I

103D CONGRESS

1ST SESSION H. R. 619

To amend the Fair Credit Reporting Act to assure the completeness and

accuracy of consumer information maintained by credit reporting agencies, to better inform consumers of their rights under the Act, and

to improve enforcement, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 26, 1993

Mr. MCCANDLESS introduced the following bill; which was referred to the

Committee on Banking, Finance and Urban Affairs

A BILL

To amend the Fair Credit Reporting Act to assure the completeness and accuracy of consumer information maintained by credit reporting agencies, to better inform consumers of their rights under the Act, and to improve

enforcement, 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 TITLE I—AMENDMENTS TO FAIR

4 CREDIT REPORTING ACT

5 SEC. 101. SHORT TITLE.

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

7 Reform Act of 1993’’.
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1 SEC. 102. DEFINITIONS.

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

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

4 adding at the end the following new subsection:

5 ‘‘(j) The term ‘adverse action’—

6 ‘‘(1) has the meaning given to such term in sec7 tion 701(d)(6) of the Equal Credit Opportunity Act;

8 and

9 ‘‘(2) includes—

10 ‘‘(A) any denial of, increase in any charge

11 for, or reduction in the amount of, insurance

12 for personal, family, or household purposes

13 made in connection with the underwriting of in14 surance;

15 ‘‘(B) any denial of employment or any

16 other decision for employment purposes which

17 adversely affects any current or prospective em18 ployee; and

19 ‘‘(C) any action taken, or determination

20 made—

21 ‘‘(i) with respect to a consumer for—

22 ‘‘(I) an application for an exten23 sion of credit;

24 ‘‘(II) a report for the cashing of

25 a check drawn by the consumer;
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1 ‘‘(III) an application for a trans2 action account (as that term is de3 fined in section 19(b)(1) of the Fed4 eral Reserve Act) at a depository in5 stitution (as that term is defined in

6 section 3(c) of the Federal Deposit

7 Insurance Act);

8 ‘‘(IV) an application for the leas9 ing of real estate; and

10 ‘‘(ii) which is adverse to the interest

11 of the consumer.’’.

12 (b) EXCLUSIONS FROM DEFINITION OF CONSUMER

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

14 Act (15 U.S.C. 1681a(d)) is amended in the second sen15 tence—

16 (1) by inserting before the semicolon at the end

17 of clause (A) the following: ‘‘, or (i) any communica18 tion of that information among persons related by

19 common ownership or affiliated by corporate control;

20 or (ii) any communication of information from a

21 credit application by a consumer among persons re22 lated by common ownership or affiliated by cor23 porate control, provided that it is clearly and con24 spicuously disclosed with the application that the in-
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1 formation may be communicated among such per2 sons and the consumer consents’’;

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

4 semicolon at the end;

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

7 (4) by adding at the end the following: ‘‘(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, if either of those persons has com13 plied with section 615(d)(2)(B) with respect to a

14 consumer report from which the information is

15 taken and the consumer has consented to use of the

16 report for the transaction in accordance with section

17 615(d)(2)(C); (E) any report furnished for use in

18 connection with a transaction which consists of an

19 extension of credit to be used for a commercial pur20 pose, or (F) any report or information furnished to

21 a government agency pursuant to section 608 for

22 law enforcement purposes.’’.

23 (c) CONSUMER REPORTING AGENCY.—Section 603(f)

24 of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)) is

25 amended by striking ‘‘practice’’ and inserting ‘‘business’’.
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1 (d) FIRM OFFER OF CREDIT.—Section 603 of the

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

3 amended by adding after subsection (j) (as added by sub4 section (a) of this section) the following:

5 ‘‘(k) The term ‘firm offer of credit’ means any offer

6 of credit to a consumer that will be honored if, based on

7 information in a consumer report on the consumer and

8 other information bearing on the creditworthiness of the

9 consumer, the consumer is determined to meet the criteria

10 used to select the consumer for the offer.’’.

11 (e) CREDIT TRANSACTION WHICH IS NOT INITIATED

12 BY THE CONSUMER.—Section 603 of the Fair Credit Re13 porting Act (15 U.S.C. 1681a) is further amended by add14 ing after subsection (k) (as added by subsection (d) of this

15 section) the following:

16 ‘‘(l) The term ‘credit transaction which is not initi17 ated by the consumer’ does not include the use of a

18 consumer report by a person with which the consumer has

19 an account, for purposes of—

20 ‘‘(1) reviewing the account; or

21 ‘‘(2) collecting the account.’’.

22 (f) STATE OR LOCAL CHILD SUPPORT ENFORCE23 MENT AGENCY DEFINED.—Section 603 of the Fair Credit

24 Reporting Act (15 U.S.C. 1681a) is further amended by
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1 adding after subsection (l) (as added by subsection (e) of

2 this section) the following:

3 ‘‘(m) The term ‘State or local child support enforce4 ment agency’ means a State or local agency which admin5 isters a State or local program for establishing and enforc6 ing child support obligations.’’.

7 (g) STATE.—Section 603 of the Fair Credit Report8 ing Act (15 U.S.C. 1681a) is further amended by adding

9 after subsection (m) (as added by subsection (f) of this

10 section) the following:

11 ‘‘(n) The term ‘State’ means any State, the Common12 wealth of Puerto Rico, the District of Columbia, and any

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

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

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

16 amended in the first sentence—

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

18 for’’; and

19 (2) by striking ‘‘(1)’’ before ‘‘credit or insur20 ance’’.

21 SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EM22 PLOYMENT PURPOSES.

23 (a) FURNISHING CONSUMER REPORTS FOR BUSI24 NESS TRANSACTIONS.—Section 604 of the Fair Credit Re25 porting Act (15 U.S.C. 1681b) is amended—
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1 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

2 ‘‘A consumer reporting agency’’;

3 (2) in subsection (a) (as designated by para4 graph (1)) by moving the left hand margins of para5 graphs (1) through (3) (including such margins of

6 subparagraphs (A) through (E) of paragraph (3)) 2

7 ems to the right; and

8 (3) in subsection (a)(3) (as designated by para9 graph (1) of this subsection) by amending subpara10 graph (E) to read as follows:

11 ‘‘(E) otherwise has a legitimate business

12 need for the information in connection with—

13 ‘‘(i) a review of an existing account of

14 the consumer; or

15 ‘‘(ii) a business transaction that—

16 ‘‘(I) is initiated by the consumer;

17 or

18 ‘‘(II) is a direct marketing trans19 action for which the furnishing of a

20 consumer report by the agency is not

21 prohibited under subsection (e).’’.

22 (b) FURNISHING AND USING CONSUMER REPORTS

23 FOR EMPLOYMENT PURPOSES.—Section 604 of the Fair

24 Credit Reporting Act (15 U.S.C. 1681b) is further amend25 ed by adding at the end the following new subsection:
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1 ‘‘(b) CONDITIONS FOR FURNISHING AND USING

2 CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—

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

4 reporting agency may furnish a consumer report for

5 employment purposes only if—

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

7 from the agency certifies to the agency that—

8 ‘‘(i) the disclosure required under

9 paragraph (2) or (3), as the case may be,

10 with respect to such consumer report has

11 been made; and

12 ‘‘(ii) information from the consumer

13 report will not be used in violation of any

14 applicable Federal or State equal employ15 ment opportunity law or regulation; and

16 ‘‘(B) the consumer reporting agency pro17 vides with the report a summary of the consum18 er’s rights under this title, as prescribed by the

19 Federal Trade Commission under section

20 609(c)(3).

21 ‘‘(2) DISCLOSURE TO PROSPECTIVE EMPLOY22 EES.—A person may not procure a consumer report,

23 or cause a consumer report to be procured, for em24 ployment purposes with respect to any consumer
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1 who is not an employee at the time such report is

2 procured or caused to be procured unless—

3 ‘‘(A) a clear and conspicuous disclosure

4 has been made in writing to the consumer be5 fore the report is procured or caused to be pro6 cured that a consumer report may be obtained

7 for purposes of considering the consumer for

8 employment; and

9 ‘‘(B) the consumer authorizes in writing

10 the procurement of the report.

11 ‘‘(3) DISCLOSURES TO EXISTING EMPLOYEES.—

12 ‘‘(A) IN GENERAL.—Except as provided in

13 subparagraph (B), a person may not procure a

14 consumer report, or cause a consumer report to

15 be procured, for employment purposes with re16 spect to any employee unless the employee has

17 received, at any time after becoming an em18 ployee and before the report is procured, a writ19 ten disclosure that consumer reports may be

20 used for employment purposes.

21 ‘‘(B) WRITTEN MATERIAL CONSTITUTING

22 DISCLOSURE.—A written statement that

23 consumer reports may be used for employment

24 purposes which is contained in employee guide25 lines or manuals available to employees or in-
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1 cluded in written materials provided to employ2 ees shall constitute a written disclosure for pur3 poses of subparagraph (A).

4 ‘‘(4) CONDITIONS ON USE FOR ADVERSE AC5 TIONS.—In using a consumer report for employment

6 purposes, before taking any adverse action based in

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

8 to the consumer to whom the report relates—

9 ‘‘(A) a copy of the report;

10 ‘‘(B) a description of the consumer’s rights

11 under this title, as prescribed by the Federal

12 Trade Commission under section 609(c)(3); and

13 ‘‘(C) a reasonable opportunity to respond

14 to any information in the report that is dis15 puted by the consumer.’’.

16 SEC. 104. AMENDMENTS RELATING TO PRESCREENING OF

17 CONSUMER REPORTS; PROHIBITION ON UN18 AUTHORIZED OR UNCERTIFIED USE OF IN19 FORMATION.

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

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

22 103, is further amended—

23 (1) in subsection (a) by striking ‘‘A consumer

24 reporting agency’’ and inserting ‘‘Subject to sub25 section (c), any consumer reporting agency’’; and
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1 (2) by adding after subsection (b) (as added by

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

3 ‘‘(c) FURNISHING REPORTS IN CONNECTION WITH

4 CREDIT TRANSACTIONS NOT INITIATED BY THE

5 CONSUMER.—

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

7 agency may furnish a consumer report relating to

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

9 connection with any credit transaction which is not

10 initiated by the consumer only if—

11 ‘‘(A) the consumer authorizes the agency

12 to provide such report to such person; or

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

14 offer of credit;

15 ‘‘(ii) the consumer reporting agency has

16 complied with subsection (d); and

17 ‘‘(iii) the consumer has not elected in ac18 cordance with subsection (d)(1) to have the con19 sumer’s name and address excluded from lists

20 of names provided by the agency pursuant to

21 this paragraph.

22 ‘‘(2) LIMITS ON INFORMATION RECEIVED

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

24 pursuant to paragraph (1)(B) only—
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1 ‘‘(A) the name and address of a consumer;

2 and

3 ‘‘(B) information pertaining to a consumer

4 that is not identified or identifiable with the

5 consumer.

6 ‘‘(3) INFORMATION REGARDING INQUIRIES.—

7 Except as provided in section 609(a)(4), a consumer

8 reporting agency shall not furnish to any person a

9 record of inquiries solely resulting from credit trans10 actions which are not initiated by a consumer.

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

12 FROM LISTS.—

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

14 have his or her name and address excluded from any

15 list provided by a consumer reporting agency in con16 nection with a transaction which is not initiated by

17 the consumer and which is a credit or direct market18 ing transaction, by—

19 ‘‘(A) notifying the agency, through the no20 tification system maintained by the agency

21 under paragraph (3), that the consumer does

22 not consent to any use of consumer reports re23 lating to the consumer in connection with any

24 transaction which is not initiated by the

25 consumer; and
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1 ‘‘(B) returning to the agency a signed

2 written notice of the election, if provided by the

3 agency in accordance with paragraph (2).

4 ‘‘(2) PROVISION OF WRITTEN NOTICE TO

5 CONSUMER.—A consumer reporting agency shall

6 provide to a consumer a written notice for purposes

7 of paragraph (1)(B), by not later than 5 business

8 days after being notified of the election of the

9 consumer in accordance with paragraph (1)(A).

10 ‘‘(3) NOTIFICATION SYSTEM.—Each consumer

11 reporting agency which furnishes a consumer report

12 in connection with any transaction which is not initi13 ated by a consumer and which is a credit or direct

14 marketing transaction, shall—

15 ‘‘(A) establish and maintain a notification

16 system, including a toll-free telephone number,

17 which permits any consumer whose consumer

18 report is maintained by the agency to notify the

19 agency, with appropriate identification, of the

20 consumer’s election to have the consumer’s

21 name and address excluded from any list of

22 names and addresses provided by the agency for

23 such a transaction; and

24 ‘‘(B) publish by not later than 12 months

25 after the date of the enactment of the
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1 Consumer Reporting Reform Act of 1992, and

2 at least annually thereafter, in a publication of

3 general circulation in the area served by the

4 agency—

5 ‘‘(i) a notification that information in

6 consumer files maintained by the agency

7 may be used in connection with such trans8 actions; and

9 ‘‘(ii) the address and toll-free tele10 phone number for consumers to use to no11 tify the agency of the consumer’s election

12 under subparagraph (A).

13 Establishment and maintenance of a notification

14 system and publication by a consumer reporting

15 agency in accordance with this paragraph is deemed

16 to be compliance with this paragraph by each affili17 ate of the agency.

18 ‘‘(4) AGENCIES WHICH OPERATE NATION19 WIDE.—Each consumer reporting agency which com20 piles and maintains files on consumers on a nation21 wide basis shall establish and maintain a notification

22 system for purposes of paragraph (3) jointly with

23 other such consumer reporting agencies.

24 ‘‘(5) EFFECTIVENESS OF ELECTION.—An elec25 tion of a consumer under paragraph (1)—
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1 ‘‘(A) shall be effective with respect to a

2 consumer reporting agency beginning on the

3 later of—

4 ‘‘(i) the date on which the consumer

5 notifies the agency in accordance with

6 paragraph (1)(A); or

7 ‘‘(ii) the date on which the consumer

8 returns to the agency a signed written no9 tification of the election in accordance with

10 paragraph (1)(B), if provided by the agen11 cy; and

12 ‘‘(B) shall not be effective after the earlier

13 of—

14 ‘‘(i) the date which is 2 years after

15 that effective date; or

16 ‘‘(ii) the date on which the consumer

17 notifies the agency (through the system es18 tablished by the agency under paragraph

19 (3)) that the election is no longer effective;

20 and

21 ‘‘(C) shall be effective with respect to each

22 affiliate of the agency.’’.

23 (b) FURNISHING CONSUMER REPORTS FOR DIRECT

24 MARKETING TRANSACTIONS.—Section 604 of the Fair

25 Credit Reporting Act (15 U.S.C. 1681b) is further amend-
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1 ed by adding after subsection (d) (as added by subsection

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

3 ‘‘(e) FURNISHING CONSUMER REPORTS FOR DIRECT

4 MARKETING TRANSACTIONS NOT INITIATED BY

5 CONSUMER.—

6 ‘‘(1) FURNISHING REPORTS PROHIBITED.—A

7 consumer reporting agency may not furnish a

8 consumer report for use for a direct marketing

9 transaction that is not initiated by the consumer to

10 whom the report relates, if—

11 ‘‘(A) the consumer notifies the agency that

12 the consumer does not consent to that use;

13 ‘‘(B) the report includes any information

14 other than the name and address of the

15 consumer; or

16 ‘‘(C) the furnishing of the consumer report

17 bears on the status of any account of the

18 consumer, because of the criteria used to decide

19 to furnish the report.

20 ‘‘(2) NOTIFICATION.—A consumer may notify a

21 consumer reporting agency for purposes of para22 graph (1)(A) by notifying the joint notification sys23 tem established under subsection (d)(4).’’.

24 (c) USE OF INFORMATION OBTAINED FROM RE25 PORTS.—Section 604 of the Fair Credit Reporting Act (15
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1 U.S.C. 1681b) is further amended by adding after sub2 section (e) (as added by subsection (b) of this section) the

3 following new subsection:

4 ‘‘(f) CERTAIN USE OR OBTAINING OF INFORMATION

5 PROHIBITED.—A person shall not use or obtain informa6 tion from a consumer report for any purpose unless—

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

8 consumer report is authorized to be furnished under

9 subsection (a); and

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

11 section 607 by a prospective user of the report.’’.

12 (d) FIRST NOTIFICATIONS BY CONSUMERS.—A

13 consumer may notify a consumer reporting agency

14 through a notification system established and maintained

15 by the agency under section 604(d) of the Fair Credit Re16 porting Act, as amended by subsection (a), on or after

17 the date which is 455 days after the date of the enactment

18 of this Act.

19 SEC. 105. AMENDMENTS RELATING TO OBSOLETE INFOR20 MATION AND INFORMATION CONTAINED IN

21 CONSUMER REPORTS.

22 (a) OBSOLETE INFORMATION.—Section 605(a) of the

23 Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amend24 ed—
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1 (1) by striking ‘‘(a) Except as authorized’’ and

2 inserting ‘‘(a) OBSOLETE INFORMATION.—Except as

3 authorized’’;

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

5 ‘‘(7) OTHER ACCOUNTS INFORMATION.—Infor6 mation regarding an account of a consumer with a

7 person, whether obtained from the person or any

8 other source (including public record information),

9 that relates to a payment which—

10 ‘‘(A) was not more than 30 days overdue

11 on the date of payment and was made more

12 than 3 years before the date of the making of

13 the report;

14 ‘‘(B) was more than 30 days, and not

15 more than 60 days, overdue on the date of pay16 ment and was made more than 4 years before

17 the date of the making of the report; or

18 ‘‘(C) was more than 60 days, and not more

19 than 90 days, overdue on the date of payment

20 and was made more than 5 years before the

21 date of the making of the report.’’; and

22 (3) by moving the left margin of paragraphs (1)

23 through (6) 2 ems to the right so as to align with

24 paragraph (7) (as added by paragraph (2) of this

25 subsection).
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1 (b) INCREASE IN EXEMPTED AMOUNTS.—Section

2 605(b) of the Fair Credit Reporting Act (15 U.S.C.

3 1681c(b)) is amended—

4 (1) by striking ‘‘(b) The provisions’’ and insert5 ing ‘‘(b) EXEMPTED TRANSACTIONS.—The provi6 sions’’;

7 (2) in paragraph (1) by striking ‘‘$50,000’’ and

8 inserting ‘‘$200,000’’;

9 (3) in paragraph (2) by striking ‘‘$50,000’’ and

10 inserting ‘‘$200,000’’; and

11 (4) in paragraph (3) by striking ‘‘$20,000’’ and

12 inserting ‘‘$100,000’’.

13 (c) CLARIFICATION OF REPORTING PERIOD.—Sec14 tion 605 of the Fair Credit Reporting Act (15 U.S.C.

15 1681c) is further amended by adding at the end the fol16 lowing new subsection:

17 ‘‘(c) RUNNING OF REPORTING PERIOD.—The 7-year

18 period referred to in paragraphs (4) and (6) of subsection

19 (a) shall begin, with respect to any delinquent account

20 which is placed for collection (internally or by referral to

21 a 3d party, whichever is earlier), charged to profit and

22 loss, or subjected to any similar action, upon the expira23 tion of the 180-day period beginning on the date of the

24 commencement of the delinquency which immediately pre-
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1 ceded the collection activity, charge to profit and loss, or

2 similar action.’’.

3 (d) ADDITIONAL INFORMATION ON BANKRUPTCY

4 FILINGS REQUIRED.—Section 605 of the Fair Credit Re5 porting Act (15 U.S.C. 1681c) is further amended by add6 ing after subsection (c) (as added by subsection (c) of this

7 section) the following new subsection:

8 ‘‘(d) INFORMATION REQUIRED TO BE DISCLOSED.—

9 Any consumer reporting agency which furnishes a

10 consumer report which contains information regarding

11 any case involving the consumer which arises under title

12 11, United States Code, shall include in the report an

13 identification of the chapter of such title 11 under which

14 such case arises if provided by the source of the informa15 tion.’’.

16 (e) DISCLOSURE OF PERSONAL INFORMATION.—Sec17 tion 605 of the Fair Credit Reporting Act (15 U.S.C.

18 1681c) is further amended by adding after subsection (d)

19 (as added by subsection (d) of this section) the following

20 new subsection:

21 ‘‘(e) DISCLOSURE OF PERSONAL INFORMATION.—A

22 person who prepares any credit report which includes per23 sonal credit information on any consumer shall not include

24 in the report any adverse item of information on the

25 consumer with respect to matters which antedate the re-
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1 port by more than 10 years or which could not be included

2 in any consumer report on the consumer in accordance

3 with this section.’’.

4 (f) INDICATION OF CLOSURE OF ACCOUNT.—Section

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

6 is further amended by adding after subsection (e) (as

7 added by subsection (e) of this section) the following new

8 subsection:

9 ‘‘(f) INDICATION OF CLOSURE OF ACCOUNT BY

10 CONSUMER.—If a consumer reporting agency is notified

11 pursuant to section 622(a)(4) that a credit account of a

12 consumer was closed by the consumer, the agency shall

13 indicate that fact in any consumer report that includes

14 information related to the account.’’.

15 (g) PROHIBITION ON MAINTAINING OR FURNISHING

16 MEDICAL INFORMATION.—Section 605 of the Fair Credit

17 Reporting Act (15 U.S.C. 1681c) is further amended by

18 adding after subsection (f) (as added by subsection (f) of

19 this section) the following new subsection:

20 ‘‘(g) MEDICAL INFORMATION.—A consumer report21 ing agency shall not maintain in the file of a consumer,

22 or furnish for credit or employment purposes a consumer

23 report on a consumer which contains, any medical infor24 mation about the consumer without the consent of the

25 consumer.’’.
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1 (h) INCLUSION OF INFORMATION REGARDING OVER2 DUE CHILD SUPPORT OBLIGATIONS.—Section 605 of the

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

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

6 ‘‘(h) OVERDUE CHILD SUPPORT OBLIGATIONS.—A

7 consumer reporting agency shall include in any consumer

8 report furnished by the agency pursuant to section 604(a)

9 information (if any) on the failure of the consumer to pay

10 overdue support (as that term is defined in section 466(e)

11 of the Social Security Act), which is—

12 ‘‘(1) provided to the agency by a State or local

13 child support enforcement agency; or

14 ‘‘(2) provided to the agency and verified by any

15 local, State, or Federal Government agency.’’.

16 (i) PROHIBITION ON MAINTAINING OR FURNISHING

17 CERTAIN ACCOUNT INFORMATION.—Section 605 of the

18 Fair Credit Reporting Act (15 U.S.C. 1681c) is further

19 amended by adding after subsection (h) (as added by sub20 section (h) of this section) the following new subsection:

21 ‘‘(i) CERTAIN ACCOUNT INFORMATION.—

22 ‘‘(1) EXCLUSION FROM CONSUMER REPORTS.—

23 A consumer reporting agency shall not maintain in

24 the file of a consumer, or furnish a consumer report

25 on a consumer which contains, any information re-
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1 garding a failure of the consumer to make any pay2 ment on an account of the consumer that became

3 due in a period during which the consumer was re4 ceiving unemployment compensation under the laws

5 of any State (or but for the exhaustion of benefits

6 would be entitled to receive such compensation), if—

7 ‘‘(A) the consumer requests in writing that

8 the consumer reporting agency exclude the in9 formation from either the file or such reports;

10 ‘‘(B) the consumer provides to the agency

11 appropriate documentation which demonstrates

12 that the consumer was receiving (or would so be

13 entitled to receive) such compensation during

14 that period; and

15 ‘‘(C) the account is maintained in a cur16 rent status during the one-year period ending

17 on the date of the submittal of the request.’’.

18 ‘‘(2) APPROPRIATE DOCUMENTATION.—The

19 Federal Trade Commission shall prescribe what con20 stitutes appropriate documentation for purposes of

21 paragraph (1).’’.

22 (j) CLERICAL AMENDMENTS.—

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

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

25 by striking ‘‘Obsolete information’’ and insert-
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1 ing ‘‘Requirements relating to information

2 contained in consumer reports’’.

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

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

5 is amended by striking the item relating to section

6 605 and inserting the following:

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

7 SEC. 106. AMENDMENTS RELATING TO COMPLIANCE PRO8 CEDURES.

9 (a) DISCLOSURE OF CONSUMER REPORTS BY

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

11 (15 U.S.C. 1681e) is amended by adding at the end the

12 following new subsection:

13 ‘‘(c) DISCLOSURE OF CONSUMER REPORTS BY

14 USERS ALLOWED.—A consumer reporting agency may not

15 prohibit a user of a consumer report furnished by the

16 agency on a consumer from disclosing the contents of the

17 report to the consumer, if adverse action against the

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

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

20 (b) NOTICE TO USERS AND PROVIDERS OF INFORMA21 TION TO ENSURE COMPLIANCE.—Section 607 of the Fair

22 Credit Reporting Act (15 U.S.C. 1681e) is further amend23 ed by adding after subsection (c) (as added by subsection

24 (a) of this section) the following new subsection:
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1 ‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR2 MATION.—

3 ‘‘(1) NOTICE REQUIREMENT.—A consumer re4 porting agency shall provide to any person—

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

6 course of business furnishes information to the

7 agency with respect to any consumer; or

8 ‘‘(B) to whom a consumer report is pro9 vided by the agency;

10 a notice of such person’s responsibilities under this

11 title.

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

13 Trade Commission shall prescribe the content of no14 tices under paragraph (1).’’.

15 (c) RECORD OF IDENTITY OF USERS AND PURPOSES

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

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

18 amended by adding after subsection (d) (as added by sub19 section (b) of this section) the following new subsection:

20 ‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE21 SALE.—

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

23 a consumer report for purposes of reselling the re24 port (or any information in the report) unless the
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1 person discloses to the consumer reporting agency

2 which originally furnishes the report—

3 ‘‘(A) the identity of the ultimate end-user

4 of the report (or information), and

5 ‘‘(B) each permissible purpose under sec6 tion 604 for which the report is furnished to

7 the ultimate end-user of the report (or informa8 tion).

9 ‘‘(2) RESPONSIBILITIES OF PROCURERS FOR

10 RESALE.—A person which procures a consumer re11 port for purposes of reselling the report (or any in12 formation in the report) shall—

13 ‘‘(A) establish and comply with reasonable

14 procedures designed to ensure that the report

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

16 a purpose for which the report may be fur17 nished under section 604, including by ensuring

18 that the person—

19 ‘‘(i) identifies each prospective user of

20 the resold report (or information);

21 ‘‘(ii) certifies each purpose for which

22 the report (or information) will be used;

23 and
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1 ‘‘(iii) certifies that the report (or in2 formation) will be used for no other pur3 pose; and

4 ‘‘(B) before reselling the report, makes

5 reasonable efforts to verify the identifications

6 and certifications made under subparagraph

7 (A).’’.

8 SEC. 107. AMENDMENTS RELATING TO CONSUMER DISCLO9 SURES.

10 (a) ALL INFORMATION IN CONSUMER’S FILE RE11 QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the

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

13 amended to read as follows:

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

15 the time of the request.’’.

16 (b) MORE INFORMATION CONCERNING RECIPIENTS

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

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

19 to read as follows:

20 ‘‘(3)(A) Identification of—

21 ‘‘(i) each person who for employment pur22 poses within the 2-year period preceding the re23 quest; and
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1 ‘‘(ii) each person who for any other pur2 pose within the 6-month period preceding the

3 request;

4 procured a consumer report.

5 ‘‘(B) An identification of a person under sub6 paragraph (A) shall include—

7 ‘‘(i) the name of the person or, if applica8 ble, the trade name (written in full) under

9 which such person conducts business; and

10 ‘‘(ii) upon request of the consumer, the ad11 dress of the person.’’.

12 (c) INFORMATION REGARDING INQUIRIES.—Section

13 609(a) of the Fair Credit Reporting Act (15 U.S.C.

14 1681g(a)) is amended—

15 (1) by adding at the end the following:

16 ‘‘(4) A record of all inquiries received by the

17 agency in the 6-month period preceding the request

18 that identified the consumer in connection with a

19 credit transaction which is not initiated by the

20 consumer.’’; and

21 (2) by moving the left margin of paragraph (2)

22 2 ems to the right so as to align with paragraph (4)

23 (as added by paragraph (1) of this subsection).

24 (d) SUMMARY OF RIGHTS REQUIRED TO BE IN25 CLUDED WITH DISCLOSURE.—
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1 (1) IN GENERAL.—Section 609 of the Fair

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

3 by adding at the end the following new subsection:

4 ‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN5 CLUDED WITH DISCLOSURE.—

6 ‘‘(1) SUMMARY OF RIGHTS.—A consumer re7 porting agency shall provide to a consumer, with

8 each written disclosure by the agency to the

9 consumer under this section—

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

11 consumer has under this title; and

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

13 agency that compiles and maintains files on

14 consumers on a nationwide basis, a toll-free

15 telephone number which the consumer can use

16 to communicate with the agency.

17 ‘‘(2) SPECIFIC ITEMS REQUIRED TO BE IN18 CLUDED.—The summary of rights required under

19 paragraph (1) shall include—

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

21 rights of consumers under this title;

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

23 may exercise the rights of the consumer under

24 this title;
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1 ‘‘(C) a list of all Federal agencies respon2 sible for enforcing any provision of this title

3 and the address and any appropriate phone

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

5 assist the consumer in selecting the appropriate

6 agency; and

7 ‘‘(D) a statement that a consumer report8 ing agency is not required to remove accurate

9 derogatory information from a consumer’s file,

10 unless the information is outdated under sec11 tion 605 or cannot be verified.

12 ‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur13 poses of this subsection and any disclosure by a

14 consumer reporting agency required under this title

15 with respect to consumers’ rights, the Federal Trade

16 Commission (after consultation with each Federal

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

18 the form and content of any disclosure of the rights

19 of consumers required under this title.’’.

20 (2) TECHNICAL AMENDMENT.—Section

21 606(a)(1)(B) of the Fair Credit Reporting Act (15

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

23 ‘‘and the written summary of the rights of the

24 consumer prepared pursuant to section 609(c)’’ be25 fore the semicolon.
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1 (e) FORM OF DISCLOSURES.—

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

3 section 610 of the Fair Credit Reporting Act (15

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

5 ‘‘(a) FORM OF DISCLOSURE, GENERALLY.—Except

6 as provided in subsection (b), the disclosures required to

7 be made under section 609 shall be provided to a

8 consumer in writing.

9 ‘‘(b) OTHER FORMS OF DISCLOSURE.—

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

11 agency may make the disclosures required under sec12 tion 609 other than in writing if authorized by the

13 consumer, and in such form as may be specified by

14 the consumer and available from the agency.

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

16 to paragraph (1) that disclosures under section 609

17 shall be made—

18 ‘‘(A) in person, upon—

19 ‘‘(i) the appearance of the consumer

20 at the place of business of the consumer

21 reporting agency where disclosures are reg22 ularly provided, during normal business

23 hours, and on reasonable notice; and

24 ‘‘(ii) the furnishing of proper identi25 fication by the consumer;
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1 ‘‘(B) by telephone, if the consumer has

2 made a written request for disclosure by tele3 phone that includes proper identification of the

4 consumer;

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

6 the agency; or

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

8 is available from the agency.’’.

9 (2) SIMPLIFIED DISCLOSURE.—Section 610 of

10 the Fair Credit Reporting Act (15 U.S.C. 1681h) is

11 amended by adding at the end the following:

12 ‘‘(f) SIMPLIFIED DISCLOSURE.—The Federal Trade

13 Commission shall prescribe the form in which a consumer

14 reporting agency shall make the disclosures required

15 under section 609(a), for the purpose of maximizing the

16 comprehensibility and standardization of such disclo17 sures.’’.

18 (3) CONFORMING AMENDMENTS.—

19 (A) Section 610 of the Fair Credit Report20 ing Act (15 U.S.C. 1681h) is amended in the

21 heading for the section by inserting ‘‘and

22 form’’ after ‘‘Conditions’’.

23 (B) The table of sections at the beginning

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

25 1681a et seq.) is amended in the item relating
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1 to section 610 by inserting ‘‘and form’’ after

2 ‘‘Conditions’’.

3 SEC. 108. AMENDMENTS RELATING TO PROCEDURES IN

4 CASE OF THE DISPUTED ACCURACY OF ANY

5 INFORMATION IN A CONSUMER’S FILE.

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

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

8 as follows:

9 ‘‘(a) REINVESTIGATIONS OF DISPUTED INFORMA10 TION.—

11 ‘‘(1) IN GENERAL.—If the completeness or ac12 curacy of any item of information contained in any

13 consumer’s file at any consumer reporting agency is

14 disputed by the consumer and the consumer notifies

15 the agency directly of such dispute, the agency shall

16 reinvestigate free of charge and record the current

17 status of the disputed information before the end of

18 the 30-business-day period beginning on the date the

19 agency receives the notice of the dispute from the

20 consumer.

21 ‘‘(2) PROMPT NOTICE OF DISPUTE TO FUR22 NISHER OF INFORMATION.—Before the end of the 5-

23 business-day period beginning on the date a

24 consumer reporting agency receives notice of a dis25 pute from any consumer in accordance with para-
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1 graph (1), the agency shall provide notification of

2 the dispute to any person who provided any item of

3 information in dispute, at the address and in the

4 manner established with the person.

5 ‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO6 LOUS OR IRRELEVANT.—

7 ‘‘(A) IN GENERAL.—Notwithstanding para8 graph (1), a consumer reporting agency may

9 terminate a reinvestigation of information dis10 puted by a consumer under that paragraph if

11 the agency determines that the dispute by the

12 consumer is frivolous or irrelevant, including by

13 reason of a failure by a consumer to provide

14 sufficient information to resolve the dispute.

15 ‘‘(B) NOTICE OF DETERMINATION.—Upon

16 making any determination in accordance with

17 subparagraph (A) that a dispute is frivolous or

18 irrelevant, a consumer reporting agency shall

19 notify the consumer within 5 business days of

20 such determination (including the reasons for

21 the determination), by mail or, if authorized by

22 the consumer for that purpose, by any other

23 means available to the agency.

24 ‘‘(4) CONSIDERATION OF CONSUMER INFORMA25 TION.—In conducting any reinvestigation under
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1 paragraph (1) with respect to disputed information

2 in the file of any consumer, the consumer reporting

3 agency shall review and consider all relevant infor4 mation submitted by the consumer in the period de5 scribed in paragraph (1) with respect to such dis6 puted information.

7 ‘‘(5) TREATMENT OF INACCURATE OR UNVERI8 FIABLE INFORMATION.—

9 ‘‘(A) IN GENERAL.—If, after any

10 reinvestigation under paragraph (1) of any in11 formation disputed by a consumer, an item of

12 the information is found to be inaccurate or

13 cannot be verified, the consumer reporting

14 agency shall promptly delete that item of infor15 mation from the consumer’s file.

16 ‘‘(B) REQUIREMENTS RELATING TO

17 REINSERTION OF PREVIOUSLY DELETED MATE18 RIAL.—

19 ‘‘(i) CERTIFICATION OF ACCURACY OF

20 INFORMATION.—If any information is de21 leted from a consumer’s file pursuant to

22 subparagraph (A), the information may

23 not be reinserted in the file after the dele24 tion unless the person who furnishes the
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1 information certifies that the information

2 is complete and accurate.

3 ‘‘(ii) NOTICE TO CONSUMER.—If any

4 information which has been deleted from a

5 consumer’s file pursuant to subparagraph

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

7 reporting agency shall promptly notify the

8 consumer of the reinsertion in writing or,

9 if authorized by the consumer for that pur10 pose, by any other means available to the

11 agency.

12 ‘‘(iii) ADDITIONAL INFORMATION.—As

13 part of or in addition to the notice under

14 clause (ii), a consumer reporting agency

15 shall provide to a consumer in writing

16 within the 5-business-day period beginning

17 on the date of the reinsertion—

18 ‘‘(I) a statement that the dis19 puted information has been

20 reinserted;

21 ‘‘(II) a notice to the consumer

22 that if requested by the consumer the

23 agency shall provide to the consumer,

24 within 15 days after the date of the

25 request, the name, business address,
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1 and telephone number of any fur2 nisher of information contacted, or of

3 any furnisher of information which

4 contacted the consumer reporting

5 agency, in connection with the

6 reinsertion of such information; and

7 ‘‘(III) the toll-free telephone

8 number of the consumer reporting

9 agency that the consumer can use to

10 contact the agency with respect to ob11 taining the information described in

12 subclause (II).

13 ‘‘(C) PROCEDURES TO PREVENT RE14 APPEARANCE.—A consumer reporting agency

15 shall maintain reasonable procedures designed

16 to prevent the reappearance in a consumer’s

17 file, and in consumer reports on the consumer,

18 of information that is deleted pursuant to this

19 paragraph (other than information that is

20 reinserted in accordance with subparagraph

21 (B)(i)).

22 ‘‘(6) NOTICE OF RESULTS OF

23 REINVESTIGATION.—

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

25 agency shall provide written notice to a
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1 consumer of the results of a reinvestigation

2 under this subsection within 5 business days

3 after the completion of the reinvestigation, by

4 mail or, if authorized by the consumer for that

5 purpose, by other means available to the agen6 cy.

7 ‘‘(B) CONTENTS.—As part of or in addi8 tion to the notice under subparagraph (A), a

9 consumer reporting agency shall provide to a

10 consumer in writing within the 5-business-day

11 period referred to in subparagraph (A)—

12 ‘‘(i) a statement that the

13 reinvestigation is completed;

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

15 upon the consumer’s file as that file is re16 vised as a result of the reinvestigation;

17 ‘‘(iii) a description or indication of

18 any changes made in the consumer report

19 as a result of those revisions to the con20 sumer’s file;

21 ‘‘(iv) a notice that, if requested by the

22 consumer, a description of the procedure

23 used to determine the accuracy and com24 pleteness of the information shall be pro25 vided to the consumer by the agency, in-
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1 cluding the name, business address, and

2 telephone number of any furnisher of in3 formation contacted in connection with

4 such information;

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

6 the right to add a statement to the con7 sumer’s file disputing the accuracy or com8 pleteness of the information; and

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

10 the right to request under subsection (d)

11 that the consumer reporting agency fur12 nish notifications under that subsection.

13 ‘‘(7) DESCRIPTION OF REINVESTIGATION

14 PROCEDURE.—A consumer reporting agency

15 shall provide to a consumer a description re16 ferred to in paragraph (6)(B)(iv) by not later

17 than 15 days after receiving a request from the

18 consumer for that description.’’.

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

20 section 611 of the Fair Credit Reporting Act (15 U.S.C.

21 1681i(d)) is amended by striking ‘‘The consumer report22 ing agency shall clearly’’ and all that follows through the

23 end of the subsection.
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1 SEC. 109. AMENDMENT RELATING TO CHARGES FOR DIS2 CLOSURE.

3 Section 612 of the Fair Credit Reporting Act (15

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

5 ‘‘§ 612. Charges for certain disclosures

6 ‘‘(a) REASONABLE CHARGES ALLOWED FOR CER7 TAIN DISCLOSURES.—Except as provided in subsections

8 (b) and (c), a consumer reporting agency may impose a

9 reasonable charge on a consumer—

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

11 pursuant to section 609, which—

12 ‘‘(A) shall not exceed $8, or such other

13 amount as is prescribed by the Federal Trade

14 Commission under subsection (d); and

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

16 prior to making disclosure; and

17 ‘‘(2) for furnishing a notification, statement,

18 summary, or codification to any person designated

19 by the consumer pursuant to section 611(d),

20 which—

21 ‘‘(A) shall not exceed the charge that the

22 agency would impose on each designated recipi23 ent for a consumer report; and

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

25 prior to furnishing such information.
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1 ‘‘(b) FREE CONSUMER REPORT AFTER ADVERSE

2 NOTICE TO CONSUMER.—Each consumer reporting agen3 cy that maintains a file on a consumer shall make all dis4 closures pursuant to section 609 without charge to the

5 consumer if, within 60 days after receipt by such

6 consumer of a notification pursuant to section 615 or of

7 a notification from a debt collection agency affiliated with

8 that consumer reporting agency stating that the consum9 er’s credit rating may be or has been adversely affected,

10 the consumer makes a request under section 609.

11 ‘‘(c) CHARGE FOR CERTAIN NOTICES PROHIB12 ITED.—A consumer reporting agency shall not impose any

13 charge for—

14 ‘‘(1) providing any notice to a consumer re15 quired under section 611; or

16 ‘‘(2) notifying a person pursuant to section

17 611(d) of the deletion of information which is found

18 to be inaccurate or which can no longer be verified,

19 if the consumer designates that person to the agency

20 before the end of the 30-day period beginning on the

21 date of the notification of the consumer under sec22 tion 611(a)(6).

23 ‘‘(d) ADJUSTMENT OF FEE.—The Federal Trade

24 Commission shall annually adjust the maximum amount
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1 of the fee authorized under subsection (a)(1)(A), to reflect

2 changes in the consumer price index.’’.

3 SEC. 110. AMENDMENTS RELATING TO DUTIES OF USERS

4 OF CONSUMER REPORTS.

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

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

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

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

9 ON THE BASIS OF INFORMATION CONTAINED IN

10 CONSUMER REPORTS.—If any person takes any adverse

11 action with respect to any consumer in connection with

12 any transaction initiated by the consumer or any employ13 ment determination, which is based in whole or in part

14 on any information contained in a consumer report, the

15 person shall—

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

17 to the consumer;

18 ‘‘(2) provide to the consumer—

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

20 number of the consumer reporting agency which

21 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
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1 the consumer the specific reasons why the ad2 verse action was taken;

3 ‘‘(3) provide to the consumer a written notice of

4 the consumer’s right—

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

6 copy of a consumer report on the consumer,

7 from the consumer reporting agency referred to

8 in paragraph (2) and from any other consumer

9 reporting agency which compiles and maintains

10 files on consumers on a nationwide basis, which

11 notice shall include an indication of the 60-day

12 period under that section for obtaining such a

13 copy; and

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

15 consumer reporting agency the accuracy or

16 completeness of any information in a consumer

17 report furnished by the agency; and

18 ‘‘(4) in the case of an adverse action based in

19 whole or in part on a credit score or other predictor

20 of credit worthiness, provide to the consumer—

21 ‘‘(A) notice that the predictor was used;

22 and

23 ‘‘(B) the principal factors used to deter24 mine that predictor, if those factors are re25 quired to be disclosed by the person for pur-
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1 poses of compliance with section 701(d)(3) of

2 the Equal Credit Opportunity Act.’’.

3 (b) DUTIES OF USERS WHO MAKE CERTAIN CREDIT

4 SOLICITATIONS.—Section 615 of the Fair Credit Report5 ing Act (15 U.S.C. 1681m) is amended by adding at the

6 end the following new subsection:

7 ‘‘(d) DUTIES OF USERS WHO MAKE WRITTEN CRED8 IT SOLICITATIONS ON THE BASIS OF INFORMATION CON9 TAINED IN CONSUMER FILES.—

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

11 consumer report of any consumer in connection with

12 any credit transaction which is not initiated by the

13 consumer and which consists of a firm offer of credit

14 shall provide with any written solicitation made to

15 the consumer regarding the transaction a clear and

16 conspicuous statement that—

17 ‘‘(A) information contained in the consum18 er’s consumer report was used in connection

19 with the transaction;

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

21 credit because the consumer satisfied the cri22 teria for creditworthiness under which the

23 consumer was selected for the offer;

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

25 extended if, after the consumer responds to the
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1 offer, the consumer does not meet the criteria

2 used to select the consumer for the offer;

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

4 information contained in the consumer’s file

5 with any consumer reporting agency to be used

6 in connection with any credit transaction that is

7 not initiated by the consumer; and

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

9 referred to in subparagraph (D) by notifying

10 the joint notification system established under

11 section 604(d).

12 ‘‘(2) LIMITATION ON APPLICATION.—Paragraph

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

14 by a person if—

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

16 ownership or by common corporate control with

17 the person who procured the report;

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

19 clearly and conspicuously disclosed to the

20 consumer to whom the report relates, before the

21 report is provided to the person who will use

22 the report, that the report might be provided to

23 and used by other persons who are affiliated in

24 the manner described in subparagraph (A) to

25 the person who procured the report; and
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1 ‘‘(C) that provision and use of the report

2 is consented to by the consumer in writing.

3 ‘‘(3) MAINTAINING CRITERIA ON FILE.—A per4 son who makes an offer of credit to a consumer

5 under a credit transaction described in paragraph

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

7 the consumer to receive the offer, until the end of

8 the 3-year period beginning on the date on which the

9 offer is made to the consumer.’’.

10 (c) DUTIES OF USERS FOR DIRECT MARKETING

11 TRANSACTIONS NOT INITIATED BY CONSUMERS.—Section

12 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m)

13 is further amended by adding after subsection (d) (as

14 added by subsection (b) of this section) the following new

15 subsection:

16 ‘‘(e) DUTIES OF USERS FOR DIRECT MARKETING

17 TRANSACTIONS NOT INITIATED BY CONSUMERS.—Any

18 person who, in connection with a direct marketing trans19 action that is not initiated by a consumer, uses informa20 tion concerning the consumer that is provided by a

21 consumer reporting agency shall provide to the consumer

22 with each solicitation made to the consumer regarding the

23 transaction a clear and conspicuous written statement—
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1 ‘‘(1) that information concerning the consumer

2 that was provided by a consumer reporting agency

3 was used in connection with the transaction;

4 ‘‘(2) that the consumer has the right under sec5 tion 604(e) to prohibit any information concerning

6 the consumer from being provided by the consumer

7 reporting agency for use in connection with any di8 rect marketing transaction that is not initiated by

9 the consumer;

10 ‘‘(3) that the consumer may exercise the right

11 referred to in paragraph (2) by notifying the joint

12 notification system established under section

13 604(d)(4).’’.

14 SEC. 111. AMENDMENTS RELATING TO CIVIL LIABILITY.

15 (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLI16 ANCE, GENERALLY.—Section 616 of the Fair Credit Re17 porting Act (15 U.S.C. 1681n) is amended by striking

18 ‘‘Any consumer reporting agency or user of information

19 which’’ and inserting ‘‘Any person who’’.

20 (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON21 COMPLIANCE.—Section 616(1) of the Fair Credit Report22 ing Act (15 U.S.C. 1681n(1)) is amended to read as fol23 lows:

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

25 consumer as a result of the failure; or
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1 ‘‘(B) in the case of liability of a natural person

2 for obtaining a consumer report under false pre3 tenses or knowingly without a permissible purpose,

4 such damages or $1,000, whichever is greater;’’.

5 (c) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI6 ANCE.—Section 617 of the Fair Credit Reporting Act (15

7 U.S.C. 1681o) is amended by striking ‘‘Any consumer re8 porting agency or user of information which’’ and insert9 ing ‘‘Any person who’’.

10 SEC. 112. AMENDMENTS RELATING TO RESPONSIBILITIES

11 OF PERSONS WHO FURNISH INFORMATION

12 TO CONSUMER REPORTING AGENCIES.

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

14 (15 U.S.C. 1681 et seq.) is amended by redesignating sec15 tion 622 as section 623 and inserting after section 621

16 the following new section:

17 ‘‘§ 622. Responsibilities of furnishers of information

18 to consumer reporting agencies

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

20 PROVIDE COMPLETE AND ACCURATE INFORMATION.—

21 ‘‘(1) IN GENERAL.—A person shall not furnish

22 any information to any consumer reporting agency if

23 the person knows or should know the information is

24 incomplete or inaccurate.
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1 ‘‘(2) DUTY TO CORRECT AND UPDATE INFOR2 MATION.—A person who—

3 ‘‘(A) in the ordinary course of business,

4 regularly and on a routine basis furnishes infor5 mation to one or more consumer reporting

6 agencies about their own transactions or experi7 ences with a consumer; and

8 ‘‘(B) furnishes information to a consumer

9 reporting agency, that the person determines is

10 not complete or accurate;

11 shall promptly notify the consumer reporting agency

12 of that determination and provide to the agency any

13 corrections to that information, or any additional in14 formation, that is necessary to make the information

15 provided by the person to the agency complete and

16 accurate.

17 ‘‘(3) DUTY TO PROVIDE NOTICE OF CONTINU18 ING DISPUTE.—If the completeness or accuracy of

19 any information furnished by any person to any

20 consumer reporting agency continues to be disputed

21 to such person, the person may not furnish the in22 formation to any consumer reporting agency without

23 notice that such information is disputed by the

24 consumer.
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1 ‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC2 COUNTS.—A person who regularly furnishes infor3 mation to a consumer reporting agency regarding a

4 consumer who has a credit account with that person

5 shall notify the agency of the closure of that account

6 by the consumer in information regularly furnished

7 for the period in which the account is closed.

8 ‘‘(5) DUTY TO PROVIDE NOTICE OF DELIN9 QUENCY OF ACCOUNTS.—A person who furnishes in10 formation to a consumer reporting agency regarding

11 a delinquent account being placed for collection,

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

13 action shall notify the agency of the commencement

14 of the delinquency immediately preceding that ac15 tion, by not later than 90 days after the date of that

16 commencement.

17 ‘‘(b) NOTICE TO CONSUMERS OF INFORMATION FUR18 NISHED TO CONSUMER REPORTING AGENCIES.—

19 ‘‘(1) NOTICE REQUIRED.—A person who in the

20 ordinary course of business regularly and on a rou21 tine basis furnishes information about that person’s

22 transactions or experiences with any consumer to

23 any consumer reporting agency, shall give notice of

24 that fact in writing to the consumer before first pro-
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1 viding any information about the consumer to any

2 consumer reporting agency.

3 ‘‘(2) CONTENTS OF NOTICE.—Written notice

4 provided to a consumer by a person pursuant to

5 paragraph (1) shall contain the following informa6 tion:

7 ‘‘(A) A brief description of the type of in8 formation which may be furnished regularly to

9 any consumer reporting agency.

10 ‘‘(B) A brief description of the frequency

11 with which or the circumstances under which

12 information is furnished to any consumer re13 porting agency.

14 ‘‘(3) NOTICE BY CERTAIN PERSONS.—A person

15 who furnishes information about consumers who

16 have written checks with insufficient funds may give

17 notice for purposes of paragraph (1) by posting the

18 notice in a conspicuous manner at each location

19 where checks are accepted by the person.

20 ‘‘(c) DUTIES OF FURNISHERS OF INFORMATION

21 UPON NOTICE OF DISPUTE.—Upon receiving notice pur22 suant to section 611(a)(2) of a dispute with regard to the

23 completeness or accuracy of any information provided by

24 a person to a consumer reporting agency, the person

25 shall—
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1 ‘‘(1) complete an investigation with respect to

2 the disputed information and report to the consumer

3 reporting agency the results of that investigation be4 fore the end of the 30-business day period beginning

5 on the date the agency receives notices of a dispute

6 from the consumer in accordance with section

7 611(a)(1); and

8 ‘‘(2) review relevant information submitted to

9 the consumer reporting agency by the consumer in

10 accordance with section 611(a)(4).

11 ‘‘(d) LIMITATIONS.—

12 ‘‘(1) CIVIL LIABILITY.—Sections 616 and 617

13 shall not apply to any failure to comply with sub14 section (a).

15 ‘‘(2) ENFORCEMENT.—Subsection (a) shall be

16 enforced exclusively under section 621 by the Fed17 eral agencies identified in that section.’’.

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

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

20 U.S.C. 1681a et seq.) is amended by striking the item re21 lating to section 622 and inserting after the item relating

22 to section 621 the following:

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

‘‘623. Relation to State laws.’’.
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1 SEC. 113. INCREASED CRIMINAL PENALTIES FOR OBTAIN2 ING INFORMATION UNDER FALSE PRE3 TENSES.

4 (a) OBTAINING INFORMATION UNDER FALSE PRE5 TENSES.—Section 619 of the Fair Credit Reporting Act

6 (15 U.S.C. 1681q) is amended by striking ‘‘fined not more

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

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

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

10 (b) UNAUTHORIZED DISCLOSURES BY OFFICERS OR

11 EMPLOYEES.—Section 620 of the Fair Credit Reporting

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

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

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

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

16 SEC. 114. ADMINISTRATIVE ENFORCEMENT.

17 The 2d sentence of section 621(a) of the Fair Credit

18 Reporting Act (15 U.S.C. 1681s(a)) is amended—

19 (1) by striking ‘‘Act and shall be subject to en20 forcement by the Federal Trade Commission under

21 section 5(b) thereof with respect to any consumer re22 porting agency or person subject to enforcement by

23 the Federal Trade Commission pursuant to this sub24 section, irrespective’’ and inserting ‘‘Act. All func25 tions and powers of the Federal Trade Commission

26 under the Federal Trade Commission Act shall be
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1 available to the Commission to enforce compliance

2 with this title by any person subject to enforcement

3 by the Federal Trade Commission pursuant to this

4 subsection and not subject to enforcement pursuant

5 to section 8 of the Federal Deposit Insurance Act,

6 irrespective’’; and

7 (2) by inserting ‘‘, including the power to en8 force the provisions of this title in the same manner

9 as if the violation had been a violation of any Fed10 eral Trade Commission trade regulation rule’’ before

11 the period.

12 SEC. 115. STATE ENFORCEMENT OF FAIR CREDIT REPORT13 ING ACT.

14 Section 621 of the Fair Credit Reporting Act (15

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

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

17 following new subsection:

18 ‘‘(c) STATE ACTION TO ENFORCE FAIR CREDIT RE19 PORTING.—

20 ‘‘(1) AUTHORITY OF STATES.—Whenever the

21 chief law enforcement officer of the State, or an offi22 cial or agency designated by a State, has reason to

23 believe that any person has violated this title the

24 State may bring a civil action on behalf of its resi-
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1 dents to enjoin such violation, an action to recover

2 for actual monetary loss, or both.

3 ‘‘(2) EXCLUSIVE JURISDICTION OF FEDERAL

4 COURTS.—The district courts of the United States,

5 the United States courts of any territory, and the

6 District Court of the United States for the District

7 of Columbia shall have exclusive jurisdiction over all

8 civil actions brought under this subsection.

9 ‘‘(3) RIGHTS OF COMMISSION.—The State shall

10 serve prior written notice of any such civil action

11 upon the Federal Trade Commission or the appro12 priate Federal regulator determined under sub13 section (b) and provide the Commission or appro14 priate Federal regulator with a copy of its com15 plaint, except in any case where such prior notice is

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

17 notice immediately upon instituting such action. The

18 Commission or appropriate Federal regulator shall

19 have the right (A) to intervene in the action, (B)

20 upon so intervening, to be heard on all matters aris21 ing therein, and (C) to file petitions for appeal.

22 ‘‘(4) VENUE; SERVICE OF PROCESS.—Any civil

23 action brought under this subsection in a district

24 court of the United States may be brought in the

25 district wherein the defendant is found or is an in-
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1 habitant or transacts business or wherein the viola2 tion occurred or is occurring, and process in such

3 cases may be served in any district in which the de4 fendant is an inhabitant or where the defendant may

5 be found.

6 ‘‘(5) INVESTIGATORY POWERS.—For purposes

7 of bringing any civil action under this subsection,

8 nothing in this subsection shall prevent the chief law

9 enforcement officer, or an official or agency des10 ignated by a State, from exercising the powers con11 ferred on the chief law enforcement officer or such

12 official by the laws of such State to conduct inves13 tigations or to administer oaths or affirmations or to

14 compel the attendance of witnesses or the production

15 of documentary and other evidence.

16 ‘‘(6) EFFECT ON STATE COURT PROCEED17 INGS.—Nothing contained in this subsection shall be

18 construed to prohibit an authorized State official

19 from proceeding in State court on the basis of an al20 leged violation of any civil or criminal statute of

21 such State.

22 ‘‘(7) LIMITATION.—Whenever the Federal

23 Trade Commission or the appropriate Federal regu24 lator has instituted a civil action for violation of this

25 title, no State may, during the pendency of such ac-
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1 tion instituted by the Commission or the appropriate

2 Federal regulator, subsequently institute a civil ac3 tion against any defendant named in the complaint

4 of the Commission or the appropriate Federal regu5 lator for any violation as alleged in the complaint.’’.

6 SEC. 116. FEDERAL RESERVE BOARD AUTHORITY.

7 Section 621 of the Fair Credit Reporting Act (15

8 U.S.C. 1681s), is further amended by adding after sub9 section (d) (as redesignated by section 115) the following

10 new subsection:

11 ‘‘(e) INTERPRETIVE AUTHORITY.—The Federal Re12 serve Board may issue interpretations of any provision of

13 this title as it may apply to any persons identified under

14 subsection (b) (1), (2), and (3), or to the holding compa15 nies and affiliates of such persons, in consultation with

16 Federal agencies identified in subsection (b) (1), (2), and

17 (3).’’.

18 SEC. 117. ESTABLISHMENT OF TOLL-FREE TELEPHONE

19 NUMBER.

20 Each consumer reporting agency that compiles and

21 maintains files on consumers on a nationwide basis shall

22 establish (and thereafter maintain) a toll-free telephone

23 number pursuant to section 609(c)(1)(B) of the Fair

24 Credit Reporting Act, as amended by section 107(d) of
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1 this Act, before the end of the 455-day period beginning

2 on the date of the enactment of this Act.

3 SEC. 118. RELATION TO STATE LAWS.

4 Section 623 of the Fair Credit Reporting Act, as re5 designated by section 112(a), is amended to read as fol6 lows:

7 ‘‘§ 623. Relation to State laws

8 ‘‘(a) STATE LAW PREEMPTED.—The provisions of

9 this title shall supersede any provision of the law of any

10 State relating to the subject matter of this title, including

11 but not limited to any provision of State law relating to

12 the furnishing, collection, distribution, or use of any infor13 mation on consumers or any fees imposed upon or any

14 disclosure to consumers associated with the furnishing,

15 collection, distribution, or use of any information on con16 sumers, except that any State may employ or establish

17 State laws for the purpose of enforcing the requirements

18 of this title.

19 ‘‘(b) LIMITATION.—Nothing in this section restricts

20 the ability of any State to employ or establish laws to ad21 dress unfair or deceptive acts or practices, or laws protect22 ing aspects of consumer privacy which do not relate to

23 the subject matter of this title. Nothing in this section

24 restricts the ability of any State to employ or establish

25 its own penalties to enforce violations of this title.’’.
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1 SEC. 119. ACTION BY FTC.

2 The Federal Trade Commission shall prescribe all

3 matters required by this title (including the amendments

4 made by this title) to be prescribed by that Commission,

5 before the end of the 270-day period beginning on the date

6 of the enactment of this Act.

7 SEC. 120. MISCELLANEOUS CLERICAL AMENDMENTS.

8 The Fair Credit Reporting Act is further amended—

9 (1) in section 605(a)(1) (15 U.S.C.

10 1681c(a)(1)) by striking ‘‘cases’’ and inserting

11 ‘‘Cases’’;

12 (2) in section 606(b) (15 U.S.C. 1681d(b)) by

13 striking ‘‘shall’’ the second place it appears;

14 (3) in section 617(1) (15 U.S.C. 1681o(1)) by

15 adding ‘‘and’’ after the semicolon at the end; and

16 (4) in section 621(b)(1)(C) (15 U.S.C.

17 1681s(b)(1)(C)) by striking the period at the end

18 and inserting a semicolon.

19 SEC. 121. EFFECTIVE DATES OF AMENDMENTS.

20 (a) IN GENERAL.—Except as provided in subsection

21 (b), the amendments made by this title shall be effective

22 after the 455-day period beginning on the date of the en23 actment of this Act.

24 (b) EXCEPTIONS.—

25 (1) NOTIFICATION SYSTEM.—Section 604(d)(3)

26 of the Fair Credit Reporting Act, as amended by
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1 section 104(a), shall be effective after the 365-day

2 period beginning on the date of the enactment of

3 this Act.

4 (2) FTC AUTHORITY.—Subsection (a) shall not

5 affect the authority of the Federal Trade Commis6 sion to prescribe matters under the amendments

7 made by this title.

8 TITLE II—CREDIT REPAIR

9 ORGANIZATIONS

10 SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZA11 TIONS.

12 Title IV of the Consumer Credit Protection Act is

13 amended to read as follows:

14 ‘‘TITLE IV—CREDIT REPAIR

15 ORGANIZATIONS

‘‘Sec.

‘‘401. Short title.

‘‘402. Findings and purposes.

‘‘403. Definitions.

‘‘404. Prohibited practices by credit repair organizations.

‘‘405. Disclosures.

‘‘406. Credit repair organizations contracts.

‘‘407. Right to cancel contract.

‘‘408. Noncompliance with this title.

‘‘409. Civil liability.

‘‘410. Administrative enforcement.

‘‘411. Relation to State law.

16 ‘‘SEC. 401. SHORT TITLE.

17 ‘‘This title may be cited as the ‘Credit Repair Organi18 zations Act’.
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1 ‘‘SEC. 402. FINDINGS AND PURPOSES.

2 ‘‘(a) FINDINGS.—The Congress makes the following

3 findings:

4 ‘‘(1) Consumers have a vital interest in estab5 lishing and maintaining their creditworthiness and

6 credit standing in order to obtain and use credit. As

7 a result, consumers who have experienced credit

8 problems may seek assistance from credit repair or9 ganizations which offer to improve the credit stand10 ing of such consumers.

11 ‘‘(2) Certain advertising and business practices

12 of some companies engaged in the business of credit

13 repair services have worked a financial hardship

14 upon consumers, particularly those of limited eco15 nomic means and who are inexperienced in credit

16 matters.

17 ‘‘(b) PURPOSES.—The purposes of this title are as

18 follows:

19 ‘‘(1) To ensure that prospective buyers of the

20 services of credit repair organizations are provided

21 with the information necessary to make an informed

22 decision regarding the purchase of such services.

23 ‘‘(2) To protect the public from unfair or decep24 tive advertising and business practices by credit re25 pair organizations.
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1 ‘‘SEC. 403. DEFINITIONS.

2 ‘‘For purposes of this title—

3 ‘‘(1) CONSUMER.—The term ‘consumer’ means

4 an individual.

5 ‘‘(2) CONSUMER CREDIT TRANSACTION.—The

6 term ‘consumer credit transaction’ means any trans7 action in which credit is offered or extended to an

8 individual for personal, family, or household pur9 poses.

10 ‘‘(3) CREDIT REPAIR ORGANIZATION.—The

11 term ‘credit repair organization’—

12 ‘‘(A) means any person who uses any in13 strumentality of interstate commerce or the

14 mails to sell, provide, or perform (or represent

15 that such person can or will sell, provide, or

16 perform) any service, in return for the payment

17 of money or other valuable consideration, for

18 the express or implied purpose of—

19 ‘‘(i) improving any consumer’s credit

20 record, credit history, or credit rating;

21 ‘‘(ii) removing adverse credit informa22 tion that is accurate and not obsolete from

23 the consumer’s record, history, or rating;

24 ‘‘(iii) altering the consumer’s identi25 fication to prevent the disclosure of the

26 consumer’s credit record, history, or rating
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1 for the purpose of concealing adverse cred2 it information that is accurate and not ob3 solete;

4 ‘‘(iv) providing advice or assistance to

5 any consumer with regard to any activity

6 or service described in clause (i), (ii), or

7 (iii); and

8 ‘‘(B) does not include—

9 ‘‘(i) any nonprofit organization which

10 is exempt from taxation under section

11 501(c)(3) of the Internal Revenue Code of

12 1986; or

13 ‘‘(ii) any attorney-at-law who is a

14 member of the bar of the highest court of

15 any State or otherwise licensed under the

16 laws of any State, with respect to services

17 rendered which are within the scope of reg18 ulations applicable to members of such bar

19 or such licensees.

20 ‘‘(4) CREDIT.—The term ‘credit’ has the mean21 ing given to such term in section 103(e) of this Act.
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1 ‘‘SEC. 404. PROHIBITED PRACTICES BY CREDIT REPAIR OR2 GANIZATIONS.

3 ‘‘No credit repair organization, and no officer, em4 ployee, agent, or other person participating in the conduct

5 of the affairs of any credit repair organization, may—

6 ‘‘(1) charge or receive any money or other valu7 able consideration for the performance of any service

8 which the credit repair organization has agreed to

9 perform for any consumer before such service is fully

10 performed;

11 ‘‘(2) make any statement, or counsel or advise

12 any consumer to make any statement, which is un13 true or misleading (or which, upon the exercise of

14 reasonable care, should be known by the credit re15 pair organization, officer, employee, agent, or other

16 person to be untrue or misleading) with respect to

17 any consumer’s creditworthiness, credit standing, or

18 credit capacity to—

19 ‘‘(A) any consumer reporting agency (as

20 defined in section 603(f) of this Act); or

21 ‘‘(B) any person—

22 ‘‘(i) who has extended credit to the

23 consumer; or

24 ‘‘(ii) to whom the consumer has ap25 plied or is applying for an extension of

26 credit;
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1 ‘‘(3) make any statement, or counsel or advise

2 any consumer to make any statement, the intended

3 effect of which is to alter the consumer’s identifica4 tion to prevent the display of the consumer’s credit

5 record, history, or rating for the purpose of conceal6 ing adverse information that is accurate and not ob7 solete to—

8 ‘‘(A) any consumer reporting agency;

9 ‘‘(B) any person—

10 ‘‘(i) who has extended credit to the

11 consumer; or

12 ‘‘(ii) to whom the consumer has ap13 plied or is applying for an extension of

14 credit;

15 ‘‘(4) make or use any untrue or misleading rep16 resentation of the services of the credit repair orga17 nization; or

18 ‘‘(5) engage, directly or indirectly, in any act,

19 practice, or course of business that constitutes or re20 sults in the commission of, or an attempt to commit,

21 a fraud or deception on any person in connection

22 with the offer or sale of the services of the credit re23 pair organization.
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1 ‘‘SEC. 405. DISCLOSURES.

2 ‘‘(a) DISCLOSURE REQUIRED.—Any credit repair or3 ganization shall provide any consumer with the following

4 written statement before any contract or agreement be5 tween the consumer and the credit repair organization is

6 executed:

7 ‘‘ ‘Consumer Credit File Rights

8 Under State and Federal Law

9 ‘‘ ‘You have a right to dispute inaccurate information

10 in your credit report by contacting the credit bureau di11 rectly. However, neither you nor any ‘‘credit repair’’ com12 pany or credit repair organization has the right to have

13 accurate, current, and verifiable information removed

14 from your credit report. The credit bureau must remove

15 accurate, negative information from your report only if it

16 is over 7 years old. Bankruptcy information can be re17 ported for 10 years.

18 ‘‘ ‘You have a right to obtain a copy of your credit

19 report from a credit bureau. You may be charged a rea20 sonable fee. There is no fee, however, if you have been

21 turned down for credit, employment, insurance, or a rental

22 dwelling because of information in your credit report with23 in the preceding 60 days. The credit bureau must provide

24 someone to help you interpret the information in your

25 credit file.
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1 ‘‘ ‘You have a right to sue a credit repair company

2 that violates the Credit Repair Organization Act. This law

3 prohibits deceptive practices by credit repair companies.

4 ‘‘ ‘You have the right to cancel your contract with any

5 credit repair organization for any reason within 3 business

6 days from the date you signed it.

7 ‘‘ ‘Credit bureaus are required to follow reasonable

8 procedures to ensure that creditors report information ac9 curately. However, mistakes may occur.

10 ‘‘ ‘You may, on your own, notify a credit bureau in

11 writing that you dispute the accuracy of information in

12 your credit file. The credit bureau must then reinvestigate

13 and modify or remove inaccurate information. The credit

14 bureau may not charge any fee for this service. Any perti15 nent information and copies of all documents you have

16 concerning an error should be given to the credit bureau.

17 ‘‘ ‘If reinvestigation does not resolve the dispute to

18 your satisfaction, you may send a brief statement to the

19 credit bureau, to be kept in your file, explaining why you

20 think the record is inaccurate. The credit bureau must in21 clude a summary of your statement about disputed infor22 mation with any report it issues about you.

23 ‘‘ ‘The Federal Trade Commission regulates credit

24 bureaus and credit repair organizations. For more infor25 mation contact:
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1 The Public Reference Branch

2 Federal Trade Commission

3 Washington, D.C. 20580’.

4 ‘‘(b) SEPARATE STATEMENT REQUIREMENT.—The

5 written statement required under this section shall be pro6 vided as a document which is separate from any written

7 contract or other agreement between the credit repair or8 ganization and the consumer or any other written material

9 provided to the consumer.

10 ‘‘(c) RETENTION OF COMPLIANCE RECORDS.—

11 ‘‘(1) IN GENERAL.—The credit repair organiza12 tion shall maintain a copy of the statement signed

13 by the consumer acknowledging receipt of the state14 ment.

15 ‘‘(2) MAINTENANCE FOR 2 YEARS.—The copy

16 of any consumer’s statement shall be maintained in

17 the organization’s files for 2 years after the date on

18 which the statement is provided to the consumer.

19 ‘‘SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

20 ‘‘(a) WRITTEN CONTRACTS REQUIRED.—No services

21 may be provided by any credit repair organization for any

22 consumer—

23 ‘‘(1) unless a written and dated contract (for

24 the purchase of such services) which meets the re-
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1 quirements of subsection (b) has been signed by the

2 consumer; or

3 ‘‘(2) before the end of the 3-business day period

4 beginning on the date the contract is signed.

5 ‘‘(b) TERMS AND CONDITIONS OF CONTRACT.—No

6 contract referred to in subsection (a) meets the require7 ments of this subsection unless such contract includes the

8 following information (in writing):

9 ‘‘(1) The terms and conditions of payment, in10 cluding the total amount of all payments to be made

11 by the consumer to the credit repair organization or

12 to any other person.

13 ‘‘(2) A full and detailed description of the serv14 ices to be performed by the credit repair organiza15 tion for the consumer, including—

16 ‘‘(A) all guarantees and all promises of full

17 or partial refunds; and

18 ‘‘(B) an estimate of—

19 ‘‘(i) the date by which the perform20 ance of the services (to be performed by

21 the credit repair organization or any other

22 person) will be complete; or

23 ‘‘(ii) the length of the period nec24 essary to perform such services.
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1 ‘‘(3) The credit repair organization’s name and

2 principal business address.

3 ‘‘(4) A conspicuous statement in bold face type,

4 in immediate proximity to the space reserved for the

5 consumer’s signature on the contract, which reads as

6 follows: ‘You may cancel this contract without pen7 alty or obligation at any time before midnight of the

8 3rd-business day after the date on which you signed

9 the contract. See the attached notice of cancellation

10 form for an explanation of this right.’.

11 ‘‘SEC. 407. RIGHT TO CANCEL CONTRACT.

12 ‘‘(a) IN GENERAL.—Any consumer may cancel any

13 contract with any credit repair organization without pen14 alty or obligation by notifying the credit repair organiza15 tion of the consumer’s intention to do so at any time be16 fore midnight of the 3rd-business day which begins after

17 the date on which the contract or agreement between the

18 consumer and the credit repair organization is executed

19 or would, but for this subsection, become enforceable

20 against the parties.

21 ‘‘(b) CANCELLATION FORM AND OTHER INFORMA22 TION.—Each contract shall be accompanied by a form, in

23 duplicate, which has the heading ‘Notice of Cancellation’

24 and contains in bold face type the following statement:
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1 ‘‘ ‘You may cancel this contract, without any

2 penalty or obligation, at any time before midnight of

3 the 3rd day which begins after the date the contract

4 is signed by you.

5 ‘‘ ‘If you cancel, any payment you made under

6 this contract will be returned before the end of the

7 10-day period beginning on the date the seller re8 ceives your cancellation notice.

9 ‘‘ ‘To cancel this contract, mail or deliver a

10 signed, dated copy of this cancellation notice, or any

11 other written notice to [ name of credit repair

12 organization ] at [ address of credit repair

13 organization ] before midnight on [ date ]

14 ‘‘ ‘I hereby cancel this transaction,

15 [ date ]

16 [ purchaser’s signature ].’.

17 ‘‘(c) CONSUMER COPY OF CONTRACT REQUIRED.—

18 Any consumer who enters into any contract with any cred19 it repair organization shall be given, by the organization—

20 ‘‘(1) a copy of the completed contract and the

21 disclosure statement required under section 405; and

22 ‘‘(2) a copy of any other document the credit

23 repair organization requires the consumer to sign,

24 at the time the contract or the other document is signed.
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1 ‘‘SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

2 ‘‘(a) CONSUMER WAIVERS INVALID.—Any waiver by

3 any consumer of any protection provided by or any right

4 of the consumer under this title—

5 ‘‘(1) shall be treated as void; and

6 ‘‘(2) may not be enforced by any Federal or

7 State court or any other person.

8 ‘‘(b) ATTEMPT TO OBTAIN WAIVER.—Any attempt

9 by any person to obtain a waiver from any consumer of

10 any protection provided by or any right of the consumer

11 under this title shall be treated as a violation of this title.

12 ‘‘(c) CONTRACTS NOT IN COMPLIANCE.—Any con13 tract for services which does not comply with the applica14 ble provisions of this title—

15 ‘‘(1) shall be treated as void; and

16 ‘‘(2) may not be enforced by any Federal or

17 State court or any other person.

18 ‘‘SEC. 409. CIVIL LIABILITY.

19 ‘‘(a) LIABILITY ESTABLISHED.—Any credit repair

20 organization, and any officer, employee, agent, or other

21 person participating in the conduct of the affairs of any

22 credit repair organization, which fails to comply with any

23 provision of this title with respect to any person shall be

24 liable to such person in an amount equal to the sum of

25 the amounts determined under each of the following para26 graphs:
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1 ‘‘(1) ACTUAL DAMAGES.—The greater of—

2 ‘‘(A) the amount of any actual damage

3 sustained by such person as a result of such

4 failure; or

5 ‘‘(B) any amount paid by the person to the

6 credit repair organization.

7 ‘‘(2) PUNITIVE DAMAGES.—

8 ‘‘(A) INDIVIDUAL ACTIONS.—In the case of

9 any action by an individual, such additional

10 amount as the court may allow.

11 ‘‘(B) CLASS ACTIONS.—In the case of a

12 class action, the sum of—

13 ‘‘(i) the aggregate of the amount

14 which the court may allow for each named

15 plaintiff; and

16 ‘‘(ii) the aggregate of the amount

17 which the court may allow for each other

18 class member, without regard to any mini19 mum individual recovery.

20 ‘‘(3) ATTORNEYS’ FEES.—In the case of any

21 successful action to enforce any liability under para22 graph (1) or (2), the costs of the action, together

23 with reasonable attorneys’ fees.

24 ‘‘(b) FACTORS TO BE CONSIDERED IN AWARDING

25 PUNITIVE DAMAGES.—In determining the amount of any
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1 liability of any credit repair organization under subsection

2 (a)(2), the court shall consider, among other relevant fac3 tors—

4 ‘‘(1) the frequency and persistence of non5 compliance by the credit repair organization;

6 ‘‘(2) the nature of the noncompliance;

7 ‘‘(3) the extent to which such noncompliance

8 was intentional; and

9 ‘‘(4) in the case of any class action, the number

10 of consumers adversely affected.

11 ‘‘(c) JURISDICTION.—Any action under this section

12 may be brought in any United States district court, or

13 in any other court of competent jurisdiction, before the

14 later of—

15 ‘‘(1) the end of the 2-year period beginning on

16 the date of the occurrence of the violation involved;

17 or

18 ‘‘(2) in any case in which any credit repair or19 ganization has materially and willfully misrepre20 sented any information which—

21 ‘‘(A) the credit repair organization is re22 quired, by any provision of this title, to disclose

23 to any consumer; and
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1 ‘‘(B) is material to the establishment of

2 the credit repair organization’s liability to the

3 consumer under this section,

4 the end of the 2-year period beginning on the date

5 of the discovery by the consumer of the mis6 representation.

7 ‘‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.

8 ‘‘(a) IN GENERAL.—Compliance with the require9 ments imposed under this title with respect to credit repair

10 organizations shall be enforced under the Federal Trade

11 Commission Act by the Federal Trade Commission.

12 ‘‘(b) VIOLATIONS OF THIS TITLE TREATED AS VIO13 LATIONS OF FEDERAL TRADE COMMISSION ACT.—

14 ‘‘(1) IN GENERAL.—For the purpose of the ex15 ercise by the Federal Trade Commission of the Com16 mission’s functions and powers under the Federal

17 Trade Commission Act, any violation of any require18 ment or prohibition imposed under this title with re19 spect to credit repair organizations shall constitute

20 an unfair or deceptive act or practice in commerce

21 in violation of section 5(a) of the Federal Trade

22 Commission Act.

23 ‘‘(2) ENFORCEMENT AUTHORITY UNDER OTHER

24 LAW.—All functions and powers of the Federal

25 Trade Commission under the Federal Trade Com-
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1 mission Act shall be available to the Commission to

2 enforce compliance with this title by any person sub3 ject to enforcement by the Federal Trade Commis4 sion pursuant to this subsection, including the power

5 to enforce the provisions of this title in the same

6 manner as if the violation had been a violation of

7 any Federal Trade Commission trade regulation

8 rule, without regard to whether the credit repair or9 ganization—

10 ‘‘(A) is engaged in commerce; or

11 ‘‘(B) meets any other jurisdictional tests in

12 the Federal Trade Commission Act.

13 ‘‘(c) STATE ENFORCEMENT OF TITLE.—

14 ‘‘(1) IN GENERAL.—The attorney general of

15 any State, or an official or agency designated under

16 the law of any State, may enforce the provisions of

17 this title in Federal or State court.

18 ‘‘(2) CIVIL ENFORCEMENT ACTIONS.—Any

19 State may bring a civil action in any Federal or

20 State court to enjoin any violation of this title and

21 recover damages under this title for consumers who

22 reside in such State.

23 ‘‘SEC. 411. RELATION TO STATE LAW.

24 ‘‘This title shall not annul, alter, affect, or exempt

25 any person subject to the provisions of this title from com-
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1 plying with any law of any State except to the extent that

2 such law is inconsistent with any provision of this title,

3 and then only to the extent of the inconsistency.’’.

Æ

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