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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1015 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1015

 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

                           February 18, 1993

Mr. Torres (for himself and Mr. Gonzalez, Mr. Kennedy, Mr. Schumer, Mr. 
 Gutierrez, Mr. Rush, Ms. Roybal-Allard, Mr. Barrett of Wisconsin, Ms. 
 Furse, Ms. Velazquez, Mr. Wynn, Mr. Watt, Mr. Hinchey, Mr. Flake, Ms. 
   Waters and Mrs. Maloney) introduced the following bill; which was 
    referred to the Committee on Banking, Finance and Urban Affairs

                           November 18, 1993

    Additional sponsors: Mrs. Johnson of Connecticut, Mr. Fields of 
   Louisiana, Mr. Bilbray, Mr. Mazzoli, Mr. Barlow, Mr. Smith of New 
  Jersey, Mr. Frank of Massachusetts, Mr. Richardson, Mr. Shays, Ms. 
             Pelosi, Mr. Filner, Mr. Kleczka, and Mr. Engel

_______________________________________________________________________

                                 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.

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

            TITLE I--AMENDMENTS TO FAIR CREDIT REPORTING ACT

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Consumer Reporting Reform Act of 
1993''.

SEC. 102. DEFINITIONS.

    (a) Adverse Action.--Section 603 of the Fair Credit Reporting Act 
(15 U.S.C. 1681a) is amended by adding at the end the following new 
subsection:
    ``(j) The term `adverse action'--
            ``(1) has the meaning given to such term in section 
        701(d)(6) of the Equal Credit Opportunity Act; and
            ``(2) includes--
                    ``(A) any denial of, increase in any charge for, or 
                reduction in the amount of, insurance for personal, 
                family, or household purposes made in connection with 
                the underwriting of insurance;
                    ``(B) any denial of employment or any other 
                decision for employment purposes which adversely 
                affects any current or prospective employee; and
                    ``(C) any action taken or determination made--
                            ``(i) in connection with an application 
                        which was made by, or a transaction which was 
                        initiated by, any consumer; and
                            ``(ii) which is adverse to the interest of 
                        the consumer.''.
    (b) Firm Offer of Credit.--Section 603 of the Fair Credit Reporting 
Act (15 U.S.C. 1681a) is further amended by adding after subsection (j) 
(as added by subsection (a) of this section) the following:
    ``(k) The term `firm offer of credit' means any offer of credit to 
a consumer that will be honored if, based on information in a consumer 
report on the consumer and other information bearing on the 
creditworthiness of the consumer obtained from the consumer's 
application for such credit, the consumer is determined to meet the 
specific criteria used to select the consumer for the offer.''.
    (c) Credit Transaction Which is not Initiated by the Consumer.--
Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is 
further amended by adding after subsection (k) (as added by subsection 
(b) of this section) the following:
    ``(l) The term `credit transaction which is not initiated by the 
consumer' does not include the use of a consumer report by a person 
with which the consumer has an account, for purposes of--
            ``(1) reviewing the account; or
            ``(2) collecting the account.''.
    (d) State.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 
1681a) is further amended by adding after subsection (l) (as added by 
subsection (c) of this section) the following:
    ``(m) The term `State' means any State, the Commonwealth of Puerto 
Rico, the District of Columbia, and any territory or possession of the 
United States.''.
    (e) Clerical Amendment.--Section 603(d) of the Fair Credit 
Reporting Act (15 U.S.C. 1681a(d)) is amended in the first sentence--
            (1) by inserting ``(1)'' after ``in whole or in part for''; 
        and
            (2) by striking ``(1)'' before ``credit or insurance''.

SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EMPLOYMENT PURPOSES.

    (a) Furnishing Consumer Reports for Business Transactions.--Section 
604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is amended--
            (1) by inserting ``(a) In General.--'' before ``A consumer 
        reporting agency''; and
            (2) in subsection (a)(3) (as designated by paragraph (1) of 
        this subsection) by amending subparagraph (E) to read as 
        follows:
                    ``(E) otherwise has a legitimate business need for 
                the information in connection with a business 
                transaction that is initiated by the consumer.''.
    (b) Furnishing and Using Consumer Reports for Employment 
Purposes.--Section 604 of the Fair Credit Reporting Act (15 U.S.C. 
1681b) is further amended by adding at the end the following new 
subsection:
    ``(b) Conditions for Furnishing and Using Consumer Reports for 
Employment Purposes.--
            ``(1) Certification from user.--A consumer reporting agency 
        may furnish a consumer report for employment purposes only if--
                    ``(A) the person who obtains such report from the 
                agency certifies to the agency that--
                            ``(i) the disclosure required under 
                        paragraph (2) or (3), as the case may be, with 
                        respect to such consumer report has been made; 
                        and
                            ``(ii) information from the consumer report 
                        will not be used in violation of any applicable 
                        Federal or State equal employment opportunity 
                        law or regulation; and
                    ``(B) the consumer reporting agency provides with 
                the report a summary of the consumer's rights under 
                this title, as prescribed by the Federal Trade 
                Commission under section 609(c)(3).
            ``(2) Disclosure to consumer.--A person may not procure a 
        consumer report, or cause a consumer report to be procured, for 
        employment purposes with respect to any consumer unless--
                    ``(A) a clear and conspicuous disclosure has been 
                made in writing to the consumer before the report is 
                procured or caused to be procured, in a document that 
                consists solely of the disclosure, that a consumer 
                report may be obtained for employment purposes; and
                    ``(B) the consumer authorizes in writing the 
                procurement of the report.
            ``(3) Conditions on use for adverse actions.--In using a 
        consumer report for employment purposes, before taking any 
        adverse action based in whole or in part on the report a person 
        shall provide to the consumer to whom the report relates--
                    ``(A) a copy of the report;
                    ``(B) a description of the consumer's rights under 
                this title, as prescribed by the Federal Trade 
                Commission under section 609(c)(3); and
                    ``(C) a reasonable opportunity to respond to any 
                information in the report that is disputed by the 
                consumer.''.

SEC. 104. AMENDMENTS RELATING TO PRESCREENING OF CONSUMER REPORTS; 
              PROHIBITION ON UNAUTHORIZED OR UNCERTIFIED USE OF 
              INFORMATION.

    (a) In General.--Section 604 of the Fair Credit Reporting Act (15 
U.S.C. 1681b), as amended by section 103, is further amended--
            (1) in subsection (a) by striking ``A consumer reporting 
        agency'' and inserting ``Subject to subsection (c), any 
        consumer reporting agency''; and
            (2) by adding after subsection (b) (as added by section 
        103(b)) the following new subsections:
    ``(c) Furnishing Reports in Connection with Credit Transactions not 
Initiated by the Consumer.--
            ``(1) In general.--A consumer reporting agency may furnish 
        a consumer report relating to any consumer pursuant to 
        subsection (a)(3)(A) in connection with any credit transaction 
        which is not initiated by the consumer only if--
                    ``(A) the consumer authorizes the agency to provide 
                such report to such person; or
                    ``(B)(i) the transaction consists of a firm offer 
                of credit;
                    ``(ii) the consumer reporting agency has complied 
                with subsection (d); and
                    ``(iii) the consumer has not elected in accordance 
                with subsection (d)(1) to have the consumer's name and 
                address excluded from lists of names provided by the 
                agency pursuant to this paragraph.
            ``(2) Limits on information received under paragraph 
        (1)(B).--A person may receive pursuant to paragraph (1)(B) 
        only--
                    ``(A) the name and address of a consumer; and
                    ``(B) information pertaining to a consumer that is 
                not identified or identifiable with the consumer.
            ``(3) Information regarding inquiries.--Except as provided 
        in section 609(a)(4), a consumer reporting agency shall not 
        furnish to any person a record of inquiries in connection with 
        credit transactions which are not initiated by a consumer.
    ``(d) Election of Consumer To Be Excluded From Lists.--
            ``(1) In general.--A consumer may elect to have his or her 
        name and address excluded from any list provided by a consumer 
        reporting agency in connection with a credit transaction which 
        is not initiated by the consumer, by--
                    ``(A) notifying the agency, through the 
                notification system maintained by the agency under 
                paragraph (3), that the consumer does not consent to 
                any use of consumer reports relating to the consumer in 
                connection with any transaction which is not initiated 
                by the consumer; and
                    ``(B) returning to the agency a signed written 
                notice of the election, if provided by the agency in 
                accordance with paragraph (2).
            ``(2) Provision of written notice to consumer.--A consumer 
        reporting agency shall provide to a consumer a written notice 
        for purposes of paragraph (1)(B), by not later than 5 business 
        days after being notified of the election of the consumer in 
        accordance with paragraph (1)(A).
            ``(3) Notification system.--Each consumer reporting agency 
        which furnishes a consumer report in connection with any credit 
        transaction which is not initiated by a consumer, shall--
                    ``(A) establish and maintain a notification system, 
                including a toll-free telephone number, which permits 
                any consumer whose consumer report is maintained by the 
                agency to notify the agency, with appropriate 
                identification, of the consumer's election to have the 
                consumer's name and address excluded from any list of 
                names and addresses provided by the agency for such a 
                transaction; and
                    ``(B) publish by not later than 12 months after the 
                date of the enactment of the Consumer Reporting Reform 
                Act of 1993, and at least annually thereafter, in a 
                publication of general circulation in the area served 
                by the agency--
                            ``(i) a notification that information in 
                        consumer files maintained by the agency may be 
                        used in connection with such transactions; and
                            ``(ii) the address and toll-free telephone 
                        number for consumers to use to notify the 
                        agency of the consumer's election under 
                        subparagraph (A).
        Establishment and maintenance of a notification system and 
        publication by a consumer reporting agency on its own behalf 
        and on behalf of any of its affiliates in accordance with this 
        paragraph is deemed to be in compliance with this paragraph by 
        each of those affiliates.
            ``(4) Agencies which operate nationwide.--Each consumer 
        reporting agency which compiles and maintains files on 
        consumers on a nationwide basis shall establish and maintain a 
        notification system for purposes of paragraph (3) jointly with 
        other such consumer reporting agencies.
            ``(5) Effectiveness of election.--An election of a consumer 
        under paragraph (1)--
                    ``(A) shall be effective with respect to a consumer 
                reporting agency beginning on the later of--
                            ``(i) the date on which the consumer 
                        notifies the agency in accordance with 
                        paragraph (1)(A); or
                            ``(ii) the date on which the consumer 
                        returns to the agency a signed written 
                        notification of the election in accordance with 
                        paragraph (1)(B), if provided by the agency; 
                        and
                    ``(B) shall not be effective after the date on 
                which the consumer notifies the agency (through the 
                system established by the agency under paragraph (3)) 
                that the election is no longer effective; and
                    ``(C) shall be effective with respect to each 
                affiliate of the agency.''.
    (b) Furnishing Consumer Reports for Certain Direct Marketing 
Transactions Prohibited.--Section 604 of the Fair Credit Reporting Act 
(15 U.S.C. 1681b) is further amended by adding after subsection (d) (as 
added by subsection (a) of this section) the following new subsection:
    ``(e) Furnishing Consumer Reports for Certain Direct Marketing 
Transactions Prohibited.--A consumer reporting agency may not furnish a 
consumer report for use for a direct marketing transaction that is not 
initiated by the consumer to whom the report relates.''.
    (c) Use of Information Obtained From Reports.--Section 604 of the 
Fair Credit Reporting Act (15 U.S.C. 1681b) is further amended by 
adding after subsection (e) (as added by subsection (b) of this 
section) the following new subsection:
    ``(f) Certain Use or Obtaining of Information Prohibited.--A person 
shall not use or obtain information from a consumer report for any 
purpose unless--
            ``(1) it is obtained for a purpose for which the consumer 
        report is authorized to be furnished under subsection (a); and
            ``(2) the purpose is certified in accordance with section 
        607 by a prospective user of the report.''.
    (d) First Notifications by Consumers.--A consumer may notify a 
consumer reporting agency through a notification system established and 
maintained by the agency under section 604(d) of the Fair Credit 
Reporting Act, as amended by subsection (a), on or after the date which 
is 455 days after the date of the enactment of this Act.

SEC. 105. AMENDMENTS RELATING TO OBSOLETE INFORMATION AND INFORMATION 
              CONTAINED IN CONSUMER REPORTS.

    (a) Repeal Large-Dollar Exceptions.--Section 605 of the Fair Credit 
Reporting Act (15 U.S.C. 1681c) is amended--
            (1) in subsection (a) by striking ``(a) Except as 
        authorized under subsection (b), no'' and inserting ``(a) 
        Information Excluded From Consumer Reports.--No''; and
            (2) by striking subsection (b).
    (b) Clarification of Reporting Period.--Section 605 of the Fair 
Credit Reporting Act (15 U.S.C. 1681c), as amended by subsection (a), 
is further amended by adding at the end the following new subsection:
    ``(b) Running of Reporting Period.--The 7-year period referred to 
in paragraphs (4) and (6) of subsection (a) shall begin, with respect 
to any delinquent account which is placed for collection (internally or 
by referral to a 3d party, whichever is earlier), charged to profit and 
loss, or subjected to any similar action, upon the expiration of the 
180-day period beginning on the date of the commencement of the 
delinquency which immediately preceded the collection activity, charge 
to profit and loss, or similar action.''.
    (c) Additional Information on Bankruptcy Filings Required.--Section 
605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further 
amended by adding after subsection (b) (as added by subsection (b) of 
this section) the following new subsection:
    ``(c) Information Required To Be Disclosed.--Any consumer reporting 
agency which furnishes a consumer report which contains information 
regarding any case involving the consumer which arises under title 11, 
United States Code, shall include in the report an identification of 
the chapter of such title 11 under which such case arises if provided 
by the source of the information.''.
    (d) Indication of Closure of Account.--Section 605 of the Fair 
Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding 
after subsection (c) (as added by subsection (c) of this section) the 
following new subsection:
    ``(d) Indication of Closure of Account by Consumer.--If a consumer 
reporting agency is notified pursuant to section 622(a)(4) that a 
credit account of a consumer was closed by the consumer with no 
outstanding balance, the agency shall indicate that the consumer closed 
the account in good standing in any consumer report that includes 
information related to the account.''.
    (e) Clerical Amendments.--
            (1) The heading for section 605 of the Fair Credit 
        Reporting Act (15 U.S.C. 1681c) is amended by striking 
        ``Obsolete information'' and inserting ``Requirements relating 
        to information contained in consumer reports''.
            (2) The table of sections at the beginning of the Fair 
        Credit Reporting Act (15 U.S.C. 1681a et seq.) is amended by 
        striking the item relating to section 605 and inserting the 
        following:

``605. Requirements relating to information contained in consumer 
                            reports.''.

SEC. 106. AMENDMENTS RELATING TO COMPLIANCE PROCEDURES.

    (a) Disclosure of Consumer Reports by Users.--Section 607 of the 
Fair Credit Reporting Act (15 U.S.C. 1681e) is amended by adding at the 
end the following new subsection:
    ``(c) Disclosure of Consumer Reports by Users Allowed.--A consumer 
reporting agency may not prohibit a user of a consumer report furnished 
by the agency on a consumer from disclosing the contents of the report 
to the consumer, if adverse action against the consumer has been taken, 
or is contemplated, by the user based in whole or in part on the 
report.''.
    (b) Notice to Users and Providers of Information to Ensure 
Compliance.--Section 607 of the Fair Credit Reporting Act (15 U.S.C. 
1681e) is further amended by adding after subsection (c) (as added by 
subsection (a) of this section) the following new subsection:
    ``(d) Notice to Users and Furnishers of Information.--
            ``(1) Notice requirement.--A consumer reporting agency 
        shall provide to any person--
                    ``(A) who regularly and in the ordinary course of 
                business furnishes information to the agency with 
                respect to any consumer; or
                    ``(B) to whom a consumer report is provided by the 
                agency;
        a notice of such person's responsibilities under this title.
            ``(2) Content of notice.--The Federal Trade Commission 
        shall prescribe the content of notices under paragraph (1).''.
    (c) Record of Identity of Users and Purposes Certified by Users of 
Reports.--Section 607 of the Fair Credit Reporting Act (15 U.S.C. 
1681e) is further amended by adding after subsection (d) (as added by 
subsection (b) of this section) the following new subsection:
    ``(e) Procurement of Consumer Report for Resale.--
            ``(1) Disclosure.--A person may not procure a consumer 
        report for purposes of reselling the report (or any information 
        in the report) unless the person discloses to the consumer 
        reporting agency which originally furnishes the report--
                    ``(A) the identity of the ultimate end-user of the 
                report (or information), and
                    ``(B) each permissible purpose under section 604 
                for which the report is furnished to the ultimate end-
                user of the report (or information).
            ``(2) Responsibilities of procurers for resale.--A person 
        which procures a consumer report for purposes of reselling the 
        report (or any information in the report) shall--
                    ``(A) establish and comply with reasonable 
                procedures designed to ensure that the report (or 
                information) is resold by the person only for a purpose 
                for which the report may be furnished under section 
                604, including by ensuring that the person--
                            ``(i) identifies each prospective user of 
                        the resold report (or information);
                            ``(ii) certifies each purpose for which the 
                        report (or information) will be used; and
                            ``(iii) certifies that the report (or 
                        information) will be used for no other purpose; 
                        and
                    ``(B) before reselling the report, makes reasonable 
                efforts to verify the identifications and 
                certifications made under subparagraph (A).''.

SEC. 107. AMENDMENTS RELATING TO CONSUMER DISCLOSURES.

    (a) All Information in Consumer's File Required To Be Disclosed.--
Section 609(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 
1681g(a)(1)) is amended to read as follows:
            ``(1) All information in the consumer's file at the time of 
        the request.''.
    (b) More Information Concerning Recipients of Reports Required.--
Section 609(a)(3) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) 
is amended to read as follows:
            ``(3)(A) Identification of each person (including each 
        ultimate end-user identified under section 607(e)(1)) who 
        procured a consumer report--
                    ``(i) for employment purposes within the 2-year 
                period preceding the request; or
                    ``(ii) for any other purpose within the 6-month 
                period preceding the request.
            ``(B) An identification of a person under subparagraph (A) 
        shall include--
                    ``(i) the name of the person or, if applicable, the 
                trade name (written in full) under which such person 
                conducts business; and
                    ``(ii) upon request of the consumer, the address of 
                the person.''.
    (c) Disclosure of Permissible Purposes.--Section 609(a) of the Fair 
Credit Reporting Act (15 U.S.C. 1681g(a)) is further amended by adding 
at the end the following:
            ``(4) The permissible purpose for which each person 
        identified under paragraph (3) procured a consumer report.''.
    (d) Information Regarding Inquiries.--Section 609(a) of the Fair 
Credit Reporting Act (15 U.S.C. 1681g(a)) is amended by adding after 
paragraph (4) (as added by subsection (d) of this section) the 
following:
            ``(5) A record of all inquiries received by the agency in 
        the 6-month period preceding the request that identified the 
        consumer in connection with a credit transaction which was not 
        initiated by the consumer.''.
    (e) Summary of Rights Required To Be Included With Disclosure.--
            (1) In general.--Section 609 of the Fair Credit Reporting 
        Act (15 U.S.C. 1681g) is amended by adding at the end the 
        following new subsection:
    ``(c) Summary of Rights Required To Be Included With Disclosure.--
            ``(1) Summary of rights.--A consumer reporting agency shall 
        provide to a consumer, with each written disclosure by the 
        agency to the consumer under this section--
                    ``(A) a written summary of all rights the consumer 
                has under this title; and
                    ``(B) in the case of a consumer reporting agency 
                that compiles and maintains files on consumers on a 
                nationwide basis, a toll-free telephone number which 
                the consumer can use to communicate with the agency.
            ``(2) Specific items required to be included.--The summary 
        of rights required under paragraph (1) shall include--
                    ``(A) a brief description of this title and all 
                rights of consumers under this title;
                    ``(B) an explanation of how the consumer may 
                exercise the rights of the consumer under this title;
                    ``(C) a list of all Federal agencies responsible 
                for enforcing any provision of this title and the 
                address and any appropriate phone number of each such 
                agency, in a form that will assist the consumer in 
                selecting the appropriate agency; and
                    ``(D) a statement that a consumer reporting agency 
                is not required to remove accurate derogatory 
                information from a consumer's file, unless the 
                information is outdated under section 605 or cannot be 
                verified.
            ``(3) Form of summary of rights.--For purposes of this 
        subsection and any disclosure by a consumer reporting agency 
        required under this title with respect to consumers' rights, 
        the Federal Trade Commission (after consultation with each 
        Federal agency referred to in section 621(b)) shall prescribe 
        the form and content of any disclosure of the rights of 
        consumers required under this title.''.
            (2) Technical amendment.--Section 606(a)(1)(B) of the Fair 
        Credit Reporting Act (15 U.S.C. 1681d(a)(1)(B)) is amended by 
        inserting ``and the written summary of the rights of the 
        consumer prepared pursuant to section 609(c)'' before the 
        semicolon.
    (f) Form of Disclosures.--
            (1) In general.--Subsections (a) and (b) of section 610 of 
        the Fair Credit Reporting Act (15 U.S.C. 1681h) are amended to 
        read as follows:
    ``(a) Form of Disclosure, Generally.--Except as provided in 
subsection (b), the disclosures required to be made under section 609 
shall be provided to a consumer in writing.
    ``(b) Other Forms of Disclosure.--
            ``(1) In general.--A consumer reporting agency may make the 
        disclosures required under section 609 other than in writing if 
        authorized by the consumer, and in such form as may be 
        specified by the consumer and available from the agency.
            ``(2) Form.--A consumer may specify pursuant to paragraph 
        (1) that disclosures under section 609 shall be made--
                    ``(A) in person, upon--
                            ``(i) the appearance of the consumer at the 
                        place of business of the consumer reporting 
                        agency where disclosures are regularly 
                        provided, during normal business hours, and on 
                        reasonable notice; and
                            ``(ii) the furnishing of proper 
                        identification by the consumer;
                    ``(B) by telephone, if the consumer has made a 
                written request for disclosure by telephone that 
                includes proper identification of the consumer;
                    ``(C) by electronic means, if available from the 
                agency; or
                    ``(D) by any other reasonable means that is 
                available from the agency.''.
            (2) Simplified disclosure.--Section 610 of the Fair Credit 
        Reporting Act (15 U.S.C. 1681h) is amended by adding at the end 
        the following:
    ``(f) Simplified Disclosure.--The Federal Trade Commission shall 
prescribe the form in which a consumer reporting agency shall make the 
disclosures required under section 609(a), for the purpose of 
maximizing the comprehensibility and standardization of such 
disclosures.''.
            (3) Conforming amendments.--
                    (A) Section 610 of the Fair Credit Reporting Act 
                (15 U.S.C. 1681h) is amended in the heading for the 
                section by inserting ``and form'' after ``Conditions''.
                    (B) The table of sections at the beginning of the 
                Fair Credit Reporting Act (15 U.S.C. 1681a et seq.) is 
                amended in the item relating to section 610 by 
                inserting ``and form'' after ``Conditions''.

SEC. 108. AMENDMENTS RELATING TO PROCEDURES IN CASE OF THE DISPUTED 
              ACCURACY OF ANY INFORMATION IN A CONSUMER'S FILE.

    (a) In General.--Section 611(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681i(a)) is amended to read as follows:
    ``(a) Reinvestigations of Disputed Information.--
            ``(1) In general.--If the completeness or accuracy of any 
        item of information contained in any consumer's file at any 
        consumer reporting agency is disputed by the consumer and the 
        consumer notifies the agency directly of such dispute, the 
        agency shall reinvestigate free of charge and record the 
        current status of the disputed information, or delete the item 
        from the file in accordance with paragraph (5), before the end 
        of the 30-day period beginning on the date the agency receives 
        the notice of the dispute from the consumer.
            ``(2) Prompt notice of dispute to furnisher of 
        information.--
                    ``(A) In general.--Before the end of the 5-day 
                period beginning on the date a consumer reporting 
                agency receives notice of a dispute from any consumer 
                in accordance with paragraph (1), the agency shall 
                provide notification of the dispute to any person that 
                provided any item of information in dispute, at the 
                address and in the manner established with the person. 
                The notice shall include disclosure of the date on 
                which the consumer reporting agency received notice of 
                the dispute from the consumer and all relevant 
                information regarding the dispute that the agency has 
                received from the consumer.
                    ``(B) Provision of other information from 
                consumer.--The consumer reporting agency shall promptly 
                provide to the person that provided the information in 
                dispute all relevant information regarding the dispute 
                that is received by the agency from the consumer after 
                the period referred to in subparagraph (A) and before 
                the end of the period referred to in paragraph (1).
            ``(3) Determination that dispute is frivolous or 
        irrelevant.--
                    ``(A) In general.--Notwithstanding paragraph (1), a 
                consumer reporting agency may terminate a 
                reinvestigation of information disputed by a consumer 
                under that paragraph if the agency determines that the 
                dispute by the consumer is frivolous or irrelevant, 
                including by reason of a failure by a consumer to 
                provide sufficient information to investigate the 
                disputed information.
                    ``(B) Notice of determination.--Upon making any 
                determination in accordance with subparagraph (A) that 
                a dispute is frivolous or irrelevant, a consumer 
                reporting agency shall notify the consumer within 5 
                days of such determination, by mail or, if authorized 
                by the consumer for that purpose, by any other means 
                available to the agency.
                    ``(C) Contents of notice.--A notice under 
                subparagraph (B) shall include--
                            ``(i) the reasons for the determination 
                        under subparagraph (A); and
                            ``(ii) identification of any information 
                        required to investigate the disputed 
                        information.
            ``(4) Consideration of consumer information.--In conducting 
        any reinvestigation under paragraph (1) with respect to 
        disputed information in the file of any consumer, the consumer 
        reporting agency shall review and consider all relevant 
        information submitted by the consumer in the period described 
        in paragraph (1) with respect to such disputed information.
            ``(5) Treatment of inaccurate or unverifiable 
        information.--
                    ``(A) In general.--If, after any reinvestigation 
                under paragraph (1) of any information disputed by a 
                consumer, an item of the information is found to be 
                inaccurate or incomplete or cannot be verified, the 
                consumer reporting agency shall promptly delete that 
                item of information from the consumer's file. The 
                information deleted shall consist solely of the 
                information that was disputed by the consumer and shall 
                not include any portion of the same item that was not 
                disputed.
                    ``(B) Requirements relating to reinsertion of 
                previously deleted material.--
                            ``(i) Certification of accuracy of 
                        information.--If any information is deleted 
                        from a consumer's file pursuant to subparagraph 
                        (A), the information may not be reinserted in 
                        the file after the deletion unless the person 
                        who furnishes the information certifies that 
                        the information is complete and accurate.
                            ``(ii) Notice to consumer.--If any 
                        information which has been deleted from a 
                        consumer's file pursuant to subparagraph (A) is 
                        reinserted in the file, the consumer reporting 
                        agency shall promptly notify the consumer of 
                        the reinsertion in writing or, if authorized by 
                        the consumer for that purpose, by any other 
                        means available to the agency.
                            ``(iii) Additional information.--As part of 
                        or in addition to the notice under clause (ii), 
                        a consumer reporting agency shall provide to a 
                        consumer in writing within the 5-day period 
                        beginning on the date of the reinsertion--
                                    ``(I) a statement that the disputed 
                                information has been reinserted;
                                    ``(II) a notice to the consumer 
                                that if requested by the consumer the 
                                agency shall provide to the consumer, 
                                within 15 days after the date of the 
                                request, the name, business address, 
                                and telephone number of any furnisher 
                                of information contacted, or of any 
                                furnisher of information which 
                                contacted the consumer reporting 
                                agency, in connection with the 
                                reinsertion of such information; and
                                    ``(III) the toll-free telephone 
                                number of the consumer reporting agency 
                                that the consumer can use to contact 
                                the agency with respect to obtaining 
                                the information described in subclause 
                                (II).
                    ``(C) Procedures to prevent reappearance.--A 
                consumer reporting agency shall maintain reasonable 
                procedures designed to prevent the reappearance in a 
                consumer's file, and in consumer reports on the 
                consumer, of information that is deleted pursuant to 
                this paragraph (other than information that is 
                reinserted in accordance with subparagraph (B)(i)).
            ``(6) Notice of results of reinvestigation.--
                    ``(A) In general.--A consumer reporting agency 
                shall provide written notice to a consumer of the 
                results of a reinvestigation under this subsection 
                within 5 days after the completion of the 
                reinvestigation, by mail or, if authorized by the 
                consumer for that purpose, by other means available to 
                the agency.
                    ``(B) Contents.--As part of or in addition to the 
                notice under subparagraph (A), a consumer reporting 
                agency shall provide to a consumer in writing within 
                the 5-day period referred to in subparagraph (A)--
                            ``(i) a statement that the reinvestigation 
                        is completed;
                            ``(ii) a consumer report that is based upon 
                        the consumer's file as that file is revised as 
                        a result of the reinvestigation;
                            ``(iii) a description or indication of any 
                        changes made in the consumer report as a result 
                        of those revisions to the consumer's file;
                            ``(iv) a notice that, if requested by the 
                        consumer, a description of the procedure used 
                        to determine the accuracy and completeness of 
                        the information shall be provided to the 
                        consumer by the agency, including the name, 
                        business address, and telephone number of any 
                        furnisher of information contacted in 
                        connection with such information;
                            ``(v) a notice that the consumer has the 
                        right to add a statement to the consumer's file 
                        disputing the accuracy or completeness of the 
                        information; and
                            ``(vi) a notice that the consumer has the 
                        right to request under subsection (d) that the 
                        consumer reporting agency furnish notifications 
                        under that subsection.
                    ``(7) Description of reinvestigation procedure.--A 
                consumer reporting agency shall provide to a consumer a 
                description referred to in paragraph (6)(B)(iv) by not 
                later than 15 days after receiving a request from the 
                consumer for that description.''.
    (b) Conforming Amendment.--Subsection (d) of section 611 of the 
Fair Credit Reporting Act (15 U.S.C. 1681i(d)) is amended by striking 
``The consumer reporting agency shall clearly'' and all that follows 
through the end of the subsection.

SEC. 109. AMENDMENT RELATING TO CHARGES FOR DISCLOSURE.

    Section 612 of the Fair Credit Reporting Act (15 U.S.C. 1681j) is 
amended to read as follows:
``Sec. 612. Charges for certain disclosures
    ``(a) Reasonable Charges Allowed for Certain Disclosures.--Except 
as provided in subsections (b), (c), and (d), a consumer reporting 
agency may impose a reasonable charge on a consumer--
            ``(1) for making a disclosure to the consumer pursuant to 
        section 609, which--
                    ``(A) shall not exceed $8; and
                    ``(B) shall be indicated to the consumer prior to 
                making disclosure; and
            ``(2) for furnishing a notification, statement, summary, or 
        codification to any person designated by the consumer pursuant 
        to section 611(d), which--
                    ``(A) shall not exceed the charge that the agency 
                would impose on each designated recipient for a 
                consumer report; and
                    ``(B) shall be indicated to the consumer prior to 
                furnishing such information.
    ``(b) Free Consumer Report After Adverse Notice to Consumer.--Each 
consumer reporting agency that maintains a file on a consumer shall 
make all disclosures pursuant to section 609 without charge to the 
consumer if, within 60 days after receipt by such consumer of a 
notification pursuant to section 615 or of a notification from a debt 
collection agency affiliated with that consumer reporting agency 
stating that the consumer's credit rating may be or has been adversely 
affected, the consumer makes a request under section 609.
    ``(c) Free Consumer Report Annually Upon Request of Consumer.--Upon 
the request of a consumer, a consumer reporting agency shall make all 
disclosures pursuant to section 609 without charge to that consumer at 
least once each calendar year.
    ``(d) Charge for Certain Notices Prohibited.--A consumer reporting 
agency shall not impose any charge for--
            ``(1) providing any notice to a consumer required under 
        section 611; or
            ``(2) notifying a person pursuant to section 611(d) of the 
        deletion of information which is found to be inaccurate or 
        which can no longer be verified, if the consumer designates 
        that person to the agency before the end of the 30-day period 
        beginning on the date of the notification of the consumer under 
        section 611(a)(6).
    ``(e) Refund of Charge in Case of Dispute.--A consumer reporting 
agency shall refund to a consumer any charge assessed to the consumer 
for providing a consumer report in the 60-day period ending on the date 
on which the consumer notifies the agency in accordance with section 
611(a)(1), if after a reinvestigation under that section any 
information in the file of the consumer is found to be incomplete or 
inaccurate.''.

SEC. 110. AMENDMENTS RELATING TO DUTIES OF USERS OF CONSUMER REPORTS.

    (a) Duties of Users Taking Adverse Actions.--Section 615(a) of the 
Fair Credit Reporting Act (15 U.S.C. 1681m(a)) is amended to read as 
follows:
    ``(a) Duties of Users Taking Adverse Actions on the Basis of 
Information Contained in Consumer Reports.--If any person takes any 
adverse action with respect to any consumer in connection with any 
transaction initiated by the consumer or any employment determination, 
which is based in whole or in part on any information contained in a 
consumer report, the person shall--
            ``(1) provide written notice of the adverse action to the 
        consumer;
            ``(2) provide to the consumer--
                    ``(A) the name, address, and telephone number of 
                the consumer reporting agency which furnished the 
                report to the person; and
                    ``(B) a statement that the consumer reporting 
                agency did not make the decision to take the adverse 
                action and is unable to provide the consumer the 
                specific reasons why the adverse action was taken;
            ``(3) provide to the consumer a written notice of the 
        consumer's right--
                    ``(A) to obtain, under section 612, a free copy of 
                a consumer report on the consumer, from the consumer 
                reporting agency referred to in paragraph (2) and from 
                any other consumer reporting agency that maintains a 
                file on the consumer, which notice shall include an 
                indication of the 60-day period under that section for 
                obtaining such a copy; and
                    ``(B) to dispute, under section 611, with a 
                consumer reporting agency the accuracy or completeness 
                of any information in a consumer report furnished by 
                the agency; and
            ``(4) in the case of an adverse action based in whole or in 
        part on a credit score or other predictor of credit worthiness, 
        provide to the consumer--
                    ``(A) notice that the predictor was used; and
                    ``(B) the principal factors used to determine that 
                predictor, if those factors are required to be 
                disclosed by the person for purposes of compliance with 
                section 701(d)(3) of the Equal Credit Opportunity 
                Act.''.
    (b) Duties of Users Who Make Certain Credit Solicitations.--Section 
615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended by 
adding at the end the following new subsection:
    ``(d) Duties of Users Who Make Written Credit Solicitations on the 
Basis of Information Contained in Consumer Files.--
            ``(1) In general.--Any person who uses a consumer report of 
        any consumer in connection with any credit transaction which is 
        not initiated by the consumer and which consists of a firm 
        offer of credit shall provide with any written solicitation 
        made to the consumer regarding the transaction a clear and 
        conspicuous statement that--
                    ``(A) information contained in the consumer's 
                consumer report was used in connection with the 
                transaction;
                    ``(B) the consumer received the offer of credit 
                because the consumer satisfied the criteria for 
                creditworthiness under which the consumer was selected 
                for the offer;
                    ``(C) if applicable, the credit may not be extended 
                if, after the consumer responds to the offer, the 
                consumer does not meet the criteria used to select the 
                consumer for the offer;
                    ``(D) the consumer has a right to prohibit 
                information contained in the consumer's file with any 
                consumer reporting agency to be used in connection with 
                any credit transaction that is not initiated by the 
                consumer; and
                    ``(E) the consumer may exercise the right referred 
                to in subparagraph (D) by notifying a notification 
                system established under section 604(d).
            ``(2) Disclosure of address and telephone number.--A 
        statement under paragraph (1) shall include the address and 
        toll-free telephone number of the appropriate notification 
        system established under section 604(d).
            ``(3) Maintaining criteria on file.--A person who makes an 
        offer of credit to a consumer under a credit transaction 
        described in paragraph (1) shall maintain on file the criteria 
        used to select the consumer to receive the offer, until the end 
        of the 3-year period beginning on the date on which the offer 
        is made to the consumer.''.

SEC. 111. AMENDMENTS RELATING TO CIVIL LIABILITY.

    (a) Civil Liability for Willful Noncompliance, Generally.--Section 
616 of the Fair Credit Reporting Act (15 U.S.C. 1681n) is amended by 
striking ``Any consumer reporting agency or user of information which'' 
and inserting ``Any person who''.
    (b) Minimum Civil Liability for Willful Noncompliance.--Section 
616(1) of the Fair Credit Reporting Act (15 U.S.C. 1681n(1)) is amended 
to read as follows:
            ``(1)(A) any actual damages sustained by the consumer as a 
        result of the failure; or
            ``(B) in the case of liability of a natural person for 
        obtaining a consumer report under false pretenses or knowingly 
        without a permissible purpose, such damages or $1,000, 
        whichever is greater;''.
    (c) Civil Liability for Negligent Noncompliance.--Section 617 of 
the Fair Credit Reporting Act (15 U.S.C. 1681o) is amended by striking 
``Any consumer reporting agency or user of information which'' and 
inserting ``Any person who''.

SEC. 112. AMENDMENTS RELATING TO RESPONSIBILITIES OF PERSONS WHO 
              FURNISH INFORMATION TO CONSUMER REPORTING AGENCIES.

    (a) In General.--The Fair Credit Reporting Act (15 U.S.C. 1681 et 
seq.) is amended by redesignating section 622 as section 623 and 
inserting after section 621 the following new section:
``Sec. 622. Responsibilities of furnishers of information to consumer 
              reporting agencies
    ``(a) Duty of Furnishers of Information to Provide Complete and 
Accurate Information.--
            ``(1) Prohibitions.--
                    ``(A) In general.--A person shall not furnish any 
                information to any consumer reporting agency if the 
                person has reasonable cause to believe the information 
                is incomplete or inaccurate.
                    ``(B) Routine furnishers.--A person shall not 
                regularly, on a routine basis, and in the ordinary 
                course of business furnish information to one or more 
                consumer reporting agencies about the person's 
                transactions or experiences with any consumer, except 
                in compliance with reasonable procedures which are 
                designed to avoid violations of this section and to 
                assure the accuracy of the information.
            ``(2) Duty to correct and update information.--A person 
        who--
                    ``(A) in the ordinary course of business, regularly 
                and on a routine basis furnishes information to one or 
                more consumer reporting agencies about the person's 
                transactions or experiences with any consumer; and
                    ``(B) furnishes information to a consumer reporting 
                agency, that the person determines is not complete or 
                accurate;
        shall promptly notify the consumer reporting agency of that 
        determination and provide to the agency any corrections to that 
        information, or any additional information, that is necessary 
        to make the information provided by the person to the agency 
        complete and accurate.
            ``(3) Duty to provide notice of continuing dispute.--If the 
        completeness or accuracy of any information furnished by any 
        person to any consumer reporting agency continues to be 
        disputed to such person, the person may not furnish the 
        information to any consumer reporting agency without notice 
        that such information is disputed by the consumer.
            ``(4) Duty to provide notice of closed accounts.--A person 
        who regularly furnishes information to a consumer reporting 
        agency regarding a consumer who has a credit account with that 
        person shall notify the agency if the consumer closes the 
        account with no outstanding balance, in information regularly 
        furnished for the period in which the account is closed.
            ``(5) Duty to provide notice of delinquency of accounts.--A 
        person who furnishes information to a consumer reporting agency 
        regarding a delinquent account being placed for collection, 
        charged to profit or loss, or subjected to any similar action 
        shall notify the agency of the commencement of the delinquency 
        immediately preceding that action, by not later than 90 days 
        after the date of that commencement.
    ``(b) Notice to Consumers of Information Furnished to Consumer 
Reporting Agencies.--
            ``(1) Notice required.--A person who in the ordinary course 
        of business regularly and on a routine basis furnishes 
        information about that person's transactions or experiences 
        with any consumer to any consumer reporting agency, shall give 
        notice of that fact in writing to the consumer before first 
        providing any information about the consumer to any consumer 
        reporting agency.
            ``(2) Contents of notice.--Written notice provided to a 
        consumer by a person pursuant to paragraph (1) shall contain 
        the following information:
                    ``(A) A brief description of the type of 
                information which may be furnished regularly to any 
                consumer reporting agency.
                    ``(B) A brief description of the frequency with 
                which or the circumstances under which information is 
                furnished to any consumer reporting agency.
            ``(3) Notice by certain persons.--A person who furnishes 
        information about consumers who have written checks with 
        insufficient funds may give notice for purposes of paragraph 
        (1) by posting the notice in a conspicuous manner at each 
        location where checks are accepted by the person.
    ``(c) Duties of Furnishers of Information Upon Notice of Dispute.--
Upon receiving notice pursuant to section 611(a)(2) of a dispute with 
regard to the completeness or accuracy of any information provided by a 
person to a consumer reporting agency, the person shall, before the end 
of the 30-day period beginning on the date the agency received notice 
of the dispute from a consumer in accordance with section 611(a)(1)--
            ``(1) complete an investigation with respect to the 
        disputed information;
            ``(2) review all relevant information provided by the 
        consumer reporting agency pursuant to section 611(a)(2);
            ``(3) report the results of the investigation to the 
        consumer reporting agency; and
            ``(4) if the investigation finds that the information is 
        incomplete or inaccurate, report those results to all other 
        consumer reporting agencies to which the person furnished the 
        information.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
the Fair Credit Reporting Act (15 U.S.C. 1681a et seq.) is amended by 
striking the item relating to section 622 and inserting the following:

``622. Responsibilities of furnishers of information to consumer 
                            reporting agencies.''.

SEC. 113. INVESTIGATIVE CONSUMER REPORTS.

    Section 606 of the Fair Credit Reporting Act (15 U.S.C. 1681d) is 
amended--
            (1) in subsection (a)(1) by striking ``or'' after the 
        semicolon at the end and inserting ``and'';
            (2) by striking subsection (a)(2) and inserting the 
        following:
            ``(2) the person certifies to the consumer reporting agency 
        that--
                    ``(A) the person has made the disclosures to the 
                consumer required by paragraph (1); and
                    ``(B) the person will comply with subsection 
                (b).'';
            (3) in subsection (b) by striking ``shall'' the second 
        place it appears; and
            (4) by adding at the end the following:
    ``(d) Prohibitions.--
            ``(1) Certification.--A consumer reporting agency shall not 
        prepare or furnish an investigative consumer report unless the 
        agency has received a certification under subsection (a)(2) 
        from the person who requested the report.
            ``(2) Inquiries.--A consumer reporting agency shall not 
        make an inquiry for the purpose of preparing a consumer report 
        on a consumer if the making of the inquiry by an employer or 
        prospective employer of the consumer would violate any 
        applicable Federal or State equal employment opportunity law or 
        regulation.
            ``(3) Public record information.--A consumer reporting 
        agency shall not prepare or furnish an investigative consumer 
        report which includes information which is a matter of public 
        record unless the agency has verified the accuracy of the 
        information by examining the public record.
            ``(4) Certain adverse information.--A consumer reporting 
        agency shall not prepare or furnish an investigative consumer 
        report on a consumer that contains information that is adverse 
        to the interest of the consumer and that is obtained through a 
        personal interview with a neighbor, friend, or associate of the 
        consumer or with another person with whom the consumer is 
        acquainted or who has knowledge of such item of information, 
        unless the agency has verified the accuracy of the information 
        by examining an independent source that is the best evidence of 
        the accuracy of the information.''.

SEC. 114. INCREASED CRIMINAL PENALTIES FOR OBTAINING INFORMATION UNDER 
              FALSE PRETENSES.

    (a) Obtaining Information Under False Pretenses.--Section 619 of 
the Fair Credit Reporting Act (15 U.S.C. 1681q) is amended by striking 
``fined not more than $5,000 or imprisoned not more than one year, or 
both'' and inserting ``fined under title 18, United States Code, 
imprisoned for not more than 2 years, or both''.
    (b) Unauthorized Disclosures by Officers or Employees.--Section 620 
of the Fair Credit Reporting Act (15 U.S.C. 1681r) is amended by 
striking ``fined not more than $5,000 or imprisoned not more than one 
year, or both'' and inserting ``fined under title 18, United States 
Code, imprisoned for not more than 2 years, or both''.

SEC. 115. ADMINISTRATIVE ENFORCEMENT.

    The 2d sentence of section 621(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681s(a)) is amended--
            (1) by striking ``Act and shall be subject to enforcement 
        by the Federal Trade Commission under section 5(b) thereof with 
        respect to any consumer reporting agency or person subject to 
        enforcement by the Federal Trade Commission pursuant to this 
        subsection, irrespective'' and inserting ``Act. All functions 
        and powers of the Federal Trade Commission under the Federal 
        Trade Commission Act shall be available to the Commission to 
        enforce compliance with this title by any person subject to 
        enforcement by the Federal Trade Commission pursuant to this 
        subsection and not subject to enforcement pursuant to section 8 
        of the Federal Deposit Insurance Act, irrespective''; and
            (2) by inserting ``, including the power to enforce the 
        provisions of this title in the same manner as if the violation 
        had been a violation of any Federal Trade Commission trade 
        regulation rule'' before the period.

SEC. 116. STATE ENFORCEMENT OF FAIR CREDIT REPORTING ACT.

    Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is 
amended by redesignating subsection (c) as subsection (d) and inserting 
after subsection (b) the following new subsection:
    ``(c) State Action to Enforce Fair Credit Reporting.--
            ``(1) Authority of states.--Whenever the chief law 
        enforcement officer of the State, or an official or agency 
        designated by a State, has reason to believe that any person 
        has violated this title the State may bring a civil action on 
        behalf of its residents to enjoin such violation, an action to 
        recover for actual monetary loss, or both, and may seek such 
        other remedies as are provided under State law.
            ``(2) Rights of commission.--The State shall serve prior 
        written notice of any such civil action upon the Federal Trade 
        Commission or the appropriate Federal regulator determined 
        under subsection (b) and provide the Commission or appropriate 
        Federal regulator with a copy of its complaint, except in any 
        case where such prior notice is not feasible, in which case the 
        State shall serve such notice immediately upon instituting such 
        action. The Commission or appropriate Federal regulator shall 
        have the right (A) to intervene in the action, (B) upon so 
        intervening, to be heard on all matters arising therein, and 
        (C) to file petitions for appeal.
            ``(3) Venue; service of process.--Any civil action brought 
        under this subsection in a district court of the United States 
        may be brought in the district wherein the defendant is found 
        or is an inhabitant or transacts business or wherein the 
        violation occurred or is occurring, and process in such cases 
        may be served in any district in which the defendant is an 
        inhabitant or where the defendant may be found.
            ``(4) Investigatory powers.--For purposes of bringing any 
        civil action under this subsection, nothing in this subsection 
        shall prevent the chief law enforcement officer, or an official 
        or agency designated by a State, from exercising the powers 
        conferred on the chief law enforcement officer or such official 
        by the laws of such State to conduct investigations or to 
        administer oaths or affirmations or to compel the attendance of 
        witnesses or the production of documentary and other evidence.
            ``(5) Effect on state court proceedings.--Nothing contained 
        in this subsection shall be construed to prohibit an authorized 
        State official from proceeding in State court on the basis of 
        an alleged violation of any civil or criminal statute of such 
        State.
            ``(6) Limitation.--Whenever the Federal Trade Commission or 
        the appropriate Federal regulator has instituted a civil action 
        for violation of this title, no State may, during the pendency 
        of such action instituted by the Commission or the appropriate 
        Federal regulator, subsequently institute a civil action 
        against any defendant named in the complaint of the Commission 
        or the appropriate Federal regulator for any violation of this 
        title that is alleged in the complaint of the Commission or the 
        Federal regulator.''.

SEC. 117. FEDERAL RESERVE BOARD AUTHORITY.

    Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s), is 
further amended by adding after subsection (d) (as redesignated by 
section 116) the following new subsection:
    ``(e) Interpretive Authority.--The Federal Reserve Board may issue 
interpretations of any provision of this title as it may apply to any 
persons identified under subsection (b) (1), (2), and (3), or to the 
holding companies and affiliates of such persons, in consultation with 
Federal agencies identified in subsection (b) (1), (2), and (3).''.

SEC. 118. ESTABLISHMENT OF TOLL-FREE TELEPHONE NUMBER.

    Each consumer reporting agency that compiles and maintains files on 
consumers on a nationwide basis shall establish (and thereafter 
maintain) a toll-free telephone number pursuant to section 609(c)(1)(B) 
of the Fair Credit Reporting Act, as amended by section 107(e) of this 
Act, before the end of the 455-day period beginning on the date of the 
enactment of this Act.

SEC. 119. ACTION BY FTC.

    The Federal Trade Commission shall prescribe all matters required 
by this title (including the amendments made by this title) to be 
prescribed by that Commission, before the end of the 270-day period 
beginning on the date of the enactment of this Act.

SEC. 120. EFFECTIVE DATES OF AMENDMENTS.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this title shall be effective after the 455-day 
period beginning on the date of the enactment of this Act.
    (b) Exceptions.--
            (1) Notification system.--Section 604(d)(3) of the Fair 
        Credit Reporting Act, as amended by section 104(a), shall be 
        effective after the 365-day period beginning on the date of the 
        enactment of this Act.
            (2) FTC authority.--Subsection (a) shall not affect the 
        authority of the Federal Trade Commission to prescribe matters 
        under the amendments made by this title.

                 TITLE II--CREDIT REPAIR ORGANIZATIONS

SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZATIONS.

    Title IV of the Consumer Credit Protection Act is amended to read 
as follows:

                ``TITLE IV--CREDIT REPAIR 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.

``SEC. 401. SHORT TITLE.

    ``This title may be cited as the `Credit Repair Organizations Act'.

``SEC. 402. FINDINGS AND PURPOSES.

    ``(a) Findings.--The Congress makes the following findings:
            ``(1) Consumers have a vital interest in establishing and 
        maintaining their creditworthiness and credit standing in order 
        to obtain and use credit. As a result, consumers who have 
        experienced credit problems may seek assistance from credit 
        repair organizations which offer to improve the credit standing 
        of such consumers.
            ``(2) Certain advertising and business practices of some 
        companies engaged in the business of credit repair services 
        have worked a financial hardship upon consumers, particularly 
        those of limited economic means and who are inexperienced in 
        credit matters.
    ``(b) Purposes.--The purposes of this title are as follows:
            ``(1) To ensure that prospective buyers of the services of 
        credit repair organizations are provided with the information 
        necessary to make an informed decision regarding the purchase 
        of such services.
            ``(2) To protect the public from unfair or deceptive 
        advertising and business practices by credit repair 
        organizations.

``SEC. 403. DEFINITIONS.

    ``For purposes of this title--
            ``(1) Consumer.--The term `consumer' means an individual.
            ``(2) Consumer credit transaction.--The term `consumer 
        credit transaction' means any transaction in which credit is 
        offered or extended to an individual for personal, family, or 
        household purposes.
            ``(3) Credit repair organization.--The term `credit repair 
        organization'--
                    ``(A) means any person who uses any instrumentality 
                of interstate commerce or the mails to sell, provide, 
                or perform (or represent that such person can or will 
                sell, provide, or perform) any service, in return for 
                the payment of money or other valuable consideration, 
                for the express or implied purpose of--
                            ``(i) improving any consumer's credit 
                        record, credit history, or credit rating; or
                            ``(ii) providing advice or assistance to 
                        any consumer with regard to any activity or 
                        service described in clause (i); and
                    ``(B) does not include--
                            ``(i) any nonprofit organization which is 
                        exempt from taxation under section 501(c)(3) of 
                        the Internal Revenue Code of 1986; or
                            ``(ii) any attorney-at-law who is a member 
                        of the bar of the highest court of any State or 
                        otherwise licensed under the laws of any State, 
                        with respect to services rendered which are 
                        within the scope of regulations applicable to 
                        members of such bar or such licensees.
            ``(4) Credit.--The term `credit' has the meaning given to 
        such term in section 103(e) of this Act.

``SEC. 404. PROHIBITED PRACTICES.

    ``(a) In General.--No person may--
            ``(1) make any statement, or counsel or advise any consumer 
        to make any statement, which is untrue or misleading (or which, 
        upon the exercise of reasonable care, should be known by the 
        credit repair organization, officer, employee, agent, or other 
        person to be untrue or misleading) with respect to any 
        consumer's creditworthiness, credit standing, or credit 
        capacity to--
                    ``(A) any consumer reporting agency (as defined in 
                section 603(f) of this Act); or
                    ``(B) any person--
                            ``(i) who has extended credit to the 
                        consumer; or
                            ``(ii) to whom the consumer has applied or 
                        is applying for an extension of credit;
            ``(2) make any statement, or counsel or advise any consumer 
        to make any statement, the intended effect of which is to alter 
        the consumer's identification to prevent the display of the 
        consumer's credit record, history, or rating for the purpose of 
        concealing adverse information that is accurate and not 
        obsolete to--
                    ``(A) any consumer reporting agency;
                    ``(B) any person--
                            ``(i) who has extended credit to the 
                        consumer; or
                            ``(ii) to whom the consumer has applied or 
                        is applying for an extension of credit;
            ``(3) make or use any untrue or misleading representation 
        of the services of the credit repair organization; or
            ``(4) engage, directly or indirectly, in any act, practice, 
        or course of business that constitutes or results in the 
        commission of, or an attempt to commit, a fraud or deception on 
        any person in connection with the offer or sale of the services 
        of the credit repair organization.
    ``(b) Payment in Advance.--No credit repair organization may charge 
or receive any money or other valuable consideration for the 
performance of any service which the credit repair organization has 
agreed to perform for any consumer before such service is fully 
performed.

``SEC. 405. DISCLOSURES.

    ``(a) Disclosure Required.--Any credit repair organization shall 
provide any consumer with the following written statement before any 
contract or agreement between the consumer and the credit repair 
organization is executed:

       ```Consumer Credit File Rights Under State and Federal Law

    ```You have a right to dispute inaccurate information in your 
credit report by contacting the credit bureau directly. However, 
neither you nor any ``credit repair'' company or credit repair 
organization has the right to have accurate, current, and verifiable 
information removed from your credit report. The credit bureau must 
remove accurate, negative information from your report only if it is 
over 7 years old. Bankruptcy information can be reported for 10 years.
    ```You have a right to obtain a copy of your credit report from a 
credit bureau. You may be charged a reasonable fee. There is no fee, 
however, if you have been turned down for credit, employment, 
insurance, or a rental dwelling because of information in your credit 
report within the preceding 60 days. The credit bureau must provide 
someone to help you interpret the information in your credit file. The 
credit report is available annually at no charge.
    ```You have a right to sue a credit repair company that violates 
the Credit Repair Organization Act. This law prohibits deceptive 
practices by credit repair companies.
    ```You have the right to cancel your contract with any credit 
repair organization for any reason within 3 business days from the date 
you signed it.
    ```Credit bureaus are required to follow reasonable procedures to 
ensure that creditors report information accurately. However, mistakes 
may occur.
    ```You may, on your own, notify a credit bureau in writing that you 
dispute the accuracy of information in your credit file. The credit 
bureau must then reinvestigate and modify or remove inaccurate or 
incomplete information. The credit bureau may not charge any fee for 
this service. Any pertinent information and copies of all documents you 
have concerning an error should be given to the credit bureau.
    ```If reinvestigation does not resolve the dispute to your 
satisfaction, you may send a brief statement to the credit bureau, to 
be kept in your file, explaining why you think the record is 
inaccurate. The credit bureau must include a summary of your statement 
about disputed information with any report it issues about you.
    ```The Federal Trade Commission regulates credit bureaus and credit 
repair organizations. For more information contact:

                      The Public Reference Branch

                        Federal Trade Commission

                        Washington, D.C. 20580'.

    ``(b) Separate Statement Requirement.--The written statement 
required under this section shall be provided as a document which is 
separate from any written contract or other agreement between the 
credit repair organization and the consumer or any other written 
material provided to the consumer.
    ``(c) Retention of Compliance Records.--
            ``(1) In general.--The credit repair organization shall 
        maintain a copy of the statement signed by the consumer 
        acknowledging receipt of the statement.
            ``(2) Maintenance for 2 years.--The copy of any consumer's 
        statement shall be maintained in the organization's files for 2 
        years after the date on which the statement is provided to the 
        consumer.

``SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

    ``(a) Written Contracts Required.--No services may be provided by 
any credit repair organization for any consumer--
            ``(1) unless a written and dated contract (for the purchase 
        of such services) which meets the requirements of subsection 
        (b) has been signed by the consumer; or
            ``(2) before the end of the 3-business day period beginning 
        on the date the contract is signed.
    ``(b) Terms and Conditions of Contract.--No contract referred to in 
subsection (a) meets the requirements of this subsection unless such 
contract includes the following information (in writing):
            ``(1) The terms and conditions of payment, including the 
        total amount of all payments to be made by the consumer to the 
        credit repair organization or to any other person.
            ``(2) A full and detailed description of the services to be 
        performed by the credit repair organization for the consumer, 
        including--
                    ``(A) all guarantees of performance; and
                    ``(B) an estimate of--
                            ``(i) the date by which the performance of 
                        the services (to be performed by the credit 
                        repair organization or any other person) will 
                        be complete; or
                            ``(ii) the length of the period necessary 
                        to perform such services.
            ``(3) The credit repair organization's name and principal 
        business address.
            ``(4) A conspicuous statement in bold face type, in 
        immediate proximity to the space reserved for the consumer's 
        signature on the contract, which reads as follows: `You may 
        cancel this contract without penalty or obligation at any time 
        before midnight of the 3rd-business day after the date on which 
        you signed the contract. See the attached notice of 
        cancellation form for an explanation of this right.'.

``SEC. 407. RIGHT TO CANCEL CONTRACT.

    ``(a) In General.--Any consumer may cancel any contract with any 
credit repair organization without penalty or obligation by notifying 
the credit repair organization of the consumer's intention to do so at 
any time before midnight of the 3rd-business day which begins after the 
date on which the contract or agreement between the consumer and the 
credit repair organization is executed or would, but for this 
subsection, become enforceable against the parties.
    ``(b) Cancellation Form and Other Information.--Each contract shall 
be accompanied by a form, in duplicate, which has the heading `Notice 
of Cancellation' and contains in bold face type the following 
statement:
            ```You may cancel this contract, without any penalty or 
        obligation, at any time before midnight of the 3rd day which 
        begins after the date the contract is signed by you.
            ```To cancel this contract, mail or deliver a signed, dated 
        copy of this cancellation notice, or any other written notice 
        to [ name of credit repair organization ] at [ address of 
        credit repair organization ] before midnight on [ date ]
            ```I hereby cancel this transaction,
            [ date ]
            [ purchaser's signature ].'.
    ``(c) Consumer Copy of Contract Required.--Any consumer who enters 
into any contract with any credit repair organization shall be given, 
by the organization--
            ``(1) a copy of the completed contract and the disclosure 
        statement required under section 405; and
            ``(2) a copy of any other document the credit repair 
        organization requires the consumer to sign,
at the time the contract or the other document is signed.

``SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

    ``(a) Consumer Waivers Invalid.--Any waiver by any consumer of any 
protection provided by or any right of the consumer under this title--
            ``(1) shall be treated as void; and
            ``(2) may not be enforced by any Federal or State court or 
        any other person.
    ``(b) Attempt to Obtain Waiver.--Any attempt by any person to 
obtain a waiver from any consumer of any protection provided by or any 
right of the consumer under this title shall be treated as a violation 
of this title.
    ``(c) Contracts Not in Compliance.--Any contract for services which 
does not comply with the applicable provisions of this title--
            ``(1) shall be treated as void; and
            ``(2) may not be enforced by any Federal or State court or 
        any other person.

``SEC. 409. CIVIL LIABILITY.

    ``(a) Liability Established.--Any person who fails to comply with 
any provision of this title with respect to any other person shall be 
liable to such person in an amount equal to the sum of the amounts 
determined under each of the following paragraphs:
            ``(1) Actual damages.--The greater of--
                    ``(A) the amount of any actual damage sustained by 
                such person as a result of such failure; or
                    ``(B) any amount paid by the person to the credit 
                repair organization.
            ``(2) Punitive damages.--
                    ``(A) Individual actions.--In the case of any 
                action by an individual, such additional amount as the 
                court may allow.
                    ``(B) Class actions.--In the case of a class 
                action, the sum of--
                            ``(i) the aggregate of the amount which the 
                        court may allow for each named plaintiff; and
                            ``(ii) the aggregate of the amount which 
                        the court may allow for each other class 
                        member, without regard to any minimum 
                        individual recovery.
            ``(3) Attorneys' fees.--In the case of any successful 
        action to enforce any liability under paragraph (1) or (2), the 
        costs of the action, together with reasonable attorneys' fees.
    ``(b) Factors To Be Considered in Awarding Punitive Damages.--In 
determining the amount of any liability of any credit repair 
organization under subsection (a)(2), the court shall consider, among 
other relevant factors--
            ``(1) the frequency and persistence of noncompliance by the 
        credit repair organization;
            ``(2) the nature of the noncompliance;
            ``(3) the extent to which such noncompliance was 
        intentional; and
            ``(4) in the case of any class action, the number of 
        consumers adversely affected.
    ``(c) Jurisdiction.--Any action under this section may be brought 
in any United States district court, or in any other court of competent 
jurisdiction, before the later of--
            ``(1) the end of the 2-year period beginning on the date of 
        the occurrence of the violation involved; or
            ``(2) in any case in which any credit repair organization 
        has materially and willfully misrepresented any information 
        which--
                    ``(A) the credit repair organization is required, 
                by any provision of this title, to disclose to any 
                consumer; and
                    ``(B) is material to the establishment of the 
                credit repair organization's liability to the consumer 
                under this section,
        the end of the 2-year period beginning on the date of the 
        discovery by the consumer of the misrepresentation.

``SEC. 410. ADMINISTRATIVE ENFORCEMENT.

    ``(a) In General.--Compliance with the requirements imposed under 
this title with respect to credit repair organizations shall be 
enforced under the Federal Trade Commission Act by the Federal Trade 
Commission.
    ``(b) Violations of This Title Treated as Violations of Federal 
Trade Commission Act.--
            ``(1) In general.--For the purpose of the exercise by the 
        Federal Trade Commission of the Commission's functions and 
        powers under the Federal Trade Commission Act, any violation of 
        any requirement or prohibition imposed under this title with 
        respect to credit repair organizations shall constitute an 
        unfair or deceptive act or practice in commerce in violation of 
        section 5(a) of the Federal Trade Commission Act.
            ``(2) Enforcement authority under other law.--All functions 
        and powers of the Federal Trade Commission under the Federal 
        Trade Commission Act shall be available to the Commission to 
        enforce compliance with this title by any person subject to 
        enforcement by the Federal Trade Commission pursuant to this 
        subsection, including the power to enforce the provisions of 
        this title in the same manner as if the violation had been a 
        violation of any Federal Trade Commission trade regulation 
        rule, without regard to whether the credit repair 
        organization--
                    ``(A) is engaged in commerce; or
                    ``(B) meets any other jurisdictional tests in the 
                Federal Trade Commission Act.
    ``(c) State Enforcement of Title.--
            ``(1) In general.--The attorney general of any State, or an 
        official or agency designated under the law of any State, may 
        enforce the provisions of this title in Federal or State court.
            ``(2) Civil enforcement actions.--Any State may bring a 
        civil action in any Federal or State court to enjoin any 
        violation of this title and recover damages under this title 
        for consumers who reside in such State, and may seek such other 
        remedies as are provided under State law.

``SEC. 411. RELATION TO STATE LAW.

    ``This title shall not annul, alter, affect, or exempt any person 
subject to the provisions of this title from complying with any law of 
any State except to the extent that such law is inconsistent with any 
provision of this title, and then only to the extent of the 
inconsistency.''.

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