Application of Consumer Credit Reporting Reform Act of 1996

to Presidential Nomination and Appointment Process

Section 2403(b)(3) o f the Consum er Credit Reporting Reform Act o f 1996, which requires persons 

“ using a consum er report for employment purposes” to notify the consum er prior to taking any 

“ adverse action” based on the report, does not apply to the process used by the President in 

considering individuals for nomination an d appointment

December 11, 1997 

M e m o r a n d u m O p in io n f o r t h e C o u n s e l t o t h e P r e s i d e n t

The Consumer Credit Reporting Reform Act of 1996 ( “ CCRRA” ), 15 U.S.C.A. 

§ 1681s-2 (West Supp. 1997), offers heightened protections to individuals whose 

credit histories are being examined by prospective employers. Section 2403(b)(3) 

of the CCRRA amends section 604 of the Fair Credit Reporting Act (“ FCRA” ) 

to require any person “ using a consumer report for employment purposes” to 

notify the consumer prior to taking “ any adverse action based in whole or in 

part on the report.” Id. § 1681b(b)(3). You have requested our advice whether 

§ 2403(b)(3) would apply to the process used by the President in considering 

individuals for nomination and appointment with the advice and consent of the 

Senate or appointment to his personal staff. As explained briefly below, we conclude that this provision of the CCRRA does not apply to the President’s decisions 

affecting such positions.

It is a well settled principle of law, applied frequently by both the Supreme 

Court and the executive branch, that statutes that do not expressly apply to the 

President must be construed as not applying to him if such application would 

involve a possible conflict with his constitutional prerogatives. See, e.g., Franklin

v. Massachusetts, 505 U.S. 788, 800-01 (1992). This Office has described that 

principle as a “ clear statement rule.” See Application o f 28 U.S.C. §458 to Presidential Appointments o f Federal Judges, 19 Op. O.L.C. 350, 351 (1995) ( “ §458 

opinion” ); see also Armstrong v. Bush, 924 F.2d 282, 289 (D.C. Cir. 1991). As 

the §458 opinion explains in greater detail, the clear statement rule has two 

sources. First, a fundamental canon of statutory interpretation requires that statutes 

be construed to avoid raising serious constitutional questions. 19 Op. O.L.C. at 

352. Second, the constitutional principle of separation of powers assures a division 

of power among the federal government’s three coordinate branches. The clear 

statement rule “ exists in order to protect *th[is] usual constitutional balance’ of 

power.” Id. (citing Gregory v. Ashcroft, 501 U.S. 452, 460-61 (1991)).

Thus, where a statute does not by its express terms apply to the President, it 

may not be applied to him if doing so would raise a serious separation of powers 

concern. We first consider the possible application of the CCRRA to the process 

by which the President nominates non-inferior officers, subject to advice and con214
Application o f Consumer Credit Reporting Reform Act o f 1996 to Presidential Nomination and

Appointment Process

sent of the Senate. Application of the CCRRA in this context would raise a serious 

separation of powers concern, for it could interfere with a power committed to 

the President by the Constitution.

The Appointments Clause provides that the President

shall nominate, and by and with the consent of the Senate, shall 

appoint Ambassadors, other Public Ministers and Consuls, Judges 

of the supreme Court, and all other Officers of the United States 

. . . but the Congress may by Law vest the Appointment of such 

inferior Officers, as they think proper, in the President alone, in 

the Courts of Law, or in the Heads of Departments.

U.S. Const, art. II, §2, cl. 2. The Constitution • thus vests in the President alone 

the power to nominate non-inferior officers of the United States. Although Congress has an important role in the appointment of such officers by virtue of the 

Senate’s assigned responsibility to advise and consent with regard to such appointments, any attempt by Congress to exercise power over the process of nominating

a particular individual to a non-inferior office would raise a serious constitutional 

question. See 19 Op. O.L.C. at 358; Federal Election Comm'n v. NRA Political

Victory Fund, 6 F.3d 821, 824 (D.C. Cir. 1993), cert, dismissed, 513 U.S. 88 

(1994).

As noted above, section 2403(b)(3) of the CCRRA requires any person who 

uses a credit report for employment purposes to notify the subject of any adverse 

action based in whole or in part on the report.1 To the extent this requirement 

were applied to the process under which potential nominees are considered by 

the President, it could impose a burden upon the unfettered nomination power 

accorded the President under the Constitution. The Constitution does not compel 

the President to disclose to a nominee the reasons for his decision not to nominate 

that person; indeed, it does not require that the President have articulable reasons 

for not nominating someone. To the extent section 2403(b)(3) would require an 

assessment whether information contained in a credit report contributed to an 

adverse decision, and then would further require communication of that fact to 

a potential nominee, section 2403(b)(3) effectively places limitations on the President’s constitutional prerogative to nominate non-inferior officers of the United 

States. We need not here decide whether Congress may, consistent with the Constitution, impose such limitations; it is enough for purposes of this analysis to 

conclude that such a restriction potentially conflicts with the President’s constitu1 Section 2403(b)(2) also requires any person procuring a consumer report for employment purposes to inform 

the consumer and to receive the consumer’s authorization in writing for the procurement of such a report Because 

we understand that you intend to comply with this separate statutory requirement (and indeed may already be doing 

so by virtue of the authorization signed by those undergoing background investigations), we need not resolve here 

the question whether the requirement of section 2403(b)(2), if applied to the President, might interfere with the 

President’s power under the Appointments Clause and thus need to be interpreted in light of a clear statement rule. 

We therefore focus our attention on the requirement imposed by section 2403(b)(3)

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Opinions o f the Office o f Legal Counsel in Volume 21

tional responsibilities. Where, as here, a potential conflict exists, the clear statement rule requires that the statutory requirement be explicitly applied to the President.

Neither the language nor the legislative history of the CCRRA, however, contains any such express statement. The definitions of “ person” and “ employment 

purposes” in section 603 of the FCRA do not explicitly refer to the President 

or to presidential nominations. Nor does any other provision of the FCRA or the 

CCRRA state specifically that the requirements of these statutes apply equally 

with respect to the President as to other potential employers. Respect for the separation of powers and the “ unique constitutional position of the President” require 

such an explicit textual reference. Franklin v. Massachusetts, 505 U.S. at 800- 

01. The legislative history of the CCRRA similarly is silent with respect to its 

specific application to presidential nominees. What is clear from that history is 

that the primary focus of the CCRRA was to grant the ordinary consumer greater 

control over the use of his or her consumer credit report by consumer reporting 

agencies. See 142 Cong. Rec. 26,666, 26,667 (1996) (statement of Sen. Bryan, 

original sponsor of CCRRA). The absence of any clear statement including the 

President within the scope of the CCRRA, together with the serious constitutional 

questions that such an interpretation would raise, compels us to conclude that 

the CCRRA does not apply to the President’s use of credit information with 

respect to potential presidential nominees for non-inferior offices.

We turn now to two other categories of appointees — inferior officers appointed 

by the President with the Senate’s advice and consent and appointees to positions 

(other than those requiring advice and consent) on the President’s personal staff. 

Application of the CCRRA to these categories of appointees, at least in some 

circumstances, might well raise separation of powers concern. However, we need 

not reach this issue. We have already concluded that section 2403(b) would not 

apply to the President, because it could do so only if there were a clear statement 

to that effect. Given that conclusion, we would be rewriting the statute if we 

were to conclude that the President had to follow the statute with regard to particular classes of potential appointees. Therefore, our conclusion that the clear 

statement rule prohibits application of section 2403(b)(3) to presidential nominations for non-inferior offices applies equally to all categories of individuals under 

consideration by the President for nomination or appointment.

DAWN E. JOHNSEN 

Acting Assistant Attorney General

Office o f Legal Counsel

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