘(i) a notification that information in

25 consumer files maintained by the agency
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1 may be used in connection with such trans2 actions; and

3 ‘‘(ii) the address and toll-free tele4 phone number for consumers to use to no5 tify the agency of the consumer’s election

6 under subparagraph (A).

7 Establishment and maintenance of a notification

8 system (including a toll-free telephone number) and

9 publication by a consumer reporting agency on its

10 own behalf and on behalf of any of its affiliates in

11 accordance with this paragraph is deemed to be

12 compliance with this paragraph by each of those af13 filiates.

14 ‘‘(6) NOTIFICATION SYSTEM BY AGENCIES

15 WHICH OPERATE NATIONWIDE.—Each consumer re16 porting agency which compiles and maintains files

17 on consumers on a nationwide basis shall establish

18 and maintain a notification system for purposes of

19 paragraph (5) jointly with other such consumer re20 porting agencies.’’.

21 (b) USE OF INFORMATION OBTAINED FROM RE22 PORTS.—Section 604 of the Fair Credit Reporting Act (15

23 U.S.C. 1681b) is further amended by adding after sub24 section (d) (as added by subsection (a) of this section) the

25 following new subsection:
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1 ‘‘(e) CERTAIN USE OR OBTAINING OF INFORMATION

2 PROHIBITED.—A person shall not use or obtain a

3 consumer report for any purpose unless—

4 ‘‘(1) it is obtained for a purpose for which the

5 consumer report is authorized to be furnished under

6 subsection (a); and

7 ‘‘(2) the purpose is certified in accordance with

8 section 607 by a prospective user of the report

9 through a general or specific certification.’’.

10 SEC. 105. CONSUMER CONSENT REQUIRED TO FURNISH

11 CONSUMER REPORT CONTAINING MEDICAL

12 INFORMATION.

13 Section 604 of the Fair Credit Reporting Act (15

14 U.S.C. 1681b), as amended by sections 103 and 104, is

15 further amended by adding at the end the following:

16 ‘‘(f) FURNISHING REPORTS CONTAINING MEDICAL

17 INFORMATION.—A consumer reporting agency shall not

18 furnish for employment purposes, or in connection with

19 a credit transaction, a consumer report which contains

20 medical information about a consumer, unless the

21 consumer consents to the furnishing of the report.’’.
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1 SEC. 106. AMENDMENTS RELATING TO OBSOLETE INFOR2 MATION AND INFORMATION CONTAINED IN

3 CONSUMER REPORTS.

4 (a) REPEAL LARGE-DOLLAR EXCEPTIONS.—Section

5 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c)

6 is amended—

7 (1) in subsection (a) by striking ‘‘(a) Except as

8 authorized under subsection (b), no’’ and inserting

9 ‘‘(a) INFORMATION EXCLUDED FROM CONSUMER

10 REPORTS.—No’’; and

11 (2) by striking subsection (b).

12 (b) CLARIFICATION OF REPORTING PERIOD.—Sec13 tion 605 of the Fair Credit Reporting Act (15 U.S.C.

14 1681c), as amended by subsection (a), is further amended

15 by adding at the end the following new subsection:

16 ‘‘(b) RUNNING OF REPORTING PERIOD.—(1) The 7-

17 year period referred to in paragraphs (4) and (6) of sub18 section (a) shall begin, with respect to any delinquent ac19 count which is placed for collection (internally or by refer20 ral to a 3d party, whichever is earlier), charged to profit

21 and loss, or subjected to any similar action, upon the expi22 ration of the 180-day period beginning on the date of the

23 commencement of the delinquency which immediately pre24 ceded the collection activity, charge to profit and loss, or

25 similar action.
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1 ‘‘(2) Paragraph (1) applies only to items of informa2 tion added to a consumer report on or after the date that

3 is 455 days after the date of the enactment of the

4 Consumer Reporting Reform Act of 1994.’’.

5 (c) ADDITIONAL INFORMATION ON BANKRUPTCY

6 FILINGS REQUIRED.—Section 605 of the Fair Credit Re7 porting Act (15 U.S.C. 1681c) is further amended by add8 ing after subsection (b) (as added by subsection (b) of this

9 section) the following new subsection:

10 ‘‘(c) INFORMATION REQUIRED TO BE DISCLOSED.—

11 Any consumer reporting agency which furnishes a

12 consumer report which contains information regarding

13 any case involving the consumer which arises under title

14 11, United States Code, shall include in the report an

15 identification of the chapter of such title 11 under which

16 such case arises if provided by the source of the informa17 tion. If any case arising or filed under title 11, United

18 States Code, is withdrawn by the consumer prior to a final

19 judgment, the consumer reporting agency shall include in

20 the report that such case or filing was withdrawn upon

21 receipt of documentation certifying such withdrawal.’’.

22 (d) INDICATION OF CLOSURE OF ACCOUNT; INDICA23 TION OF DISPUTE BY CONSUMER.—Section 605 of the

24 Fair Credit Reporting Act (15 U.S.C. 1681c) is further
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1 amended by adding after subsection (c) (as added by sub2 section (c) of this section) the following new subsections:

3 ‘‘(d) INDICATION OF CLOSURE OF ACCOUNT BY

4 CONSUMER.—If a consumer reporting agency is notified

5 pursuant to section 623(a)(4) that a credit account of a

6 consumer was voluntarily closed by the consumer, the

7 agency shall indicate that fact in any consumer report that

8 includes information related to the account.

9 ‘‘(e) INDICATION OF DISPUTE BY CONSUMER.—If a

10 consumer reporting agency is notified pursuant to section

11 623(a)(3) that information regarding a consumer that was

12 furnished to the agency is disputed by the consumer, the

13 agency shall indicate that fact in each consumer report

14 that includes the disputed information.’’.

15 (e) NOTATION ON CONSUMER REPORT.—Section 605

16 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is

17 further amended by adding at the end the following new

18 subsection:

19 ‘‘(f) CERTAIN ACCOUNT INFORMATION.—A consumer

20 reporting agency, upon the written request of a consumer,

21 and subject to the submission of appropriate documenta22 tion by the consumer, shall include with any information

23 regarding a failure of the consumer to make any payment

24 on an account of the consumer, a statement (in such form

25 as the Federal Trade Commission shall prescribe) that
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1 during the period when the account in question became

2 due, the consumer was receiving assistance pursuant to

3 a declaration of a disaster by the President under the Rob4 ert T. Stafford Disaster Relief and Emergency Assistance

5 Act, or unemployment compensation under the laws of any

6 State (or, but for the exhaustion of benefits, would be enti7 tled to receive such compensation).’’.

8 (f) CLERICAL AMENDMENTS.—

9 (1) The heading for section 605 of the Fair

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

11 by striking ‘‘Obsolete information’’ and insert12 ing ‘‘Requirements relating to information

13 contained in consumer reports’’.

14 (2) The table of sections at the beginning of the

15 Fair Credit Reporting Act (15 U.S.C. 1681a et seq.)

16 is amended by striking the item relating to section

17 605 and inserting the following:

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

18 SEC. 107. AMENDMENTS RELATING TO COMPLIANCE PRO19 CEDURES.

20 (a) DISCLOSURE OF CONSUMER REPORTS BY

21 USERS.—Section 607 of the Fair Credit Reporting Act

22 (15 U.S.C. 1681e) is amended by adding at the end the

23 following new subsection:

24 ‘‘(c) DISCLOSURE OF CONSUMER REPORTS BY

25 USERS ALLOWED.—A consumer reporting agency may not
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•HR 5178 EH

1 prohibit a user of a consumer report furnished by the

2 agency on a consumer from disclosing the contents of the

3 report to the consumer, if adverse action against the

4 consumer has been taken, or is contemplated, by the user

5 based in whole or in part on the report.’’.

6 (b) NOTICE TO USERS AND PROVIDERS OF INFORMA7 TION TO ENSURE COMPLIANCE.—Section 607 of the Fair

8 Credit Reporting Act (15 U.S.C. 1681e) is further amend9 ed by adding after subsection (c) (as added by subsection

10 (a) of this section) the following new subsection:

11 ‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR12 MATION.—

13 ‘‘(1) NOTICE REQUIREMENT.—A consumer re14 porting agency shall provide to any person—

15 ‘‘(A) who regularly and in the ordinary

16 course of business furnishes information to the

17 agency with respect to any consumer; or

18 ‘‘(B) to whom a consumer report is pro19 vided by the agency;

20 a notice of such person’s responsibilities under this

21 title.

22 ‘‘(2) CONTENT OF NOTICE.—The Federal

23 Trade Commission shall prescribe the content of no24 tices under paragraph (1).’’.
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1 (c) RECORD OF IDENTITY OF USERS AND PURPOSES

2 CERTIFIED BY USERS OF REPORTS.—Section 607 of the

3 Fair Credit Reporting Act (15 U.S.C. 1681e) is further

4 amended by adding after subsection (d) (as added by sub5 section (b) of this section) the following new subsection:

6 ‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE7 SALE.—

8 ‘‘(1) DISCLOSURE.—A person may not procure

9 a consumer report for purposes of reselling the re10 port (or any information in the report) unless the

11 person discloses to the consumer reporting agency

12 which originally furnishes the report—

13 ‘‘(A) the identity of the end-user of the re14 port (or information), and

15 ‘‘(B) each permissible purpose under sec16 tion 604 for which the report is furnished to

17 the end-user of the report (or information).

18 ‘‘(2) RESPONSIBILITIES OF PROCURERS FOR

19 RESALE.—A person which procures a consumer re20 port for purposes of reselling the report (or any in21 formation in the report) shall—

22 ‘‘(A) establish and comply with reasonable

23 procedures designed to ensure that the report

24 (or information) is resold by the person only for

25 a purpose for which the report may be fur-
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•HR 5178 EH

1 nished under section 604, including by requir2 ing that each person to which the report (or

3 information) is resold and which resells or pro4 vides the report (or information) to any other

5 person—

6 ‘‘(i) identifies each end user of the re7 sold report (or information);

8 ‘‘(ii) certifies each purpose for which

9 the report (or information) will be used;

10 and

11 ‘‘(iii) certifies that the report (or in12 formation) will be used for no other pur13 pose; and

14 ‘‘(B) before reselling the report, make

15 reasonable efforts to verify the identifications

16 and certifications made under subparagraph

17 (A).’’.

18 SEC. 108. AMENDMENTS RELATING TO CONSUMER DISCLO19 SURES.

20 (a) ALL INFORMATION IN CONSUMER’S FILE RE21 QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the

22 Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is

23 amended to read as follows:

24 ‘‘(1) All information in the consumer’s file at

25 the time of the request.’’.
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•HR 5178 EH

1 (b) MORE INFORMATION CONCERNING RECIPIENTS

2 OF REPORTS REQUIRED.—Section 609(a)(3) of the Fair

3 Credit Reporting Act (15 U.S.C. 1681g(a)) is amended

4 to read as follows:

5 ‘‘(3)(A) Identification of each person (including

6 each end-user identified under section 607(e)(1))

7 who procured a consumer report—

8 ‘‘(i) for employment purposes within the 2-

9 year period preceding the request; or

10 ‘‘(ii) for any other purpose within the 1-

11 year period preceding the request.

12 ‘‘(B) An identification of a person under sub13 paragraph (A) shall include—

14 ‘‘(i) the name of the person or, if applica15 ble, the trade name (written in full) under

16 which such person conducts business; and

17 ‘‘(ii) upon request of the consumer, the ad18 dress and telephone number of the person.’’.

19 (c) DISCLOSURE OF PERMISSIBLE PURPOSES.—Sec20 tion 609(a) of the Fair Credit Reporting Act (15 U.S.C.

21 1681g(a)) is further amended by adding at the end the

22 following:

23 ‘‘(4) The permissible purpose under section

24 604, by category, for which each person identified

25 under paragraph (3) procured a consumer report.’’.
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1 (d) INFORMATION REGARDING INQUIRIES.—Section

2 609(a) of the Fair Credit Reporting Act (15 U.S.C.

3 1681g(a)) is amended by adding after paragraph (4) (as

4 added by subsection (c) of this section) the following:

5 ‘‘(5) A record of all inquiries received by the

6 agency in the 1-year period preceding the request

7 that identified the consumer in connection with a

8 credit transaction which was not initiated by the

9 consumer.’’.

10 (e) SUMMARY OF RIGHTS REQUIRED TO BE IN11 CLUDED WITH DISCLOSURE.—

12 (1) IN GENERAL.—Section 609 of the Fair

13 Credit Reporting Act (15 U.S.C. 1681g) is amended

14 by adding at the end the following new subsection:

15 ‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN16 CLUDED WITH DISCLOSURE.—

17 ‘‘(1) SUMMARY OF RIGHTS.—A consumer re18 porting agency shall provide to a consumer, with

19 each written disclosure by the agency to the

20 consumer under this section—

21 ‘‘(A) a written summary of all rights the

22 consumer has under this title; and

23 ‘‘(B) in the case of a consumer reporting

24 agency that compiles and maintains files on

25 consumers on a nationwide basis, a toll-free
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•HR 5178 EH

1 telephone number established by the agency at

2 which personnel are accessible to consumers

3 during normal business hours.

4 ‘‘(2) SPECIFIC ITEMS REQUIRED TO BE IN5 CLUDED.—The summary of rights required under

6 paragraph (1) shall include—

7 ‘‘(A) a brief description of this title and all

8 rights of consumers under this title;

9 ‘‘(B) an explanation of how the consumer

10 may exercise the rights of the consumer under

11 this title;

12 ‘‘(C) a list of all Federal agencies respon13 sible for enforcing any provision of this title

14 and the address and any appropriate phone

15 number of each such agency, in a form that will

16 assist the consumer in selecting the appropriate

17 agency;

18 ‘‘(D) a statement that the consumer may

19 have additional rights under State law and that

20 the consumer may wish to contact a State or

21 local consumer protection agency or a State at22 torney general to learn of those rights; and

23 ‘‘(E) a statement that a consumer report24 ing agency is not required to remove accurate

25 derogatory information from a consumer’s file,
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•HR 5178 EH

1 unless the information is outdated under sec2 tion 605 or cannot be verified.

3 ‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur4 poses of this subsection and any disclosure by a

5 consumer reporting agency required under this title

6 with respect to consumers’ rights, the Federal Trade

7 Commission (after consultation with each Federal

8 agency referred to in section 621(b)) shall prescribe

9 the form and content of any disclosure of the rights

10 of consumers required under this title.’’.

11 (2) TECHNICAL AMENDMENT.—Section

12 606(a)(1)(B) of the Fair Credit Reporting Act (15

13 U.S.C. 1681d(a)(1)(B)) is amended by inserting

14 ‘‘and the written summary of the rights of the

15 consumer prepared pursuant to section 609(c)’’ be16 fore the semicolon.

17 (f) FORM OF DISCLOSURES.—

18 (1) IN GENERAL.—Subsections (a) and (b) of

19 section 610 of the Fair Credit Reporting Act (15

20 U.S.C. 1681h) are amended to read as follows:

21 ‘‘(a) IN GENERAL.—

22 ‘‘(1) PROPER IDENTIFICATION.—A consumer

23 reporting agency shall require, as a condition of

24 making the disclosures required under section 609,

25 that the consumer furnish proper identification.
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1 ‘‘(2) DISCLOSURE IN WRITING.—Except as pro2 vided in subsection (b), the disclosures required to

3 be made under section 609 shall be provided under

4 that section in writing.

5 ‘‘(b) OTHER FORMS OF DISCLOSURE.—

6 ‘‘(1) IN GENERAL.—If authorized by a

7 consumer, a consumer reporting agency may make

8 the disclosures required under 609—

9 ‘‘(A) other than in writing; and

10 ‘‘(B) in such form as may be—

11 ‘‘(i) specified by the consumer in ac12 cordance with paragraph (2); and

13 ‘‘(ii) available from the agency.

14 ‘‘(2) FORM.—A consumer may specify pursuant

15 to paragraph (1) that disclosures under section 609

16 shall be made—

17 ‘‘(A) in person, upon the appearance of the

18 consumer at the place of business of the

19 consumer reporting agency where disclosures

20 are regularly provided, during normal business

21 hours, and on reasonable notice;

22 ‘‘(B) by telephone, if the consumer has

23 made a written request for disclosure by tele24 phone;
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•HR 5178 EH

1 ‘‘(C) by electronic means, if available from

2 the agency; or

3 ‘‘(D) by any other reasonable means that

4 is available from the agency.’’.

5 (2) SIMPLIFIED DISCLOSURE.—Not later than

6 90 days after the date of enactment of this Act, each

7 consumer reporting agency shall develop a form on

8 which such consumer reporting agency shall make

9 the disclosures required under section 609(a) of the

10 Fair Credit Reporting Act, for the purpose of maxi11 mizing the comprehensibility and standardization of

12 such disclosures.

13 (3) GOALS.—The Federal Trade Commission

14 shall take appropriate action to assure that the goals

15 of comprehensibility and standardization are

16 achieved in accordance with paragraph (2).

17 (4) CONFORMING AMENDMENTS.—

18 (A) Section 609(a) of the Fair Credit Re19 porting Act (15 U.S.C. 1681h(a)) is amended

20 in the matter preceding paragraph (1) by strik21 ing ‘‘and proper identification of any consumer’’

22 and inserting ‘‘and subject to section

23 610(a)(1)’’.

24 (B) Section 610 of the Fair Credit Report25 ing Act (15 U.S.C. 1681h) is amended in the
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•HR 5178 EH

1 heading for the section by inserting ‘‘and

2 form’’ after ‘‘Conditions’’.

3 (C) The table of sections at the beginning

4 of the Fair Credit Reporting Act (15 U.S.C.

5 1681a et seq.) is amended in the item relating

6 to section 610 by inserting ‘‘and form’’ after

7 ‘‘Conditions’’.

8 SEC. 109. AMENDMENTS RELATING TO PROCEDURES IN

9 CASE OF THE DISPUTED ACCURACY OF ANY

10 INFORMATION IN A CONSUMER’S FILE.

11 (a) IN GENERAL.—Section 611(a) of the Fair Credit

12 Reporting Act (15 U.S.C. 1681i(a)) is amended to read

13 as follows:

14 ‘‘(a) REINVESTIGATIONS OF DISPUTED INFORMA15 TION.—

16 ‘‘(1) REINVESTIGATION REQUIRED.—

17 ‘‘(A) IN GENERAL.—If the completeness or

18 accuracy of any item of information contained

19 in a consumer’s file at a consumer reporting

20 agency is disputed by the consumer and the

21 consumer notifies the agency directly of such

22 dispute, the agency shall reinvestigate free of

23 charge and record the current status of the dis24 puted information, or delete the item from the

25 file in accordance with paragraph (5), before
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1 the end of the 30-day period beginning on the

2 date the agency receives the notice of the dis3 pute from the consumer.

4 ‘‘(B) EXTENSION OF PERIOD TO

5 REINVESTIGATE.—Except as provided in sub6 paragraph (C), the 30-day period described in

7 subparagraph (A) may be extended for up to,

8 but for no more than, 15 additional days if the

9 consumer reporting agency receives information

10 from the consumer within that 30-day period

11 that is relevant to the reinvestigation.

12 ‘‘(C) LIMITATIONS ON EXTENSION OF PE13 RIOD TO REINVESTIGATE.—Subparagraph (B)

14 shall not apply to any reinvestigation in which,

15 in the 30-day period described in subparagraph

16 (A), the information that is the subject of the

17 reinvestigation is found to be inaccurate or in18 complete or the consumer reporting agency de19 termines that the information cannot be veri20 fied.

21 ‘‘(2) PROMPT NOTICE OF DISPUTE TO FUR22 NISHER OF INFORMATION.—

23 ‘‘(A) IN GENERAL.—Before the end of the

24 5-business-day period beginning on the date a

25 consumer reporting agency receives notice of a
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1 dispute from any consumer in accordance with

2 paragraph (1), the agency shall provide notifi3 cation of the dispute to any person that pro4 vided any item of information in dispute, at the

5 address and in the manner established with the

6 person. The notice shall include all relevant in7 formation regarding the dispute that the agency

8 has received from the consumer.

9 ‘‘(B) PROVISION OF OTHER INFORMATION

10 FROM CONSUMER.—The consumer reporting

11 agency shall promptly provide to the person

12 that provided the information in dispute all rel13 evant information regarding the dispute that is

14 received by the agency from the consumer after

15 the period referred to in subparagraph (A) and

16 before the end of the period referred to in para17 graph (1)(A).

18 ‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO19 LOUS OR IRRELEVANT.—

20 ‘‘(A) IN GENERAL.—Notwithstanding para21 graph (1), a consumer reporting agency may

22 terminate a reinvestigation of information dis23 puted by a consumer under that paragraph if

24 the agency reasonably determines that the dis25 pute by the consumer is frivolous or irrelevant,
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1 including by reason of a failure by a consumer

2 to provide sufficient information to investigate

3 the disputed information.

4 ‘‘(B) NOTICE OF DETERMINATION.—Upon

5 making any determination in accordance with

6 subparagraph (A) that a dispute is frivolous or

7 irrelevant, a consumer reporting agency shall

8 notify the consumer within 5 business days of

9 such determination, by mail or, if authorized by

10 the consumer for that purpose, by any other

11 means available to the agency.

12 ‘‘(C) CONTENTS OF NOTICE.—A notice

13 under subparagraph (B) shall include—

14 ‘‘(i) the reasons for the determination

15 under subparagraph (A); and

16 ‘‘(ii) identification of any information

17 required to investigate the disputed infor18 mation, which may consist of a standard19 ized form describing the general nature of

20 such information.

21 ‘‘(4) CONSIDERATION OF CONSUMER INFORMA22 TION.—In conducting any reinvestigation under

23 paragraph (1) with respect to disputed information

24 in the file of any consumer, the consumer reporting

25 agency shall review and consider all relevant infor-
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1 mation submitted by the consumer in the period de2 scribed in paragraph (1)(A) with respect to such dis3 puted information.

4 ‘‘(5) TREATMENT OF INACCURATE OR UNVERI5 FIABLE INFORMATION.—

6 ‘‘(A) IN GENERAL.—If, after any

7 reinvestigation under paragraph (1) of any in8 formation disputed by a consumer, an item of

9 the information is found to be inaccurate or in10 complete or cannot be verified, the consumer re11 porting agency shall promptly delete that item

12 of information from the consumer’s file. The in13 formation deleted shall consist solely of the in14 formation that was disputed by the consumer

15 and shall not include any portion of the same

16 item that was not disputed.

17 ‘‘(B) REQUIREMENTS RELATING TO

18 REINSERTION OF PREVIOUSLY DELETED MATE19 RIAL.—

20 ‘‘(i) CERTIFICATION OF ACCURACY OF

21 INFORMATION.—If any information is de22 leted from a consumer’s file pursuant to

23 subparagraph (A), the information may

24 not be reinserted in the file by the

25 consumer reporting agency unless the per-
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1 son who furnishes the information certifies

2 that the information is complete and accu3 rate.

4 ‘‘(ii) NOTICE TO CONSUMER.—If any

5 information which has been deleted from a

6 consumer’s file pursuant to subparagraph

7 (A) is reinserted in the file, the consumer

8 reporting agency shall notify the consumer

9 of the reinsertion in writing within 5 busi10 ness days after the reinsertion or, if au11 thorized by the consumer for that purpose,

12 by any other means available to the agen13 cy.

14 ‘‘(iii) ADDITIONAL INFORMATION.—As

15 part of or in addition to the notice under

16 clause (ii), a consumer reporting agency

17 shall provide to a consumer in writing

18 within 5 business days after the date of

19 the reinsertion—

20 ‘‘(I) a statement that the dis21 puted information has been

22 reinserted;

23 ‘‘(II) the name, business address,

24 and telephone number of any fur25 nisher of information contacted, or of
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1 any furnisher of information which

2 contacted the consumer reporting

3 agency, in connection with the

4 reinsertion of such information; and

5 ‘‘(III) a notice that the consumer

6 has the right to add a statement to

7 the consumer’s file disputing the accu8 racy or completeness of the disputed

9 information.

10 ‘‘(C) PROCEDURES TO PREVENT RE11 APPEARANCE.—A consumer reporting agency

12 shall maintain reasonable procedures designed

13 to prevent the reappearance in a consumer’s

14 file, and in consumer reports on the consumer,

15 of information that is deleted pursuant to this

16 paragraph (other than information that is

17 reinserted in accordance with subparagraph

18 (B)(i)).

19 ‘‘(D) FREE CONSUMER REPORT DURING

20 12-MONTH PERIOD AFTER DELETION OF INFOR21 MATION.—Upon the request of a consumer, a

22 consumer reporting agency shall make all dis23 closures pursuant to section 609 without charge

24 to that consumer at least once during the 12-

25 month period after the consumer receives a no-
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1 tification under paragraph (6) or paragraph (8)

2 of the deletion of information that is found to

3 be inaccurate or cannot be verified.

4 ‘‘(E) AUTOMATED REINVESTIGATION SYS5 TEM.—

6 ‘‘(i) IN GENERAL.—Any consumer re7 porting agency that compiles and main8 tains files on consumers on a nationwide

9 basis shall implement an automated system

10 through which furnishers of information to

11 that consumer reporting agency may re12 port the results of a reinvestigation that

13 finds incomplete or inaccurate information

14 in a consumer’s file to other such

15 consumer reporting agencies.

16 ‘‘(ii) NATIONWIDE CONSUMER RE17 PORTING AGENCIES.—A consumer report18 ing agency that compiles and maintains

19 files on consumers on a nationwide basis

20 shall report the results of a reinvestigation

21 initiated by a consumer under section 611

22 that finds in the consumer’s file informa23 tion that is incomplete or inaccurate or in24 formation that cannot be verified, to any

25 other consumer reporting agency that com-
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1 piles and maintains files on consumers on

2 a nationwide basis and—

3 ‘‘(I) to which a consumer report

4 on the consumer was provided within

5 the preceding 2-year period for pur6 poses of resale by that other agency;

7 or

8 ‘‘(II) to which a consumer report

9 on the consumer was provided within

10 the preceding 7-year period for pur11 poses of merging that report to that

12 other agency’s proprietary files.

13 ‘‘(iii) ACTION REQUIRED UPON RE14 CEIPT OF REPORT.—If a consumer report15 ing agency receives a report under clause

16 (ii), the agency shall—

17 ‘‘(I) change the data in its files

18 in accordance with the report;

19 ‘‘(II) delete data from its propri20 etary files in accordance with the re21 port; or

22 ‘‘(III) reinvestigate the disputed

23 data that is the subject of the report

24 in accordance with section 611, with

25 the source of that data.
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1 ‘‘(6) NOTICE OF RESULTS OF

2 REINVESTIGATION.—

3 ‘‘(A) IN GENERAL.—A consumer reporting

4 agency shall provide written notice to a

5 consumer of the results of a reinvestigation

6 under this subsection within 5 business days

7 after the completion of the reinvestigation, by

8 mail or, if authorized by the consumer for that

9 purpose, by other means available to the agen10 cy.

11 ‘‘(B) CONTENTS.—As part of or in addi12 tion to the notice under subparagraph (A), a

13 consumer reporting agency shall provide to a

14 consumer in writing within the 5-day period

15 referred to in subparagraph (A)—

16 ‘‘(i) a statement that the reinves17 tigation is completed;

18 ‘‘(ii) a consumer report that is based

19 upon the consumer’s file as that file is re20 vised as a result of the reinvestigation;

21 ‘‘(iii) a description or indication of

22 any changes made in the consumer report

23 as a result of those revisions to the con24 sumer’s file;
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1 ‘‘(iv) a notice that, if requested by the

2 consumer, a description of the procedure

3 used to determine the accuracy and com4 pleteness of the information shall be pro5 vided to the consumer by the agency, in6 cluding the name, business address, and

7 telephone number of any furnisher of in8 formation contacted in connection with

9 such information;

10 ‘‘(v) a notice that the consumer has

11 the right to add a statement to the con12 sumer’s file disputing the accuracy or com13 pleteness of the information; and

14 ‘‘(vi) a notice that the consumer has

15 the right to request under subsection (d)

16 that the consumer reporting agency fur17 nish notifications under that subsection.

18 ‘‘(7) DESCRIPTION OF REINVESTIGATION PRO19 CEDURE.—A consumer reporting agency shall pro20 vide to a consumer a description referred to in para21 graph (6)(B)(iv) by not later than 15 days after re22 ceiving a request from the consumer for that de23 scription.

24 ‘‘(8) EXPEDITED DISPUTE RESOLUTION.—If a

25 dispute regarding an item of information in a con-
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1 sumer’s file at a consumer reporting agency is re2 solved in accordance with paragraph (5)(A) by the

3 deletion of the disputed information by not later

4 than 3 business days after the date on which the

5 agency receives notice of the dispute from the

6 consumer in accordance with paragraph (1)(A), then

7 the agency shall not be required to comply with

8 paragraphs (2), (6), and (7) with respect to that dis9 pute if the agency—

10 ‘‘(A) provides prompt notice of the deletion

11 to the consumer by telephone;

12 ‘‘(B) includes in that notice, or in a writ13 ten notice that accompanies a confirmation and

14 consumer report provided in accordance with

15 subparagraph (C), a statement of the consum16 er’s right to request under subsection (d) that

17 the agency furnish notifications under that sub18 section; and

19 ‘‘(C) provides written confirmation of the

20 deletion and a copy of a consumer report on the

21 consumer which is based on the consumer’s file

22 after the deletion, within 5 business days after

23 making the deletion.’’.

24 (b) CONFORMING AMENDMENT.—Subsection (d) of

25 section 611 of the Fair Credit Reporting Act (15 U.S.C.
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1 1681i(d)) is amended by striking ‘‘The consumer report2 ing agency shall clearly’’ and all that follows through the

3 end of the subsection.

4 SEC. 110. AMENDMENT RELATING TO CHARGES FOR DIS5 CLOSURE.

6 Section 612 of the Fair Credit Reporting Act (15

7 U.S.C. 1681j) is amended to read as follows:

8 ‘‘§ 612. Charges for certain disclosures

9 ‘‘(a) REASONABLE CHARGES ALLOWED FOR CER10 TAIN DISCLOSURES.—Except as provided in subsections

11 (b), (c), (d), and (e), a consumer reporting agency may

12 impose a reasonable charge on a consumer—

13 ‘‘(1) for making a disclosure to the consumer

14 pursuant to section 609, which—

15 ‘‘(A) shall not exceed $8; and

16 ‘‘(B) shall be indicated to the consumer

17 prior to making disclosure; and

18 ‘‘(2) for furnishing pursuant to section 611(d),

19 following a reinvestigation under section 611(a), a

20 statement, codification, or summary to a person des21 ignated by the consumer under that section after the

22 30-day period beginning on the date of notification

23 of the consumer under section 611(a)(6) or (8) with

24 respect to the reinvestigation, which—
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1 ‘‘(A) shall not exceed the charge that the

2 agency would impose on each designated recipi3 ent for a consumer report; and

4 ‘‘(B) shall be indicated to the consumer

5 prior to furnishing such information.

6 ‘‘(b) FREE CONSUMER REPORT AFTER ADVERSE

7 NOTICE TO CONSUMER.—Each consumer reporting agen8 cy that maintains a file on a consumer shall make all dis9 closures pursuant to section 609 without charge to the

10 consumer if, within 60 days after receipt by such

11 consumer of a notification pursuant to section 615 or of

12 a notification from a debt collection agency affiliated with

13 that consumer reporting agency stating that the consum14 er’s credit rating may be or has been adversely affected,

15 the consumer makes a request under section 609.

16 ‘‘(c) FREE CONSUMER REPORT UNDER CERTAIN

17 OTHER CIRCUMSTANCES.—Upon the request of the

18 consumer, a consumer reporting agency shall make all dis19 closures pursuant to section 609 without charge to that

20 consumer if the consumer certifies in writing that the

21 consumer—

22 ‘‘(1) is unemployed and intends to apply for

23 employment in the 60-day period beginning on the

24 date the certification is made;
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1 ‘‘(2) is a recipient of public welfare assistance;

2 or

3 ‘‘(3) has reason to believe that the file on the

4 consumer at the agency contains inaccurate informa5 tion due to fraud.

6 ‘‘(d) OTHER CHARGES PROHIBITED.—A consumer

7 reporting agency shall not impose any charge on a

8 consumer for providing any notification required by this

9 Act or making any disclosure required by this Act, except

10 as authorized by subsection (a).

11 ‘‘(e) ANNUAL CONSUMER REPORT UPON REQUEST

12 AT SPECIFIED CHARGE.—

13 ‘‘(1) IN GENERAL.—Upon the written request

14 of a consumer, a consumer reporting agency that

15 maintains a file on the consumer shall make all dis16 closures pursuant to section 609 once in any 12-

17 month period, at the charge specified in paragraph

18 (2).

19 ‘‘(2) CHARGE SPECIFIED.—The charge for dis20 closures under paragraph (1) shall be an amount

21 that does not exceed the lesser of—

22 ‘‘(A) the total cost incurred by the

23 consumer reporting agency in making the dis24 closures; or

25 ‘‘(B) $3.’’.
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1 SEC. 111. AMENDMENTS RELATING TO DUTIES OF USERS

2 OF CONSUMER REPORTS AND DUTIES OF AF3 FILIATES SHARING CERTAIN INFORMATION.

4 (a) DUTIES OF USERS TAKING ADVERSE ACTIONS.—

5 Section 615(a) of the Fair Credit Reporting Act (15

6 U.S.C. 1681m(a)) is amended to read as follows:

7 ‘‘(a) DUTIES OF USERS TAKING ADVERSE ACTIONS

8 ON THE BASIS OF INFORMATION CONTAINED IN

9 CONSUMER REPORTS.—If any person takes any adverse

10 action with respect to any consumer which is based in

11 whole or in part on any information contained in a

12 consumer report, the person shall—

13 ‘‘(1) provide written notice of the adverse action

14 to the consumer;

15 ‘‘(2) provide to the consumer in writing—

16 ‘‘(A) the name, address, and telephone

17 number of the consumer reporting agency (in18 cluding a toll-free telephone number established

19 by the agency if the agency compiles and main20 tains files on consumers on a nationwide basis)

21 which furnished the report to the person; and

22 ‘‘(B) a statement that the consumer re23 porting agency did not make the decision to

24 take the adverse action and is unable to provide

25 the consumer the specific reasons why the ad26 verse action was taken; and
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1 ‘‘(3) provide to the consumer a written notice of

2 the consumer’s right—

3 ‘‘(A) to obtain, under section 612, a free

4 copy of a consumer report on the consumer

5 from the consumer reporting agency referred to

6 in paragraph (2), which notice shall include an

7 indication of the 60-day period under that sec8 tion for obtaining such a copy; and

9 ‘‘(B) to dispute, under section 611, with a

10 consumer reporting agency the accuracy or

11 completeness of any information in a consumer

12 report furnished by the agency.’’.

13 (b) DUTIES OF USERS WHO MAKE CERTAIN CREDIT

14 SOLICITATIONS.—Section 615 of the Fair Credit Report15 ing Act (15 U.S.C. 1681m) is amended by adding at the

16 end the following new subsection:

17 ‘‘(d) DUTIES OF USERS WHO MAKE WRITTEN CRED18 IT SOLICITATIONS ON THE BASIS OF INFORMATION CON19 TAINED IN CONSUMER FILES.—

20 ‘‘(1) IN GENERAL.—Any person who uses a

21 consumer report on any consumer in connection with

22 any credit transaction which is not initiated by the

23 consumer and which consists of a firm offer of credit

24 shall provide with any written solicitation made to
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1 the consumer regarding the transaction a clear and

2 conspicuous statement that—

3 ‘‘(A) information contained in the consum4 er’s consumer report was used in connection

5 with the transaction;

6 ‘‘(B) the consumer received the offer of

7 credit because the consumer satisfied the cri8 teria for creditworthiness under which the

9 consumer was selected for the offer;

10 ‘‘(C) if applicable, the credit may not be

11 extended if, after the consumer responds to the

12 offer, the consumer does not meet the criteria

13 used to select the consumer for the offer or any

14 applicable criteria bearing on creditworthiness

15 or does not furnish any required collateral;

16 ‘‘(D) the consumer has a right to prohibit

17 information contained in the consumer’s file

18 with any consumer reporting agency from being

19 used in connection with any credit transaction

20 which is not initiated by the consumer; and

21 ‘‘(E) the consumer may exercise the right

22 referred to in subparagraph (D) by notifying a

23 notification system established under section

24 604(d).
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1 ‘‘(2) DISCLOSURE OF ADDRESS AND TELE2 PHONE NUMBER.—A statement under paragraph (1)

3 shall include the address and toll-free telephone

4 number of the appropriate notification system estab5 lished under section 604(d).

6 ‘‘(3) MAINTAINING CRITERIA ON FILE.—A per7 son who makes an offer of credit to a consumer

8 under a credit transaction described in paragraph

9 (1) shall maintain on file the criteria used to select

10 the consumer to receive the offer, all criteria bearing

11 on creditworthiness that are the basis for determin12 ing whether or not to extend credit pursuant to the

13 offer, and any requirement for the furnishing of col14 lateral as a condition of the extension of credit, until

15 the end of the 3-year period beginning on the date

16 on which the offer is made to the consumer.

17 ‘‘(4) LIMITATION ON APPLICATION.—Paragraph

18 (1) does not apply to the use of a consumer report

19 by a person if—

20 ‘‘(A) the person is affiliated by common

21 ownership or by common corporate control with

22 the person who procured the report;

23 ‘‘(B) the person who procured the report

24 clearly and conspicuously disclosed to the

25 consumer to whom the report relates, before the
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1 report is provided to the person using the re2 port, that the report might be provided to and

3 used by other persons who are affiliated in the

4 manner described in subparagraph (A) to the

5 person who procured the report; and

6 ‘‘(C) the provision and use of the report

7 is—

8 ‘‘(i) consented to by the consumer in

9 writing, or

10 ‘‘(ii) with respect to existing cus11 tomers, the consumer has been afforded

12 the opportunity to direct in writing that

13 the report may not be provided to or used

14 by persons who are affiliated in the man15 ner described in subparagraph (A) and has

16 not done so.

17 ‘‘(5) AUTHORITY OF FEDERAL AGENCIES RE18 GARDING UNFAIR OR DECEPTIVE ACTS OR PRAC19 TICES NOT AFFECTED.—This title is not intended to

20 affect the authority of any Federal agency to enforce

21 a prohibition against unfair or deceptive acts or

22 practices, including the making of false or mislead23 ing statements in connection with credit transactions

24 not initiated by the consumer.’’.
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1 (c) DUTIES OF PERSON TAKING CERTAIN ACTIONS

2 BASED ON INFORMATION PROVIDED BY AFFILIATE.—

3 Section 615 of the Fair Credit Reporting Act (15 U.S.C.

4 1681m) is further amended by adding after subsection (d),

5 as added by subsection (b) of this section, the following

6 new subsection:

7 ‘‘(e) DUTIES OF PERSON TAKING CERTAIN ACTIONS

8 BASED ON INFORMATION PROVIDED BY AFFILIATE.—

9 ‘‘(1) DUTIES, GENERALLY.—If a person takes

10 an action described in paragraph (2) with respect to

11 a consumer based in whole or in part on information

12 described in paragraph (3), the person shall—

13 ‘‘(A) notify the consumer in writing of the

14 action, including a statement that the consumer

15 may obtain the information in accordance with

16 subparagraph (B) and may contact the toll-free

17 telephone number required by subparagraph

18 (C);

19 ‘‘(B) upon a written request from the

20 consumer received within 60 days after trans21 mittal of the notice required by subparagraph

22 (A), disclose to the consumer in writing the na23 ture of the information upon which the action

24 is based by not later than 30 days after receipt

25 of the request; and
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1 ‘‘(C) make available a toll-free telephone

2 number at which personnel are available to

3 communicate with the consumer regarding the

4 action during normal business hours.

5 ‘‘(2) ACTION DESCRIBED.—An action referred

6 to in paragraph (1) is—

7 ‘‘(A) an adverse action described in section

8 603(k)(1)(A) taken in connection with a trans9 action initiated by the consumer, or any adverse

10 action described in section 603(k)(1) (B) or

11 (C);

12 ‘‘(B) a denial of any other transaction ini13 tiated by the consumer for personal, family, or

14 household purposes; or

15 ‘‘(C) an increase in any charge for a trans16 action described in subparagraph (B).

17 ‘‘(3) INFORMATION DESCRIBED.—Information

18 referred to in paragraph (1)—

19 ‘‘(A) except as provided in subparagraph

20 (B), is information that—

21 ‘‘(i) is furnished to the person taking

22 the action by a person related by common

23 ownership or affiliated by common cor24 porate control to the person taking the ac25 tion; and
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1 ‘‘(ii) bears on the consumer’s credit

2 worthiness, credit standing, credit capacity,

3 character, general reputation, personal

4 characteristics, or mode of living; and

5 ‘‘(B) does not include—

6 ‘‘(i) information solely as to trans7 actions or experiences between the

8 consumer and the person furnishing the in9 formation; or

10 ‘‘(ii) information in a consumer re11 port.’’.

12 (d) CONFORMING AMENDMENT.—Section 615(c) of

13 the Fair Credit Reporting Act (15 U.S.C. 1681m(c)) is

14 amended by striking ‘‘subsections (a) and (b)’’ and insert15 ing ‘‘this section’’.

16 SEC. 112. AMENDMENTS RELATING TO CIVIL LIABILITY.

17 (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLI18 ANCE, GENERALLY.—Section 616 of the Fair Credit Re19 porting Act (15 U.S.C. 1681n) is amended by striking

20 ‘‘Any consumer reporting agency or user of information

21 which’’ and inserting ‘‘(a) IN GENERAL.—Any person

22 who’’.

23 (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON24 COMPLIANCE.—Section 616(1) of the Fair Credit Report-
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1 ing Act (15 U.S.C. 1681n(1)) is amended to read as fol2 lows:

3 ‘‘(1)(A) any actual damages sustained by the

4 consumer as a result of the failure or damages of no

5 less than $100 and no more than $1,000; or

6 ‘‘(B) in the case of liability of a natural person

7 for obtaining a consumer report under false pre8 tenses or knowingly without a permissible purpose,

9 actual damages sustained by the consumer as a re10 sult of the failure or $1,000, whichever is greater;’’.

11 (c) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI12 ANCE.—Section 617 of the Fair Credit Reporting Act

13 (15 U.S.C. 1681o) is amended by striking ‘‘Any consumer

14 reporting agency or user of information which’’ and insert15 ing ‘‘(a) IN GENERAL.—Any person who’’.

16 (d) ATTORNEY’S FEES.—

17 (1) WILLFUL NONCOMPLIANCE.—Section 616

18 of the Fair Credit Reporting Act (15 U.S.C. 1681n)

19 is amended by adding at the end the following:

20 ‘‘(b) ATTORNEY’S FEES.—On a finding by the court

21 that an unsuccessful pleading, motion, or other paper filed

22 in connection with an action under this section was filed

23 in bad faith or for purposes of harassment, the court shall

24 award to the prevailing party attorney’s fees reasonable
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1 in relation to the work expended in responding to the

2 pleading, motion, or other paper.’’.

3 (2) NEGLIGENT NONCOMPLIANCE.—Section

4 617 of the Fair Credit Reporting Act (15 U.S.C.

5 1681o) is amended by adding at the end the follow6 ing:

7 ‘‘(b) ATTORNEY’S FEES.—On a finding by the court

8 that an unsuccessful pleading, motion, or other paper filed

9 in connection with an action under this section was filed

10 in bad faith or for purposes of harassment, the court shall

11 award to the prevailing party attorney’s fees reasonable

12 in relation to the work expended in responding to the

13 pleading, motion, or other paper.’’.

14 SEC. 113. AMENDMENTS RELATING TO RESPONSIBILITIES

15 OF PERSONS WHO FURNISH INFORMATION

16 TO CONSUMER REPORTING AGENCIES.

17 (a) IN GENERAL.—The Fair Credit Reporting Act

18 (15 U.S.C. 1681 et seq.) is amended by redesignating sec19 tion 623 as section 624 and inserting after section 622

20 the following new section:

21 ‘‘§ 623. Responsibilities of furnishers of information

22 to consumer reporting agencies

23 ‘‘(a) DUTY OF FURNISHERS OF INFORMATION TO

24 PROVIDE COMPLETE AND ACCURATE INFORMATION.—
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1 ‘‘(1) PROHIBITIONS.—A person shall not fur2 nish any information to any consumer reporting

3 agency if the person knows or should have known

4 the information is incomplete or inaccurate.

5 ‘‘(2) DUTY TO CORRECT AND UPDATE INFOR6 MATION.—A person who—

7 ‘‘(A) regularly and in the ordinary course

8 of business furnishes information to one or

9 more consumer reporting agencies about the

10 person’s transactions or experiences with any

11 consumer; and

12 ‘‘(B) has furnished to a consumer report13 ing agency information that the person deter14 mines is not complete or accurate;

15 shall promptly notify the consumer reporting agency

16 of that determination and provide to the agency any

17 corrections to that information, or any additional in18 formation, that is necessary to make the information

19 provided by the person to the agency complete and

20 accurate, and shall not thereafter furnish to the

21 agency any of the information that remains not com22 plete or accurate.

23 ‘‘(3) DUTY TO PROVIDE NOTICE OF DISPUTE.—

24 If the completeness or accuracy of any information

25 furnished by any person to any consumer reporting
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1 agency is disputed to such person by a consumer,

2 the person may not furnish the information to any

3 consumer reporting agency without notice that such

4 information is disputed by the consumer.

5 ‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC6 COUNTS.—A person who regularly and in the ordi7 nary course of business furnishes information to a

8 consumer reporting agency regarding a consumer

9 who has a credit account with that person shall no10 tify the agency of the voluntary closure of the ac11 count by the consumer, in information regularly fur12 nished for the period in which the account is closed.

13 ‘‘(5) DUTY TO PROVIDE NOTICE OF DELIN14 QUENCY OF ACCOUNTS.—A person who furnishes in15 formation to a consumer reporting agency regarding

16 a delinquent account being placed for collection,

17 charged to profit or loss, or subjected to any similar

18 action shall, by not later than 90 days after furnish19 ing the information, notify the agency of the month

20 and year of the commencement of the delinquency

21 which immediately preceded the action.

22 ‘‘(b) DUTIES OF FURNISHERS OF INFORMATION

23 UPON NOTICE OF DISPUTE.—

24 ‘‘(1) IN GENERAL.—After receiving notice pur25 suant to section 611(a)(2) of a dispute with regard
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1 to the completeness or accuracy of any information

2 provided by a person to a consumer reporting agen3 cy, the person shall—

4 ‘‘(A) complete an investigation with respect

5 to the disputed information;

6 ‘‘(B) review all relevant information pro7 vided by the consumer reporting agency pursu8 ant to section 611(a)(2);

9 ‘‘(C) report the results of the investigation

10 to the consumer reporting agency; and

11 ‘‘(D) if the investigation finds that the in12 formation is incomplete or inaccurate, report

13 those results to all other consumer reporting

14 agencies to which the person furnished the in15 formation and that compile and maintain files

16 on consumers on a nationwide basis.

17 ‘‘(2) DEADLINE.—A person shall complete all

18 investigations, reviews, and reports required under

19 paragraph (1) regarding information provided by the

20 person to a consumer reporting agency, before the

21 end of the period under section 611(a)(1) within

22 which the consumer reporting agency is required to

23 complete actions required by that section regarding

24 that information.
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1 ‘‘(c) LIMITATION ON LIABILITY.—Sections 616 and

2 617 do not apply to any failure to comply with subsection

3 (a), except as provided in section 621(c)(1)(B).

4 ‘‘(d) LIMITATION ON ENFORCEMENT.—Subsection

5 (a) may be enforced exclusively under section 621 by the

6 Federal agencies and officials and the State officials iden7 tified in that section.’’.

8 (b) CLERICAL AMENDMENT.—The table of sections

9 at the beginning of the Fair Credit Reporting Act (15

10 U.S.C. 1681a et seq.) is amended by striking the item re11 lating to section 623 and inserting the following:

‘‘623. Responsibilities of furnishers of information to consumer reporting agencies.

‘‘624. Relation to State laws.’’.

12 SEC. 114. INVESTIGATIVE CONSUMER REPORTS.

13 Section 606 of the Fair Credit Reporting Act (15

14 U.S.C. 1681d) is amended—

15 (1) in subsection (a)(1) by striking ‘‘or’’ after

16 the semicolon at the end and inserting ‘‘and’’;

17 (2) by striking subsection (a)(2) and inserting

18 the following:

19 ‘‘(2) the person certifies or has certified to the

20 consumer reporting agency that—

21 ‘‘(A) the person has made the disclosures

22 to the consumer required by paragraph (1); and

23 ‘‘(B) the person will comply with sub24 section (b).’’;
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1 (3) in subsection (b) by striking ‘‘shall’’ the sec2 ond place it appears; and

3 (4) by adding at the end the following:

4 ‘‘(d) PROHIBITIONS.—

5 ‘‘(1) CERTIFICATION.—A consumer reporting

6 agency shall not prepare or furnish an investigative

7 consumer report unless the agency has received a

8 certification under subsection (a)(2) from the person

9 who requested the report.

10 ‘‘(2) INQUIRIES.—A consumer reporting agency

11 shall not make an inquiry for the purpose of prepar12 ing an investigative consumer report on a consumer

13 for employment purposes if the making of the in14 quiry by an employer or prospective employer of the

15 consumer would violate any applicable Federal or

16 State equal employment opportunity law or regula17 tion.

18 ‘‘(3) CERTAIN PUBLIC RECORD INFORMA19 TION.—Except as otherwise provided in section 613,

20 a consumer reporting agency shall not furnish an in21 vestigative consumer report which includes informa22 tion which is a matter of public record and which re23 lates to an arrest, indictment, conviction, civil judi24 cial action, tax lien, or outstanding judgment, unless

25 the agency has verified the accuracy of the informa-
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1 tion within the 30-day period ending on the date the

2 report is furnished.

3 ‘‘(4) CERTAIN ADVERSE INFORMATION.—A

4 consumer reporting agency shall not prepare or fur5 nish an investigative consumer report on a consumer

6 that contains information that is adverse to the in7 terest of the consumer and that is obtained through

8 a personal interview with a neighbor, friend, or asso9 ciate of the consumer or with another person with

10 whom the consumer is acquainted or who has knowl11 edge of such item of information, unless—

12 ‘‘(A) the agency has followed reasonable

13 procedures to obtain confirmation of the infor14 mation, from an additional source that has

15 independent and direct knowledge of the infor16 mation; or

17 ‘‘(B) the person interviewed is the best

18 possible source of the information.’’.

19 SEC. 115. INCREASED CRIMINAL PENALTIES FOR OBTAIN20 ING INFORMATION UNDER FALSE PRE21 TENSES.

22 (a) OBTAINING INFORMATION UNDER FALSE PRE23 TENSES.—Section 619 of the Fair Credit Reporting Act

24 (15 U.S.C. 1681q) is amended by striking ‘‘fined not more

25 than $5,000 or imprisoned not more than one year, or
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1 both’’ and inserting ‘‘fined under title 18, United States

2 Code, imprisoned for not more than 2 years, or both’’.

3 (b) UNAUTHORIZED DISCLOSURES BY OFFICERS OR

4 EMPLOYEES.—Section 620 of the Fair Credit Reporting

5 Act (15 U.S.C. 1681r) is amended by striking ‘‘fined not

6 more than $5,000 or imprisoned not more than one year,

7 or both’’ and inserting ‘‘fined under title 18, United States

8 Code, imprisoned for not more than 2 years, or both’’.

9 SEC. 116. ADMINISTRATIVE ENFORCEMENT.

10 (a) AVAILABLE ENFORCEMENT POWERS.—Section

11 621(a) of the Fair Credit Reporting Act (15 U.S.C.

12 1681s(a))—

13 (1) is amended in the second sentence by strik14 ing ‘‘Act and shall be subject to enforcement by the

15 Federal Trade Commission under section 5(b) there16 of with respect to any consumer reporting agency or

17 person subject to enforcement by the Federal Trade

18 Commission pursuant to this subsection, irrespec19 tive’’ and inserting ‘‘Act. All functions and powers of

20 the Federal Trade Commission under the Federal

21 Trade Commission Act shall be available to the

22 Commission to enforce compliance with this title by

23 any person subject to enforcement by the Federal

24 Trade Commission pursuant to this subsection and
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1 not subject to enforcement pursuant to section 8 of

2 the Federal Deposit Insurance Act, irrespective’’;

3 (2) as amended by paragraph (1), is further

4 amended by inserting before the 3rd period the fol5 lowing: ‘‘, including the power to enforce the provi6 sions of this title in the same manner as if the viola7 tion had been a violation of any Federal Trade Com8 mission trade regulation rule’’; and

9 (3) as amended by paragraph (1), is further

10 amended by adding after the 3rd period the follow11 ing: ‘‘Notwithstanding the preceding sentence, a

12 court may not impose any civil penalty on a person

13 for a violation of section 623(a)(1) unless the person

14 has been enjoined from committing the violation, or

15 ordered not to commit the violation, in an action or

16 proceeding brought by or on behalf of the Federal

17 Trade Commission and has violated the injunction

18 or order, and the court may not impose any civil

19 penalty for any violation occurring before the date of

20 the violation of the injunction or order.’’.

21 (b) AGENCIES RESPONSIBLE FOR ENFORCEMENT.—

22 Section 621 of the Fair Credit Reporting Act (15 U.S.C.

23 1681s) is amended—
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1 (1) in subsection (a), by inserting ‘‘ENFORCE2 MENT BY FEDERAL TRADE COMMISSION.—’’ before

3 ‘‘Compliance with the requirements’’; and

4 (2) in subsection (b), by striking the matter

5 preceding paragraph (1) and inserting the following:

6 ‘‘(b) ENFORCEMENT BY OTHER AGENCIES.—Compli7 ance with the requirements imposed under this title with

8 respect to consumer reporting agencies, persons who use

9 consumer reports from such agencies, persons who furnish

10 information to such agencies, and users of information

11 who are subject to section 615(e) shall be enforced

12 under—’’.

13 SEC. 117. STATE ENFORCEMENT OF FAIR CREDIT REPORT14 ING ACT.

15 Section 621 of the Fair Credit Reporting Act (15

16 U.S.C. 1681s) is amended by redesignating subsection (c)

17 as subsection (d) and inserting after subsection (b) the

18 following new subsection:

19 ‘‘(c) STATE ACTION FOR VIOLATIONS.—

20 ‘‘(1) AUTHORITY OF STATES.—In addition to

21 such other remedies as are provided under State

22 law, whenever the chief law enforcement officer of a

23 State, or an official or agency designated by a State,

24 has reason to believe that any person has violated or

25 is violating this title, the State—
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1 ‘‘(A) may bring an action to enjoin such

2 violation in any appropriate United States dis3 trict court or in any other court of competent

4 jurisdiction;

5 ‘‘(B) subject to paragraph (5), may bring

6 an action on behalf of its residents to recover—

7 ‘‘(i) damages for which the person is

8 liable to such residents under sections 616

9 and 617 as a result of the violation;

10 ‘‘(ii) in the case of a violation of sec11 tion 623(a), damages for which the person

12 would, but for section 623(c), be liable to

13 such residents as a result of the violation;

14 or

15 ‘‘(iii) damages of not more than

16 $1,000 for each willful or negligent viola17 tion; and

18 ‘‘(C) in the case of any successful action

19 under subparagraph (A) or (B), shall be award20 ed the costs of the action and reasonable attor21 ney fees as determined by the court.

22 ‘‘(2) RIGHTS OF FEDERAL REGULATORS.—The

23 State shall serve prior written notice of any such ac24 tion upon the Federal Trade Commission or the ap25 propriate Federal regulator determined under sub-
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1 section (b) and provide the Commission or appro2 priate Federal regulator with a copy of its com3 plaint, except in any case where such prior notice is

4 not feasible, in which case the State shall serve such

5 notice immediately upon instituting such action. The

6 Federal Trade Commission or appropriate Federal

7 regulator shall have the right (A) to intervene in the

8 action, (B) upon so intervening, to be heard on all

9 matters arising therein, (C) to remove the action to

10 the appropriate United States district court, and (D)

11 to file petitions for appeal.

12 ‘‘(3) INVESTIGATORY POWERS.—For purposes

13 of bringing any action under this subsection, nothing

14 in this subsection shall prevent the chief law enforce15 ment officer, or an official or agency designated by

16 a State, from exercising the powers conferred on the

17 chief law enforcement officer or such official by the

18 laws of such State to conduct investigations or to

19 administer oaths or affirmations or to compel the at20 tendance of witnesses or the production of documen21 tary and other evidence.

22 ‘‘(4) LIMITATION ON STATE ACTION WHILE

23 FEDERAL ACTION PENDING.—Whenever the Federal

24 Trade Commission or the appropriate Federal regu25 lator has instituted a civil action or an administra-
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1 tive action under section 8 of the Federal Deposit

2 Insurance Act for a violation of this title, no State

3 may, during the pendency of such action, bring an

4 action under this section against any defendant

5 named in the complaint of the Commission or the

6 appropriate Federal regulator for any violation of

7 this title that is alleged in that complaint.

8 ‘‘(5) LIMITATIONS ON STATE ACTIONS FOR VIO9 LATION OF SECTION 621(a)(1).—

10 ‘‘(A) VIOLATION OF INJUNCTION RE11 QUIRED.—A State may not bring an action

12 against a person under paragraph (1)(B) for a

13 violation of section 623(a)(1), unless—

14 ‘‘(i) the person has been enjoined

15 from committing the violation, in an action

16 brought by the State under paragraph

17 (1)(A); and

18 ‘‘(ii) the person has violated the in19 junction.

20 ‘‘(B) LIMITATION ON DAMAGES RECOVER21 ABLE.—In an action against a person under

22 paragraph (1)(B) for a violation of section

23 623(a)(1), a State may not recover any dam24 ages incurred before the date of the violation of

25 an injunction on which the action is based.’’.
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1 SEC. 118. FEDERAL RESERVE BOARD AUTHORITY.

2 Section 621 of the Fair Credit Reporting Act (15

3 U.S.C. 1681s), is further amended by adding after sub4 section (d) (as redesignated by section 117) the following

5 new subsection:

6 ‘‘(e) INTERPRETIVE AUTHORITY.—The Board of

7 Governors of the Federal Reserve System may issue inter8 pretations of any provision of this title as it may apply

9 to any persons identified under paragraph (1), (2), and

10 (3) of subsection (b), or to the holding companies and af11 filiates of such persons, in consultation with Federal agen12 cies identified in paragraphs (1), (2), and (3) of subsection

13 (b).’’.

14 SEC. 119. PREEMPTION OF STATE LAW.

15 Section 624 of the Fair Credit Reporting Act, as re16 designated by section 113(a) of this Act, is further amend17 ed—

18 (1) by striking ‘‘This title’’ and inserting ‘‘(a)

19 IN GENERAL.—Except as provided in subsections

20 (b) and (c), this title’’; and

21 (2) by adding at the end the following:

22 ‘‘(b) GENERAL EXCEPTIONS.—No requirement or

23 prohibition may be imposed under the laws of any State—

24 ‘‘(1) with respect to any subject matter regu25 lated under—
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1 ‘‘(A) subsection (c) or (d) of section 604,

2 relating to the prescreening of consumer re3 ports;

4 ‘‘(B) section 611, relating to the time by

5 which a consumer reporting agency must take

6 any action, including the provision of notifica7 tion to a consumer or other person, in any pro8 cedure related to the disputed accuracy of infor9 mation in a consumer’s file, except that this

10 subparagraph does not apply to any State law

11 in effect on the date of the enactment of the

12 Consumer Reporting Reform Act of 1994;

13 ‘‘(C) section 615(a), relating to the duties

14 of a person who takes any adverse action with

15 respect to a consumer on the basis of informa16 tion contained in a consumer report;

17 ‘‘(D) section 615(d), relating to the duties

18 of persons who use a consumer report of a

19 consumer in connection with any credit trans20 action which is not initiated by the consumer

21 and which consists of a firm offer of credit;

22 ‘‘(E) section 605, relating to obsolete in23 formation, except that this subparagraph does

24 not apply to any State law in effect on the date
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1 of the enactment of the Consumer Reporting

2 Reform Act of 1994; or

3 ‘‘(F) section 623(b)(2), relating to the

4 time by which a person must take any action

5 required under section 623(b)(1) with respect

6 to an investigation of information furnished by

7 the person to a consumer reporting agency, ex8 cept that this subparagraph does not apply to

9 any State law in effect on the date of the enact10 ment of the Consumer Reporting Reform Act of

11 1994;

12 ‘‘(2) with respect to the exchange of informa13 tion among persons affiliated by common ownership

14 or common corporate control, except that this para15 graph does not apply to section 2480e (a) and (c)(1)

16 of title 9, Vermont Statutes Annotated (as in effect

17 on the date of the enactment of the Consumer Re18 porting Reform Act of 1994); or

19 ‘‘(3) with respect to the form and content of

20 any disclosure required to be made under section

21 609(c).

22 ‘‘(c) DEFINITION OF FIRM OFFER OF CREDIT.—Not23 withstanding any definition of the term ‘firm offer of cred24 it’ (or any equivalent term) under the laws of any State,

25 the definition of that term contained in section 603(l) shall
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1 be construed to apply in the enforcement and interpreta2 tion of the laws of any State governing consumer reports.

3 ‘‘(d) LIMITATIONS.—Subsections (b) and (c)—

4 ‘‘(1) do not affect any settlement, agreement, or

5 consent judgment between any State Attorney Gen6 eral and any consumer reporting agency in effect on

7 the date of the enactment of the Consumer Report8 ing Reform Act of 1994; and

9 ‘‘(2) do not apply to any provision of State law

10 (including any provision of a State constitution)

11 that—

12 ‘‘(A) is enacted after January 1, 2003;

13 ‘‘(B) states explicitly that the provision is

14 intended to supplement this Act; and

15 ‘‘(C) gives greater protection to consumers

16 than is provided under this Act.’’.

17 SEC. 120. ACTION BY FTC AND FEDERAL RESERVE BOARD.

18 (a) MODIFICATION OF REQUIREMENTS BY FTC AND

19 FEDERAL RESERVE BOARD AUTHORIZED.—

20 (1) IN GENERAL.—Section 621 of the Fair

21 Credit Reporting Act (15 U.S.C. 1681s), is further

22 amended by adding after subsection (e) (as added by

23 section 118 of this Act) the following new sub24 section:
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1 ‘‘(f) MODIFICATION OF REQUIREMENTS BY FTC AU2 THORIZED.—

3 ‘‘(1) IN GENERAL.—If the Federal Trade Com4 mission considers such action necessary for the pro5 tection of consumers, the Commission may, after

6 consultation with appropriate State regulatory and

7 law enforcement agencies, promulgate regulations in

8 accordance with section 553 of title 5, United States

9 Code, to impose, with respect to consumer reporting

10 agencies and all other persons subject to this title

11 other than any person described in paragraph (1),

12 (2), or (3) of subsection (b), requirements—

13 ‘‘(A) that are more stringent than those

14 imposed under—

15 ‘‘(i) section 611, relating to the time

16 by which a consumer reporting agency

17 must take any action, including the provi18 sion of notification to a consumer or other

19 person, in any procedure related to the dis20 puted accuracy of information in a con21 sumer’s file;

22 ‘‘(ii) section 615(a), relating to the

23 duties of a person who takes any adverse

24 action with respect to a consumer on the
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1 basis of information contained in a

2 consumer report;

3 ‘‘(iii) section 615(d), relating to the

4 duties of persons who use a consumer re5 port on a consumer in connection with any

6 credit transaction which is not initiated by

7 the consumer and that consists of a firm

8 offer of credit; or

9 ‘‘(iv) section 623(b)(2), relating to the

10 time by which a person must take any ac11 tion required under section 623(b)(1) with

12 respect to an investigation of information

13 furnished by the person to a consumer re14 porting agency; and

15 ‘‘(B) with respect to the form and content

16 of any disclosure required to be made under

17 section 609(c).

18 ‘‘(2) FEDERAL RESERVE BOARD AUTHORITY.—

19 If the Board of Governors of the Federal Reserve

20 System determines such action to be necessary for

21 the protection of consumers, the Board may pre22 scribe regulations imposing on persons described in

23 paragraph (1), (2), or (3) of subsection (b) or on the

24 holding companies and affiliates of such persons any
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1 requirement described in paragraph (1) of this sub2 section.’’.

3 (2) CLERICAL AMENDMENTS.—

4 (A) The heading for section 621 of the

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

6 amended to read as follows:

7 ‘‘§ 621. Administrative enforcement and authorities;

8 State actions’’.

9 (B) The table of contents at the beginning

10 of the Fair Credit Reporting Act is amended by

11 striking the item relating to section 621 and in12 serting the following new item:

‘‘621. Administrative enforcement and authorities; State actions.’’.

13 (b) DEADLINE TO PRESCRIBE MATTERS.—The Fed14 eral Trade Commission shall prescribe all matters required

15 by this title (including the amendments made by this title)

16 to be prescribed by that Commission, before the end of

17 the 300-day period beginning on the date of the enactment

18 of this Act.

19 SEC. 121. AMENDMENT TO FAIR DEBT COLLECTION PRAC20 TICES ACT.

21 Section 807(11) of the Fair Debt Collection Practices

22 Act (15 U.S.C. 1692e), relating to certain practices con23 stituting prohibited representations, is amended to read

24 as follows:
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1 ‘‘(11) The failure to disclose clearly, in any

2 written communication made to collect a debt or to

3 obtain information about a consumer, that the debt

4 collector is attempting to collect a debt and that any

5 information obtained will be used for that purpose,

6 except that this paragraph does not apply to a com7 munication—

8 ‘‘(A) to acquire location information in ac9 cordance with section 804;

10 ‘‘(B) made solely to acknowledge receipt of

11 monies or payments; or

12 ‘‘(C) that consists solely of information re13 quested by the consumer or the consumer’s at14 torney.’’.

15 SEC. 122. FURNISHING CONSUMER REPORTS FOR CERTAIN

16 PURPOSES RELATING TO CHILD SUPPORT.

17 Section 604(a) of the Fair Credit Reporting Act (15

18 U.S.C. 1681b) is amended in subsection (a) (as designated

19 by section 103(a)(1) of this Act) by adding at the end

20 the following:

21 ‘‘(4) In response to a request by the head of a

22 department, agency, or office of any State or any

23 political subdivision of any State that is responsible

24 under law for enforcing child support orders (or an

25 official authorized by the head of any such depart-
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1 ment, agency, or office), if the person making the re2 quest certifies to the consumer reporting agency

3 that—

4 ‘‘(A) the consumer report is needed to es5 tablish an individual’s capacity to make child

6 support payments, or to determine the appro7 priate level of such payments;

8 ‘‘(B) the person has provided at least 10

9 days prior written notice to the consumer whose

10 report is requested, by certified or registered

11 mail to the last known address of the consumer,

12 that the report will be requested; and

13 ‘‘(C) the consumer report obtained pursu14 ant to this paragraph will be kept confidential,

15 will be used solely for establishing child support

16 payment obligations, and will not be used in

17 connection with any other civil, administrative,

18 or criminal proceeding or for any other pur19 pose.’’.

20 SEC. 123. DISCLOSURE OF INFORMATION AND CONSUMER

21 REPORTS TO FBI FOR COUNTERINTEL22 LIGENCE PURPOSES.

23 (a) IN GENERAL.—The Fair Credit Reporting Act

24 (15 U.S.C. 1681 et seq.) is amended by adding after sec-
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1 tion 624, as redesignated by section 113(a) of this Act,

2 the following new section:

3 ‘‘§ 625. Disclosures to FBI for counterintelligence

4 purposes

5 ‘‘(a) IDENTITY OF FINANCIAL INSTITUTIONS.—Not6 withstanding section 604 or any other provision of this

7 title, a consumer reporting agency shall furnish to the

8 Federal Bureau of Investigation the names and addresses

9 of all financial institutions (as that term is defined in sec10 tion 1101 of the Right to Financial Privacy Act of 1978)

11 at which a consumer maintains or has maintained an ac12 count, to the extent that information is in the files of the

13 agency, when presented with a written request for that

14 information, signed by the Director of the Federal Bureau

15 of Investigation, or the Director’s designee, which certifies

16 compliance with this section. The Director or the Direc17 tor’s designee may make such a certification only if the

18 Director or the Director’s designee has determined in writ19 ing that—

20 ‘‘(1) such information is necessary for the con21 duct of an authorized foreign counterintelligence in22 vestigation; and

23 ‘‘(2) there are specific and articulable facts giv24 ing reason to believe that the consumer—
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1 ‘‘(A) is a foreign power (as defined in sec2 tion 101 of the Foreign Intelligence Surveil3 lance Act of 1978) or a person who is not a

4 United States person (as defined in such sec5 tion 101) and is an official of a foreign power;

6 or

7 ‘‘(B) is an agent of a foreign power and is

8 engaging or has engaged in international terror9 ism (as that term is defined in section 101(c)

10 of the Foreign Intelligence Surveillance Act of

11 1978) or clandestine intelligence activities that

12 involve or may involve a violation of criminal

13 statutes of the United States.

14 ‘‘(b) IDENTIFYING INFORMATION.—Notwithstanding

15 the provisions of section 604 or any other provision of this

16 title, a consumer reporting agency shall furnish identifying

17 information respecting a consumer, limited to name, ad18 dress, former addresses, places of employment, or former

19 places of employment, to the Federal Bureau of Investiga20 tion when presented with a written request, signed by the

21 Director or the Director’s designee, which certifies compli22 ance with this subsection. The Director or the Director’s

23 designee may make such a certification only if the Director

24 or the Director’s designee has determined in writing

25 that—
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1 ‘‘(A) such information is necessary to the

2 conduct of an authorized counterintelligence in3 vestigation; and

4 ‘‘(B) there is information giving reason to

5 believe that the consumer has been, or is about

6 to be, in contact with a foreign power or an

7 agent of a foreign power (as defined in section

8 101 of the Foreign Intelligence Surveillance Act

9 of 1978).

10 ‘‘(c) COURT ORDER FOR DISCLOSURE OF CONSUMER

11 REPORTS.—Notwithstanding section 604 or any other

12 provision of this title, if requested in writing by the Direc13 tor of the Federal Bureau of Investigation, or a designee

14 of the Director, a court may issue an order ex parte direct15 ing a consumer reporting agency to furnish a consumer

16 report to the Federal Bureau of Investigation, upon a

17 showing in camera that—

18 ‘‘(1) the consumer report is necessary for the

19 conduct of an authorized foreign counterintelligence

20 investigation; and

21 ‘‘(2) there are specific and articulable facts giv22 ing reason to believe that the consumer whose

23 consumer report is sought—

24 ‘‘(A) is an agent of a foreign power; and
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1 ‘‘(B) is engaging or has engaged in inter2 national terrorism (as that term is defined in

3 section 101(c) of the Foreign Intelligence Sur4 veillance Act of 1978) or clandestine intel5 ligence activities that involve or may involve a

6 violation of criminal statutes of the United

7 States.

8 The terms of an order issued under this subsection shall

9 not disclose that the order is issued for purposes of a

10 counterintelligence investigation.

11 ‘‘(d) CONFIDENTIALITY.—No consumer reporting

12 agency or officer, employee, or agent of a consumer report13 ing agency shall disclose to any person, other than those

14 officers, employees, or agents of a consumer reporting

15 agency necessary to fulfill the requirement to disclose in16 formation to the Federal Bureau of Investigation under

17 this section, that the Federal Bureau of Investigation has

18 sought or obtained the identity of financial institutions or

19 a consumer report respecting any consumer under sub20 section (a), (b), or (c) and no consumer reporting agency

21 or officer, employee, or agent of a consumer reporting

22 agency shall include in any consumer report any informa23 tion that would indicate that the Federal Bureau of Inves24 tigation has sought or obtained such information or a

25 consumer report.
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1 ‘‘(e) PAYMENT OF FEES.—The Federal Bureau of

2 Investigation shall, subject to the availability of appropria3 tions, pay to the consumer reporting agency assembling

4 or providing reports or information in accordance with

5 procedures established under this section, a fee for reim6 bursement for such costs as are reasonably necessary and

7 which have been directly incurred in searching, reproduc8 ing, or transporting books, papers, records, or other data

9 required or requested to be produced under this section.

10 ‘‘(f) LIMIT ON DISSEMINATION.—The Federal Bu11 reau of Investigation may not disseminate information ob12 tained pursuant to this section outside of the Federal Bu13 reau of Investigation, except to the Department of Justice

14 as may be necessary for the approval or conduct of a for15 eign counterintelligence investigation, or, where the infor16 mation concerns a person subject to the Uniform Code of

17 Military Justice, to appropriate investigative authorities

18 within the military department concerned as may be nec19 essary for the conduct of a joint foreign counterintel20 ligence investigation.

21 ‘‘(g) RULES OF CONSTRUCTION.—Nothing in this

22 section shall be construed to prohibit information from

23 being furnished by the Federal Bureau of Investigation

24 pursuant to a subpoena or court order, or in connection

25 with a judicial or administrative proceeding to enforce the
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1 provisions of this Act. Nothing in this section shall be con2 strued to authorize or permit the withholding or informa3 tion from the Congress.

4 ‘‘(h) REPORTS TO CONGRESS.—On a semiannual

5 basis, the Attorney General of the United States shall fully

6 inform the Permanent Select Committee on Intelligence

7 and the Committee on Banking, Finance and Urban Af8 fairs of the House of Representatives, and the Select Com9 mittee on Intelligence and the Committee on Banking,

10 Housing, and Urban Affairs of the Senate concerning all

11 requests made pursuant to subsections (a), (b), and (c).

12 ‘‘(i) DAMAGES.—Any agency or department of the

13 United States obtaining or disclosing any consumer re14 ports, records, or information contained therein in viola15 tion of this section is liable to the consumer to whom such

16 consumer reports, records, or information relate in an

17 amount equal to the sum of—

18 ‘‘(1) $100, without regard to the volume of

19 consumer reports, records, or information involved;

20 ‘‘(2) any actual damages sustained by the

21 consumer as a result of the disclosure;

22 ‘‘(3) if the violation is found to have been will23 ful or intentional, such punitive damages as a court

24 may allow; and
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1 ‘‘(4) in the case of any successful action to en2 force liability under this subsection, the costs of the

3 action, together with reasonable attorney fees, as de4 termined by the court.

5 ‘‘(j) DISCIPLINARY ACTIONS FOR VIOLATIONS.—If a

6 court determines that any agency or department of the

7 United States has violated any provision of this section

8 and the court finds that the circumstances surrounding

9 the violation raise questions of whether or not an officer

10 or employee of the agency or department acted willfully

11 or intentionally with respect to the violation, the agency

12 or department shall promptly initiate a proceeding to de13 termine whether or not disciplinary action is warranted

14 against the officer or employee who was responsible for

15 the violation.

16 ‘‘(k) GOOD-FAITH EXCEPTION.—Notwithstanding

17 any other provision of this title, any consumer reporting

18 agency or agent or employee thereof making disclosure of

19 consumer reports or identifying information pursuant to

20 this subsection in good-faith reliance upon a certification

21 of the Federal Bureau of Investigation pursuant to provi22 sions of this section shall not be liable to any person for

23 such disclosure under this title, the constitution of any

24 State, or any law or regulation of any State or any politi25 cal subdivision of any State.
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1 ‘‘(l) LIMITATION OF REMEDIES.—Notwithstanding

2 any other provision of this title, the remedies and sanc3 tions set forth in this section shall be the only judicial

4 remedies and sanctions for violation of this section.

5 ‘‘(m) INJUNCTIVE RELIEF.—In addition to any other

6 remedy contained in this section, injunctive relief shall be

7 available to require compliance with the procedures of this

8 section. In the event of any successful action under this

9 subsection, costs together with reasonable attorney fees,

10 as determined by the court, may be recovered.’’.

11 (b) CLERICAL AMENDMENT.—The table of sections

12 at the beginning of the Fair Credit Reporting Act (15

13 U.S.C. 1681a et seq.), as amended by section 114(b) of

14 this Act, is further amended by adding after the item re15 lating to section 624 the following:

‘‘625. Disclosures to FBI for counterintelligence purposes.’’.

16 (c) REPEAL OF PROVISIONS.—The following provi17 sions of the Fair Credit Reporting Act, as amended by

18 this section, are repealed:

19 (1) Section 625.

20 (2) In the table of contents at the beginning of

21 the Fair Credit Reporting Act, the item relating to

22 section 625.

23 SEC. 124. EFFECTIVE DATES.

24 (a) IN GENERAL.—Except as provided in subsection

25 (b), the amendments and repeals made by this title shall
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1 take effect 365 days after the date of the enactment of

2 this Act.

3 (b) EXCEPTIONS.—

4 (1) The amendment made by section 121 shall

5 take effect 90 days after the date of the enactment

6 of this Act.

7 (2) The amendments made by subsections (a)

8 and (b) of section 123 shall take effect on the date

9 of the enactment of this Act.

10 (3) Subsection (c) of section 123 shall take ef11 fect on the date that is 5 years after the date of the

12 enactment of this Act.

13 SEC. 125. RELATIONSHIP TO OTHER LAW.

14 Nothing in this title or the amendments made by this

15 Act shall be considered to supersede or otherwise affect

16 section 2721 of title 18, United States Code, with respect

17 to motor vehicle records for surveys, marketing, or solici18 tations.

19 SEC. 126. SENSE OF SENATE.

20 It is the sense of the Senate that—

21 (1) individuals should generally be judged for

22 credit worthiness based on their own credit worthi23 ness and not on the zip code or neighborhood in

24 which they live; and
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1 (2) the Federal Trade Commission after con2 sultation with the appropriate Federal banking agen3 cies shall report to the Committee on Banking,

4 Housing, and Urban Affairs of the Senate within 6

5 months as to whether and how the location of the

6 residence of an applicant for unsecured credit is con7 sidered by many companies and financial institutions

8 in deciding whether an applicant should be granted

9 credit.

10 SEC. 127. TECHNICAL CORRECTION TO DEPOSITORY INSTI11 TUTIONS MANAGEMENT INTERLOCKS ACT.

12 Section 209(c)(1)(C) of the Depository Institution

13 Management Interlocks Act (12 U.S.C. 3207(c)(1)(C), as

14 added by section 338(b) of the Riegle Community Devel15 opment and Regulatory Improvement Act of 1994) is

16 amended by inserting ‘‘or institutions’’ after ‘‘newly char17 tered institutions’’.

18 TITLE II—CREDIT REPAIR

19 ORGANIZATIONS

20 SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZA21 TIONS.

22 Title IV of the Consumer Credit Protection Act is

23 amended to read as follows:
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1 ‘‘TITLE IV—CREDIT REPAIR

2 ORGANIZATIONS

‘‘Sec.

‘‘401. Short title.

‘‘402. Findings and purposes.

‘‘403. Definitions.

‘‘404. Prohibited practices.

‘‘405. Disclosures.

‘‘406. Credit repair organizations contracts.

‘‘407. Right to cancel contract.

‘‘408. Noncompliance with this title.

‘‘409. Civil liability.

‘‘410. Administrative enforcement.

‘‘411. Statute of limitations.

‘‘412. Relation to State law.

‘‘413. Effective date.

3 ‘‘SEC. 401. SHORT TITLE.

4 ‘‘This title may be cited as the ‘Credit Repair Organi5 zations Act’.

6 ‘‘SEC. 402. FINDINGS AND PURPOSES.

7 ‘‘(a) FINDINGS.—The Congress makes the following

8 findings:

9 ‘‘(1) Consumers have a vital interest in estab10 lishing and maintaining their creditworthiness and

11 credit standing in order to obtain and use credit. As

12 a result, consumers who have experienced credit

13 problems may seek assistance from credit repair or14 ganizations which offer to improve the credit stand15 ing of such consumers.

16 ‘‘(2) Certain advertising and business practices

17 of some companies engaged in the business of credit

18 repair services have worked a financial hardship
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1 upon consumers, particularly those of limited eco2 nomic means and who are inexperienced in credit

3 matters.

4 ‘‘(b) PURPOSES.—The purposes of this title are as

5 follows:

6 ‘‘(1) To ensure that prospective buyers of the

7 services of credit repair organizations are provided

8 with the information necessary to make an informed

9 decision regarding the purchase of such services.

10 ‘‘(2) To protect the public from unfair or decep11 tive advertising and business practices by credit re12 pair organizations.

13 ‘‘SEC. 403. DEFINITIONS.

14 ‘‘For purposes of this title—

15 ‘‘(1) CONSUMER.—The term ‘consumer’ means

16 an individual.

17 ‘‘(2) CONSUMER CREDIT TRANSACTION.—The

18 term ‘consumer credit transaction’ means any trans19 action in which credit is offered or extended to an

20 individual for personal, family, or household pur21 poses.

22 ‘‘(3) CREDIT REPAIR ORGANIZATION.—The

23 term ‘credit repair organization’—

24 ‘‘(A) means any person who uses any in25 strumentality of interstate commerce or the
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1 mails to sell, provide, or perform (or represent

2 that such person can or will sell, provide, or

3 perform) any service, in return for the payment

4 of money or other valuable consideration, for

5 the express or implied purpose of—

6 ‘‘(i) improving any consumer’s credit

7 record, credit history, or credit rating; or

8 ‘‘(ii) providing advice or assistance to

9 any consumer with regard to any activity

10 or service described in clause (i); and

11 ‘‘(B) does not include—

12 ‘‘(i) any nonprofit organization which

13 is exempt from taxation under section

14 501(c)(3) of the Internal Revenue Code of

15 1986;

16 ‘‘(ii) any attorney-at-law who is a

17 member of the bar of the highest court of

18 any State or otherwise licensed under the

19 laws of any State, with respect to services

20 rendered which are within the scope of reg21 ulations applicable to members of such bar

22 or such licensees; or

23 ‘‘(iii) any creditor (as defined in sec24 tion 103 of the Truth in Lending Act),

25 with respect to any consumer, to the extent
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1 the creditor is assisting the consumer to

2 restructure any debt owed by the consumer

3 to the creditor.

4 ‘‘(4) CREDIT.—The term ‘credit’ has the mean5 ing given to such term in section 103(e) of this Act.

6 ‘‘SEC. 404. PROHIBITED PRACTICES.

7 ‘‘(a) IN GENERAL.—No person may—

8 ‘‘(1) make any statement, or counsel or advise

9 any consumer to make any statement, which is un10 true or misleading (or which, upon the exercise of

11 reasonable care, should be known by the credit re12 pair organization, officer, employee, agent, or other

13 person to be untrue or misleading) with respect to

14 any consumer’s creditworthiness, credit standing, or

15 credit capacity to—

16 ‘‘(A) any consumer reporting agency (as

17 defined in section 603(f) of this Act); or

18 ‘‘(B) any person—

19 ‘‘(i) who has extended credit to the

20 consumer; or

21 ‘‘(ii) to whom the consumer has ap22 plied or is applying for an extension of

23 credit;

24 ‘‘(2) make any statement, or counsel or advise

25 any consumer to make any statement, the intended
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1 effect of which is to alter the consumer’s identifica2 tion to prevent the display of the consumer’s credit

3 record, history, or rating for the purpose of conceal4 ing adverse information that is accurate and not ob5 solete to—

6 ‘‘(A) any consumer reporting agency;

7 ‘‘(B) any person—

8 ‘‘(i) who has extended credit to the

9 consumer; or

10 ‘‘(ii) to whom the consumer has ap11 plied or is applying for an extension of

12 credit;

13 ‘‘(3) make or use any untrue or misleading rep14 resentation of the services of the credit repair orga15 nization; or

16 ‘‘(4) engage, directly or indirectly, in any act,

17 practice, or course of business that constitutes or re18 sults in the commission of, or an attempt to commit,

19 a fraud or deception on any person in connection

20 with the offer or sale of the services of the credit re21 pair organization.

22 ‘‘(b) PAYMENT IN ADVANCE.—No credit repair orga23 nization may charge or receive any money or other valu24 able consideration for the performance of any service
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1 which the credit repair organization has agreed to perform

2 for any consumer before such service is fully performed.

3 ‘‘SEC. 405. DISCLOSURES.

4 ‘‘(a) DISCLOSURE REQUIRED.—Any credit repair or5 ganization shall provide any consumer with the following

6 written statement before any contract or agreement be7 tween the consumer and the credit repair organization is

8 executed:

9 ‘‘ ‘Consumer Credit File Rights

10 Under State and Federal Law

11 ‘‘ ‘You have a right to dispute inaccurate information

12 in your credit report by contacting the credit bureau di13 rectly. However, neither you nor any ‘‘credit repair’’ com14 pany or credit repair organization has the right to have

15 accurate, current, and verifiable information removed

16 from your credit report. The credit bureau must remove

17 accurate, negative information from your report only if it

18 is over 7 years old. Bankruptcy information can be re19 ported for 10 years.

20 ‘‘ ‘You have a right to obtain a copy of your credit

21 report from a credit bureau. You may be charged a rea22 sonable fee. There is no fee, however, if you have been

23 turned down for credit, employment, insurance, or a rental

24 dwelling because of information in your credit report with25 in the preceding 60 days. The credit bureau must provide
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1 someone to help you interpret the information in your

2 credit file. You are entitled to receive a free copy of your

3 credit report if you are unemployed and intend to apply

4 for employment in the next 60 days, if you are a recipient

5 of public welfare assistance, or if you have reason to be6 lieve that there is inaccurate information in your credit

7 report due to fraud.

8 ‘‘ ‘You have a right to sue a credit repair organization

9 that violates the Credit Repair Organization Act. This law

10 prohibits deceptive practices by credit repair organiza11 tions.

12 ‘‘ ‘You have the right to cancel your contract with any

13 credit repair organization for any reason within 3 business

14 days from the date you signed it.

15 ‘‘ ‘Credit bureaus are required to follow reasonable

16 procedures to ensure that the information they report is

17 accurate. However, mistakes may occur.

18 ‘‘ ‘You may, on your own, notify a credit bureau in

19 writing that you dispute the accuracy of information in

20 your credit file. The credit bureau must then reinvestigate

21 and modify or remove inaccurate or incomplete informa22 tion. The credit bureau may not charge any fee for this

23 service. Any pertinent information and copies of all docu24 ments you have concerning an error should be given to

25 the credit bureau.
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1 ‘‘ ‘If the credit bureau’s reinvestigation does not re2 solve the dispute to your satisfaction, you may send a brief

3 statement to the credit bureau, to be kept in your file,

4 explaining why you think the record is inaccurate. The

5 credit bureau must include a summary of your statement

6 about disputed information with any report it issues about

7 you.

8 ‘‘ ‘The Federal Trade Commission regulates credit

9 bureaus and credit repair organizations. For more infor10 mation contact:

11 The Public Reference Branch

12 Federal Trade Commission

13 Washington, D.C. 20580’.

14 ‘‘(b) SEPARATE STATEMENT REQUIREMENT.—The

15 written statement required under this section shall be pro16 vided as a document which is separate from any written

17 contract or other agreement between the credit repair or18 ganization and the consumer or any other written material

19 provided to the consumer.

20 ‘‘(c) RETENTION OF COMPLIANCE RECORDS.—

21 ‘‘(1) IN GENERAL.—The credit repair organiza22 tion shall maintain a copy of the statement signed

23 by the consumer acknowledging receipt of the state24 ment.
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1 ‘‘(2) MAINTENANCE FOR 2 YEARS.—The copy

2 of any consumer’s statement shall be maintained in

3 the organization’s files for 2 years after the date on

4 which the statement is signed by the consumer.

5 ‘‘SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

6 ‘‘(a) WRITTEN CONTRACTS REQUIRED.—No services

7 may be provided by any credit repair organization for any

8 consumer—

9 ‘‘(1) unless a written and dated contract (for

10 the purchase of such services) which meets the re11 quirements of subsection (b) has been signed by the

12 consumer; or

13 ‘‘(2) before the end of the 3-business-day period

14 beginning on the date the contract is signed.

15 ‘‘(b) TERMS AND CONDITIONS OF CONTRACT.—No

16 contract referred to in subsection (a) meets the require17 ments of this subsection unless such contract includes the

18 following information (in writing):

19 ‘‘(1) The terms and conditions of payment, in20 cluding the total amount of all payments to be made

21 by the consumer to the credit repair organization or

22 to any other person.

23 ‘‘(2) A full and detailed description of the serv24 ices to be performed by the credit repair organiza25 tion for the consumer, including—
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1 ‘‘(A) all guarantees of performance; and

2 ‘‘(B) an estimate of—

3 ‘‘(i) the date by which the perform4 ance of the services (to be performed by

5 the credit repair organization or any other

6 person) will be complete; or

7 ‘‘(ii) the length of the period nec8 essary to perform such services.

9 ‘‘(3) The credit repair organization’s name and

10 principal business address.

11 ‘‘(4) A conspicuous statement in bold face type,

12 in immediate proximity to the space reserved for the

13 consumer’s signature on the contract, which reads as

14 follows: ‘You may cancel this contract without pen15 alty or obligation at any time before midnight of the

16 3rd business day after the date on which you signed

17 the contract. See the attached notice of cancellation

18 form for an explanation of this right.’.

19 ‘‘SEC. 407. RIGHT TO CANCEL CONTRACT.

20 ‘‘(a) IN GENERAL.—Any consumer may cancel any

21 contract with any credit repair organization without pen22 alty or obligation by notifying the credit repair organiza23 tion of the consumer’s intention to do so at any time be24 fore midnight of the 3rd business day which begins after

25 the date on which the contract or agreement between the
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1 consumer and the credit repair organization is executed

2 or would, but for this subsection, become enforceable

3 against the parties.

4 ‘‘(b) CANCELLATION FORM AND OTHER INFORMA5 TION.—Each contract shall be accompanied by a form, in

6 duplicate, which has the heading ‘Notice of Cancellation’

7 and contains in bold face type the following statement:

8 ‘‘ ‘You may cancel this contract, without any

9 penalty or obligation, at any time before midnight of

10 the 3rd day which begins after the date the contract

11 is signed by you.

12 ‘‘ ‘To cancel this contract, mail or deliver a

13 signed, dated copy of this cancellation notice, or any

14 other written notice to [ name of credit repair

15 organization ] at [ address of credit repair

16 organization ] before midnight on [ date ]

17 ‘‘ ‘I hereby cancel this transaction,

18 [ date ]

19 [ purchaser’s signature ].’.

20 ‘‘(c) CONSUMER COPY OF CONTRACT REQUIRED.—

21 Any consumer who enters into any contract with any cred22 it repair organization shall be given, by the organization—

23 ‘‘(1) a copy of the completed contract and the

24 disclosure statement required under section 405; and
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1 ‘‘(2) a copy of any other document the credit

2 repair organization requires the consumer to sign,

3 at the time the contract or the other document is signed.

4 ‘‘SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

5 ‘‘(a) CONSUMER WAIVERS INVALID.—Any waiver by

6 any consumer of any protection provided by or any right

7 of the consumer under this title—

8 ‘‘(1) shall be treated as void; and

9 ‘‘(2) may not be enforced by any Federal or

10 State court or any other person.

11 ‘‘(b) ATTEMPT TO OBTAIN WAIVER.—Any attempt

12 by any person to obtain a waiver from any consumer of

13 any protection provided by or any right of the consumer

14 under this title shall be treated as a violation of this title.

15 ‘‘(c) CONTRACTS NOT IN COMPLIANCE.—Any con16 tract for services which does not comply with the applica17 ble provisions of this title—

18 ‘‘(1) shall be treated as void; and

19 ‘‘(2) may not be enforced by any Federal or

20 State court or any other person.

21 ‘‘SEC. 409. CIVIL LIABILITY.

22 ‘‘(a) LIABILITY ESTABLISHED.—Any person who

23 fails to comply with any provision of this title with respect

24 to any other person shall be liable to such person in an
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1 amount equal to the sum of the amounts determined

2 under each of the following paragraphs:

3 ‘‘(1) ACTUAL DAMAGES.—The greater of—

4 ‘‘(A) the amount of any actual damage

5 sustained by such person as a result of such

6 failure; or

7 ‘‘(B) any amount paid by the person to the

8 credit repair organization.

9 ‘‘(2) PUNITIVE DAMAGES.—

10 ‘‘(A) INDIVIDUAL ACTIONS.—In the case of

11 any action by an individual, such additional

12 amount as the court may allow.

13 ‘‘(B) CLASS ACTIONS.—In the case of a

14 class action, the sum of—

15 ‘‘(i) the aggregate of the amount

16 which the court may allow for each named

17 plaintiff; and

18 ‘‘(ii) the aggregate of the amount

19 which the court may allow for each other

20 class member, without regard to any mini21 mum individual recovery.

22 ‘‘(3) ATTORNEYS’ FEES.—In the case of any

23 successful action to enforce any liability under para24 graph (1) or (2), the costs of the action, together

25 with reasonable attorneys’ fees.
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1 ‘‘(b) FACTORS TO BE CONSIDERED IN AWARDING

2 PUNITIVE DAMAGES.—In determining the amount of any

3 liability of any credit repair organization under subsection

4 (a)(2), the court shall consider, among other relevant fac5 tors—

6 ‘‘(1) the frequency and persistence of non7 compliance by the credit repair organization;

8 ‘‘(2) the nature of the noncompliance;

9 ‘‘(3) the extent to which such noncompliance

10 was intentional; and

11 ‘‘(4) in the case of any class action, the number

12 of consumers adversely affected.

13 ‘‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.

14 ‘‘(a) IN GENERAL.—Compliance with the require15 ments imposed under this title with respect to credit repair

16 organizations shall be enforced under the Federal Trade

17 Commission Act by the Federal Trade Commission.

18 ‘‘(b) VIOLATIONS OF THIS TITLE TREATED AS VIO19 LATIONS OF FEDERAL TRADE COMMISSION ACT.—

20 ‘‘(1) IN GENERAL.—For the purpose of the ex21 ercise by the Federal Trade Commission of the Com22 mission’s functions and powers under the Federal

23 Trade Commission Act, any violation of any require24 ment or prohibition imposed under this title with re25 spect to credit repair organizations shall constitute
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1 an unfair or deceptive act or practice in commerce

2 in violation of section 5(a) of the Federal Trade

3 Commission Act.

4 ‘‘(2) ENFORCEMENT AUTHORITY UNDER OTHER

5 LAW.—All functions and powers of the Federal

6 Trade Commission under the Federal Trade Com7 mission Act shall be available to the Commission to

8 enforce compliance with this title by any person sub9 ject to enforcement by the Federal Trade Commis10 sion pursuant to this subsection, including the power

11 to enforce the provisions of this title in the same

12 manner as if the violation had been a violation of

13 any Federal Trade Commission trade regulation

14 rule, without regard to whether the credit repair or15 ganization—

16 ‘‘(A) is engaged in commerce; or

17 ‘‘(B) meets any other jurisdictional tests in

18 the Federal Trade Commission Act.

19 ‘‘(c) STATE ACTION FOR VIOLATIONS.—

20 ‘‘(1) AUTHORITY OF STATES.—In addition to

21 such other remedies as are provided under State

22 law, whenever the chief law enforcement officer of a

23 State, or an official or agency designated by a State,

24 has reason to believe that any person has violated or

25 is violating this title, the State—
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1 ‘‘(A) may bring an action to enjoin such

2 violation;

3 ‘‘(B) may bring an action on behalf of its

4 residents to recover damages for which the per5 son is liable to such residents under section 409

6 as a result of the violation; and

7 ‘‘(C) in the case of any successful action

8 under subparagraph (A) or (B), shall be award9 ed the costs of the action and reasonable attor10 ney fees as determined by the court.

11 ‘‘(2) RIGHTS OF COMMISSION.—

12 ‘‘(A) NOTICE TO COMMISSION.—The State

13 shall serve prior written notice of any civil ac14 tion under paragraph (1) upon the Federal

15 Trade Commission and provide the Commission

16 with a copy of its complaint, except in any case

17 where such prior notice is not feasible, in which

18 case the State shall serve such notice imme19 diately upon instituting such action.

20 ‘‘(B) INTERVENTION.—The Commission

21 shall have the right—

22 ‘‘(i) to intervene in any action re23 ferred to in subparagraph (A);

24 ‘‘(ii) upon so intervening, to be heard

25 on all matters arising in the action; and
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1 ‘‘(iii) to file petitions for appeal.

2 ‘‘(3) INVESTIGATORY POWERS.—For purposes

3 of bringing any action under this subsection, nothing

4 in this subsection shall prevent the chief law enforce5 ment officer, or an official or agency designated by

6 a State, from exercising the powers conferred on the

7 chief law enforcement officer or such official by the

8 laws of such State to conduct investigations or to

9 administer oaths or affirmations or to compel the at10 tendance of witnesses or the production of documen11 tary and other evidence.

12 ‘‘(4) LIMITATION.—Whenever the Federal

13 Trade Commission has instituted a civil action for

14 violation of this title, no State may, during the pend15 ency of such action, bring an action under this sec16 tion against any defendant named in the complaint

17 of the Commission for any violation of this title that

18 is alleged in that complaint.

19 ‘‘SEC. 411. STATUTE OF LIMITATIONS.

20 ‘‘Any action to enforce any liability under this title

21 may be brought before the later of—

22 ‘‘(1) the end of the 2-year period beginning on

23 the date of the occurrence of the violation involved;

24 or
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1 ‘‘(2) in any case in which any credit repair or2 ganization has materially and willfully misrepre3 sented any information which—

4 ‘‘(A) the credit repair organization is re5 quired, by any provision of this title, to disclose

6 to any consumer; and

7 ‘‘(B) is material to the establishment of

8 the credit repair organization’s liability to the

9 consumer under this title,

10 the end of the 2-year period beginning on the date

11 of the discovery by the consumer of the misrepresen12 tation.

13 ‘‘SEC. 412. RELATION TO STATE LAW.

14 ‘‘This title shall not annul, alter, affect, or exempt

15 any person subject to the provisions of this title from com16 plying with any law of any State except to the extent that

17 such law is inconsistent with any provision of this title,

18 and then only to the extent of the inconsistency.

19 ‘‘SEC. 413. EFFECTIVE DATE.

20 ‘‘This title shall apply after the end of the 6-month

21 period beginning on the date of the enactment of the Cred22 it Repair Organizations Act, except with respect to con23 tracts entered into by a credit repair organization before

24 the end of such period.’’.
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1 TITLE III—TRUTH IN LENDING

2 ACT

3 SEC. 301. TREATMENT OF DELIVERY FEES AND INTANGI4 BLES TAXES.

5 (a) IN GENERAL.—Section 106(a) of the Truth in

6 Lending Act (15 U.S.C. 1605) is amended by adding at

7 the end the following new paragraph:

8 ‘‘(6) Taxes levied on security instruments or on

9 documents evidencing indebtedness if such taxes

10 must be paid as a precondition to recording the in11 strument securing the evidence of indebtedness.’’.

12 (b) EXCLUDED FEES.—Section 106(e) of the Truth

13 in Lending Act (15 U.S.C. 1605(e)) is amended by insert14 ing ‘‘, if bona fide and reasonable’’ before the colon.

15 (c) FEES FOR DELIVERY CHARGES.—Section 106(e)

16 of the Truth in Lending Act (15 U.S.C. 1605(e)) is

17 amended by adding at the end the following new para18 graph:

19 ‘‘(7) Fees for delivery charges imposed by third

20 parties (including settlement agents, attorneys, and

21 escrow and title companies) if the creditor does not

22 retain the charges and the fees do not exceed $20

23 per delivery, or $50 per consumer transaction.’’.
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1 (d) APPLICABILITY.—The amendments made by this

2 section shall apply to all consumer credit transactions con3 summated on or after February 1, 1995.

4 SEC. 302. LIMITATIONS ON LIABILITY.

5 (a) IN GENERAL.—Chapter 2 of the Truth in Lend6 ing Act (15 U.S.C. 1631 et seq.) is amended by adding

7 at the end the following new section:

8 ‘‘SEC. 139. CERTAIN LIMITATIONS ON LIABILITY.

9 ‘‘(a) IN GENERAL.—For transactions consummated

10 prior to February 1, 1995, a creditor or assignee shall

11 have no civil or criminal liability under this title, nor shall

12 a consumer have extended rescission rights under section

13 125, due to a creditor’s improper disclosure of—

14 ‘‘(1) delivery charges actually and reasonably

15 imposed by the creditor, or any delivery charges im16 posed by third parties (including settlement agents,

17 attorneys, and escrow and title companies), if the

18 creditor does not retain the charges; or

19 ‘‘(2) taxes levied on security instruments or

20 documents evidencing indebtedness.

21 ‘‘(b) APPLICABILITY.—Subsection (a) does not apply

22 to—

23 ‘‘(1) any individual action or counterclaim

24 brought under this title filed prior to October 1,
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1 1994, that alleged (prior to such date) improper dis2 closure of delivery charges or taxes;

3 ‘‘(2) any class action brought under this title in

4 which a class was certified prior to October 1, 1994,

5 that alleged (prior to such date) improper disclosure

6 of delivery charges or taxes;

7 ‘‘(3) the named individual plaintiffs in any class

8 action filed under this title prior to October 1, 1994,

9 that alleged (prior to such date) improper disclosure

10 of delivery charges or taxes; or

11 ‘‘(4) any consumer credit transaction in which

12 a notice of rescission was sent to the creditor prior

13 to October 1, 1994.’’.

14 (b) AMENDMENT TO THE TABLE OF SECTIONS.—The

15 table of sections for chapter 2 of the Truth in Lending

16 Act is amended by inserting after the item relating to sec17 tion 138 the following:

‘‘139. Certain limitations on liability.’’.

18 TITLE IV—DISASTER RELIEF

19 SEC. 401. DEPOSITORY INSTITUTIONS DISASTER RELIEF.

20 (a) TRUTH IN LENDING ACT; EXPEDITED FUNDS

21 AVAILABILITY ACT.—

22 (1) TRUTH IN LENDING ACT.—During the 240-

23 day period beginning on the date of enactment of

24 this Act, the Board of Governors of the Federal Re25 serve System may make exceptions to the Truth in
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1 Lending Act for transactions within an area in

2 which the President, pursuant to section 401 of the

3 Robert T. Stafford Disaster Relief and Emergency

4 Assistance Act, has determined, on or after July 1,

5 1994, that a major disaster exists, or within an area

6 determined to be eligible for disaster relief under

7 other Federal law by reason of damage related to

8 the 1994 flooding in Georgia, Alabama, and Florida

9 resulting from Tropical Storm Alberto, if the Board

10 determines that the exception can reasonably be ex11 pected to alleviate hardships to the public resulting

12 from such disaster that outweigh possible adverse ef13 fects.

14 (2) EXPEDITED FUNDS AVAILABILITY ACT.—

15 During the 240-day period beginning on the date of

16 enactment of this Act, the Board of Governors of

17 the Federal Reserve System may make exceptions to

18 the Expedited Funds Availability Act for depository

19 institution offices located within any area referred to

20 in paragraph (1) of this section if the Board deter21 mines that the exception can reasonably be expected

22 to alleviate hardships to the public resulting from

23 such disaster that outweigh possible adverse effects.
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1 (3) TIME LIMIT ON EXCEPTIONS.—Any excep2 tion made under this subsection shall expire not

3 later than July 1, 1995.

4 (4) PUBLICATION REQUIRED.—The Board of

5 Governors of the Federal Reserve System shall pub6 lish in the Federal Register a statement that—

7 (A) describes any exception made under

8 this subsection; and

9 (B) explains how the exception can reason10 ably be expected to produce benefits to the pub11 lic that outweigh possible adverse effects.

12 (b) DEPOSIT OF INSURANCE PROCEEDS.—

13 (1) IN GENERAL.—The appropriate Federal

14 banking agency may, by order, permit an insured de15 pository institution to subtract from the institution’s

16 total assets, in calculating compliance with the lever17 age limit prescribed under section 38 of the Federal

18 Deposit Insurance Act, an amount not exceeding the

19 qualifying amount attributable to insurance pro20 ceeds, if the agency determines that—

21 (A) the institution—

22 (i) had its principal place of business

23 within an area in which the President, pur24 suant to section 401 of the Robert T. Staf25 ford Disaster Relief and Emergency Assist-
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1 ance Act, has determined, on or after July

2 1, 1994, that a major disaster exists, or

3 within an area determined to be eligible for

4 disaster relief under other Federal law by

5 reason of damage related to the 1994

6 flooding in Georgia, Alabama, and Florida

7 resulting from Tropical Storm Alberto, on

8 the day before the date of any such deter9 mination;

10 (ii) derives more than 60 percent of

11 its total deposits from persons who nor12 mally reside within, or whose principal

13 place of business is normally within, areas

14 of intense devastation caused by the major

15 disaster;

16 (iii) was adequately capitalized (as de17 fined in section 38 of the Federal Deposit

18 Insurance Act) before the major disaster;

19 and

20 (iv) has an acceptable plan for manag21 ing the increase in its total assets and total

22 deposits; and

23 (B) the subtraction is consistent with the

24 purpose of section 38 of the Federal Deposit

25 Insurance Act.
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1 (2) TIME LIMIT ON EXCEPTIONS.—Any excep2 tion made under this subsection shall expire not

3 later than July 1, 1995.

4 (3) DEFINITIONS.—For purposes of this sub5 section, the following definitions shall apply:

6 (A) APPROPRIATE FEDERAL BANKING

7 AGENCY.—The term ‘‘appropriate Federal

8 banking agency’’ has the same meaning as in

9 section 3 of the Federal Deposit Insurance Act.

10 (B) INSURED DEPOSITORY INSTITUTION.—

11 The term ‘‘insured depository institution’’ has

12 the same meaning as in section 3 of the Federal

13 Deposit Insurance Act.

14 (C) LEVERAGE LIMIT.—The term ‘‘lever15 age limit’’ has the same meaning as in section

16 38 of the Federal Deposit Insurance Act.

17 (D) QUALIFYING AMOUNT ATTRIBUTABLE

18 TO INSURANCE PROCEEDS.—The term ‘‘qualify19 ing amount attributable to insurance proceeds’’

20 means the amount (if any) by which the institu21 tion’s total assets exceed the institution’s aver22 age total assets during the calendar quarter

23 ending before the date of any determination re24 ferred to in paragraph (1)(A)(i), because of the

25 deposit of insurance payments or governmental
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1 assistance made with respect to damage caused

2 by, or other costs resulting from, the major dis3 aster.

4 (c) BANKING AGENCY PUBLICATION REQUIRE5 MENTS.—

6 (1) IN GENERAL.—A qualifying regulatory

7 agency may take any of the following actions with

8 respect to depository institutions or other regulated

9 entities whose principal place of business is within,

10 or with respect to transactions or activities within,

11 an area in which the President, pursuant to section

12 401 of the Robert T. Stafford Disaster Relief and

13 Emergency Assistance Act, has determined, on or

14 after July 1, 1994, that a major disaster exists, or

15 within an area determined to be eligible for disaster

16 relief under other Federal law by reason of damage

17 related to the 1994 flooding in Georgia, Alabama,

18 and Florida resulting from Tropical Storm Alberto,

19 if the agency determines that the action would facili20 tate recovery from the major disaster:

21 (A) PROCEDURE.—Exercising the agency’s

22 authority under provisions of law other than

23 this subsection without complying with—

24 (i) any requirement of section 553 of

25 title 5, United States Code; or
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1 (ii) any provision of law that requires

2 notice or opportunity for hearing or sets

3 maximum or minimum time limits with re4 spect to agency action.

5 (B) PUBLICATION REQUIREMENTS.—Mak6 ing exceptions, with respect to institutions or

7 other entities for which the agency is the pri8 mary Federal regulator, to—

9 (i) any publication requirement with

10 respect to establishing branches or other

11 deposit-taking facilities; or

12 (ii) any similar publication require13 ment.

14 (2) PUBLICATION REQUIRED.—A qualifying

15 regulatory agency shall publish in the Federal Reg16 ister a statement that—

17 (A) describes any action taken under this

18 subsection; and

19 (B) explains the need for the action.

20 (3) QUALIFYING REGULATORY AGENCY DE21 FINED.—For purposes of this subsection, the term

22 ‘‘qualifying regulatory agency’’ means—

23 (A) the Board of Governors of the Federal

24 Reserve System;

25 (B) the Comptroller of the Currency;
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1 (C) the Director of the Office of Thrift Su2 pervision;

3 (D) the Federal Deposit Insurance Cor4 poration;

5 (E) the Financial Institutions Examination

6 Council;

7 (F) the National Credit Union Administra8 tion; and

9 (G) with respect to chapter 53 of title 31,

10 United States Code, the Secretary of the Treas11 ury.

12 (4) EXPIRATION.—Any exception made under

13 this subsection shall expire not later than July 1,

14 1995.

15 (d) SENSE OF THE CONGRESS.—It is the sense of

16 the Congress that the Board of Governors of the Federal

17 Reserve System, the Comptroller of the Currency, the Di18 rector of the Office of Thrift Supervision, the Federal De19 posit Insurance Corporation, and the National Credit

20 Union Administration should encourage depository insti21 tutions to meet the financial services needs of their com22 munities and customers located in areas affected by the

23 1994 flooding in Georgia, Alabama, and Florida resulting

24 from Tropical Storm Alberto.
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1 (e) OTHER AUTHORITY NOT AFFECTED.—No provi2 sion of this section shall be construed as limiting the au3 thority of any department or agency under any other pro4 vision of law.

Passed the House of Representatives October 5,

1994.

Attest:

Clerk.

103D CONGRESS

2D SESSION H. R. 5178

AN ACT

To amend the Fair Credit Reporting Act, and for

other purposes.