Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Proposed Rules 9123

13. Alex S. Konigsberg, QC (‘‘Konigsberg’’),

Lapoint Rosenstein

14. Andrew P. Loewinger (‘‘Loewinger’’),

Abraham Pressman & Bauer

15. H. Bret Lowell (‘‘Lowell’’), Brownstein

Zeidman & Lore

16. John Melle (‘‘Melle’’), Office of U.S. Trade

Representative

17. Raymond L. Miolla (‘‘Miolla’’), Burger

King Corp.

18. Alec Papadakis (‘‘Papadakis’’), Hurt

Sinisi Papadakis

19. Matthew R. Shay (‘‘Shay’’), International

Franchise Association (‘‘IFA’’)

20. Neil A. Simon (‘‘Simon’’), Hogan &

Hartson

21. Leonard Swartz (‘‘Swartz’’), Arthur

Andersen & Co.

22. Greg L. Walther (‘‘Walther’’), Outback

Steakhouse International

23. Dennis E. Wieczorek (‘‘Wieczorek’’),

Rudnick & Wolfe

24. Erik B. Wulff (‘‘Wulff’’), Hogan & Hartson

25. Philip F. Zeidman (‘‘Zeidman’’),

Brownstein Zeidman & Lore

26. Carl Zwisler (‘‘Zwisler’’), Keck, Mahin &

Cate

Public Participants

1. Jeff Brams (‘‘Brams’’), Sign-A-Rama and

Shipping Connection

2. Pamella Mills (‘‘Mills’’), Baker & McKenzie

Attachment 3—Table of Commenters

Comment 1. Robert E. Mulloy, Jr. (‘‘Mulloy’’)

Comment 2. Stanley M. Dub (‘‘Dub’’),

Dworken & Bernstein

Comment 3. Marvin J. Migdol (‘‘Migdol’’),

Nationwide Franchise Marketing

Services

Comment 4. SCPromotions, Inc.

(‘‘SCPromotions’’)

Comment 5. R. Dana Pennell (‘‘Pennell’’)

Comment 6. Robin Day Glenn (‘‘Glenn’’)

Comment 7. Jack McBirney (‘‘McBirney’’),

McGrow Consulting

Comment 8. SRA International (‘‘SRA

International’’)

Comment 9. Harold Brown (‘‘Brown’’),

Brown & Stadfeld

Comment 10. Ronald N. Rosenwasser

(‘‘Rosenwasser’’)

Comment 11. Louis F. Sokol (‘‘Sokol’’)

Comment 12. J. Howard Beales III (‘‘Beales’’),

Professor, George Washington University

Comment 13. Peter Lagarias (‘‘Lagarias’’)

Comment 14. Harold L. Kestenbaum

(‘‘Kestenbaum’’)

Comment 15. Walter D. Wilson (‘‘Wilson’’),

Better Business Bureau of Central

Georgia, Inc.

Comment 16. Connie B. D’Imperio

(‘‘D’Imperio’’), Color Your Carpet, Inc.

Comment 17. Q.M. Marketing, Inc. (‘‘Q.M.

Marketing’’)

Comment 18. David Gurnick (‘‘Gurnick’’),

Kindel & Anderson

Comment 19. U-Save Auto Rental (‘‘U-Save

Auto Rental’’)

Comment 20. The Longaberger Co.

(‘‘Longaberger’’)

Comment 21. Direct Selling Association

(‘‘DSA’’)

Comment 22. American Bar Association,

Section of Antitrust Law (‘‘ABA AT’’)

Comment 23. Dennis E. Wieczorek

(‘‘Wieczorek’’), Rudnick & Wolfe

Comment 24. Real Estate National Network

(‘‘RENN’’) (representing Better Homes

and Gardens Real Estate Service; Century

21 Real Estate Corp.; Coldwell Bankers

Residential Group; Electronic Realty

Associates (‘‘ERA’’); Realty World Corp.;

Re/Max International; and The

Prudential Real Estate Affiliates)

Comment 25. Attorney General Jim Ryan

(‘‘General Ryan), State of Illinois

Comment 26. Alan S. Nopar (‘‘Nopar’’),

Bosco, Blau, Ward & Nopar

Comment 27. Snap-On, Inc. (‘‘Snap-On’’)

Comment 28. Steven Rabenberg

(‘‘Rabenberg’’), Explore St. Louis

Comment 29. Douglas M. Brooks (‘‘Brooks’’),

Martland & Brooks

Comment 30. Robert N. McDonald

(‘‘Commissioner McDonald’’), Securities

Commissioner, State of Maryland

Comment 31. Little Caesars (‘‘Little Caesars’’)

Comment 32. International Franchise

Association (‘‘IFA’’)

Comment 33. Brownstein Zeidman & Lore

(‘‘Brownstein Zeidman’’)

Comment 34. Jere W. Glover (‘‘Glover’’),

Counsel for Advocacy, U.S. Small

Business Administration (‘‘SBA

Advocacy’’)

Comment 35. Jan Meyers (‘‘Representative

Meyers’’), Chair, House Committee on

Small Business

Comment 36. Neil A. Simon (‘‘Simon’’),

Hogan & Hartson

Comment 37. Deborah Bortner (‘‘Bortner’’),

Washington State Department of

Financial Institutes, Securities Division

Comment 38. American Franchisee

Association (‘‘AFA’’)

Comment 39. American Association of

Franchisees & Dealers (‘‘AAFD’’)

Comment 40. Warren Lewis (‘‘Lewis’’), Lewis

& Trattner

Comment 41. Century 21 Real Estate Corp.

(‘‘Century 21’’)

Comment 42. John Hayden (‘‘Hayden’’)

Comment 43. North American Securities

Administrators Association, Inc.

(‘‘NASAA’’)

Comment 44. Robert L. Perry (‘‘Perry’’)

Comment 45. The State Bar of California,

Business Law Section (‘‘CA BLS’’)

Comment 46. Mike Gaston (‘‘Gaston’’),

Barkley & Evergreen

Comment 47. The Southland Corporation

(‘‘Southland’’)

Comment 48. Medicap Pharmacies, Inc.

(‘‘Medicap’’)

Comment 49. Rochelle B. Spandorf

(‘‘Spandorf’’), ABA Forum on

Franchising, Andrew C. Selden

(‘‘Selden’’), David J. Kaufmann

(‘‘Kaufmann’’)

Comment 50. Joyce G. Mazero (‘‘Mazero’’),

Locke Purnell Rain Harrell

Comment 51. Mark B. Forseth (‘‘Forseth’’),

Locke Purnell Rain Harrell

Comment 52. Forte Hotels (‘‘Forte Hotels’’)

Comment 53. R.A. Politte (‘‘Politte’’)

Comment 54. Politte (see supra, Comment

53)

Comment 55. Brown (see supra, Comment 9)

Comment 56. Wieczorek (see supra,

Comment 23)

Comment 57. Scott Shane (‘‘Shane’’), Georgia

Institute of Technology

Comment 58. Friday’s

Comment 59. Carl E. Zwisler (‘‘Zwisler’’),

Keck, Mahin & Cate

Comment 60. Wieczorek (see supra,

Comment 23)

Comment 61. Enrique A. Gonzalez

(‘‘Gonzalez’’), Gonzalez Calvillo Y

Forastierei

Comment 62. Pepsico Restaurants

International (‘‘Pepsico’’)

Comment 63. IFA (see supra, Comment 32)

Comment 64. Atlantic Richfield Company

(‘‘ARCO’’)

Comment 65. David Clanton (‘‘Clanton’’)

Comment 66. Leonard Swartz (‘‘Swartz’’),

Arthur Andersen & Co.

Comment 67. John R.F. Baer (‘‘Baer’’), Keck,

Mahin & Cate

Comment 68. Lynn Scott (‘‘Scott’’)

Comment 69. Eversheds (‘‘Eversheds’’)

Comment 70. Brownstein Zeidman (see

supra, Comment 33)

Comment 71. Penny Ward (‘‘Ward’’), Baker &

McKenzie

Comment 72. Matthias Stein (‘‘Stein’’)

Comment 73. Byron Fox (‘‘Fox’’), Hunton &

Williams

Comment 74. Papa Johns Pizza (‘‘Papa

Johns’’)

Comment 75. Harold L. Kestenbaum (see

supra, Comment 14)

[FR Doc. 97–4988 Filed 2–27–97; 8:45 am]

BILLING CODE 6750–01–P

16 CFR Part 601

Proposed Notices of Rights and Duties

Under the Fair Credit Reporting Act

AGENCY: Federal Trade Commission.

ACTION: Publication of proposed

guidance for forms, and request for

public comment.

SUMMARY: The Federal Trade

Commission is publishing for public

comment three notices that it is required

to prescribe under recent amendments

to the Fair Credit Reporting Act. Under

those amendments, which become

effective September 30, 1997, consumer

reporting agencies will be required to

provide: A summary of rights under the

law to consumers; a notice of

responsibilities under the law to parties

who regularly furnish such agencies

with consumer information, and a

notice of responsibilities under the law

to parties who obtain consumer reports

from the agency. Under the statute, a

consumer reporting agency will be in

compliance with these requirements if it

provides notice forms substantially

similar to those prescribed by the

Commission.

DATES: Comments must be received on

or before March 31, 1997.

ADDRESSES: Comments should be

addressed to: Office of the Secretary,
9124 Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Proposed Rules

1 The CRA must also provide the consumer

summary to any party to whom it provides a

consumer report for employment purposes (CCRRA

Section 2403(b), FCRA Section 604(o)(1)(B)), and

the employer must in turn provide the report and

the summary to the consumer before taking adverse

action against him or her (FCRA Section 604(o)(3)).

Federal Trade Commission, Room H–

159, Sixth Street and Pennsylvania

Avenue NW, Washington, DC 20580.

Submissions should be marked

‘‘Proposed Notices of Rights and Duties

under the Fair Credit Reporting Act, 16

CFR Part 601—Comment.’’

FOR FURTHER INFORMATION CONTACT:

Clarke Brinckerhoff or William Haynes,

Attorneys, Division of Credit Practices,

Federal Trade Commission,

Washington, DC 20580, 202–326–3224.

SUPPLEMENTARY INFORMATION:

I. Background

A major revision of the Fair Credit

Reporting Act (‘‘FCRA’’) was included

in the Omnibus Consolidated

Appropriations Act for Fiscal Year 1997

(Pub. L. 104–208), signed by the

President on September 30, 1996. The

revisions of the FCRA are set forth in a

portion of the omnibus bill (Title II,

Subtitle D, Chapter 1), the ‘‘Consumer

Credit Reporting Reform Act of 1996’’

(CCRRA). The provisions discussed in

this publication become effective on

September 30, 1997.

The amended FCRA requires each

consumer reporting agency (‘‘CRA,’’

usually a credit bureau) to provide

certain notices, and mandates that the

Federal Trade Commission

(‘‘Commission’’ or ‘‘FTC’’) prescribe the

content of all three notices and the form

of one notice.

The FCRA amendments require each

CRA to provide as part of its file

disclosure to consumers a written

summary of consumer rights

(‘‘summary’’ or ‘‘consumer summary’’)

under the FCRA ((CCRRA Section

2408(d), FCRA Section 609(c)).1 Section

2408(d)(1) of the CCRRA adds a new

Section 609(c) to the FCRA that

describes the required summary of

consumer rights and the FTC’s mandate

with respect to it. The new section

specifies certain items that must be in

the summary, requires the Commission

to prescribe the form and content of the

disclosure, and states that the provision

will not take effect until the

Commission has prescribed the

summary.

Each CRA must also provide a notice

of responsibilities under the FCRA to

persons who buy consumer information

from the CRA (‘‘user notice’’), and a

notice of responsibilities under the

FCRA to persons who regularly furnish

consumer information to the CRA

(‘‘furnisher notice’’) (CCRRA Section

2407(b), FCRA Section 607(d)(1)). The

amended law states that the

‘‘Commission shall prescribe the

content of the notices’’ to be provided

(FCRA Section 607(d)(2)).

For each of the three required

disclosures, a CRA complies with the

law if it provides the applicable person

with a notice that is substantially

similar to that prescribed by the

Commission (FCRA Sections 607(d)(2)

and 609(c)(3)).

II. Opportunity for Public Comment

The Commission welcomes comments

related in any way to the proposed

consumer summary, user notice, or

furnisher notice. The Commission is

particularly interested in comments in

the following areas.

A. Consumer Summary

1. Balancing brevity and completeness

The statute gives conflicting guidance

as to whether the summary should be

brief or comprehensive. It is described

as a ‘‘summary of all the rights the

consumer has under’’ the FCRA (Section

609(c)(1)(A)) that includes ‘‘a brief

description of * * * all rights of

consumers’’ provided by that law

(Section 609(c)(2)(A)). Arguably, no

document that is actually a

‘‘summary’’—or that constitutes a ‘‘brief

description’’ of FCRA consumer rights—

could literally include ‘‘all’’ of them.

The proposal seeks to meet these

various statutory goals by prescribing a

summary that is both reasonably

comprehensive and user friendly for

consumers. Is the proposed notice too

long in any way to be effective as a

summary, and if so, how should it be

abbreviated? Conversely, are there

important consumer rights that are not

included in the proposed form or are

discussed too briefly? Please identify

any specific sections of the proposed

summary that are viewed as too lengthy

or incomplete.

2. Statutorily-required items

Section 609(c)(2) mandates that the

summary include an explanation of how

the consumer may assert his or her

rights, list all federal agencies with

administrative authority under the

FCRA in a form that will help

consumers find the appropriate agency,

and include specific statements

concerning (1) state laws and authorities

that may assist consumers, and (2) the

fact that verifiable accurate information

that is not outdated under Section 605

need not be removed. Are the

statutorily-required items accurately

and understandably presented? In what

way, if any, could they be improved?

Specifically, the Commission has

drafted the table of federal agencies at

the end of the summary to comply

literally with Section 609(c)(2)(C) by

including all agencies granted

enforcement authority by Section

621(b)(1). Is what way, if any, could this

table be shortened or made more

understandable?

3. Terminology

Because the summary is a document

intended to inform consumers, the

proposal is written in non-technical

language, to the extent it is possible to

do so and also include in sufficient

detail the large number of important

consumer rights conferred by the FCRA.

Are there sections which can be

improved by simplifying the

presentation to make it easier for

consumers to understand? Are there

sections where the language does not

accurately convey the substance of the

provision? How could such sections be

improved?

4. Form issues

The Commission is required to

‘‘prescribe the form and content of’’ the

consumer summary (Section 609(c)(3))

(emphasis added). The goal is to create

a notice that sets forth all statutorily

required items in a form that is readable,

understandable, and attractive. The

Commission proposes to prescribe that

the text be provided on paper no smaller

than 81⁄2x11 inches in size, in type size

no smaller than 12-point type (8-point

for the chart of federal agencies), in a

document separate from the consumer

report. Generally, is there a format that

would better convey the same

information to consumers? If so, what is

it and what costs would it entail? Is

there a format that would convey the

same information to consumers in a less

expensive manner? If so, what is it and

what cost saving would it achieve?

5. Numeric changes

The Commission realizes that some of

the numbers in the notice may change

over time. For example, the permissible

charges for file disclosures or telephone

numbers of agencies may change. Such

changes will be incorporated in any

revisions to the summary the

Commission may prescribe from time to

time. In addition, the Commission

proposes that all notices issued prior to

such revisions that contain accurate and

updated information concerning

numeric changes will be considered

‘‘substantially similar’’ to the prescribed

notice as to those items. Is there a better

way to accommodate such changes?
Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Proposed Rules 9125

B. Furnisher Notice

1. Content of notice

The proposed notice summarizes the

responsibilities imposed upon

furnishers of information to CRAs by

Section 623 of the FCRA. Are all

statutory obligations of furnishers

included? Is the presentation accurate

and understandable? In what way can it

be improved? Is it sufficient for the

notice to refer furnishers to the

complete text of the FCRA at the

Internet web site maintained by the

Commission, or would the notice be

improved if it was expanded to add the

complete text of Section 623?

2. Scope of notice

The FCRA directs the Commission to

prescribe a notice setting forth the

responsibilities of any party ‘‘who

regularly and in the ordinary course of

business furnishes (consumer)

information to the agency’’ and requires

each CRA to provide the notice to all

such parties (CCRRA Section 2407(b),

FCRA Section 607(d)). Two of the listed

duties apply only to parties who furnish

information to CRAs regularly, and thus

by inference, not to occasional

information providers. Would some

CRAs send these notices to occasional

as well as regular furnishers? If so,

would addition of a reference to the

duties of occasional, as well as regular,

providers be helpful?

3. Terminology

The Commission’s proposed notice

summarizes the duties of furnishers.

This summary is written in nontechnical language, but with the

expectation that regular providers of

information to CRAs will be relatively

sophisticated and will be able to

understand both the language of the

statute and the description of duties. Is

the description of duties accurate and

understandable for this audience? What

improvements can be made?

C. User Notice

1. Number of Notices

The ‘‘users’’ of consumer reports fall

into a number of categories, and the

duties imposed by the FCRA vary by

user category. Accordingly, CRAs could

send out one notice to all users setting

forth all of the user requirements of the

FCRA or they could send out notices

that contain only those responsibilities

that pertain to the particular user. The

Commission is proposing a single

notice, which first specifies the general

responsibilities that apply to all users of

consumer reports from a CRA (Part I).

The proposed notice then lists the

responsibilities that are specific to

certain categories of users: users of

consumer reports for employment

purposes (Part II); users of investigative

consumer reports (Part III); users of

medical information (Part IV); users of

‘‘prescreened’’ lists (Part V); and users

who are resellers (Part VI). Should there

be a single notice or multiple notices?

If multiple notices are appropriate,

which types of users should receive

particularized notices? Can CRAs easily

determine through the certifications

they receive from users which portions

of the proposed notice are applicable to

which users?

2. Content of notice

The proposed notice discusses the

principal portions of the FCRA that

impose specific obligations upon all

those who receive consumer reports and

has included these in the six parts of the

proposed notice. Are there other

statutory requirements that should be

included? Should additional

information be included in the notice?

Will the length of the notice impose

substantial burdens upon CRAs? Are

there ways to modify the notice to

reduce this burden?

3. Terminology

The Commission expects that user

notices will be sent to a wide range of

users and that these persons will have

varying degrees of legal sophistication.

Are the duties set forth in the proposed

notice clear and understandable? Can

they be improved upon?

D. Timing of Distribution of Notices

With respect to the consumer

summary, Section 609(c) makes clear

that it must be provided every time a

CRA makes a written file disclosure

under the section. With respect to the

furnisher and user notices, however,

Section 607(d) provides no specific

guidance. Is there a need for advice from

the Commission about the timing of the

distribution of furnisher and user

notices to ensure that the documents are

distributed in such a way that they are

meaningful and effective? If so, when

should the notices be distributed?

Should the distribution of the user

notice vary based on the recipient’s

status (e.g., regular and occasional

users)?

E. Impact on Small Businesses

The Commission is seeking comments

on the impact that its prescription of

these notices will have on small entities

and for suggestions as to any ways in

which the Commission can both meet

its obligations under the FCRA and, if

possible, lessen any burden imposed on

small businesses.

The FCRA itself requires three types

of notices containing specified types of

information, and also specifies how one

type (the consumer notices) must be

distributed. Accordingly, this

discussion does not cover the necessity

for any of the notices or the distribution

requirements for the consumer notices.

The Commission is prescribing these

notices at the direction of Congress. The

purpose of these notices is described in

section I above. There is no requirement

that the notices used be exactly as

prescribed by the Commission. Rather,

there is a presumption of compliance

with the FCRA if notices are used that

are substantially similar to those

prescribed by the Commission. (FCRA

Sections 607 and 609).

A search of proprietary data bases has

revealed approximately 500 consumer

reporting agencies that have sales of $5

million or less per year—the threshold

for ‘‘small’’ credit reporting businesses

as defined by the Small Business

Administration. However, because the

consumer reporting industry is

dominated by a number of large

companies who provide most of the

information sold by smaller entities in

the industry, the Commission believes

that most of these 500 companies either

are affiliated, or have contractual

arrangements, with one of the large

consumer reporting agencies in the

industry. These large agencies, as well

as industry trade associations, may

make information about the notice

requirements and the Commission’s

prescribed forms available to the smaller

entities. The Commission’s staff plans to

make information about complying with

the new FCRA requirements available

through various means, including

placing the prescribed forms on the

Commission’s Internet home page.

The FCRA imposes no specific record

keeping or reporting requirements

directly tied to the use of the notices

prescribed by the Commission. In

addition, there are no federal rules or

regulations that conflict with or

duplicate the notices prescribed by the

Commission.

In these circumstances, the

Commission does not believe that the

prescription of the notices will have a

significant economic impact upon small

business. In fact, the Commission’s

‘‘prescription’’ of these notices may

lessen the burden on small businesses,

since these entities can—but need not—

adopt the Commission’s forms and

thereby avoid the risk and expense of

developing their notices independently.

To ensure that no significant economic

impact is overlooked, however, the

Commission seeks comments on this

issue. The Commission also seeks
9126 Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Proposed Rules

comments on possible alternatives to

the language of the proposed notices to

accomplish the stated objectives within

the statutory framework. Specifically,

what benefits and costs to consumers

and businesses would result from the

proposed notices? Would the proposed

notices have a significant economic

impact on a substantial number of small

business entities? If so, explain the

nature of any such impact.

F. Firm Timetable for Comments

The FTC intends to move promptly in

order to allow time for (1) the staff to

review and consider comments on the

proposed summary and notices, (2) the

agency to prescribe them in final form,

and (3) the industry to prepare and use

the final versions of the documents

when the amendments take effect on

September 30, 1997. The public should

therefore anticipate no extension of the

30-day comment period.

III. Review under the Paperwork

Reduction Act

The FTC has reviewed the three

notices that the FCRA amendments

require it to prescribe—the Summary of

FCRA Rights, the Notice of User

Obligations, and the Notice of Furnisher

Obligations—for the purpose of

determining whether the agency will

‘‘conduct or sponsor’’ any ‘‘collection(s)

of information’’ as these terms are

defined in the OMB regulation that

implements the Paperwork Reduction

Act (44 U.S.C. Chapter 35) (‘‘PRA’’), 5

C.F.R. Part 1320.

A. Conduct or Sponsor

The purpose of the PRA is to

minimize the Federal paperwork burden

that agencies impose on individuals,

businesses, State and local governments,

and others by collecting unnecessary or

duplicative information. 44 U.S.C.

Section 3501; 5 C.F.R. § 1320. Thus, an

agency must seek and obtain clearance

from OMB before it ‘‘conducts or

sponsors’’ a ‘‘collection of information’’

from ten or more persons during a 12

month period. 44 U.S.C. Section 3507;

5 C.F.R. 1320.5.

The FCRA amendments require the

credit reporting agencies to provide

relevant parties with a Notice of User

Obligations and a Notice of Furnisher

Obligations that describe certain

investigation, disclosure, and

recordkeeping requirements. The

amendments further require the FTC to

prescribe the ‘‘content’’ of the notices.

So doing will not trigger the application

of the PRA. The PRA is triggered when

an agency ‘‘conduct[s) or sponsor[s)’’ a

collection of information. The

investigation, disclosure, and

recordkeeping requirements described

in the User and Furnisher Notices are

imposed by the statute and the notices

merely describe the requirements of the

new FCRA. Further, the requirements

contained in the notices become

effective on October 31, 1997, regardless

of whether the FTC has provided the

language for these forms by that time.

The FCRA amendments also require

the Commission to prescribe the content

and form of a new Summary of

Consumer Rights that must be provided

to consumers. Because the amended

FCRA further provides that: ‘‘[n)o

disclosures shall be required under this

subsection [discussing the Summary of

Consumer Rights) until the date on

which the Federal Trade Commission

prescribes the form and content of such

disclosures * * *,’’ it could be argued

that the Commission’s actions in

prescribing the manner and content of

the Summary of Consumer Rights may

be considered to ‘‘require’’ or ‘‘cause’’

the disclosures to occur. Nevertheless,

as discussed below, we have determined

that none of these notices constitute a

‘‘collection of information.’’

B. Collection of Information

Because the three notices to be

prescribed by the Commission contain

information that must be distributed to

third parties, these documents involve

public disclosures that would otherwise

constitute ‘‘collections of information’’

under the PRA. However, OMB has

recognized that some disclosures do not

entail the ‘‘collection of information’’

and are thus outside the Act’s

paperwork control provisions.

Specifically relevant here is OMB’s

determination that a disclosure

requirement is not a ‘‘collection of

information’’ when the information to

be disclosed is supplied by the

government. 5 C.F.R. 1320.3(c)(2). In

such a situation, a mandate to disclose

does not impose any requirement to

collect the information to be disclosed.

The information in the proposed

FCRA notices will be supplied by the

government. The proposed notices

supply all the information that subject

firms will be required to disclose. The

FCRA requires credit reporting agencies

to provide these (or substantially

similar) notices. FCRA Sections

607(d)(2) and 609(c)(3). The latitude

provided by the statute to use language

other than the precise language

prescribed by the FTC does not

undercut this concept because the

consumer reporting agencies can simply

adopt these notices for distribution

without any change to the language. We

have concluded therefore that these

notices do not fall within the definition

of ‘‘collection of information’’ because

they are ‘‘[t)he public disclosure of

information originally supplied by the

Federal government to the recipient for

the purpose of disclosure to the public

* * *’’ 5 C.F.R. § 1320.3(c)(2). Thus, the

PRA does not apply.

List of Subjects in 16 CFR Part 601

Credit, Trade practices.

Pursuant to 15 U.S.C. 1681g and

1681s, the FTC hereby proposes to add

to Subchapter F of Chapter I of 16 CFR

a new Part 601 to read as follows:

PART 601—SUMMARY OF CONSUMER

RIGHTS, NOTICE OF USER

RESPONSIBILITIES, AND NOTICE OF

FURNISHER RESPONSIBILITIES

UNDER THE FAIR CREDIT REPORTING

ACT

Sec.

601.1 Authority and purpose.

601.2 Legal effect.

Appendix A to Part 601—Prescribed

Summary of Consumer Rights

Appendix B to Part 601—Prescribed Notice

of Furnisher Responsibilities

Appendix C to Part 601—Prescribed Notice

of User Responsibilities

Authority: 15 U.S.C. 1681g and 1681s.

§ 601.1 Authority and purpose.

(a) Authority. This part is issued by

the Commission pursuant to the

provisions of the Fair Credit Reporting

Act (15 U.S.C. 1681 et seq.), as most

recently amended by the Consumer

Credit Reporting Reform Act of 1996

(Title II, Subtitle D, Chapter 1, of the

Omnibus Consolidated Appropriations

Act for Fiscal Year 1997), Public Law

104–208, 110 Stat. 3009–426 (Sept. 30,

1996).

(b) Purpose. The purpose of this part

is to comply with sections 607(c) and

609(c) of the Fair Credit Reporting Act,

as amended. Section 609(c)(3) directs

the FTC to prescribe the form and

content of a summary of consumers’

legal rights under the FCRA that the

amended law requires each consumer

reporting agency to provide when

disclosing the information in its file to

consumers, and section 609(c)(4)

provides that the summary need not be

provided until the FTC has in fact

prescribed its form and content. Section

607(d)(2) directs the FTC to prescribe

the content of notices that consumer

reporting agencies are required to

provide to parties that supply

information to, or purchase consumer

reports from, the agency. These notices

will set forth the responsibilities under

the FCRA of all persons who furnish

information to consumer reporting

agencies or use information subject to

the FCRA.
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§ 601.2 Legal effect.

The forms prescribed by the FTC do

not constitute a trade regulation rule.

They carry out the directive in the

statute that the FTC prescribe the

summary and notices. A consumer

reporting agency that provides notices

substantially similar to those prescribed

by the FTC will be in compliance with

Section 607(d) or 609(c) of the FCRA, as

applicable.

Appendix A to Part 601—Prescribed

Summary of Consumer Rights

The prescribed form for this summary is as

a separate document, on paper no smaller

than 81⁄2x11 inches in size, with text no less

than 12-point type (8-point for the chart of

federal agencies), in bold or capital letters as

indicated. The form in this appendix

prescribes both the content and the sequence

of items in the required summary. A

consumer reporting agency that is not

required by law to have a toll-free number

may omit the sentence inviting consumers to

call that number. A summary may accurately

reflect changes in numerical items that

change over time (e.g., dollar amounts, or

phone numbers and addresses of federal

agencies), and remain in compliance.

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By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97–4987 Filed 2–27–97; 8:45 am]

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