II

Calendar No. 461

103D CONGRESS

2D SESSION H. R. 1015

IN THE SENATE OF THE UNITED STATES

JUNE 14 (legislative day, JUNE 7), 1994

Received; read twice and placed on the calendar

AN ACT

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

enforcement, and for other purposes.

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

3 TITLE I—AMENDMENTS TO FAIR

4 CREDIT REPORTING ACT

5 SEC. 101. SHORT TITLE.

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

7 Reform Act of 1994’’.
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1 SEC. 102. DEFINITIONS.

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

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

4 adding at the end the following new subsection:

5 ‘‘(k) The term ‘adverse action’—

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

8 and

9 ‘‘(2) includes—

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

11 for, or reduction in the amount of, insurance

12 for personal, family, or household purposes

13 made in connection with the underwriting of in14 surance;

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

16 other decision for employment purposes which

17 adversely affects any current or prospective em18 ployee; and

19 ‘‘(C) any action taken or determination

20 made—

21 ‘‘(i) in connection with an application

22 which was made by, or a transaction which

23 was initiated by, any consumer; and

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

25 of the consumer.’’.
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1 (b) FIRM OFFER OF CREDIT.—Section 603 of the

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

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

5 ‘‘(l) The term ‘firm offer of credit’—

6 ‘‘(1) means any offer of credit to a consumer

7 that, except as provided in paragraph (2), will be

8 honored if the consumer is determined, based on in9 formation in a consumer report on the consumer, to

10 meet the specific criteria used to select the consumer

11 for the offer; and

12 ‘‘(2) includes an offer of credit described in

13 paragraph (1) for which extension of credit may be

14 conditioned solely on any combination of the follow15 ing:

16 ‘‘(A) The consumer being determined,

17 based on information in the consumer’s applica18 tion for the credit, to meet specific criteria

19 bearing on creditworthiness that are estab20 lished—

21 ‘‘(i) before selection of the consumer

22 for the offer; and

23 ‘‘(ii) for the purpose of determining

24 whether to extend credit pursuant to the

25 offer.
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1 ‘‘(B) Verification—

2 ‘‘(i) that the consumer continues to

3 meet the specific criteria used to select the

4 consumer for the offer, by using informa5 tion in a consumer report on the consumer,

6 information in the consumer’s application

7 for the credit, or other information bearing

8 on the creditworthiness of the consumer; or

9 ‘‘(ii) of the information in the con10 sumer’s application for the credit, to deter11 mine that the consumer meets the specific

12 criteria bearing on creditworthiness.

13 ‘‘(C) The consumer furnishing any collat14 eral that is a requirement for the extension of

15 the credit that was—

16 ‘‘(i) established before selection of the

17 consumer for the offer of credit; and

18 ‘‘(ii) described to the consumer in the

19 offer of credit.’’.

20 (c) CREDIT TRANSACTION WHICH IS NOT INITIATED

21 BY THE CONSUMER.—Section 603 of the Fair Credit Re22 porting Act (15 U.S.C. 1681a) is further amended by add23 ing after subsection (l) (as added by subsection (b) of this

24 section) the following:
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1 ‘‘(m) The term ‘credit transaction which is not initi2 ated by the consumer’ does not include the use of a

3 consumer report by a person with which the consumer has

4 an account, for purposes of—

5 ‘‘(1) reviewing the account; or

6 ‘‘(2) collecting the account.’’.

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

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

10 section) the following:

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

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

14 (e) EXCLUSIONS FROM DEFINITION OF CONSUMER

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

16 Act (15 U.S.C. 1681a(d)) is amended in the second sen17 tence in clause (A)—

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

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

20 the following: ‘‘, (ii) any communication of that in21 formation among persons related by common owner22 ship or affiliated by corporate control, or (iii) any

23 communication of information from a credit applica24 tion by a consumer among persons related by com25 mon ownership or affiliated by corporate control if
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1 it is clearly and conspicuously disclosed (I) with the

2 application that the information may be commu3 nicated among such persons and the consumer con4 sents, or (II) with respect to existing customers, at

5 any time prior to the time that the information is

6 initially communicated, that such information may

7 be communicated among such persons and the

8 consumer is given the opportunity, prior to the time

9 that the information is initially communicated, to di10 rect in writing that such information not be commu11 nicated among such persons’’;

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

13 semicolon at the end;

14 (4) in clause (C) by striking the period and in15 serting a semicolon; and

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

17 any communication of information about a consumer

18 between persons who are affiliated by common own19 ership or common corporate control and in connec20 tion with a credit transaction which is not initiated

21 by the consumer, if either of those persons has com22 plied with section 615(d)(4)(B) with respect to a

23 consumer report from which the information is

24 taken and the consumer has consented to use of the

25 report for the transaction, or with respect to existing
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1 customers, the consumer has not directed in writing

2 that the report may not be used for the transaction,

3 in accordance with section 615(d)(4)(C).’’.

4 (f) EXCLUSION OF CERTAIN COMMUNICATIONS BY

5 EMPLOYMENT AGENCIES FROM DEFINITION OF

6 CONSUMER REPORT.—Section 603 of the Fair Credit Re7 porting Act (15 U.S.C. 1681(a)) is further amended—

8 (1) in subsection (d), as amended by subsection

9 (e) of this section, by adding at the end the follow10 ing: ‘‘The term also does not include a communica11 tion described in subsection (o).’’; and

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

13 ‘‘(o) COMMUNICATIONS BY EMPLOYMENT AGENCIES

14 EXCLUDED FROM DEFINITION OF CONSUMER REPORT.—

15 A communication is described in this subsection if it is

16 a communication—

17 ‘‘(1) that, but for the 3rd sentence of sub18 section (d), would be an investigative consumer re19 port;

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

21 the purpose of—

22 ‘‘(A) procuring an employee for the em23 ployer, or

24 ‘‘(B) procuring an opportunity for a natu25 ral person to work for the employer;
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1 ‘‘(3) that is made by a person that regularly

2 performs such procurement;

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

4 purpose other than a purpose described in para5 graph (2) (A) or (B);

6 ‘‘(5) with respect to which—

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

8 the communication—

9 ‘‘(i) consents orally or in writing to

10 the nature and scope of the communica11 tion, before the collection of any informa12 tion for the purpose of making the commu13 nication;

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

15 the making of the communication to a pro16 spective employer, before the making of the

17 communication; and

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

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

20 written confirmation of that consent by the

21 person making the communication, within

22 3 business days after the receipt of the

23 consent by that person;

24 ‘‘(B) the person that makes the commu25 nication does not, for the purpose of making
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1 the communication, make any inquiry that if

2 made by a prospective employer of the

3 consumer who is the subject of the communica4 tion would violate any applicable Federal or

5 State equal employment opportunity law or reg6 ulation; and

7 ‘‘(C) the person that makes the commu8 nication—

9 ‘‘(i) discloses in writing to the

10 consumer who is the subject of the commu11 nication, within 5 business days after re12 ceiving any request from the consumer for

13 such disclosure, the nature and substance

14 of all information in the consumer’s file at

15 the time of the request, except that the

16 sources of information that is acquired

17 solely for use in making the communica18 tion and actually used for no other purpose

19 need not be disclosed other than under ap20 propriate discovery procedures in the court

21 in which an action is brought; and

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

23 subject of the communication, in writing,

24 of the consumer’s right to request the in25 formation described in clause (i).’’.
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1 (g) CLERICAL AMENDMENT.—Section 603(d) of the

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

3 amended in the first sentence—

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

5 for’’; and

6 (2) by striking ‘‘(1)’’ before ‘‘credit or insur7 ance’’.

8 SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EM9 PLOYMENT PURPOSES.

10 (a) FURNISHING CONSUMER REPORTS FOR BUSI11 NESS TRANSACTIONS.—Section 604 of the Fair Credit Re12 porting Act (15 U.S.C. 1681b) is amended—

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

14 ‘‘A consumer reporting agency’’; and

15 (2) in subsection (a)(3) (as designated by para16 graph (1) of this subsection) by amending subpara17 graph (E) to read as follows:

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

19 for the information in connection with a business

20 transaction that is initiated by the consumer.’’.

21 (b) FURNISHING AND USING CONSUMER REPORTS

22 FOR EMPLOYMENT PURPOSES.—Section 604 of the Fair

23 Credit Reporting Act (15 U.S.C. 1681b) is further amend24 ed by adding at the end the following new subsection:
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1 ‘‘(b) CONDITIONS FOR FURNISHING AND USING

2 CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—

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

4 reporting agency may furnish a consumer report for

5 employment purposes only if—

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

7 from the agency certifies to the agency that—

8 ‘‘(i) the person has complied with

9 paragraph (2) with respect to the

10 consumer report, and the person will com11 ply with paragraph (3) with respect to the

12 consumer report if paragraph (3) becomes

13 applicable; and

14 ‘‘(ii) information from the consumer

15 report will not be used in violation of any

16 applicable Federal or State equal employ17 ment opportunity law or regulation; and

18 ‘‘(B) the consumer reporting agency pro19 vides with the report a summary of the consum20 er’s rights under this title, as prescribed by the

21 Federal Trade Commission under section

22 609(c)(3).

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

24 may not procure a consumer report, or cause a
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1 consumer report to be procured, for employment

2 purposes with respect to any consumer unless—

3 ‘‘(A) a clear and conspicuous disclosure

4 has been made in writing to the consumer at

5 any time before the report is procured or

6 caused to be procured, in a document that con7 sists solely of the disclosure, that a consumer

8 report may be obtained for employment pur9 poses; and

10 ‘‘(B) the consumer has authorized in writ11 ing the procurement of the report by that per12 son.

13 ‘‘(3) CONDITIONS ON USE FOR ADVERSE AC14 TIONS.—In using a consumer report for employment

15 purposes, before taking any adverse action based in

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

17 to the consumer to whom the report relates—

18 ‘‘(A) a copy of the report;

19 ‘‘(B) a description in writing of the con20 sumer’s rights under this title, as prescribed by

21 the Federal Trade Commission under section

22 609(c)(3); and

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

24 exceed 5 business days following receipt of the

25 report by the consumer) to respond to any in-
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1 formation in the report that is disputed by the

2 consumer, and notice in writing of the oppor3 tunity for the consumer to respond in that pe4 riod.

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

6 paragraph (1), a consumer reporting agency may

7 furnish a consumer report, and a person may use a

8 consumer report, for employment purposes only

9 under the following circumstances:

10 ‘‘(A) The employment requires or is ex11 pected to require a security clearance issued by

12 an agency of the United States as a condition

13 for employment.

14 ‘‘(B) The employment requires or is ex15 pected to require an employee to be covered by

16 a fidelity bond.

17 ‘‘(C) The employment requires or is ex18 pected to require an employee, on a regular

19 basis and as part of the normal duties of em20 ployment—

21 ‘‘(i) to handle or otherwise have ac22 cess to substantial amounts of cash or

23 other things of value of the employer: or
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1 ‘‘(ii) to engage in any conduct or ac2 tivity with respect to which the employee

3 has a fiduciary duty.’’.

4 SEC. 104. AMENDMENTS RELATING TO USE OF CONSUMER

5 REPORTS FOR PRESCREENING; PROHIBITION

6 ON UNAUTHORIZED OR UNCERTIFIED USE OF

7 INFORMATION.

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

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

10 103, is further amended—

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

12 reporting agency’’ and inserting ‘‘Subject to sub13 section (c), any consumer reporting agency’’; and

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

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

16 ‘‘(c) FURNISHING REPORTS IN CONNECTION WITH

17 CREDIT TRANSACTIONS NOT INITIATED BY THE

18 CONSUMER.—

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

20 agency may furnish a consumer report relating to

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

22 connection with any credit transaction which is not

23 initiated by the consumer only if—

24 ‘‘(A) the consumer authorizes the agency

25 to provide such report to such person; or
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1 ‘‘(B)(i) the transaction consists of a firm

2 offer of credit;

3 ‘‘(ii) the consumer reporting agency has

4 complied with subsection (d); and

5 ‘‘(iii) the consumer has not elected in ac6 cordance with subsection (d)(1) to have the con7 sumer’s name and address excluded from lists

8 of names provided by the agency pursuant to

9 this paragraph.

10 ‘‘(2) LIMITS ON INFORMATION RECEIVED

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

12 pursuant to paragraph (1)(B) only—

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

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

15 consumer and is used by the person solely for

16 the purpose of verifying the identity of the

17 consumer; and

18 ‘‘(C) information pertaining to a consumer

19 that is not identified or identifiable with the

20 consumer.

21 ‘‘(3) INFORMATION REGARDING INQUIRIES.—

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

23 reporting agency shall not furnish to any person a

24 record of inquiries in connection with credit trans25 actions which are not initiated by a consumer.
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1 ‘‘(d) ELECTION OF CONSUMER TO BE EXCLUDED

2 FROM LISTS.—

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

4 have his or her name and address excluded from any

5 list provided by a consumer reporting agency in con6 nection with a credit transaction which is not initi7 ated by the consumer, by—

8 ‘‘(A) notifying the agency, through the no9 tification system maintained by the agency

10 under paragraph (3), that the consumer does

11 not consent to any use of consumer reports re12 lating to the consumer in connection with any

13 credit transaction which is not initiated by the

14 consumer; and

15 ‘‘(B) returning to the agency a signed

16 written notice of the election, if provided by the

17 agency in accordance with paragraph (2).

18 ‘‘(2) PROVISION OF WRITTEN NOTICE TO

19 CONSUMER.—A consumer reporting agency shall

20 provide to a consumer a written notice for purposes

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

22 days after being notified of the election of the

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

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

25 reporting agency which furnishes a consumer report
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1 in connection with any credit transaction which is

2 not initiated by a consumer, shall—

3 ‘‘(A) establish and maintain a notification

4 system, including a toll-free telephone number,

5 which permits any consumer whose consumer

6 report is maintained by the agency to notify the

7 agency, with appropriate identification, of the

8 consumer’s election to have the consumer’s

9 name and address excluded from any list of

10 names and addresses provided by the agency for

11 such a transaction; and

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

13 after the date of the enactment of the

14 Consumer Reporting Reform Act of 1994, and

15 at least annually thereafter, in a publication of

16 general circulation in the area served by the

17 agency—

18 ‘‘(i) a notification that information in

19 consumer files maintained by the agency

20 may be used in connection with such trans21 actions; and

22 ‘‘(ii) the address and toll-free tele23 phone number for consumers to use to no24 tify the agency of the consumer’s election

25 under subparagraph (A).
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1 Establishment and maintenance of a notification

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

3 publication by a consumer reporting agency on its

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

5 accordance with this paragraph is deemed to be

6 compliance with this paragraph by each of those af7 filiates.

8 ‘‘(4) AGENCIES WHICH OPERATE NATION9 WIDE.—Each consumer reporting agency which com10 piles and maintains files on consumers on a nation11 wide basis shall establish and maintain a notification

12 system for purposes of paragraph (3) jointly with

13 other such consumer reporting agencies.

14 ‘‘(5) EFFECTIVENESS OF ELECTION.—An elec15 tion of a consumer under paragraph (1)—

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

17 consumer reporting agency beginning on the

18 later of—

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

20 notifies the agency in accordance with

21 paragraph (1)(A); or

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

23 returns to the agency a signed written

24 notification of the election in accordance
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1 with paragraph (1)(B), if provided by the

2 agency;

3 ‘‘(B) shall not be effective after the date

4 on which the consumer notifies the agency

5 (through the system established by the agency

6 under paragraph (3)) that the election is no

7 longer effective; and

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

9 affiliate of the agency.’’.

10 (b) FURNISHING CONSUMER REPORTS FOR CERTAIN

11 DIRECT MARKETING TRANSACTIONS PROHIBITED.—Sec12 tion 604 of the Fair Credit Reporting Act (15 U.S.C.

13 1681b) is further amended by adding after subsection (d)

14 (as added by subsection (a) of this section) the following

15 new subsection:

16 ‘‘(e) FURNISHING CONSUMER REPORTS FOR CER17 TAIN DIRECT MARKETING TRANSACTIONS PROHIB18 ITED.—Except as provided in subsection (a)(2) and sub19 section (c), a consumer reporting agency may not furnish

20 a consumer report for use for a direct marketing trans21 action which is not initiated by the consumer to whom the

22 report relates.’’.

23 (c) USE OF INFORMATION OBTAINED FROM RE24 PORTS.—Section 604 of the Fair Credit Reporting Act (15

25 U.S.C. 1681b) is further amended by adding after sub-
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1 section (e) (as added by subsection (b) of this section) the

2 following new subsection:

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

4 PROHIBITED.—A person shall not use or obtain informa5 tion from a consumer report for any purpose unless—

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

7 consumer report is authorized to be furnished under

8 subsection (a); and

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

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

11 (d) FIRST NOTIFICATIONS BY CONSUMERS.—A

12 consumer may notify a consumer reporting agency

13 through a notification system established and maintained

14 by the agency under section 604(d) of the Fair Credit Re15 porting Act, as amended by subsection (a), on or after

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

17 of this Act.

18 SEC. 105. CONSUMER CONSENT REQUIRED TO FURNISH

19 CONSUMER REPORT CONTAINING MEDICAL

20 INFORMATION.

21 Section 604 of the Fair Credit Reporting Act (15

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

23 further amended by adding at the end the following:

24 ‘‘(g) FURNISHING REPORTS CONTAINING MEDICAL

25 INFORMATION.—A consumer reporting agency shall not
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1 furnish for employment purposes, or in connection with

2 a credit transaction, a consumer report which contains

3 medical information about a consumer, unless the

4 consumer consents to the furnishing of the report.’’.

5 SEC. 106. AMENDMENTS RELATING TO OBSOLETE INFOR6 MATION AND INFORMATION CONTAINED IN

7 CONSUMER REPORTS.

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

9 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c)

10 is amended—

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

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

13 ‘‘(a) INFORMATION EXCLUDED FROM CONSUMER

14 REPORTS.—No’’; and

15 (2) by striking subsection (b).

16 (b) CLARIFICATION OF REPORTING PERIOD.—Sec17 tion 605 of the Fair Credit Reporting Act (15 U.S.C.

18 1681c), as amended by subsection (a), is further amended

19 by adding at the end the following new subsection:

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

21 year period referred to in paragraphs (4) and (6) of sub22 section (a) shall begin, with respect to any delinquent ac23 count which is placed for collection (internally or by refer24 ral to a 3d party, whichever is earlier), charged to profit

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

2 commencement of the delinquency which immediately pre3 ceded the collection activity, charge to profit and loss, or

4 similar action.

5 ‘‘(2) Paragraph (1) applies only to items of informa6 tion added to a consumer report on or after the date that

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

8 Consumer Reporting Reform Act of 1994.’’.

9 (c) ADDITIONAL INFORMATION ON BANKRUPTCY

10 FILINGS REQUIRED.—Section 605 of the Fair Credit Re11 porting Act (15 U.S.C. 1681c) is further amended by add12 ing after subsection (b) (as added by subsection (b) of this

13 section) the following new subsection:

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

15 Any consumer reporting agency which furnishes a

16 consumer report which contains information regarding

17 any case involving the consumer which arises under title

18 11, United States Code, shall include in the report an

19 identification of the chapter of such title 11 under which

20 such case arises if provided by the source of the informa21 tion. If any case arising or filed under title 11, United

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

23 judgment, the consumer reporting agency shall include in

24 the report that such case or filing was withdrawn upon

25 receipt of documentation certifying such withdrawal.’’.
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1 (d) INDICATION OF CLOSURE OF ACCOUNT; INDICA2 TION OF DISPUTE BY CONSUMER.—Section 605 of the

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

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

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

7 CONSUMER.—If a consumer reporting agency is notified

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

9 consumer was voluntarily closed by the consumer, the

10 agency shall indicate that fact in any consumer report that

11 includes information related to the account.

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

13 consumer reporting agency is notified pursuant to section

14 623(a)(3) that information regarding a consumer that was

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

16 agency shall indicate that fact in each consumer report

17 that includes the disputed information.’’.

18 (e) PROHIBITION ON MAINTAINING OR FURNISHING

19 CERTAIN ACCOUNT INFORMATION.—

20 (1) IN GENERAL.—Section 605 of the Fair

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

22 amended by adding at the end the following new

23 subsection:

24 ‘‘(f) CERTAIN ACCOUNT INFORMATION.—
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1 ‘‘(1) EXCLUSION FROM CONSUMER REPORT.—A

2 consumer reporting agency shall not maintain in the

3 file of a consumer, or furnish a consumer report on

4 a consumer which contains, any information regard5 ing a failure of the consumer to make any payment

6 on an account of the consumer that became due in

7 a period during which the consumer was receiving

8 assistance pursuant to a declaration of an emer9 gency by the President under The Robert T. Staf10 ford Disaster Relief and Emergency Assistance Act,

11 or unemployment compensation under the laws of

12 any State (or but for the exhaustion of benefits

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

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

15 the consumer reporting agency exclude the in16 formation from either the file or such reports;

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

18 appropriate documentation which demonstrates

19 that the consumer was receiving such assistance

20 or was receiving (or would so be entitled to re21 ceive) such compensation during that period;

22 and

23 ‘‘(C) the account is maintained in a cur24 rent status during the 1-year period ending on

25 the date of the submittal of the request.
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1 ‘‘(2) APPROPRIATE DOCUMENTATION.—The

2 Federal Trade Commission shall prescribe what con3 stitutes appropriate documentation for purposes of

4 paragraph (1).’’.

5 (g) CLERICAL AMENDMENTS.—

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

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

8 by striking ‘‘Obsolete information’’ and insert9 ing ‘‘Requirements relating to information

10 contained in consumer reports’’.

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

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

13 is amended by striking the item relating to section

14 605 and inserting the following:

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

15 SEC. 107. AMENDMENTS RELATING TO COMPLIANCE PRO16 CEDURES.

17 (a) DISCLOSURE OF CONSUMER REPORTS BY

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

19 (15 U.S.C. 1681e) is amended by adding at the end the

20 following new subsection:

21 ‘‘(c) DISCLOSURE OF CONSUMER REPORTS BY

22 USERS ALLOWED.—A consumer reporting agency may not

23 prohibit a user of a consumer report furnished by the

24 agency on a consumer from disclosing the contents of the

25 report to the consumer, if adverse action against the
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1 consumer has been taken, or is contemplated, by the user

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

3 (b) NOTICE TO USERS AND PROVIDERS OF INFORMA4 TION TO ENSURE COMPLIANCE.—Section 607 of the Fair

5 Credit Reporting Act (15 U.S.C. 1681e) is further amend6 ed by adding after subsection (c) (as added by subsection

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

8 ‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR9 MATION.—

10 ‘‘(1) NOTICE REQUIREMENT.—A consumer re11 porting agency shall provide to any person—

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

13 course of business furnishes information to the

14 agency with respect to any consumer; or

15 ‘‘(B) to whom a consumer report is pro16 vided by the agency;

17 a notice of such person’s responsibilities under this

18 title.

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

20 Trade Commission shall prescribe the content of no21 tices under paragraph (1).’’.

22 (c) RECORD OF IDENTITY OF USERS AND PURPOSES

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

24 Fair Credit Reporting Act (15 U.S.C. 1681e) is further
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•HR 1015 PCS

1 amended by adding after subsection (d) (as added by sub2 section (b) of this section) the following new subsection:

3 ‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE4 SALE.—

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

6 a consumer report for purposes of reselling the re7 port (or any information in the report) unless the

8 person discloses to the consumer reporting agency

9 which originally furnishes the report—

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

11 of the report (or information), and

12 ‘‘(B) each permissible purpose under sec13 tion 604 for which the report is furnished to

14 the ultimate end-user of the report (or informa15 tion).

16 ‘‘(2) RESPONSIBILITIES OF PROCURERS FOR

17 RESALE.—A person which procures a consumer re18 port for purposes of reselling the report (or any in19 formation in the report) shall—

20 ‘‘(A) establish and comply with reasonable

21 procedures designed to ensure that the report

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

23 a purpose for which the report may be fur24 nished under section 604, including by requir-
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•HR 1015 PCS

1 ing that each person to which the report (or

2 information) is resold—

3 ‘‘(i) identifies each prospective user of

4 the resold report (or information);

5 ‘‘(ii) certifies each purpose for which

6 the report (or information) will be used;

7 and

8 ‘‘(iii) certifies that the report (or in9 formation) will be used for no other pur10 pose; and

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

12 reasonable efforts to verify the identifications

13 and certifications made under subparagraph

14 (A).’’.

15 SEC. 108. AMENDMENTS RELATING TO CONSUMER DISCLO16 SURES.

17 (a) ALL INFORMATION IN CONSUMER’S FILE RE18 QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the

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

20 amended to read as follows:

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

22 the time of the request.’’.

23 (b) MORE INFORMATION CONCERNING RECIPIENTS

24 OF REPORTS REQUIRED.—Section 609(a)(3) of the Fair
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•HR 1015 PCS

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

2 to read as follows:

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

4 each ultimate end-user identified under section

5 607(e)(1)) who procured a consumer report—

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

7 year period preceding the request; or

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

9 year period preceding the request.

10 ‘‘(B) An identification of a person under sub11 paragraph (A) shall include—

12 ‘‘(i) the name of the person or, if applica13 ble, the trade name (written in full) under

14 which such person conducts business; and

15 ‘‘(ii) upon request of the consumer, the ad16 dress and telephone number of the person.’’.

17 (c) DISCLOSURE OF PERMISSIBLE PURPOSES.—Sec18 tion 609(a) of the Fair Credit Reporting Act (15 U.S.C.

19 1681g(a)) is further amended by adding at the end the

20 following:

21 ‘‘(4) The permissible purpose for which each

22 person identified under paragraph (3) procured a

23 consumer report.’’.

24 (d) INFORMATION REGARDING INQUIRIES.—Section

25 609(a) of the Fair Credit Reporting Act (15 U.S.C.
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•HR 1015 PCS

1 1681g(a)) is amended by adding after paragraph (4) (as

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

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

4 agency in the 1-year period preceding the request

5 that identified the consumer in connection with a

6 credit transaction which was not initiated by the

7 consumer.’’.

8 (e) DISCLOSING THE FACTS REGARDING CHECKS

9 UPON WHICH ADVERSE CHARACTERIZATION IS BASED.—

10 Section 609(a) of the Fair Credit Reporting Act (15

11 U.S.C. 1681g(a)) is amended by adding after paragraph

12 (5) (as added by subsection (d) of this section) the follow13 ing:

14 ‘‘(6) The dates, original payees, and amounts of

15 any checks upon which is based any adverse charac16 terization of the consumer included in the file at the

17 time of the disclosure.’’.

18 (f) SUMMARY OF RIGHTS REQUIRED TO BE IN19 CLUDED WITH DISCLOSURE.—

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

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

22 by adding at the end the following new subsection:

23 ‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN24 CLUDED WITH DISCLOSURE.—
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•HR 1015 PCS

1 ‘‘(1) SUMMARY OF RIGHTS.—A consumer re2 porting agency shall provide to a consumer, with

3 each written disclosure by the agency to the

4 consumer under this section—

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

6 consumer has under this title; and

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

8 agency that compiles and maintains files on

9 consumers on a nationwide basis, the toll-free

10 telephone number established by the agency

11 pursuant to section 607(f).

12 ‘‘(2) SPECIFIC ITEMS REQUIRED TO BE IN13 CLUDED.—The summary of rights required under

14 paragraph (1) shall include—

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

16 rights of consumers under this title;

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

18 may exercise the rights of the consumer under

19 this title;

20 ‘‘(C) a list of all Federal agencies respon21 sible for enforcing any provision of this title

22 and the address and any appropriate phone

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

24 assist the consumer in selecting the appropriate

25 agency; and
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•HR 1015 PCS

1 ‘‘(D) a statement that a consumer report2 ing agency is not required to remove accurate

3 derogatory information from a consumer’s file,

4 unless the information is outdated under sec5 tion 605 or cannot be verified.

6 ‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur7 poses of this subsection and any disclosure by a

8 consumer reporting agency required under this title

9 with respect to consumers’ rights, the Federal Trade

10 Commission (after consultation with each Federal

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

12 the form and content of any disclosure of the rights

13 of consumers required under this title.’’.

14 (2) TECHNICAL AMENDMENT.—Section

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

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

17 ‘‘and the written summary of the rights of the

18 consumer prepared pursuant to section 609(c)’’ be19 fore the semicolon.

20 (g) FORM OF DISCLOSURES.—

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

22 section 610 of the Fair Credit Reporting Act (15

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

24 ‘‘(a) IN GENERAL.—
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•HR 1015 PCS

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

2 reporting agency shall require, as a condition of

3 making the disclosures required under section 609,

4 that the consumer furnish proper identification.

5 ‘‘(2) DISCLOSURE IN WRITING.—Except as pro6 vided in subsection (b), the disclosures required to

7 be made under section 609 shall be provided under

8 that section in writing.

9 ‘‘(b) OTHER FORMS OF DISCLOSURE.—

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

11 consumer, a consumer reporting agency may make

12 the disclosures required under 609—

13 ‘‘(A) other than in writing; and

14 ‘‘(B) in such form as may be—

15 ‘‘(i) specified by the consumer in ac16 cordance with paragraph (2); and

17 ‘‘(ii) available from the agency.

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

19 to paragraph (1) that disclosures under section 609

20 shall be made—

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

22 consumer at the place of business of the

23 consumer reporting agency where disclosures

24 are regularly provided, during normal business

25 hours, and on reasonable notice;
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•HR 1015 PCS

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

2 made a written request for disclosure by tele3 phone;

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

5 the agency; or

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

7 is available from the agency.’’.

8 (2) SIMPLIFIED DISCLOSURE.—Section 610 of

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

10 amended by adding at the end the following:

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

12 Commission shall prescribe the form in which a consumer

13 reporting agency shall make the disclosures required

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

15 comprehensibility and standardization of such disclo16 sures.’’.

17 (3) CONFORMING AMENDMENTS.—

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

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

22 and inserting ‘‘and subject to section

23 610(a)(1)’’.

24 (B) Section 610 of the Fair Credit Report25 ing Act (15 U.S.C. 1681h) is amended in the
35

•HR 1015 PCS

1 heading for the section by inserting ‘‘and

2 form’’ after ‘‘Conditions’’.

3 (C) The table of sections at the beginning

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

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

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

7 ‘‘Conditions’’.

8 SEC. 109. AMENDMENTS RELATING TO PROCEDURES IN

9 CASE OF THE DISPUTED ACCURACY OF ANY

10 INFORMATION IN A CONSUMER’S FILE.

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

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

13 as follows:

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

16 ‘‘(1) REINVESTIGATION REQUIRED.—

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

18 accuracy of any item of information contained

19 in any consumer’s file at any consumer report20 ing agency is disputed by the consumer and the

21 consumer notifies the agency directly of such

22 dispute, the agency shall reinvestigate free of

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

25 file in accordance with paragraph (5), before
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•HR 1015 PCS

1 the end of the 30-day period beginning on the

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

4 ‘‘(B) EXTENSION OF PERIOD TO

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

7 subparagraph (A) may be extended if—

8 ‘‘(i) the consumer reporting agency

9 receives information from the consumer

10 within that 30-day period that is relevant

11 to the reinvestigation; and

12 ‘‘(ii) the consumer reporting agency

13 has provided clear and conspicuous notice

14 to the consumer, in a disclosure under sec15 tion 609(c), of the circumstances that may

16 cause such an extension.

17 The period, as extended, shall end not later

18 than 15 days after the last date the agency re19 ceives such information.

20 ‘‘(C) LIMITATIONS ON EXTENSION OF PE21 RIOD TO REINVESTIGATE.—Subparagraph (B)

22 shall not apply to any reinvestigation in which,

23 in the 30-day period described in subparagraph

24 (A), the information that is the subject of the
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•HR 1015 PCS

1 reinvestigation is found to be inaccurate or in2 complete or cannot be verified.

3 ‘‘(2) PROMPT NOTICE OF DISPUTE TO FUR4 NISHER OF INFORMATION.—

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

6 5-day period beginning on the date a consumer

7 reporting agency receives notice of a dispute

8 from any consumer in accordance with para9 graph (1), the agency shall provide notification

10 of the dispute to any person that provided any

11 item of information in dispute, at the address

12 and in the manner established with the person.

13 The notice shall include disclosure of the date

14 on which the consumer reporting agency re15 ceived notice of the dispute from the consumer

16 and all relevant information regarding the dis17 pute that the agency has received from the

18 consumer.

19 ‘‘(B) PROVISION OF OTHER INFORMATION

20 FROM CONSUMER.—The consumer reporting

21 agency shall promptly provide to the person

22 that provided the information in dispute all rel23 evant information regarding the dispute that is

24 received by the agency from the consumer after

25 the period referred to in subparagraph (A) and
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•HR 1015 PCS

1 before the end of the period referred to in para2 graph (1)(A).

3 ‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO4 LOUS OR IRRELEVANT.—

5 ‘‘(A) IN GENERAL.—Notwithstanding para6 graph (1), a consumer reporting agency may

7 terminate a reinvestigation of information dis8 puted by a consumer under that paragraph if

9 the agency reasonably determines that the dis10 pute by the consumer is frivolous or irrelevant,

11 including by reason of a failure by a consumer

12 to provide sufficient information to investigate

13 the disputed information.

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

15 making any determination in accordance with

16 subparagraph (A) that a dispute is frivolous or

17 irrelevant, a consumer reporting agency shall

18 notify the consumer within 5 days of such de19 termination, by mail or, if authorized by the

20 consumer for that purpose, by any other means

21 available to the agency.

22 ‘‘(C) CONTENTS OF NOTICE.—A notice

23 under subparagraph (B) shall include—

24 ‘‘(i) the reasons for the determination

25 under subparagraph (A); and
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•HR 1015 PCS

1 ‘‘(ii) identification of any information

2 required to investigate the disputed infor3 mation.

4 ‘‘(4) CONSIDERATION OF CONSUMER INFORMA5 TION.—In conducting any reinvestigation under

6 paragraph (1) with respect to disputed information

7 in the file of any consumer, the consumer reporting

8 agency shall review and consider all relevant infor9 mation submitted by the consumer in the period de10 scribed in paragraph (1)(A) with respect to such dis11 puted information.

12 ‘‘(5) TREATMENT OF INACCURATE OR UNVERI13 FIABLE INFORMATION.—

14 ‘‘(A) IN GENERAL.—If, after any

15 reinvestigation under paragraph (1) of any in16 formation disputed by a consumer, an item of

17 the information is found to be inaccurate or in18 complete or cannot be verified, the consumer re19 porting agency shall promptly delete that item

20 of information from the consumer’s file. The in21 formation deleted shall consist solely of the in22 formation that was disputed by the consumer

23 and shall not include any portion of the same

24 item that was not disputed.
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•HR 1015 PCS

1 ‘‘(B) REQUIREMENTS RELATING TO

2 REINSERTION OF PREVIOUSLY DELETED MATE3 RIAL.—

4 ‘‘(i) CERTIFICATION OF ACCURACY OF

5 INFORMATION.—If any information is de6 leted from a consumer’s file pursuant to

7 subparagraph (A), the information may

8 not be reinserted in the file by the

9 consumer reporting agency unless the per10 son who furnishes the information certifies

11 that the information is complete and accu12 rate.

13 ‘‘(ii) NOTICE TO CONSUMER.—If any

14 information which has been deleted from a

15 consumer’s file pursuant to subparagraph

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

17 reporting agency shall promptly notify the

18 consumer of the reinsertion in writing or,

19 if authorized by the consumer for that pur20 pose, by any other means available to the

21 agency.

22 ‘‘(iii) ADDITIONAL INFORMATION.—As

23 part of or in addition to the notice under

24 clause (ii), a consumer reporting agency

25 shall provide to a consumer in writing
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•HR 1015 PCS

1 within the 5-day period beginning on the

2 date of the reinsertion—

3 ‘‘(I) a statement that the dis4 puted information has been

5 reinserted;

6 ‘‘(II) a notice to the consumer

7 that if requested by the consumer the

8 agency shall provide to the consumer,

9 within 15 days after the date of the

10 request, the name, business address,

11 and telephone number of any fur12 nisher of information contacted, or of

13 any furnisher of information which

14 contacted the consumer reporting

15 agency, in connection with the

16 reinsertion of such information;

17 ‘‘(III) the toll-free telephone

18 number of the consumer reporting

19 agency if the agency is required to

20 maintain such a number under section

21 607(f), or a telephone number that

22 the consumer can use to contact the

23 agency with respect to obtaining the

24 information described in subclause

25 (II); and
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•HR 1015 PCS

1 ‘‘(IV) a notice that the consumer

2 has the right to add a statement to

3 the consumer’s file disputing the accu4 racy or completeness of the disputed

5 information.

6 ‘‘(C) PROCEDURES TO PREVENT RE7 APPEARANCE.—A consumer reporting agency

8 shall maintain reasonable procedures designed

9 to prevent the reappearance in a consumer’s

10 file, and in consumer reports on the consumer,

11 of information that is deleted pursuant to this

12 paragraph (other than information that is

13 reinserted in accordance with subparagraph

14 (B)(i)).

15 ‘‘(D) FREE CONSUMER REPORT DURING

16 12-MONTH PERIOD AFTER DELETION OF INFOR17 MATION.—Upon the request of a consumer, a

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

20 to that consumer at least once during the 12-

21 month period after the consumer receives a no22 tification under paragraph (6) or paragraph (8)

23 of the deletion of information that is found to

24 be inaccurate or cannot be verified.
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1 ‘‘(E) Any nationwide consumer reporting

2 agency that maintains files on a consumer on a

3 nationwide basis that is subject to this section,

4 shall report the results of a reinvestigation that

5 finds incomplete or inaccurate information in a

6 consumer’s file to all other such agencies.

7 ‘‘(6) NOTICE OF RESULTS OF

8 REINVESTIGATION.—

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

10 agency shall provide written notice to a

11 consumer of the results of a reinvestigation

12 under this subsection within 5 days after the

13 completion of the reinvestigation, by mail or, if

14 authorized by the consumer for that purpose,

15 by other means available to the agency.

16 ‘‘(B) CONTENTS.—As part of or in addi17 tion to the notice under subparagraph (A), a

18 consumer reporting agency shall provide to a

19 consumer in writing within the 5-day period

20 referred to in subparagraph (A)—

21 ‘‘(i) a statement that the reinves22 tigation is completed;

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

24 upon the consumer’s file as that file is re25 vised as a result of the reinvestigation;
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•HR 1015 PCS

1 ‘‘(iii) a description or indication of

2 any changes made in the consumer report

3 as a result of those revisions to the con4 sumer’s file;

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

6 consumer, a description of the procedure

7 used to determine the accuracy and com8 pleteness of the information shall be pro9 vided to the consumer by the agency, in10 cluding the name, business address, and

11 telephone number of any furnisher of in12 formation contacted in connection with

13 such information;

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

15 the right to add a statement to the con16 sumer’s file disputing the accuracy or com17 pleteness of the information; and

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

19 the right to request under subsection (d)

20 that the consumer reporting agency fur21 nish notifications under that subsection.

22 ‘‘(7) DESCRIPTION OF REINVESTIGATION PRO23 CEDURE.—A consumer reporting agency shall pro24 vide to a consumer a description referred to in para25 graph (6)(B)(iv) by not later than 15 days after re-
45

•HR 1015 PCS

1 ceiving a request from the consumer for that de2 scription.

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

4 dispute regarding an item of information in a con5 sumer’s file at a consumer reporting agency is re6 solved in accordance with paragraph (5)(A) by the

7 deletion of the disputed information by not later

8 than 3 business days after the date on which the

9 agency receives notice of the dispute from the

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

11 the agency shall not be required to comply with

12 paragraphs (2), (6), and (7) with respect to that dis13 pute if the agency—

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

15 to the consumer by telephone;

16 ‘‘(B) includes in that notice, or in a writ17 ten notice that accompanies a confirmation and

18 consumer report provided in accordance with

19 subparagraph (C), a statement of the consum20 er’s right to request under subsection (d) that

21 the agency furnish notifications under that sub22 section; and

23 ‘‘(C) provides written confirmation of the

24 deletion and a copy of a consumer report on the

25 consumer which is based on the consumer’s file
46

•HR 1015 PCS

1 after the deletion, within 5 days after making

2 the deletion.’’.

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

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

5 1681i(d)) is amended by striking ‘‘The consumer report6 ing agency shall clearly’’ and all that follows through the

7 end of the subsection.

8 SEC. 110. AMENDMENT RELATING TO CHARGES FOR DIS9 CLOSURE.

10 Section 612 of the Fair Credit Reporting Act (15

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

12 ‘‘§ 612. Charges for certain disclosures

13 ‘‘(a) REASONABLE CHARGES ALLOWED FOR CER14 TAIN DISCLOSURES.—Except as provided in subsections

15 (b), (c), (d), and (f), a consumer reporting agency may

16 impose a reasonable charge on a consumer—

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

18 pursuant to section 609, which—

19 ‘‘(A) shall not exceed $8; and

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

21 prior to making disclosure; and

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

23 summary, or codification to any person designated

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

25 which—
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1 ‘‘(A) shall not exceed the charge that the

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

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

5 prior to furnishing such information.

6 ‘‘(b) FREE CONSUMER REPORT AFTER ADVERSE

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

10 consumer if, within 60 days after receipt by such

11 consumer of a notification pursuant to section 615 or of

12 a notification from a debt collection agency affiliated with

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

15 the consumer makes a request under section 609.

16 ‘‘(c) FREE CONSUMER REPORT UNDER CERTAIN

17 OTHER CIRCUMSTANCES.—Upon the request of the

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

20 consumer if the consumer certifies in writing that the

21 consumer—

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

23 employment in the 60-day period beginning on the

24 date the certification is made;
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•HR 1015 PCS

1 ‘‘(2) is a recipient of public welfare assistance;

2 or

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

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

6 ‘‘(d) CHARGE FOR CERTAIN NOTICES PROHIB7 ITED.—A consumer reporting agency shall not impose any

8 charge for—

9 ‘‘(1) providing any notice to a consumer re10 quired under section 611; or

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

12 611(d) of the deletion of information which is found

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

14 if the consumer designates that person to the agency

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

16 date of the notification of the consumer under sec17 tion 611(a)(6) or 611(a)(8).

18 ‘‘(e) REFUND OF CHARGE IN CASE OF DISPUTE.—

19 A consumer reporting agency shall refund to a consumer

20 any charge assessed to the consumer for providing a

21 consumer report in the 60-day period ending on the date

22 on which the consumer notifies the agency in accordance

23 with section 611(a)(1), if after a reinvestigation under

24 that section any information in the file of the consumer

25 is found to be incomplete or inaccurate.
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1 ‘‘(f) ANNUAL CONSUMER REPORT UPON REQUEST

2 AT SPECIFIED CHARGE.—

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

4 of a consumer, a consumer reporting agency that

5 maintains a file on the consumer shall make all dis6 closures pursuant to section 609 once in any 12-

7 month period, at the charge specified in paragraph

8 (2).

9 ‘‘(2) CHARGE SPECIFIED.—The charge for dis10 closures under paragraph (1) shall be an amount

11 that does not exceed the lesser of—

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

13 consumer reporting agency in making the dis14 closures; or

15 ‘‘(B) $3.’’.

16 SEC. 111. AMENDMENTS RELATING TO DUTIES OF USERS

17 OF CONSUMER REPORTS AND DUTIES OF AF18 FILIATES SHARING CERTAIN INFORMATION.

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

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

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

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

23 ON THE BASIS OF INFORMATION CONTAINED IN

24 CONSUMER REPORTS.—If any person takes any adverse

25 action with respect to any consumer in connection with
50

•HR 1015 PCS

1 any transaction initiated by the consumer or any employ2 ment determination, which is based in whole or in part

3 on any information contained in a consumer report, the

4 person shall—

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

6 to the consumer;

7 ‘‘(2) provide to the consumer in writing, the

8 name, address, and telephone number of the

9 consumer reporting agency (including any toll-free

10 telephone number established by the agency pursu11 ant to section 607(f)) which furnished the report to

12 the person; and

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

14 the consumer’s right—

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

16 copy of a consumer report on the consumer,

17 from the consumer reporting agency referred to

18 in paragraph (2) and from any other consumer

19 reporting agency that maintains a file on the

20 consumer and maintains files on consumers on

21 a nationwide basis, which notice shall include

22 an indication of the 60-day period under that

23 section for obtaining such a copy; and

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

25 consumer reporting agency the accuracy or
51

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1 completeness of any information in a consumer

2 report furnished by the agency.’’.

3 (b) DUTIES OF USERS WHO MAKE CERTAIN CREDIT

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

6 end the following new subsection:

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

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

11 consumer report on any consumer in connection with

12 any credit transaction which is not initiated by the

13 consumer and which consists of a firm offer of credit

14 shall provide with any written solicitation made to

15 the consumer regarding the transaction a clear and

16 conspicuous statement that—

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

19 with the transaction;

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

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

23 consumer was selected for the offer;

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

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

2 used to select the consumer for the offer or any

3 applicable criteria bearing on creditworthiness

4 or does not furnish any required collateral;

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

6 information contained in the consumer’s file

7 with any consumer reporting agency from being

8 used in connection with any credit transaction

9 which is not initiated by the consumer; and

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

11 referred to in subparagraph (D) by notifying a

12 notification system established under section

13 604(d).

14 ‘‘(2) DISCLOSURE OF ADDRESS AND TELE15 PHONE NUMBER.—A statement under paragraph (1)

16 shall include the address and toll-free telephone

17 number of the appropriate notification system estab18 lished under section 604(d).

19 ‘‘(3) MAINTAINING CRITERIA ON FILE.—A per20 son who makes an offer of credit to a consumer

21 under a credit transaction described in paragraph

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

23 the consumer to receive the offer, all criteria bearing

24 on creditworthiness that are the basis for determin25 ing whether or not to extend credit pursuant to the
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1 offer, and any requirement for the furnishing of col2 lateral as a condition of the extension of credit, until

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

4 on which the offer is made to the consumer.

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

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

7 by a person if—

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

9 ownership or by common corporate control with

10 the person who procured the report;

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

12 clearly and conspicuously disclosed to the

13 consumer to whom the report relates, before the

14 report is provided to the person using the re15 port, that the report might be provided to and

16 used by other persons who are affiliated in the

17 manner described in subparagraph (A) to the

18 person who procured the report; and

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

20 is—

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

22 writing, or

23 ‘‘(ii) with respect to existing cus24 tomers, the consumer has been afforded

25 the opportunity to direct in writing that
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1 the report may not be provided to or used

2 by persons who are affiliated in the man3 ner described in subparagraph (A) and has

4 not done so.’’.

5 (c) ADVERSE ACTIONS BY AFFILIATES BASED ON

6 CERTAIN INFORMATION.—Section 615 of the Fair Credit

7 Reporting Act (15 U.S.C. 1681m) is further amended by

8 adding after subsection (d), as added by subsection (b)

9 of this section, the following new subsection:

10 ‘‘(e) DUTIES OF AFFILIATES TAKING ADVERSE AC11 TIONS BASED ON CERTAIN INFORMATION.—Whenever an

12 adverse action is taken in connection with any transaction

13 initiated by a consumer or any employment determination,

14 which is based in whole or in part on information that

15 was furnished to the user of the information, other than

16 in a consumer report, by a person related by common own17 ership or affiliated by common corporate control to the

18 user and that bears upon the consumer’s credit worthi19 ness, credit standing, credit capacity, character, general

20 reputation, personal characteristics, or mode of living, the

21 user of the information shall—

22 ‘‘(1) notify the consumer in writing of the ac23 tion, including a statement that the consumer may

24 obtain the information in accordance with paragraph
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1 (2) and may contact the toll-free telephone number

2 required by paragraph (3);

3 ‘‘(2) upon a written request from the consumer

4 received within 60 days after transmittal of the no5 tice required by paragraph (1), disclose to the

6 consumer in writing the nature of the information

7 on which the adverse action was based by not later

8 than 30 days after receipt of the request; and

9 ‘‘(3) make available a toll-free number at which

10 personnel are available to communicate with the

11 consumer regarding the action during normal busi12 ness hours.’’.

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

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

15 amended by striking ‘‘subsections (a) and (b)’’ and insert16 ing ‘‘this section’’.

17 SEC. 112. AMENDMENTS RELATING TO CIVIL LIABILITY.

18 (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLI19 ANCE, GENERALLY.—Section 616 of the Fair Credit Re20 porting Act (15 U.S.C. 1681n) is amended by striking

21 ‘‘Any consumer reporting agency or user of information

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

23 who’’.

24 (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON25 COMPLIANCE.—Section 616(1) of the Fair Credit Report-
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•HR 1015 PCS

1 ing Act (15 U.S.C. 1681n(1)) is amended to read as fol2 lows:

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

4 consumer as a result of the failure; or

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

6 for obtaining a consumer report under false pre7 tenses or knowingly without a permissible purpose,

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

9 (c) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI10 ANCE.—Section 617 of the Fair Credit Reporting Act (15

11 U.S.C. 1681o) is amended by striking ‘‘Any consumer re12 porting agency or user of information which’’ and insert13 ing ‘‘(a) IN GENERAL.—Any person who’’.

14 (d) ATTORNEY’S FEES.—

15 (1) WILLFUL NONCOMPLIANCE.—Section 616

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

17 is amended by adding at the end the following:

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

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

20 in connection with an action under this section was filed

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

22 award to the prevailing party attorney’s fees reasonable

23 in relation to the work expended in responding to the

24 pleading, motion, or other paper.’’.
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1 (2) NEGLIGENT NONCOMPLIANCE.—Section

2 617 of the Fair Credit Reporting Act (15 U.S.C.

3 1681o) is amended by adding at the end the follow4 ing:

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

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

7 in connection with an action under this section was filed

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

9 award to the prevailing party attorney’s fees reasonable

10 in relation to the work expended in responding to the

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

12 SEC. 113. AMENDMENTS RELATING TO RESPONSIBILITIES

13 OF PERSONS WHO FURNISH INFORMATION

14 TO CONSUMER REPORTING AGENCIES.

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

16 (15 U.S.C. 1681 et seq.) is amended by redesignating sec17 tion 623 as section 624 and inserting after section 622

18 the following new section:

19 ‘‘§ 623. Responsibilities of furnishers of information

20 to consumer reporting agencies

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

22 PROVIDE COMPLETE AND ACCURATE INFORMATION.—

23 ‘‘(1) PROHIBITIONS.—A person shall not fur24 nish any information to any consumer reporting
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1 agency if the person knows or should have known

2 the information is incomplete or inaccurate.

3 ‘‘(2) DUTY TO CORRECT AND UPDATE INFOR4 MATION.—A person who—

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

6 of business furnishes information to one or

7 more consumer reporting agencies about the

8 person’s transactions or experiences with any

9 consumer; and

10 ‘‘(B) has furnished to a consumer report11 ing agency information that the person deter12 mines is not complete or accurate;

13 shall promptly notify the consumer reporting agency

14 of that determination and provide to the agency any

15 corrections to that information, or any additional in16 formation, that is necessary to make the information

17 provided by the person to the agency complete and

18 accurate, and shall not thereafter furnish to the

19 agency any of the information that remains not com20 plete or accurate.

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

22 If the completeness or accuracy of any information

23 furnished by any person to any consumer reporting

24 agency is disputed to such person by a consumer,

25 the person may not furnish the information to any
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1 consumer reporting agency without notice that such

2 information is disputed by the consumer.

3 ‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC4 COUNTS.—A person who regularly and in the ordi5 nary course of business furnishes information to a

6 consumer reporting agency regarding a consumer

7 who has a credit account with that person shall no8 tify the agency of the voluntary closure of the ac9 count by the consumer, in information regularly fur10 nished for the period in which the account is closed.

11 ‘‘(5) DUTY TO PROVIDE NOTICE OF DELIN12 QUENCY OF ACCOUNTS.—A person who furnishes in13 formation to a consumer reporting agency regarding

14 a delinquent account being placed for collection,

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

16 action shall, by not later than 90 days after furnish17 ing the information, notify the agency of the month

18 and year of the commencement of the delinquency

19 which immediately preceded the action.

20 ‘‘(b) DUTIES OF FURNISHERS OF INFORMATION

21 UPON NOTICE OF DISPUTE.—

22 ‘‘(1) IN GENERAL.—After receiving notice pur23 suant to section 611(a)(2) of a dispute with regard

24 to the completeness or accuracy of any information
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1 provided by a person to a consumer reporting agen2 cy, the person shall—

3 ‘‘(A) complete an investigation with respect

4 to the disputed information;

5 ‘‘(B) review all relevant information pro6 vided by the consumer reporting agency pursu7 ant to section 611(a)(2);

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

9 to the consumer reporting agency; and

10 ‘‘(D) if the investigation finds that the in11 formation is incomplete or inaccurate, report

12 those results to all other consumer reporting

13 agencies to which the person furnished the in14 formation.

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

16 investigations, reviews, and reports required under

17 paragraph (1) regarding information provided by the

18 person to a consumer reporting agency, before the

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

20 which the consumer reporting agency is required to

21 complete actions required by that section regarding

22 that information.

23 ‘‘(c) LIMITATION ON LIABILITY.—Sections 616 and

24 617 do not apply to any failure to comply with subsection

25 (a), except as provided in section 621(c)(1)(B).’’.
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1 (b) CLERICAL AMENDMENT.—The table of sections

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

3 U.S.C. 1681a et seq.) is amended by striking the item re4 lating to section 623 and inserting the following:

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

‘‘624. Relation to State laws.’’.

5 SEC. 114. INVESTIGATIVE CONSUMER REPORTS.

6 Section 606 of the Fair Credit Reporting Act (15

7 U.S.C. 1681d) is amended—

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

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

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

11 the following:

12 ‘‘(2) the person certifies to the consumer re13 porting agency that—

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

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

16 ‘‘(B) the person will comply with sub17 section (b).’’;

18 (3) in subsection (b) by striking ‘‘shall’’ the sec19 ond place it appears; and

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

21 ‘‘(d) PROHIBITIONS.—

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

23 agency shall not prepare or furnish an investigative

24 consumer report unless the agency has received a
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1 certification under subsection (a)(2) from the person

2 who requested the report.

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

4 shall not make an inquiry for the purpose of prepar5 ing a consumer report on a consumer if the making

6 of the inquiry by an employer or prospective em7 ployer of the consumer would violate any applicable

8 Federal or State equal employment opportunity law

9 or regulation.

10 ‘‘(3) PUBLIC RECORD INFORMATION.—A

11 consumer reporting agency shall not furnish an in12 vestigative consumer report which includes informa13 tion which is a matter of public record unless the

14 agency has verified the accuracy of the information

15 within the 30-day period ending on the date the re16 port is furnished.

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

18 consumer reporting agency shall not prepare or fur19 nish an investigative consumer report on a consumer

20 that contains information that is adverse to the in21 terest of the consumer and that is obtained through

22 a personal interview with a neighbor, friend, or asso23 ciate of the consumer or with another person with

24 whom the consumer is acquainted or who has knowl25 edge of such item of information, unless—
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1 ‘‘(A) the agency has followed reasonable

2 procedures to obtain confirmation of the infor3 mation, from an additional source that has

4 independent and direct knowledge of the infor5 mation; or

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

7 possible source of the information.’’.

8 SEC. 115. INCREASED CRIMINAL PENALTIES FOR OBTAIN9 ING INFORMATION UNDER FALSE PRE10 TENSES.

11 (a) OBTAINING INFORMATION UNDER FALSE PRE12 TENSES.—Section 619 of the Fair Credit Reporting Act

13 (15 U.S.C. 1681q) is amended by striking ‘‘fined not more

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

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

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

17 (b) UNAUTHORIZED DISCLOSURES BY OFFICERS OR

18 EMPLOYEES.—Section 620 of the Fair Credit Reporting

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

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

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

22 Code, imprisoned for not more than 2 years, or both’’.
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1 SEC. 116. ADMINISTRATIVE ENFORCEMENT.

2 (a) AVAILABLE ENFORCEMENT POWERS.—The 2d

3 sentence of section 621(a) of the Fair Credit Reporting

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

5 (1) by striking ‘‘Act and shall be subject to en6 forcement by the Federal Trade Commission under

7 section 5(b) thereof with respect to any consumer re8 porting agency or person subject to enforcement by

9 the Federal Trade Commission pursuant to this sub10 section, irrespective’’ and inserting ‘‘Act. All func11 tions and powers of the Federal Trade Commission

12 under the Federal Trade Commission Act shall be

13 available to the Commission to enforce compliance

14 with this title by any person subject to enforcement

15 by the Federal Trade Commission pursuant to this

16 subsection and not subject to enforcement pursuant

17 to section 8 of the Federal Deposit Insurance Act,

18 irrespective’’; and

19 (2) by inserting ‘‘, including the power to en20 force the provisions of this title in the same manner

21 as if the violation had been a violation of any Fed22 eral Trade Commission trade regulation rule’’ before

23 the period.

24 (b) AGENCIES RESPONSIBLE FOR ENFORCEMENT.—

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

26 1681s) is amended—
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1 (1) in subsection (a), by inserting ‘‘ENFORCE2 MENT BY FEDERAL TRADE COMMISSION.—’’ before

3 ‘‘Compliance with the requirements’’; and

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

5 preceding paragraph (1) and inserting the following:

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

8 respect to consumer reporting agencies, persons who use

9 consumer reports from such agencies, persons who furnish

10 information to such agencies, and users of information

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

12 under—’’.

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

15 Section 621 of the Fair Credit Reporting Act (15

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

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

18 following new subsection:

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

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

21 such other remedies as are provided under State

22 law, whenever the chief law enforcement officer of a

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

24 has reason to believe that any person has violated or

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

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

4 jurisdiction;

5 ‘‘(B) may bring an action on behalf of its

6 residents to recover—

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

8 liable to such residents under sections 616

9 and 617 as a result of the violation;

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

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

13 such residents as a result of the violation;

14 or

15 ‘‘(iii) damages of not more than

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

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

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

22 ‘‘(2) RIGHTS OF COMMISSION.—The State shall

23 serve prior written notice of any such action upon

24 the Federal Trade Commission or the appropriate

25 Federal regulator determined under subsection (b)
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1 and provide the Commission or appropriate Federal

2 regulator with a copy of its complaint, except in any

3 case where such prior notice is not feasible, in which

4 case the State shall serve such notice immediately

5 upon instituting such action. The Commission or ap6 propriate Federal regulator shall have the right (A)

7 to intervene in the action, (B) upon so intervening,

8 to be heard on all matters arising therein, and (C)

9 to file petitions for appeal.

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

11 of bringing any action under this subsection, nothing

12 in this subsection shall prevent the chief law enforce13 ment officer, or an official or agency designated by

14 a State, from exercising the powers conferred on the

15 chief law enforcement officer or such official by the

16 laws of such State to conduct investigations or to

17 administer oaths or affirmations or to compel the at18 tendance of witnesses or the production of documen19 tary and other evidence.

20 ‘‘(4) LIMITATION.—Whenever the Federal

21 Trade Commission or the appropriate Federal regu22 lator has instituted a civil action for violation of this

23 title, no State may, during the pendency of such ac24 tion, bring an action under this section against any

25 defendant named in the complaint of the Commis-
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1 sion or the appropriate Federal regulator for any

2 violation of this title that is alleged in that com3 plaint.’’.

4 SEC. 118. FEDERAL RESERVE BOARD AUTHORITY.

5 Section 621 of the Fair Credit Reporting Act (15

6 U.S.C. 1681s), is further amended by adding after sub7 section (d) (as redesignated by section 117) the following

8 new subsection:

9 ‘‘(e) INTERPRETIVE AUTHORITY.—The Federal Re10 serve Board may issue interpretations of any provision of

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

12 subsection (b) (1), (2), and (3), or to the holding compa13 nies and affiliates of such persons, in consultation with

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

15 (3).’’.

16 SEC. 119. ESTABLISHMENT OF TOLL-FREE TELEPHONE

17 NUMBER.

18 Section 607 of the Fair Credit Reporting Act (15

19 U.S.C. 1681e) is amended by adding after subsection (e)

20 (as added by section 107(c) of this Act) the following new

21 subsection:

22 ‘‘(f) ESTABLISHMENT OF TOLL-FREE TELEPHONE

23 NUMBER.—Each consumer reporting agency that com24 piles and maintains files on consumers on a nationwide

25 basis shall establish (and thereafter maintain) a toll-free
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1 telephone number for the purpose of making agency per2 sonnel accessible to consumers for communicating with the

3 agency during normal business hours.’’.

4 SEC. 120. PREEMPTION OF STATE LAW.

5 Section 624 of the Fair Credit Reporting Act, as re6 designated by section 113(a) of this Act, is further amend7 ed—

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

9 IN GENERAL.—Except as provided in subsections

10 (b) and (c), this title’’; and

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

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

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

14 ‘‘(1) with respect to any subject matter regu15 lated under—

16 ‘‘(A) subsection (c) or (d) of section 604,

17 relating to the prescreening of consumer re18 ports;

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

20 which a consumer reporting agency must take

21 any action, including the provision of notifica22 tion to a consumer or other person, in any pro23 cedure related to the disputed accuracy of infor24 mation in a consumer’s file, except that this

25 subparagraph does not apply to any State law
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1 in effect on the date of the enactment of the

2 Consumer Reporting Reform Act of 1994;

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

4 of a person who takes any adverse action with

5 respect to a consumer on the basis of informa6 tion contained in a consumer report;

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

8 of persons who use a consumer report of a

9 consumer in connection with any credit trans10 action which is not initiated by the consumer

11 and which consists of a firm offer of credit;

12 ‘‘(E) section 605, relating to obsolete in13 formation, except that this subparagraph does

14 not apply to any State law in effect on the date

15 of the enactment of the Consumer Reporting

16 Reform Act of 1994; or

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

18 time by which a person must take any action

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

20 to an investigation of information furnished by

21 the person to a consumer reporting agency, ex22 cept that this subparagraph does not apply to

23 any State law in effect on the date of the enact24 ment of the Consumer Reporting Reform Act of

25 1994;
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1 ‘‘(2) with respect to the exchange of informa2 tion among persons affiliated by common ownership

3 or common corporate control; or

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

5 any disclosure required to be made under section

6 609(c).

7 ‘‘(c) DEFINITION OF FIRM OFFER OF CREDIT.—Not8 withstanding any definition of the term ‘firm offer of cred9 it’ (or any equivalent term) under the laws of any State,

10 the definition of that term contained in section 603(l) shall

11 be construed to apply in the enforcement and interpreta12 tion of the laws of any State governing consumer reports.

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

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

15 consent judgment between any State Attorney Gen16 eral and any consumer reporting agency in effect on

17 the date of the enactment of the Consumer Report18 ing Reform Act of 1994; and

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

20 (including any provision of a State constitution)

21 that—

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

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

24 intended to supplement this Act; and
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1 ‘‘(C) gives greater protection to consumers

2 than is provided under this Act.’’.

3 SEC. 121. ACTION BY FTC.

4 (a) MODIFICATION OF REQUIREMENTS BY FTC AU5 THORIZED.—

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

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

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

9 section 118 of this Act) the following:

10 ‘‘(f) MODIFICATION OF REQUIREMENTS BY FTC AU11 THORIZED.—If it considers such action necessary for the

12 protection of consumers, the Federal Trade Commission

13 may, after consultation with each Federal agency referred

14 to in section 621(b) and with appropriate State regulatory

15 and law enforcement agencies, promulgate regulations in

16 accordance with section 553 of title 5, United States Code,

17 to impose requirements—

18 ‘‘(1) that are more stringent than those im19 posed under—

20 ‘‘(A) section 611, relating to the time by

21 which a consumer reporting agency must take

22 any action, including the provision of notifica23 tion to a consumer or other person, in any pro24 cedure related to the disputed accuracy of infor25 mation in a consumer’s file;
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1 ‘‘(B) section 615(a), relating to the duties

2 of a person who takes any adverse action with

3 respect to a consumer on the basis of informa4 tion contained in a consumer report;

5 ‘‘(C) section 615(d), relating to the duties

6 of persons who use a consumer report on a

7 consumer in connection with any credit trans8 action which is not initiated by the consumer

9 and that consists of a firm offer of credit; or

10 ‘‘(D) section 623(b)(2), relating to the

11 time by which a person must take any action

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

13 to an investigation of information furnished by

14 the person to a consumer reporting agency; and

15 ‘‘(2) with respect to the form and content of

16 any disclosure required to be made under section

17 609(c).’’.

18 (2) CLERICAL AMENDMENTS.—

19 (A) The heading for section 621 of the

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

21 amended to read as follows:

22 ‘‘§ 621. Administrative enforcement and authorities;

23 State actions’’.

24 (B) The table of contents at the beginning

25 of the Fair Credit Reporting Act is amended by
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1 striking the item relating to section 621 and in2 serting the following:

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

3 (b) DEADLINE TO PRESCRIBE MATTERS.—The Fed4 eral Trade Commission shall prescribe all matters required

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

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

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

8 of this Act.

9 SEC. 122. EFFECTIVE DATES OF AMENDMENTS.

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

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

12 after the 455-day period beginning on the date of the en13 actment of this Act.

14 (b) EXCEPTIONS.—

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

16 of the Fair Credit Reporting Act, as amended by

17 section 104(a), shall be effective after the 365-day

18 period beginning on the date of the enactment of

19 this Act.

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

21 affect the authority of the Federal Trade Commis22 sion to prescribe matters under the amendments

23 made by this title.
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1 SEC. 123. FURNISHING CONSUMER REPORTS TO FEDERAL

2 BUREAU OF INVESTIGATION FOR COUNTER3 INTELLIGENCE PURPOSES.

4 (a) PERMISSIBLE PURPOSE.—Section 604 of the

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

6 in subsection (a) (as designated by section 103(a)(1) of

7 this Act) by adding at the end the following:

8 ‘‘(4) To the Federal Bureau of Investigation in re9 sponse to a court order issued under section 625.’’.

10 (b) REQUIREMENTS FOR FEDERAL BUREAU OF IN11 VESTIGATION TO OBTAIN AND USE CONSUMER RE12 PORTS.—

13 (1) IN GENERAL.—The Fair Credit Reporting

14 Act (15 U.S.C. 1601 et seq.) is amended by adding

15 at the end the following new section:

16 ‘‘§ 625. Requirements for Federal Bureau of Inves17 tigation to obtain and use consumer re18 ports

19 ‘‘(a) COURT ORDER.—If requested in writing by the

20 Director of the Federal Bureau of Investigation or a des21 ignee of the Director, a court may issue an order ex parte

22 directing a consumer reporting agency to furnish a

23 consumer report to the Federal Bureau of Investigation,

24 upon a showing in camera that—
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1 ‘‘(1) the consumer report is necessary for the

2 conduct of an authorized foreign counterintelligence

3 investigation; and

4 ‘‘(2) there are specific and articulable facts giv5 ing reason to believe that the consumer whose

6 consumer report is sought—

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

8 ‘‘(B) is engaging or has engaged in inter9 national terrorism (as that term is defined in

10 section 101(c) of the Foreign Intelligence Sur11 veillance Act of 1978 (50 U.S.C. 1801(c))) or

12 clandestine intelligence activities that involve or

13 may involve a violation of criminal statutes of

14 the United States.

15 ‘‘(b) USE OF CONSUMER REPORTS PROCURED BY

16 FEDERAL BUREAU OF INVESTIGATION.—

17 ‘‘(1) LIMITATION ON USE AND FURNISHING OF

18 CONSUMER REPORTS BY FBI.—The Federal Bureau

19 of Investigation—

20 ‘‘(A) shall not use a consumer report pro21 cured under section 604(a)(4) for any purpose

22 other than the investigation for which the

23 consumer report was procured; and

24 ‘‘(B) shall not furnish the consumer report

25 or any information obtained from the consumer
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1 report to any other person, except to an officer

2 or employee of the Department of Justice as

3 necessary for approval or conduct of the inves4 tigation.

5 ‘‘(2) LIMITATION ON FURTHER DISSEMINATION

6 BY DEPARTMENT OF JUSTICE.—An officer or em7 ployee of the Department of Justice shall not pro8 vide a consumer report or information obtained from

9 a consumer report to any person except for purposes

10 of the investigation for which the consumer report

11 was procured under section 604(a)(4).

12 ‘‘(3) NOTIFICATION REGARDING COMPLETION

13 OF INVESTIGATION.—The Federal Bureau of Inves14 tigation, within 6 months after the completion of an

15 investigation for which a consumer report is pro16 cured under section 604(a)(4), shall notify the

17 consumer reporting agency that furnished the report

18 that the investigation is completed.

19 ‘‘(4) FURNISHING INFORMATION PURSUANT TO

20 SUBPOENA, COURT ORDER, OR ENFORCEMENT PRO21 CEEDING NOT PROHIBITED.—Nothing in paragraph

22 (1) or (2) shall be construed to prohibit the furnish23 ing of information pursuant to a subpoena or court

24 order, or in connection with a court proceeding to

25 enforce this title.
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1 ‘‘(c) PROHIBITIONS ON DISCLOSURE.—

2 ‘‘(1) COURT OFFICER OR EMPLOYEE.—An offi3 cer or employee of a court shall not disclose to any

4 person that the Federal Bureau of Investigation has

5 sought or obtained a consumer report under section

6 604(a)(4), except to the court or another officer or

7 employee of the court in connection with the issu8 ance of an order under subsection (a) with respect

9 to the report.

10 ‘‘(2) CONSUMER REPORTING AGENCY OFFICER

11 OR EMPLOYEE.—An officer or employee of a

12 consumer reporting agency shall not disclose to any

13 person that the Federal Bureau of Investigation has

14 sought or obtained a consumer report under section

15 604(a)(4), except—

16 ‘‘(A) for the purpose of furnishing the re17 port to the Federal Bureau of Investigation; or

18 ‘‘(B) to the court or an officer or employee

19 of the court in connection with the issuance of

20 an order under subsection (a) with respect to

21 the report.

22 ‘‘(3) PENALTY.—A person that knowingly and

23 willfully violates paragraph (1) or (2) shall be fined

24 under title 18, United States Code, or imprisoned

25 not more than 2 years, or both.
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1 ‘‘(d) DISCLOSURE TO CONSUMER.—

2 ‘‘(1) NOTICE OF COMPLETION OF INVESTIGA3 TION REQUIRED.—Notwithstanding section

4 609(a)(3) and subject to paragraph (2), a consumer

5 reporting agency shall not disclose under that sec6 tion the identity of the Federal Bureau of Investiga7 tion or that the agency has furnished a consumer re8 port to the Federal Bureau of Investigation, unless

9 the consumer reporting agency has received from the

10 Federal Bureau of Investigation a notice under sub11 section (b)(3) of the completion of the investigation

12 with respect to which the report was furnished.

13 ‘‘(2) DISCLOSURES REQUIRED.—A consumer

14 reporting agency shall include with a disclosure to a

15 consumer under section 609(a) information in its

16 files on the consumer regarding the furnishing of a

17 consumer report to, or the making of any inquiry by,

18 the Federal Bureau of Investigation with respect to

19 an investigation for which the consumer reporting

20 agency received from the Federal Bureau of Inves21 tigation a notice of completion of the investigation in

22 the year preceding the request from the consumer

23 for the disclosure.

24 ‘‘(e) CIVIL LIABILITY FOR VIOLATIONS.—For each

25 violation of subsection (b) (1) or (2) with respect to a
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1 consumer report on a consumer, the Federal Bureau of

2 Investigation or the Department of Justice, respectively,

3 is liable to the consumer for an amount equal to the sum

4 of—

5 ‘‘(1) the greater of—

6 ‘‘(A) actual damages sustained by the

7 consumer as a result of the violation and such

8 amount of punitive damages as the court may

9 allow; or

10 ‘‘(B) $500; plus

11 ‘‘(2) in a successful action to enforce any liabil12 ity under this section, the costs of the action and

13 reasonable attorneys’ fees as determined by the

14 court.

15 ‘‘(f) INJUNCTIVE RELIEF.—Any person may bring an

16 action to enjoin a violation of this section.

17 ‘‘(g) EXCLUSIVE REMEDIES.—No action for relief for

18 a violation of subsection (b) (1) or (2) may be brought

19 except under subsection (e) or (f).

20 ‘‘(h) SEMIANNUAL REPORTS.—The Attorney General

21 shall, on a semiannual basis, fully inform the Permanent

22 Select Committee on Intelligence and the Committee on

23 Banking, Finance and Urban Affairs of the House of Rep24 resentatives and the Select Committee on Intelligence and

25 the Committee on Banking, Housing, and Urban Affairs
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1 of the Senate concerning all requests made by the Director

2 of the Federal Bureau of Investigation or a designee of

3 the Director for a court to issue an order under this sec4 tion directing a consumer reporting agency to furnish a

5 consumer report to the Federal Bureau of Investigation.’’.

6 (2) CLERICAL AMENDMENT.—The table of sec7 tions at the beginning of the Fair Credit Reporting

8 Act (15 U.S.C. 1681a et seq.), as amended by sec9 tion 113(b) of this Act, is further amended by add10 ing at the end the following:

‘‘625. Requirements for Federal Bureau of Investigation to obtain and use

consumer reports.’’.

11 (c) REPEAL OF PROVISIONS.—

12 (1) REPEAL.—The following provisions of the

13 Fair Credit Reporting Act, as amended by this sec14 tion, are repealed:

15 (A) Section 604(a)(4).

16 (B) Section 625.

17 (C) In the table of contents at the begin18 ning of the Fair Credit Reporting Act, the item

19 relating to section 625.

20 (2) EFFECTIVE DATE.—Paragraph (1) shall

21 take effect on the date that is 5 years after the date

22 of the enactment of this Act.
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1 TITLE II—CREDIT REPAIR

2 ORGANIZATIONS

3 SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZA4 TIONS.

5 Title IV of the Consumer Credit Protection Act is

6 amended to read as follows:

7 ‘‘TITLE IV—CREDIT REPAIR

8 ORGANIZATIONS

‘‘Sec.

‘‘401. Short title.

‘‘402. Findings and purposes.

‘‘403. Definitions.

‘‘404. Prohibited practices.

‘‘405. Disclosures.

‘‘406. Credit repair organizations contracts.

‘‘407. Right to cancel contract.

‘‘408. Noncompliance with this title.

‘‘409. Civil liability.

‘‘410. Administrative enforcement.

‘‘411. Statute of limitations.

‘‘412. Relation to State law.

‘‘413. Effective date.

9 ‘‘SEC. 401. SHORT TITLE.

10 ‘‘This title may be cited as the ‘Credit Repair Organi11 zations Act’.

12 ‘‘SEC. 402. FINDINGS AND PURPOSES.

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

14 findings:

15 ‘‘(1) Consumers have a vital interest in estab16 lishing and maintaining their creditworthiness and

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

18 a result, consumers who have experienced credit
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1 problems may seek assistance from credit repair or2 ganizations which offer to improve the credit stand3 ing of such consumers.

4 ‘‘(2) Certain advertising and business practices

5 of some companies engaged in the business of credit

6 repair services have worked a financial hardship

7 upon consumers, particularly those of limited eco8 nomic means and who are inexperienced in credit

9 matters.

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

11 follows:

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

13 services of credit repair organizations are provided

14 with the information necessary to make an informed

15 decision regarding the purchase of such services.

16 ‘‘(2) To protect the public from unfair or decep17 tive advertising and business practices by credit re18 pair organizations.

19 ‘‘SEC. 403. DEFINITIONS.

20 ‘‘For purposes of this title—

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

22 an individual.

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

24 term ‘consumer credit transaction’ means any trans25 action in which credit is offered or extended to an
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1 individual for personal, family, or household pur2 poses.

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

4 term ‘credit repair organization’—

5 ‘‘(A) means any person who uses any in6 strumentality of interstate commerce or the

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

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

9 perform) any service, in return for the payment

10 of money or other valuable consideration, for

11 the express or implied purpose of—

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

13 record, credit history, or credit rating; or

14 ‘‘(ii) providing advice or assistance to

15 any consumer with regard to any activity

16 or service described in clause (i); and

17 ‘‘(B) does not include—

18 ‘‘(i) any nonprofit organization which

19 is exempt from taxation under section

20 501(c)(3) of the Internal Revenue Code of

21 1986; or

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

23 member of the bar of the highest court of

24 any State or otherwise licensed under the

25 laws of any State, with respect to services
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1 rendered which are within the scope of reg2 ulations applicable to members of such bar

3 or such licensees.

4 ‘‘(4) CREDIT.—The term ‘credit’ has the mean5 ing given to such term in section 103(e) of this Act.

6 ‘‘SEC. 404. PROHIBITED PRACTICES.

7 ‘‘(a) IN GENERAL.—No person may—

8 ‘‘(1) make any statement, or counsel or advise

9 any consumer to make any statement, which is un10 true or misleading (or which, upon the exercise of

11 reasonable care, should be known by the credit re12 pair organization, officer, employee, agent, or other

13 person to be untrue or misleading) with respect to

14 any consumer’s creditworthiness, credit standing, or

15 credit capacity to—

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

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

18 ‘‘(B) any person—

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

20 consumer; or

21 ‘‘(ii) to whom the consumer has ap22 plied or is applying for an extension of

23 credit;

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

25 any consumer to make any statement, the intended
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1 effect of which is to alter the consumer’s identifica2 tion to prevent the display of the consumer’s credit

3 record, history, or rating for the purpose of conceal4 ing adverse information that is accurate and not ob5 solete to—

6 ‘‘(A) any consumer reporting agency;

7 ‘‘(B) any person—

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

9 consumer; or

10 ‘‘(ii) to whom the consumer has ap11 plied or is applying for an extension of

12 credit;

13 ‘‘(3) make or use any untrue or misleading rep14 resentation of the services of the credit repair orga15 nization; or

16 ‘‘(4) engage, directly or indirectly, in any act,

17 practice, or course of business that constitutes or re18 sults in the commission of, or an attempt to commit,

19 a fraud or deception on any person in connection

20 with the offer or sale of the services of the credit re21 pair organization.

22 ‘‘(b) PAYMENT IN ADVANCE.—No credit repair orga23 nization may charge or receive any money or other valu24 able consideration for the performance of any service
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1 which the credit repair organization has agreed to perform

2 for any consumer before such service is fully performed.

3 ‘‘SEC. 405. DISCLOSURES.

4 ‘‘(a) DISCLOSURE REQUIRED.—Any credit repair or5 ganization shall provide any consumer with the following

6 written statement before any contract or agreement be7 tween the consumer and the credit repair organization is

8 executed:

9 ‘‘ ‘Consumer Credit File Rights

10 Under State and Federal Law

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

12 in your credit report by contacting the credit bureau di13 rectly. However, neither you nor any ‘‘credit repair’’ com14 pany or credit repair organization has the right to have

15 accurate, current, and verifiable information removed

16 from your credit report. The credit bureau must remove

17 accurate, negative information from your report only if it

18 is over 7 years old. Bankruptcy information can be re19 ported for 10 years.

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

21 report from a credit bureau. You may be charged a rea22 sonable fee. There is no fee, however, if you have been

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

24 dwelling because of information in your credit report with25 in the preceding 60 days. The credit bureau must provide
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1 someone to help you interpret the information in your

2 credit file. You are entitled to receive a free copy of your

3 credit report if you are unemployed and intend to apply

4 for employment in the next 60 days, if you are a recipient

5 of public welfare assistance, or if you have reason to be6 lieve that there is inaccurate information in your credit

7 report due to fraud.

8 ‘‘ ‘You have a right to sue a credit repair organization

9 that violates the Credit Repair Organization Act. This law

10 prohibits deceptive practices by credit repair organiza11 tions.

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

13 credit repair organization for any reason within 3 business

14 days from the date you signed it.

15 ‘‘ ‘Credit bureaus are required to follow reasonable

16 procedures to ensure that the information they report is

17 accurate. However, mistakes may occur.

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

19 writing that you dispute the accuracy of information in

20 your credit file. The credit bureau must then reinvestigate

21 and modify or remove inaccurate or incomplete informa22 tion. The credit bureau may not charge any fee for this

23 service. Any pertinent information and copies of all docu24 ments you have concerning an error should be given to

25 the credit bureau.
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1 ‘‘ ‘If the credit bureau’s reinvestigation does not re2 solve the dispute to your satisfaction, you may send a brief

3 statement to the credit bureau, to be kept in your file,

4 explaining why you think the record is inaccurate. The

5 credit bureau must include a summary of your statement

6 about disputed information with any report it issues about

7 you.

8 ‘‘ ‘The Federal Trade Commission regulates credit

9 bureaus and credit repair organizations. For more infor10 mation contact:

11 The Public Reference Branch

12 Federal Trade Commission

13 Washington, D.C. 20580’.

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

15 written statement required under this section shall be pro16 vided as a document which is separate from any written

17 contract or other agreement between the credit repair or18 ganization and the consumer or any other written material

19 provided to the consumer.

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

21 ‘‘(1) IN GENERAL.—The credit repair organiza22 tion shall maintain a copy of the statement signed

23 by the consumer acknowledging receipt of the state24 ment.
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1 ‘‘(2) MAINTENANCE FOR 2 YEARS.—The copy

2 of any consumer’s statement shall be maintained in

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

4 which the statement is signed by the consumer.

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

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

7 may be provided by any credit repair organization for any

8 consumer—

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

10 the purchase of such services) which meets the re11 quirements of subsection (b) has been signed by the

12 consumer; or

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

14 beginning on the date the contract is signed.

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

16 contract referred to in subsection (a) meets the require17 ments of this subsection unless such contract includes the

18 following information (in writing):

19 ‘‘(1) The terms and conditions of payment, in20 cluding the total amount of all payments to be made

21 by the consumer to the credit repair organization or

22 to any other person.

23 ‘‘(2) A full and detailed description of the serv24 ices to be performed by the credit repair organiza25 tion for the consumer, including—
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1 ‘‘(A) all guarantees of performance; and

2 ‘‘(B) an estimate of—

3 ‘‘(i) the date by which the perform4 ance of the services (to be performed by

5 the credit repair organization or any other

6 person) will be complete; or

7 ‘‘(ii) the length of the period nec8 essary to perform such services.

9 ‘‘(3) The credit repair organization’s name and

10 principal business address.

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

12 in immediate proximity to the space reserved for the

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

14 follows: ‘You may cancel this contract without pen15 alty or obligation at any time before midnight of the

16 3rd business day after the date on which you signed

17 the contract. See the attached notice of cancellation

18 form for an explanation of this right.’.

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

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

21 contract with any credit repair organization without pen22 alty or obligation by notifying the credit repair organiza23 tion of the consumer’s intention to do so at any time be24 fore midnight of the 3rd business day which begins after

25 the date on which the contract or agreement between the
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1 consumer and the credit repair organization is executed

2 or would, but for this subsection, become enforceable

3 against the parties.

4 ‘‘(b) CANCELLATION FORM AND OTHER INFORMA5 TION.—Each contract shall be accompanied by a form, in

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

7 and contains in bold face type the following statement:

8 ‘‘ ‘You may cancel this contract, without any

9 penalty or obligation, at any time before midnight of

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

11 is signed by you.

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

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

14 other written notice to [ name of credit repair

15 organization ] at [ address of credit repair

16 organization ] before midnight on [ date ]

17 ‘‘ ‘I hereby cancel this transaction,

18 [ date ]

19 [ purchaser’s signature ].’.

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

21 Any consumer who enters into any contract with any cred22 it repair organization shall be given, by the organization—

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

24 disclosure statement required under section 405; and
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1 ‘‘(2) a copy of any other document the credit

2 repair organization requires the consumer to sign,

3 at the time the contract or the other document is signed.

4 ‘‘SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

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

6 any consumer of any protection provided by or any right

7 of the consumer under this title—

8 ‘‘(1) shall be treated as void; and

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

10 State court or any other person.

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

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

13 any protection provided by or any right of the consumer

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

15 ‘‘(c) CONTRACTS NOT IN COMPLIANCE.—Any con16 tract for services which does not comply with the applica17 ble provisions of this title—

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

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

20 State court or any other person.

21 ‘‘SEC. 409. CIVIL LIABILITY.

22 ‘‘(a) LIABILITY ESTABLISHED.—Any person who

23 fails to comply with any provision of this title with respect

24 to any other person shall be liable to such person in an
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1 amount equal to the sum of the amounts determined

2 under each of the following paragraphs:

3 ‘‘(1) ACTUAL DAMAGES.—The greater of—

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

5 sustained by such person as a result of such

6 failure; or

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

8 credit repair organization.

9 ‘‘(2) PUNITIVE DAMAGES.—

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

11 any action by an individual, such additional

12 amount as the court may allow.

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

14 class action, the sum of—

15 ‘‘(i) the aggregate of the amount

16 which the court may allow for each named

17 plaintiff; and

18 ‘‘(ii) the aggregate of the amount

19 which the court may allow for each other

20 class member, without regard to any mini21 mum individual recovery.

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

23 successful action to enforce any liability under para24 graph (1) or (2), the costs of the action, together

25 with reasonable attorneys’ fees.
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1 ‘‘(b) FACTORS TO BE CONSIDERED IN AWARDING

2 PUNITIVE DAMAGES.—In determining the amount of any

3 liability of any credit repair organization under subsection

4 (a)(2), the court shall consider, among other relevant fac5 tors—

6 ‘‘(1) the frequency and persistence of non7 compliance by the credit repair organization;

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

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

10 was intentional; and

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

12 of consumers adversely affected.

13 ‘‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.

14 ‘‘(a) IN GENERAL.—Compliance with the require15 ments imposed under this title with respect to credit repair

16 organizations shall be enforced under the Federal Trade

17 Commission Act by the Federal Trade Commission.

18 ‘‘(b) VIOLATIONS OF THIS TITLE TREATED AS VIO19 LATIONS OF FEDERAL TRADE COMMISSION ACT.—

20 ‘‘(1) IN GENERAL.—For the purpose of the ex21 ercise by the Federal Trade Commission of the Com22 mission’s functions and powers under the Federal

23 Trade Commission Act, any violation of any require24 ment or prohibition imposed under this title with re25 spect to credit repair organizations shall constitute
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1 an unfair or deceptive act or practice in commerce

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

3 Commission Act.

4 ‘‘(2) ENFORCEMENT AUTHORITY UNDER OTHER

5 LAW.—All functions and powers of the Federal

6 Trade Commission under the Federal Trade Com7 mission Act shall be available to the Commission to

8 enforce compliance with this title by any person sub9 ject to enforcement by the Federal Trade Commis10 sion pursuant to this subsection, including the power

11 to enforce the provisions of this title in the same

12 manner as if the violation had been a violation of

13 any Federal Trade Commission trade regulation

14 rule, without regard to whether the credit repair or15 ganization—

16 ‘‘(A) is engaged in commerce; or

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

18 the Federal Trade Commission Act.

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

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

21 such other remedies as are provided under State

22 law, whenever the chief law enforcement officer of a

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

24 has reason to believe that any person has violated or

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

2 violation;

3 ‘‘(B) may bring an action on behalf of its

4 residents to recover damages for which the per5 son is liable to such residents under section 409

6 as a result of the violation; and

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

8 under subparagraph (A) or (B), shall be award9 ed the costs of the action and reasonable attor10 ney fees as determined by the court.

11 ‘‘(2) RIGHTS OF COMMISSION.—

12 ‘‘(A) NOTICE TO COMMISSION.—The State

13 shall serve prior written notice of any civil ac14 tion under paragraph (1) upon the Federal

15 Trade Commission and provide the Commission

16 with a copy of its complaint, except in any case

17 where such prior notice is not feasible, in which

18 case the State shall serve such notice imme19 diately upon instituting such action.

20 ‘‘(B) INTERVENTION.—The Commission

21 shall have the right—

22 ‘‘(i) to intervene in any action re23 ferred to in subparagraph (A);

24 ‘‘(ii) upon so intervening, to be heard

25 on all matters arising in the action; and
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1 ‘‘(iii) to file petitions for appeal.

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

3 of bringing any action under this subsection, nothing

4 in this subsection shall prevent the chief law enforce5 ment officer, or an official or agency designated by

6 a State, from exercising the powers conferred on the

7 chief law enforcement officer or such official by the

8 laws of such State to conduct investigations or to

9 administer oaths or affirmations or to compel the at10 tendance of witnesses or the production of documen11 tary and other evidence.

12 ‘‘(4) LIMITATION.—Whenever the Federal

13 Trade Commission has instituted a civil action for

14 violation of this title, no State may, during the pend15 ency of such action, bring an action under this sec16 tion against any defendant named in the complaint

17 of the Commission for any violation of this title that

18 is alleged in that complaint.

19 ‘‘SEC. 411. STATUTE OF LIMITATIONS.

20 ‘‘Any action to enforce any liability under this title

21 may be brought before the later of—

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

23 the date of the occurrence of the violation involved;

24 or
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1 ‘‘(2) in any case in which any credit repair or2 ganization has materially and willfully misrepre3 sented any information which—

4 ‘‘(A) the credit repair organization is re5 quired, by any provision of this title, to disclose

6 to any consumer; and

7 ‘‘(B) is material to the establishment of

8 the credit repair organization’s liability to the

9 consumer under this title,

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

11 of the discovery by the consumer of the misrepresen12 tation.

13 ‘‘SEC. 412. RELATION TO STATE LAW.

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

15 any person subject to the provisions of this title from com16 plying with any law of any State except to the extent that

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

18 and then only to the extent of the inconsistency.

19 ‘‘SEC. 413. EFFECTIVE DATE.

20 ‘‘This title shall apply after the end of the 6-month

21 period beginning on the date of the enactment of the Cred22 it Repair Organizations Act, except with respect to con-
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1 tracts entered into by a credit repair organization before

2 the end of such period.’’.

Passed the House of Representatives June 13, 1994.

Attest: DONNALD K. ANDERSON,

Clerk.

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Calendar No. 461

103D CONGRESS

2D SESSION H. R. 1015

AN ACT

To amend the Fair Credit Reporting Act to assure

for other purposes.under the Act, and to improve enforcement, andcies, to better inform consumers of their rightsformation maintained by credit reporting agenthe completeness and accuracy of consumer inJUNE 14 (legislative day, JUNE 7), 1994

Received; read twice and placed on the calendar