Union Calendar No. 271

103D CONGRESS

2D SESSION H. R. 1015

[Report No. 103–486]

A BILL

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 inAPRIL 28, 1994

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
IB

Union Calendar No. 271

103D CONGRESS

2D SESSION H. R. 1015

[Report No. 103–486]

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

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

to improve enforcement, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 18, 1993

Mr. TORRES (for himself and Mr. GONZALEZ, Mr. KENNEDY, Mr. SCHUMER,

Mr. GUTIERREZ, Mr. RUSH, Ms. ROYBAL-ALLARD, Mr. BARRETT of Wisconsin, Ms. FURSE, Ms. VELA ́ZQUEZ, Mr. WYNN, Mr. WATT, Mr.

HINCHEY, Mr. FLAKE, Ms. WATERS, and Mrs. MALONEY) introduced the

following bill; which was referred to the Committee on Banking, Finance

and Urban Affairs

NOVEMBER 18, 1993

Additional sponsors: Mrs. JOHNSON of Connecticut, Mr. FIELDS of Louisiana,

Mr. BILBRAY, Mr. MAZZOLI, Mr. BARLOW, Mr. SMITH of New Jersey,

Mr. FRANK of Massachusetts, Mr. RICHARDSON, Mr. SHAYS, Ms.

PELOSI, Mr. FILNER, Mr. KLECZKA, and Mr. ENGEL

APRIL 28, 1994

Additional sponsors: Mr. ROMERO-BARCELO ́, Mr. GILMAN, Mr. BLUTE, Mr.

STARK, and Mrs. MORELLA

APRIL 28, 1994

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

[For text of introduced bill, see copy of bill as introduced on February 18, 1993]
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A BILL

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

enforcement, and for other purposes.

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

3 TITLE I—AMENDMENTS TO FAIR

4 CREDIT REPORTING ACT

5 SEC. 101. SHORT TITLE.

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

7 Reform Act of 1994’’.

8 SEC. 102. DEFINITIONS.

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

10 Reporting Act (15 U.S.C. 1681a) is amended by adding at

11 the end the following new subsection:

12 ‘‘(k) The term ‘adverse action’—

13 ‘‘(1) has the meaning given to such term in sec14 tion 701(d)(6) of the Equal Credit Opportunity Act;

15 and

16 ‘‘(2) includes—

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

18 for, or reduction in the amount of, insurance for

19 personal, family, or household purposes made in

20 connection with the underwriting of insurance;
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1 ‘‘(B) any denial of employment or any

2 other decision for employment purposes which

3 adversely affects any current or prospective em4 ployee; and

5 ‘‘(C) any action taken or determination

6 made—

7 ‘‘(i) in connection with an application

8 which was made by, or a transaction which

9 was initiated by, any consumer; and

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

11 the consumer.’’.

12 (b) FIRM OFFER OF CREDIT.—Section 603 of the Fair

13 Credit Reporting Act (15 U.S.C. 1681a) is further amended

14 by adding after subsection (k) (as added by subsection (a)

15 of this section) the following:

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

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

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

19 honored if the consumer is determined, based on in20 formation in a consumer report on the consumer, to

21 meet the specific criteria used to select the consumer

22 for the offer; and

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

24 paragraph (1) for which extension of credit may be
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1 conditioned solely on any combination of the follow2 ing:

3 ‘‘(A) The consumer being determined, based

4 on information in the consumer’s application for

5 the credit, to meet specific income criteria or em6 ployment criteria (or both) that are estab7 lished—

8 ‘‘(i) before selection of the consumer for

9 the offer; and

10 ‘‘(ii) for the purpose of determining

11 whether to extend credit pursuant to the

12 offer.

13 ‘‘(B) Verification—

14 ‘‘(i) that the consumer continues to

15 meet the specific criteria used to select the

16 consumer for the offer, by using information

17 in a consumer report on the consumer, in18 formation in the consumer’s application for

19 the credit, or other information bearing on

20 the creditworthiness of the consumer; or

21 ‘‘(ii) of the information in the consum22 er’s application for the credit, to determine

23 that the consumer meets the specific income

24 criteria or employment criteria (or both).
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1 ‘‘(C) The consumer furnishing any collat2 eral that is a requirement for the extension of the

3 credit that was—

4 ‘‘(i) established before selection of the

5 consumer for the offer of credit; and

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

7 offer of credit.’’.

8 (c) CREDIT TRANSACTION WHICH IS NOT INITIATED

9 BY THE CONSUMER.—Section 603 of the Fair Credit Re10 porting Act (15 U.S.C. 1681a) is further amended by add11 ing after subsection (l) (as added by subsection (b) of this

12 section) the following:

13 ‘‘(m) The term ‘credit transaction which is not initi14 ated by the consumer’ does not include the use of a consumer

15 report by a person with which the consumer has an account,

16 for purposes of—

17 ‘‘(1) reviewing the account; or

18 ‘‘(2) collecting the account.’’.

19 (d) STATE.—Section 603 of the Fair Credit Reporting

20 Act (15 U.S.C. 1681a) is further amended by adding after

21 subsection (m) (as added by subsection (c) of this section)

22 the following:

23 ‘‘(n) The term ‘State’ means any State, the Common24 wealth of Puerto Rico, the District of Columbia, and any

25 territory or possession of the United States.’’.
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1 (e) EXCLUSIONS FROM DEFINITION OF CONSUMER RE2 PORT.—Section 603(d) of the Fair Credit Reporting Act (15

3 U.S.C. 1681a(d)) is amended in the second sentence in

4 clause (A)—

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

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

7 the following: ‘‘, (ii) any communication of that in8 formation among persons related by common owner9 ship or affiliated by corporate control, or (iii) any

10 communication of information from a credit applica11 tion by a consumer among persons related by common

12 ownership or affiliated by corporate control if it is

13 clearly and conspicuously disclosed (I) with the appli14 cation that the information may be communicated

15 among such persons and the consumer consents, or

16 (II) with respect to existing customers, at any time

17 prior to the time that the information is initially

18 communicated, that such information may be commu19 nicated among such persons and the consumer is

20 given the opportunity, prior to the time that the in21 formation is initially communicated, to direct in

22 writing that such information not be communicated

23 among such persons’’;

24 (3) in clause (B) by striking ‘‘or’’ after the semi25 colon at the end;
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1 (4) in clause (C) by striking the period and in2 serting a semicolon; and

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

4 any communication of information about a consumer

5 between persons who are affiliated by common owner6 ship or common corporate control and in connection

7 with a credit transaction which is not initiated by

8 the consumer, if either of those persons has complied

9 with section 615(d)(4)(B) with respect to a consumer

10 report from which the information is taken and the

11 consumer has consented to use of the report for the

12 transaction, or with respect to existing customers, the

13 consumer has not directed in writing that the report

14 may not be used for the transaction, in accordance

15 with section 615(d)(4)(C).’’.

16 (f) EXCLUSION OF CERTAIN COMMUNICATIONS BY EM17 PLOYMENT AGENCIES FROM DEFINITION OF CONSUMER

18 REPORT.—Section 603 of the Fair Credit Reporting Act (15

19 U.S.C. 1681(a)) is further amended—

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

21 (e) of this section, by adding at the end the following:

22 ‘‘The term also does not include a communication de23 scribed in subsection (o).’’; and

24 (2) by adding at the end the following:
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1 ‘‘(o) COMMUNICATIONS BY EMPLOYMENT AGENCIES

2 EXCLUDED FROM DEFINITION OF CONSUMER REPORT.—

3 A communication is described in this subsection if it is a

4 communication—

5 ‘‘(1) that, but for the 3rd sentence of subsection

6 (d), would be an investigative consumer report;

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

8 the purpose of—

9 ‘‘(A) procuring an employee for the em10 ployer, or

11 ‘‘(B) procuring an opportunity for a natu12 ral person to work for the employer;

13 ‘‘(3) that is made by a person that regularly per14 forms such procurement;

15 ‘‘(4) that is not used by any person for any pur16 pose other than a purpose described in paragraph (2)

17 (A) or (B);

18 ‘‘(5) with respect to which—

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

20 communication—

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

22 the nature and scope of the communication,

23 before the collection of any information for

24 the purpose of making the communication;
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1 ‘‘(ii) consents orally or in writing to

2 the making of the communication to a pro3 spective employer, before the making of the

4 communication; and

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

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

7 written confirmation of that consent by the

8 person making the communication, within

9 3 business days after the receipt of the con10 sent by that person;

11 ‘‘(B) the person that makes the communica12 tion does not, for the purpose of making the com13 munication, make any inquiry that if made by

14 a prospective employer of the consumer who is

15 the subject of the communication would violate

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

18 ‘‘(C) the person that makes the communica19 tion—

20 ‘‘(i) discloses in writing to the

21 consumer who is the subject of the commu22 nication, within 5 business days after re23 ceiving any request from the consumer for

24 such disclosure, the nature and substance of

25 all information in the consumer’s file at the
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1 time of the request, except that the sources

2 of information that is acquired solely for

3 use in making the communication and ac4 tually used for no other purpose need not be

5 disclosed other than under appropriate dis6 covery procedures in the court in which an

7 action is brought; and

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

9 subject of the communication, in writing, of

10 the consumer’s right to request the informa11 tion described in clause (i).’’.

12 (g) CLERICAL AMENDMENT.—Section 603(d) of the

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

14 in the first sentence—

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

16 for’’; and

17 (2) by striking ‘‘(1)’’ before ‘‘credit or insur18 ance’’.

19 SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EM20 PLOYMENT PURPOSES.

21 (a) FURNISHING CONSUMER REPORTS FOR BUSINESS

22 TRANSACTIONS.—Section 604 of the Fair Credit Reporting

23 Act (15 U.S.C. 1681b) is amended—

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

25 consumer reporting agency’’; and
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1 (2) in subsection (a)(3) (as designated by para2 graph (1) of this subsection) by amending subpara3 graph (E) to read as follows:

4 ‘‘(E) otherwise has a legitimate business need for

5 the information in connection with a business trans6 action that is initiated by the consumer.’’.

7 (b) FURNISHING AND USING CONSUMER REPORTS FOR

8 EMPLOYMENT PURPOSES.—Section 604 of the Fair Credit

9 Reporting Act (15 U.S.C. 1681b) is further amended by

10 adding at the end the following new subsection:

11 ‘‘(b) CONDITIONS FOR FURNISHING AND USING

12 CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—

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

14 reporting agency may furnish a consumer report for

15 employment purposes only if—

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

17 from the agency certifies to the agency that—

18 ‘‘(i) the person has complied with

19 paragraph (2) with respect to the consumer

20 report, and the person will comply with

21 paragraph (3) with respect to the consumer

22 report if paragraph (3) becomes applicable;

23 and

24 ‘‘(ii) information from the consumer

25 report will not be used in violation of any
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1 applicable Federal or State equal employ2 ment opportunity law or regulation; and

3 ‘‘(B) the consumer reporting agency pro4 vides with the report a summary of the consum5 er’s rights under this title, as prescribed by the

6 Federal Trade Commission under section

7 609(c)(3).

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

9 may not procure a consumer report, or cause a

10 consumer report to be procured, for employment pur11 poses with respect to any consumer unless—

12 ‘‘(A) a clear and conspicuous disclosure has

13 been made in writing to the consumer at any

14 time before the report is procured or caused to be

15 procured, in a document that consists solely of

16 the disclosure, that a consumer report may be ob17 tained for employment purposes; and

18 ‘‘(B) the consumer has authorized in writ19 ing the procurement of the report by that person.

20 ‘‘(3) CONDITIONS ON USE FOR ADVERSE AC21 TIONS.—In using a consumer report for employment

22 purposes, before taking any adverse action based in

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

24 to the consumer to whom the report relates—

25 ‘‘(A) a copy of the report;
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1 ‘‘(B) a description in writing of the con2 sumer’s rights under this title, as prescribed by

3 the Federal Trade Commission under section

4 609(c)(3); and

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

6 exceed 5 business days following receipt of the re7 port by the consumer) to respond to any infor8 mation in the report that is disputed by the

9 consumer, and notice in writing of the oppor10 tunity for the consumer to respond in that pe11 riod.

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

13 paragraph (1), a consumer reporting agency may fur14 nish a consumer report, and a person may use a

15 consumer report, for employment purposes only under

16 the following circumstances:

17 ‘‘(A) The employment requires or is ex18 pected to require a security clearance issued by

19 an agency of the United States as a condition for

20 employment.

21 ‘‘(B) The employment requires or is ex22 pected to require an employee to be covered by a

23 fidelity bond.

24 ‘‘(C) The employment requires or is ex25 pected to require an employee, on a regular basis
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1 and as part of the normal duties of employ2 ment—

3 ‘‘(i) to handle or otherwise have access

4 to substantial amounts of cash or other

5 things of value of the employer: or

6 ‘‘(ii) to engage in any conduct or ac7 tivity with respect to which the employee

8 has a fiduciary duty.’’.

9 SEC. 104. AMENDMENTS RELATING TO USE OF CONSUMER

10 REPORTS FOR PRESCREENING; PROHIBITION

11 ON UNAUTHORIZED OR UNCERTIFIED USE OF

12 INFORMATION.

13 (a) IN GENERAL.—Section 604 of the Fair Credit Re14 porting Act (15 U.S.C. 1681b), as amended by section 103,

15 is further amended—

16 (1) in subsection (a) by striking ‘‘A consumer re17 porting agency’’ and inserting ‘‘Subject to subsection

18 (c), any consumer reporting agency’’; and

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

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

21 ‘‘(c) FURNISHING REPORTS IN CONNECTION WITH

22 CREDIT TRANSACTIONS NOT INITIATED BY THE

23 CONSUMER.—

24 ‘‘(1) IN GENERAL.—A consumer reporting agen25 cy may furnish a consumer report relating to any
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1 consumer pursuant to subsection (a)(3)(A) in connec2 tion with any credit transaction which is not initi3 ated by the consumer only if—

4 ‘‘(A) the consumer authorizes the agency to

5 provide such report to such person; or

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

7 offer of credit;

8 ‘‘(ii) the consumer reporting agency has

9 complied with subsection (d); and

10 ‘‘(iii) the consumer has not elected in ac11 cordance with subsection (d)(1) to have the con12 sumer’s name and address excluded from lists of

13 names provided by the agency pursuant to this

14 paragraph.

15 ‘‘(2) LIMITS ON INFORMATION RECEIVED UNDER

16 PARAGRAPH (1)(B).—A person may receive pursuant

17 to paragraph (1)(B) only—

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

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

20 consumer and is used by the person solely for the

21 purpose of verifying the identity of the consumer;

22 and

23 ‘‘(C) information pertaining to a consumer

24 that is not identified or identifiable with the

25 consumer.
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1 ‘‘(3) INFORMATION REGARDING INQUIRIES.—Ex2 cept as provided in section 609(a)(5), a consumer re3 porting agency shall not furnish to any person a

4 record of inquiries in connection with credit trans5 actions which are not initiated by a consumer.

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

7 FROM LISTS.—

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

9 have his or her name and address excluded from any

10 list provided by a consumer reporting agency in con11 nection with a credit transaction which is not initi12 ated by the consumer, by—

13 ‘‘(A) notifying the agency, through the noti14 fication system maintained by the agency under

15 paragraph (3), that the consumer does not con16 sent to any use of consumer reports relating to

17 the consumer in connection with any credit

18 transaction which is not initiated by the

19 consumer; and

20 ‘‘(B) returning to the agency a signed writ21 ten notice of the election, if provided by the agen22 cy in accordance with paragraph (2).

23 ‘‘(2) PROVISION OF WRITTEN NOTICE TO

24 CONSUMER.—A consumer reporting agency shall pro25 vide to a consumer a written notice for purposes of
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1 paragraph (1)(B), by not later than 5 business days

2 after being notified of the election of the consumer in

3 accordance with paragraph (1)(A).

4 ‘‘(3) NOTIFICATION SYSTEM.—Each consumer re5 porting agency which furnishes a consumer report in

6 connection with any credit transaction which is not

7 initiated by a consumer, shall—

8 ‘‘(A) establish and maintain a notification

9 system, including a toll-free telephone number,

10 which permits any consumer whose consumer re11 port is maintained by the agency to notify the

12 agency, with appropriate identification, of the

13 consumer’s election to have the consumer’s name

14 and address excluded from any list of names and

15 addresses provided by the agency for such a

16 transaction; and

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

18 after the date of the enactment of the Consumer

19 Reporting Reform Act of 1994, and at least an20 nually thereafter, in a publication of general cir21 culation in the area served by the agency—

22 ‘‘(i) a notification that information in

23 consumer files maintained by the agency

24 may be used in connection with such trans25 actions; and
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1 ‘‘(ii) the address and toll-free telephone

2 number for consumers to use to notify the

3 agency of the consumer’s election under sub4 paragraph (A).

5 Establishment and maintenance of a notification sys6 tem (including a toll-free telephone number) and pub7 lication by a consumer reporting agency on its own

8 behalf and on behalf of any of its affiliates in accord9 ance with this paragraph is deemed to be compliance

10 with this paragraph by each of those affiliates.

11 ‘‘(4) AGENCIES WHICH OPERATE NATIONWIDE.—

12 Each consumer reporting agency which compiles and

13 maintains files on consumers on a nationwide basis

14 shall establish and maintain a notification system for

15 purposes of paragraph (3) jointly with other such

16 consumer reporting agencies.

17 ‘‘(5) EFFECTIVENESS OF ELECTION.—An election

18 of a consumer under paragraph (1)—

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

20 consumer reporting agency beginning on the

21 later of—

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

23 notifies the agency in accordance with

24 paragraph (1)(A); or
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1 ‘‘(ii) the date on which the consumer

2 returns to the agency a signed written

3 notification of the election in accordance

4 with paragraph (1)(B), if provided by the

5 agency;

6 ‘‘(B) shall not be effective after the date on

7 which the consumer notifies the agency (through

8 the system established by the agency under para9 graph (3)) that the election is no longer effective;

10 and

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

12 affiliate of the agency.’’.

13 (b) FURNISHING CONSUMER REPORTS FOR CERTAIN

14 DIRECT MARKETING TRANSACTIONS PROHIBITED.—Sec15 tion 604 of the Fair Credit Reporting Act (15 U.S.C.

16 1681b) is further amended by adding after subsection (d)

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

18 new subsection:

19 ‘‘(e) FURNISHING CONSUMER REPORTS FOR CERTAIN

20 DIRECT MARKETING TRANSACTIONS PROHIBITED.—A

21 consumer reporting agency may not furnish a consumer re22 port for use for a direct marketing transaction which is

23 not initiated by the consumer to whom the report relates.’’.

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

3 following new subsection:

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

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

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

8 consumer report is authorized to be furnished under

9 subsection (a); and

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

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

12 (d) FIRST NOTIFICATIONS BY CONSUMERS.—A

13 consumer may notify a consumer reporting agency through

14 a notification system established and maintained by the

15 agency under section 604(d) of the Fair Credit Reporting

16 Act, as amended by subsection (a), on or after the date

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

18 Act.

19 SEC. 105. CONSUMER CONSENT REQUIRED TO FURNISH

20 CONSUMER REPORT CONTAINING MEDICAL

21 INFORMATION.

22 Section 604 of the Fair Credit Reporting Act (15

23 U.S.C. 1681b), as amended by sections 103 and 104, is fur24 ther amended by adding at the end the following:
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1 ‘‘(g) FURNISHING REPORTS CONTAINING MEDICAL IN2 FORMATION.—A consumer reporting agency shall not fur3 nish for employment purposes, or in connection with a cred4 it transaction, a consumer report which contains medical

5 information about a consumer, unless the consumer con6 sents to the furnishing of the report.’’.

7 SEC. 106. AMENDMENTS RELATING TO OBSOLETE INFORMA8 TION AND INFORMATION CONTAINED IN

9 CONSUMER REPORTS.

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

11 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c)

12 is amended—

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

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

15 ‘‘(a) INFORMATION EXCLUDED FROM CONSUMER RE16 PORTS.—No’’; and

17 (2) by striking subsection (b).

18 (b) CLARIFICATION OF REPORTING PERIOD.—Section

19 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c),

20 as amended by subsection (a), is further amended by adding

21 at the end the following new subsection:

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

23 year period referred to in paragraphs (4) and (6) of sub24 section (a) shall begin, with respect to any delinquent ac25 count which is placed for collection (internally or by refer-
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1 ral to a 3d party, whichever is earlier), charged to profit

2 and loss, or subjected to any similar action, upon the expi3 ration of the 180-day period beginning on the date of the

4 commencement of the delinquency which immediately pre5 ceded the collection activity, charge to profit and loss, or

6 similar action.

7 ‘‘(2) Paragraph (1) applies only to items of informa8 tion added to a consumer report on or after the date that

9 is 455 days after the date of the enactment of the Consumer

10 Reporting Reform Act of 1994.’’.

11 (c) ADDITIONAL INFORMATION ON BANKRUPTCY FIL12 INGS REQUIRED.—Section 605 of the Fair Credit Reporting

13 Act (15 U.S.C. 1681c) is further amended by adding after

14 subsection (b) (as added by subsection (b) of this section)

15 the following new subsection:

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

17 Any consumer reporting agency which furnishes a consumer

18 report which contains information regarding any case in19 volving the consumer which arises under title 11, United

20 States Code, shall include in the report an identification

21 of the chapter of such title 11 under which such case arises

22 if provided by the source of the information. If any case

23 arising or filed under title 11, United States Code, is with24 drawn by the consumer prior to a final judgment, the

25 consumer reporting agency shall include in the report that
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1 such case or filing was withdrawn upon receipt of docu2 mentation certifying such withdrawal.’’.

3 (d) INDICATION OF CLOSURE OF ACCOUNT; INDICA4 TION OF DISPUTE BY CONSUMER.—Section 605 of the Fair

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

6 by adding after subsection (c) (as added by subsection (c)

7 of this section) the following new subsections:

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

9 CONSUMER.—If a consumer reporting agency is notified

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

11 consumer was voluntarily closed by the consumer, the agen12 cy shall indicate that fact in any consumer report that in13 cludes information related to the account.

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

15 consumer reporting agency is notified pursuant to section

16 623(a)(3) that information regarding a consumer that was

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

18 agency shall indicate that fact in each consumer report that

19 includes the disputed information.’’.

20 (e) PROHIBITION ON MAINTAINING OR FURNISHING

21 CERTAIN ACCOUNT INFORMATION.—

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

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

24 by adding at the end the following new subsection:

25 ‘‘(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 a

7 period during which the consumer was receiving as8 sistance pursuant to a declaration of an emergency by

9 the President under The Robert T. Stafford Disaster

10 Relief and Emergency Assistance Act, or unemploy11 ment compensation under the laws of any State (or

12 but for the exhaustion of benefits would be entitled to

13 receive such compensation), if—

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

15 the consumer reporting agency exclude the infor16 mation 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 current

24 status during the 1-year period ending on the

25 date of the submittal of the request.
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1 ‘‘(2) APPROPRIATE DOCUMENTATION.—The Fed2 eral 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 Cred7 it Reporting Act (15 U.S.C. 1681c) is amended by

8 striking ‘‘Obsolete information’’ and inserting

9 ‘‘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 (15

19 U.S.C. 1681e) is amended by adding at the end the follow20 ing new subsection:

21 ‘‘(c) DISCLOSURE OF CONSUMER REPORTS BY USERS

22 ALLOWED.—A consumer reporting agency may not prohibit

23 a user of a consumer report furnished by the agency on a

24 consumer from disclosing the contents of the report to the

25 consumer, if adverse action against the consumer has been
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1 taken, or is contemplated, by the user based in whole or

2 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 amended

6 by adding after subsection (c) (as added by subsection (a)

7 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 Trade

20 Commission shall prescribe the content of notices

21 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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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 a

6 consumer report for purposes of reselling the report

7 (or any information in the report) unless the person

8 discloses to the consumer reporting agency which

9 originally furnishes the report—

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

11 the report (or information), and

12 ‘‘(B) each permissible purpose under section

13 604 for which the report is furnished to the ulti14 mate end-user of the report (or information).

15 ‘‘(2) RESPONSIBILITIES OF PROCURERS FOR RE16 SALE.—A person which procures a consumer report

17 for purposes of reselling the report (or any informa18 tion in the report) shall—

19 ‘‘(A) establish and comply with reasonable

20 procedures designed to ensure that the report (or

21 information) is resold by the person only for a

22 purpose for which the report may be furnished

23 under section 604, including by requiring that

24 each person to which the report (or information)

25 is resold—
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1 ‘‘(i) identifies each prospective user of

2 the resold report (or information);

3 ‘‘(ii) certifies each purpose for which

4 the report (or information) will be used;

5 and

6 ‘‘(iii) certifies that the report (or infor7 mation) will be used for no other purpose;

8 and

9 ‘‘(B) before reselling the report, make rea10 sonable efforts to verify the identifications and

11 certifications made under subparagraph (A).’’.

12 SEC. 108. AMENDMENTS RELATING TO CONSUMER DISCLO13 SURES.

14 (a) ALL INFORMATION IN CONSUMER’S FILE RE15 QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the Fair

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

17 to read as follows:

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

19 time of the request.’’.

20 (b) MORE INFORMATION CONCERNING RECIPIENTS OF

21 REPORTS REQUIRED.—Section 609(a)(3) of the Fair Credit

22 Reporting Act (15 U.S.C. 1681g(a)) is amended to read as

23 follows:
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1 ‘‘(3)(A) Identification of each person (including

2 each ultimate end-user identified under section

3 607(e)(1)) who procured a consumer report—

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

5 year period preceding the request; or

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

7 year period preceding the request.

8 ‘‘(B) An identification of a person under sub9 paragraph (A) shall include—

10 ‘‘(i) the name of the person or, if applicable,

11 the trade name (written in full) under which

12 such person conducts business; and

13 ‘‘(ii) upon request of the consumer, the ad14 dress and telephone number of the person.’’.

15 (c) DISCLOSURE OF PERMISSIBLE PURPOSES.—Sec16 tion 609(a) of the Fair Credit Reporting Act (15 U.S.C.

17 1681g(a)) is further amended by adding at the end the fol18 lowing:

19 ‘‘(4) The permissible purpose for which each per20 son identified under paragraph (3) procured a

21 consumer report.’’.

22 (d) INFORMATION REGARDING INQUIRIES.—Section

23 609(a) of the Fair Credit Reporting Act (15 U.S.C.

24 1681g(a)) is amended by adding after paragraph (4) (as

25 added by subsection (c) of this section) the following:
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1 ‘‘(5) A record of all inquiries received by the

2 agency in the 1-year period preceding the request that

3 identified the consumer in connection with a credit

4 transaction which was not initiated by the

5 consumer.’’.

6 (e) DISCLOSING THE FACTS REGARDING CHECKS

7 UPON WHICH ADVERSE CHARACTERIZATION IS BASED.—

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

9 1681g(a)) is amended by adding after paragraph (5) (as

10 added by subsection (d) of this section) the following:

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

12 any checks upon which is based any adverse charac13 terization of the consumer included in the file at the

14 time of the disclosure.’’.

15 (f) SUMMARY OF RIGHTS REQUIRED TO BE INCLUDED

16 WITH DISCLOSURE.—

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

18 Reporting Act (15 U.S.C. 1681g) is amended by add19 ing at the end the following new subsection:

20 ‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN21 CLUDED WITH DISCLOSURE.—

22 ‘‘(1) SUMMARY OF RIGHTS.—A consumer report23 ing agency shall provide to a consumer, with each

24 written disclosure by the agency to the consumer

25 under this section—
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1 ‘‘(A) a written summary of all rights the

2 consumer has under this title; and

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

4 agency that compiles and maintains files on con5 sumers on a nationwide basis, the toll-free tele6 phone number established by the agency pursu7 ant to section 607(f).

8 ‘‘(2) SPECIFIC ITEMS REQUIRED TO BE IN9 CLUDED.—The summary of rights required under

10 paragraph (1) shall include—

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

12 rights of consumers under this title;

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

14 may exercise the rights of the consumer under

15 this title;

16 ‘‘(C) a list of all Federal agencies respon17 sible for enforcing any provision of this title and

18 the address and any appropriate phone number

19 of each such agency, in a form that will assist

20 the consumer in selecting the appropriate agen21 cy; and

22 ‘‘(D) a statement that a consumer reporting

23 agency is not required to remove accurate derog24 atory information from a consumer’s file, unless
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1 the information is outdated under section 605 or

2 cannot be verified.

3 ‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur4 poses of this subsection and any disclosure by a

5 consumer reporting agency required under this title

6 with respect to consumers’ rights, the Federal Trade

7 Commission (after consultation with each Federal

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

9 the form and content of any disclosure of the rights

10 of consumers required under this title.’’.

11 (2) TECHNICAL AMENDMENT.—Section

12 606(a)(1)(B) of the Fair Credit Reporting Act (15

13 U.S.C. 1681d(a)(1)(B)) is amended by inserting ‘‘and

14 the written summary of the rights of the consumer

15 prepared pursuant to section 609(c)’’ before the semi16 colon.

17 (g) FORM OF DISCLOSURES.—

18 (1) IN GENERAL.—Subsections (a) and (b) of sec19 tion 610 of the Fair Credit Reporting Act (15 U.S.C.

20 1681h) are amended to read as follows:

21 ‘‘(a) IN GENERAL.—

22 ‘‘(1) PROPER IDENTIFICATION.—A consumer re23 porting agency shall require, as a condition of mak24 ing the disclosures required under section 609, that

25 the consumer furnish proper identification.
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1 ‘‘(2) DISCLOSURE IN WRITING.—Except as pro2 vided in subsection (b), the disclosures required to be

3 made under section 609 shall be provided under that

4 section in writing.

5 ‘‘(b) OTHER FORMS OF DISCLOSURE.—

6 ‘‘(1) IN GENERAL.—If authorized by a consumer,

7 a consumer reporting agency may make the disclo8 sures required under 609—

9 ‘‘(A) other than in writing; and

10 ‘‘(B) in such form as may be—

11 ‘‘(i) specified by the consumer in ac12 cordance with paragraph (2); and

13 ‘‘(ii) available from the agency.

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

15 to paragraph (1) that disclosures under section 609

16 shall be made—

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

18 consumer at the place of business of the consumer

19 reporting agency where disclosures are regularly

20 provided, during normal business hours, and on

21 reasonable notice;

22 ‘‘(B) by telephone, if the consumer has made

23 a written request for disclosure by telephone;

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

25 the agency; or
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1 ‘‘(D) by any other reasonable means that is

2 available from the agency.’’.

3 (2) SIMPLIFIED DISCLOSURE.—Section 610 of

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

5 amended by adding at the end the following:

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

7 Commission shall prescribe the form in which a consumer

8 reporting agency shall make the disclosures required under

9 section 609(a), for the purpose of maximizing the com10 prehensibility and standardization of such disclosures.’’.

11 (3) CONFORMING AMENDMENTS.—

12 (A) Section 609(a) of the Fair Credit Re13 porting Act (15 U.S.C. 1681h(a)) is amended in

14 the matter preceding paragraph (1) by striking

15 ‘‘and proper identification of any consumer’’

16 and inserting ‘‘and subject to section 610(a)(1)’’.

17 (B) Section 610 of the Fair Credit Report18 ing Act (15 U.S.C. 1681h) is amended in the

19 heading for the section by inserting ‘‘and

20 form’’ after ‘‘Conditions’’.

21 (C) The table of sections at the beginning of

22 the Fair Credit Reporting Act (15 U.S.C. 1681a

23 et seq.) is amended in the item relating to sec24 tion 610 by inserting ‘‘and form’’ after ‘‘Condi25 tions’’.
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1 SEC. 109. AMENDMENTS RELATING TO PROCEDURES IN

2 CASE OF THE DISPUTED ACCURACY OF ANY

3 INFORMATION IN A CONSUMER’S FILE.

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

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

6 follows:

7 ‘‘(a) REINVESTIGATIONS OF DISPUTED INFORMA8 TION.—

9 ‘‘(1) REINVESTIGATION REQUIRED.—

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

11 accuracy of any item of information contained

12 in any consumer’s file at any consumer report13 ing agency is disputed by the consumer and the

14 consumer notifies the agency directly of such dis15 pute, the agency shall reinvestigate free of charge

16 and record the current status of the disputed in17 formation, or delete the item from the file in ac18 cordance with paragraph (5), before the end of

19 the 30-day period beginning on the date the

20 agency receives the notice of the dispute from the

21 consumer.

22 ‘‘(B) EXTENSION OF PERIOD TO

23 REINVESTIGATE.—Except as provided in sub24 paragraph (C), the 30-day period described in

25 subparagraph (A) may be extended if—
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1 ‘‘(i) the consumer reporting agency re2 ceives information from the consumer with3 in that 30-day period that is relevant to the

4 reinvestigation; and

5 ‘‘(ii) the consumer reporting agency

6 has provided clear and conspicuous notice

7 to the consumer, in a disclosure under sec8 tion 609(c), of the circumstances that may

9 cause such an extension.

10 The period, as extended, shall end not later than

11 15 days after the last date the agency receives

12 such information.

13 ‘‘(C) LIMITATIONS ON EXTENSION OF PE14 RIOD TO REINVESTIGATE.—Subparagraph (B)

15 shall not apply to any reinvestigation in which,

16 in the 30-day period described in subparagraph

17 (A), the information that is the subject of the

18 reinvestigation is found to be inaccurate or in19 complete or cannot be verified.

20 ‘‘(2) PROMPT NOTICE OF DISPUTE TO FUR21 NISHER OF INFORMATION.—

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

23 day period beginning on the date a consumer re24 porting agency receives notice of a dispute from

25 any consumer in accordance with paragraph (1),
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1 the agency shall provide notification of the dis2 pute to any person that provided any item of in3 formation in dispute, at the address and in the

4 manner established with the person. The notice

5 shall include disclosure of the date on which the

6 consumer reporting agency received notice of the

7 dispute from the consumer and all relevant in8 formation regarding the dispute that the agency

9 has received from the consumer.

10 ‘‘(B) PROVISION OF OTHER INFORMATION

11 FROM CONSUMER.—The consumer reporting

12 agency shall promptly provide to the person that

13 provided the information in dispute all relevant

14 information regarding the dispute that is re15 ceived by the agency from the consumer after the

16 period referred to in subparagraph (A) and be17 fore the end of the period referred to in para18 graph (1)(A).

19 ‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO20 LOUS OR IRRELEVANT.—

21 ‘‘(A) IN GENERAL.—Notwithstanding para22 graph (1), a consumer reporting agency may ter23 minate a reinvestigation of information disputed

24 by a consumer under that paragraph if the agen25 cy reasonably determines that the dispute by the
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1 consumer is frivolous or irrelevant, including by

2 reason of a failure by a consumer to provide suf3 ficient information to investigate the disputed

4 information.

5 ‘‘(B) NOTICE OF DETERMINATION.—Upon

6 making any determination in accordance with

7 subparagraph (A) that a dispute is frivolous or

8 irrelevant, a consumer reporting agency shall no9 tify the consumer within 5 days of such deter10 mination, by mail or, if authorized by the

11 consumer for that purpose, by any other means

12 available to the agency.

13 ‘‘(C) CONTENTS OF NOTICE.—A notice

14 under subparagraph (B) shall include—

15 ‘‘(i) the reasons for the determination

16 under subparagraph (A); and

17 ‘‘(ii) identification of any information

18 required to investigate the disputed infor19 mation.

20 ‘‘(4) CONSIDERATION OF CONSUMER INFORMA21 TION.—In conducting any reinvestigation under

22 paragraph (1) with respect to disputed information

23 in the file of any consumer, the consumer reporting

24 agency shall review and consider all relevant infor25 mation submitted by the consumer in the period de-
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1 scribed in paragraph (1)(A) with respect to such dis2 puted information.

3 ‘‘(5) TREATMENT OF INACCURATE OR UNVERIFI4 ABLE INFORMATION.—

5 ‘‘(A) IN GENERAL.—If, after any

6 reinvestigation under paragraph (1) of any in7 formation disputed by a consumer, an item of

8 the information is found to be inaccurate or in9 complete or cannot be verified, the consumer re10 porting agency shall promptly delete that item of

11 information from the consumer’s file. The infor12 mation deleted shall consist solely of the informa13 tion that was disputed by the consumer and

14 shall not include any portion of the same item

15 that was not disputed.

16 ‘‘(B) REQUIREMENTS RELATING TO

17 REINSERTION OF PREVIOUSLY DELETED MATE18 RIAL.—

19 ‘‘(i) CERTIFICATION OF ACCURACY OF

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

22 subparagraph (A), the information may not

23 be reinserted in the file by the consumer re24 porting agency unless the person who fur-
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1 nishes the information certifies that the in2 formation is complete and accurate.

3 ‘‘(ii) NOTICE TO CONSUMER.—If any

4 information which has been deleted from a

5 consumer’s file pursuant to subparagraph

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

7 reporting agency shall promptly notify the

8 consumer of the reinsertion in writing or, if

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

11 agency.

12 ‘‘(iii) ADDITIONAL INFORMATION.—As

13 part of or in addition to the notice under

14 clause (ii), a consumer reporting agency

15 shall provide to a consumer in writing

16 within the 5-day period beginning on the

17 date of the reinsertion—

18 ‘‘(I) a statement that the disputed

19 information has been reinserted;

20 ‘‘(II) a notice to the consumer

21 that if requested by the consumer the

22 agency shall provide to the consumer,

23 within 15 days after the date of the re24 quest, the name, business address, and

25 telephone number of any furnisher of
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1 information contacted, or of any fur2 nisher of information which contacted

3 the consumer reporting agency, in con4 nection with the reinsertion of such in5 formation;

6 ‘‘(III) the toll-free telephone num7 ber of the consumer reporting agency if

8 the agency is required to maintain

9 such a number under section 607(f), or

10 a telephone number that the consumer

11 can use to contact the agency with re12 spect to obtaining the information de13 scribed in subclause (II); and

14 ‘‘(IV) a notice that the consumer

15 has the right to add a statement to the

16 consumer’s file disputing the accuracy

17 or completeness of the disputed infor18 mation.

19 ‘‘(C) PROCEDURES TO PREVENT REAPPEAR20 ANCE.—A consumer reporting agency shall

21 maintain reasonable procedures designed to pre22 vent the reappearance in a consumer’s file, and

23 in consumer reports on the consumer, of infor24 mation that is deleted pursuant to this para-
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1 graph (other than information that is reinserted

2 in accordance with subparagraph (B)(i)).

3 ‘‘(D) FREE CONSUMER REPORT DURING 12-

4 MONTH PERIOD AFTER DELETION OF INFORMA5 TION.—Upon the request of a consumer, a

6 consumer reporting agency shall make all disclo7 sures pursuant to section 609 without charge to

8 that consumer at least once during the 12-month

9 period after the consumer receives a notification

10 under paragraph (6) or paragraph (8) of the de11 letion of information that is found to be inac12 curate or cannot be verified.

13 ‘‘(E) Any nationwide consumer reporting

14 agency that maintains files on a consumer on a

15 nationwide basis that is subject to this section,

16 shall report the results of a reinvestigation that

17 finds incomplete or inaccurate information in a

18 consumer’s file to all other such agencies.

19 ‘‘(6) NOTICE OF RESULTS OF

20 REINVESTIGATION.—

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

22 agency shall provide written notice to a

23 consumer of the results of a reinvestigation under

24 this subsection within 5 days after the comple25 tion of the reinvestigation, by mail or, if author-
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1 ized by the consumer for that purpose, by other

2 means available to the agency.

3 ‘‘(B) CONTENTS.—As part of or in addition

4 to the notice under subparagraph (A), a

5 consumer reporting agency shall provide to a

6 consumer in writing within the 5-day period

7 referred to in subparagraph (A)—

8 ‘‘(i) a statement that the reinves9 tigation is completed;

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

11 upon the consumer’s file as that file is re12 vised as a result of the reinvestigation;

13 ‘‘(iii) a description or indication of

14 any changes made in the consumer report

15 as a result of those revisions to the consum16 er’s file;

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

18 consumer, a description of the procedure

19 used to determine the accuracy and com20 pleteness of the information shall be pro21 vided to the consumer by the agency, in22 cluding the name, business address, and

23 telephone number of any furnisher of infor24 mation contacted in connection with such

25 information;
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1 ‘‘(v) a notice that the consumer has the

2 right to add a statement to the consumer’s

3 file disputing the accuracy or completeness

4 of the information; and

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

6 the right to request under subsection (d)

7 that the consumer reporting agency furnish

8 notifications under that subsection.

9 ‘‘(7) DESCRIPTION OF REINVESTIGATION PROCE10 DURE.—A consumer reporting agency shall provide to

11 a consumer a description referred to in paragraph

12 (6)(B)(iv) by not later than 15 days after receiving

13 a request from the consumer for that description.

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

15 dispute regarding an item of information in a con16 sumer’s file at a consumer reporting agency is re17 solved in accordance with paragraph (5)(A) by the

18 deletion of the disputed information by not later than

19 3 business days after the date on which the agency re20 ceives notice of the dispute from the consumer in ac21 cordance with paragraph (1)(A), then the agency

22 shall not be required to comply with paragraphs (2),

23 (6), and (7) with respect to that dispute if the agen24 cy—
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1 ‘‘(A) provides prompt notice of the deletion

2 to the consumer by telephone;

3 ‘‘(B) includes in that notice, or in a written

4 notice that accompanies a confirmation and

5 consumer report provided in accordance with

6 subparagraph (C), a statement of the consumer’s

7 right to request under subsection (d) that the

8 agency furnish notifications under that sub9 section; and

10 ‘‘(C) provides written confirmation of the

11 deletion and a copy of a consumer report on the

12 consumer which is based on the consumer’s file

13 after the deletion, within 5 days after making

14 the deletion.’’.

15 (b) CONFORMING AMENDMENT.—Subsection (d) of sec16 tion 611 of the Fair Credit Reporting Act (15 U.S.C.

17 1681i(d)) is amended by striking ‘‘The consumer reporting

18 agency shall clearly’’ and all that follows through the end

19 of the subsection.

20 SEC. 110. AMENDMENT RELATING TO CHARGES FOR DIS21 CLOSURE.

22 Section 612 of the Fair Credit Reporting Act (15

23 U.S.C. 1681j) is amended to read as follows:
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1 ‘‘§ 612. Charges for certain disclosures

2 ‘‘(a) REASONABLE CHARGES ALLOWED FOR CERTAIN

3 DISCLOSURES.—Except as provided in subsections (b), (c),

4 and (d), a consumer reporting agency may impose a rea5 sonable charge on a consumer—

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

7 pursuant to section 609, which—

8 ‘‘(A) shall not exceed $8; and

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

10 prior to making disclosure; and

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

12 summary, or codification to any person designated by

13 the consumer pursuant to section 611(d), which—

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

15 agency would impose on each designated recipi16 ent for a consumer report; and

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

18 prior to furnishing such information.

19 ‘‘(b) FREE CONSUMER REPORT AFTER ADVERSE NO20 TICE TO CONSUMER.—Each consumer reporting agency

21 that maintains a file on a consumer shall make all disclo22 sures pursuant to section 609 without charge to the

23 consumer if, within 60 days after receipt by such consumer

24 of a notification pursuant to section 615 or of a notification

25 from a debt collection agency affiliated with that consumer

26 reporting agency stating that the consumer’s credit rating
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1 may be or has been adversely affected, the consumer makes

2 a request under section 609.

3 ‘‘(c) FREE CONSUMER REPORT ANNUALLY UPON RE4 QUEST OF CONSUMER.—Upon the request of a consumer,

5 a consumer reporting agency shall make all disclosures pur6 suant to section 609 without charge to that consumer at

7 least once each calendar year.

8 ‘‘(d) CHARGE FOR CERTAIN NOTICES PROHIBITED.—

9 A consumer reporting agency shall not impose any charge

10 for—

11 ‘‘(1) providing any notice to a consumer re12 quired under section 611; or

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

14 611(d) of the deletion of information which is found

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

16 if the consumer designates that person to the agency

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

18 date of the notification of the consumer under section

19 611(a)(6) or 611(a)(8).

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

21 consumer reporting agency shall refund to a consumer any

22 charge assessed to the consumer for providing a consumer

23 report in the 60-day period ending on the date on which

24 the consumer notifies the agency in accordance with section

25 611(a)(1), if after a reinvestigation under that section any
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1 information in the file of the consumer is found to be incom2 plete or inaccurate.’’.

3 SEC. 111. AMENDMENTS RELATING TO DUTIES OF USERS

4 OF CONSUMER REPORTS.

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

6 Section 615(a) of the Fair Credit Reporting Act (15 U.S.C.

7 1681m(a)) is amended to read as follows:

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

9 THE BASIS OF INFORMATION CONTAINED IN CONSUMER

10 REPORTS.—If any person takes any adverse action with re11 spect to any consumer in connection with any transaction

12 initiated by the consumer or any employment determina13 tion, which is based in whole or in part on any information

14 contained in a consumer report, the person shall—

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

16 to the consumer;

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

18 name, address, and telephone number of the consumer

19 reporting agency (including any toll-free telephone

20 number established by the agency pursuant to section

21 607(f)) which furnished the report to the person; and

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

23 the consumer’s right—

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

25 copy of a consumer report on the consumer, from
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1 the consumer reporting agency referred to in

2 paragraph (2) and from any other consumer re3 porting agency that maintains a file on the

4 consumer and maintains files on consumers on

5 a nationwide basis, which notice shall include an

6 indication of the 60-day period under that sec7 tion for obtaining such a copy; and

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

9 consumer reporting agency the accuracy or com10 pleteness of any information in a consumer re11 port furnished by the agency.’’.

12 (b) DUTIES OF USERS WHO MAKE CERTAIN CREDIT

13 SOLICITATIONS.—Section 615 of the Fair Credit Reporting

14 Act (15 U.S.C. 1681m) is amended by adding at the end

15 the following new subsection:

16 ‘‘(d) DUTIES OF USERS WHO MAKE WRITTEN CREDIT

17 SOLICITATIONS ON THE BASIS OF INFORMATION CON18 TAINED IN CONSUMER FILES.—

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

20 consumer report on any consumer in connection with

21 any credit transaction which is not initiated by the

22 consumer and which consists of a firm offer of credit

23 shall provide with any written solicitation made to

24 the consumer regarding the transaction a clear and

25 conspicuous statement that—
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1 ‘‘(A) information contained in the consum2 er’s consumer report was used in connection with

3 the transaction;

4 ‘‘(B) the consumer received the offer of cred5 it because the consumer satisfied the criteria for

6 creditworthiness under which the consumer was

7 selected for the offer;

8 ‘‘(C) if applicable, the credit may not be ex9 tended if, after the consumer responds to the

10 offer, the consumer does not meet the criteria

11 used to select the consumer for the offer or any

12 applicable income or employment criteria or

13 does not furnish any required collateral;

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

15 information contained in the consumer’s file

16 with any consumer reporting agency from being

17 used in connection with any credit transaction

18 which is not initiated by the consumer; and

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

20 referred to in subparagraph (D) by notifying a

21 notification system established under section

22 604(d).

23 ‘‘(2) DISCLOSURE OF ADDRESS AND TELEPHONE

24 NUMBER.—A statement under paragraph (1) shall in25 clude the address and toll-free telephone number of the
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1 appropriate notification system established under sec2 tion 604(d).

3 ‘‘(3) MAINTAINING CRITERIA ON FILE.—A person

4 who makes an offer of credit to a consumer under a

5 credit transaction described in paragraph (1) shall

6 maintain on file the criteria used to select the

7 consumer to receive the offer, all income and employ8 ment criteria that are the basis for determining

9 whether or not to extend credit pursuant to the offer,

10 and any requirement for the furnishing of collateral

11 as a condition of the extension of credit, until the end

12 of the 3-year period beginning on the date on which

13 the offer is made to the consumer.

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

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

16 a person if—

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

18 ownership or by common corporate control with

19 the person who procured the report;

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

21 clearly and conspicuously disclosed to the

22 consumer to whom the report relates, before the

23 report is provided to the person using the report,

24 that the report might be provided to and used by

25 other persons who are affiliated in the manner
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1 described in subparagraph (A) to the person who

2 procured the report; and

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

4 is—

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

6 writing, or

7 ‘‘(ii) with respect to existing customers,

8 the consumer has been afforded the oppor9 tunity to direct in writing that the report

10 may not be provided to or used by persons

11 who are affiliated in the manner described

12 in subparagraph (A) and has not done so.’’.

13 SEC. 112. AMENDMENTS RELATING TO CIVIL LIABILITY.

14 (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLIANCE,

15 GENERALLY.—Section 616 of the Fair Credit Reporting Act

16 (15 U.S.C. 1681n) is amended by striking ‘‘Any consumer

17 reporting agency or user of information which’’ and insert18 ing ‘‘(a) IN GENERAL.—Any person who’’.

19 (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON20 COMPLIANCE.—Section 616(1) of the Fair Credit Reporting

21 Act (15 U.S.C. 1681n(1)) is amended to read as follows:

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

23 consumer as a result of the failure; or

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

25 for obtaining a consumer report under false pretenses
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1 or knowingly without a permissible purpose, such

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

3 (c) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI4 ANCE.—Section 617 of the Fair Credit Reporting Act (15

5 U.S.C. 1681o) is amended by striking ‘‘Any consumer re6 porting agency or user of information which’’ and inserting

7 ‘‘(a) IN GENERAL.—Any person who’’.

8 (d) ATTORNEY’S FEES.—

9 (1) WILLFUL NONCOMPLIANCE.—Section 616 of

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

11 amended by adding at the end the following:

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

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

14 in connection with an action under this section was filed

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

16 award to the prevailing party attorney’s fees reasonable in

17 relation to the work expended in responding to the pleading,

18 motion, or other paper.’’.

19 (2) NEGLIGENT NONCOMPLIANCE.—Section 617

20 of the Fair Credit Reporting Act (15 U.S.C. 1681o)

21 is amended by adding at the end the following:

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

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

24 in connection with an action under this section was filed

25 in bad faith or for purposes of harassment, the court shall
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1 award to the prevailing party attorney’s fees reasonable in

2 relation to the work expended in responding to the pleading,

3 motion, or other paper.’’.

4 SEC. 113. AMENDMENTS RELATING TO RESPONSIBILITIES

5 OF PERSONS WHO FURNISH INFORMATION

6 TO CONSUMER REPORTING AGENCIES.

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

8 U.S.C. 1681 et seq.) is amended by redesignating section

9 623 as section 624 and inserting after section 622 the fol10 lowing new section:

11 ‘‘§ 623. Responsibilities of furnishers of information to

12 consumer reporting agencies

13 ‘‘(a) DUTY OF FURNISHERS OF INFORMATION TO PRO14 VIDE COMPLETE AND ACCURATE INFORMATION.—

15 ‘‘(1) PROHIBITIONS.—

16 ‘‘(A) IN GENERAL.—A person shall not fur17 nish any information to any consumer reporting

18 agency if the person knows or should have known

19 the information is incomplete or inaccurate.

20 ‘‘(B) ROUTINE FURNISHERS.—A person

21 who regularly and in the ordinary course of

22 business furnishes information to one or more

23 consumer reporting agencies about the person’s

24 transactions or experiences with any consumer,

25 shall not furnish such information except in
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1 compliance with reasonable procedures which are

2 designed to avoid violations of this section and

3 to assure the accuracy of the information.

4 ‘‘(2) DUTY TO CORRECT AND UPDATE INFORMA5 TION.—A person who—

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

7 of business furnishes information to one or more

8 consumer reporting agencies about the person’s

9 transactions or experiences with any consumer;

10 and

11 ‘‘(B) has furnished to a consumer reporting

12 agency information that the person determines is

13 not complete or accurate;

14 shall promptly notify the consumer reporting agency

15 of that determination and provide to the agency any

16 corrections to that information, or any additional in17 formation, that is necessary to make the information

18 provided by the person to the agency complete and ac19 curate, and shall not thereafter furnish to the agency

20 any of the information that remains not complete or

21 accurate.

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

23 If the completeness or accuracy of any information

24 furnished by any person to any consumer reporting

25 agency is disputed to such person by a consumer, the
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1 person may not furnish the information to any

2 consumer reporting agency without notice that such

3 information is disputed by the consumer.

4 ‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC5 COUNTS.—A person who regularly and in the ordi6 nary course of business furnishes information to a

7 consumer reporting agency regarding a consumer who

8 has a credit account with that person shall notify the

9 agency of the voluntary closure of the account by the

10 consumer, in information regularly furnished for the

11 period in which the account is closed.

12 ‘‘(5) DUTY TO PROVIDE NOTICE OF DELINQUENCY

13 OF ACCOUNTS.—A person who furnishes information

14 to a consumer reporting agency regarding a delin15 quent account being placed for collection, charged to

16 profit or loss, or subjected to any similar action shall,

17 by not later than 90 days after furnishing the infor18 mation, notify the agency of the month and year of

19 the commencement of the delinquency which imme20 diately preceded the action.

21 ‘‘(b) DUTIES OF FURNISHERS OF INFORMATION UPON

22 NOTICE OF DISPUTE.—

23 ‘‘(1) IN GENERAL.—After receiving notice pursu24 ant to section 611(a)(2) of a dispute with regard to

25 the completeness or accuracy of any information pro-
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1 vided by a person to a consumer reporting agency, the

2 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 infor14 mation.

15 ‘‘(2) DEADLINE.—A person shall complete all in16 vestigations, reviews, and reports required under

17 paragraph (1) regarding information provided by the

18 person to a consumer reporting agency, before the end

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

20 the consumer reporting agency is required to complete

21 actions required by that section regarding that infor22 mation.

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

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

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

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

3 1681a et seq.) is amended by striking the item relating to

4 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 the

9 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 report13 ing agency that—

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

15 the consumer required by paragraph (1); and

16 ‘‘(B) the person will comply with subsection

17 (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 cer-
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1 tification under subsection (a)(2) from the person who

2 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 inves12 tigative consumer report which includes information

13 which is a matter of public record unless the agency

14 has verified the accuracy of the information within

15 the 30-day period ending on the date the report is

16 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 inter21 est of the consumer and that is obtained through a

22 personal interview with a neighbor, friend, or associ23 ate 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 pro2 cedures to obtain confirmation of the informa3 tion, from an additional source that has inde4 pendent and direct knowledge of the information;

5 or

6 ‘‘(B) the person interviewed is the best pos7 sible 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 (15

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

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

15 inserting ‘‘fined under title 18, United States Code, impris16 oned for not more than 2 years, or both’’.

17 (b) UNAUTHORIZED DISCLOSURES BY OFFICERS OR

18 EMPLOYEES.—Section 620 of the Fair Credit Reporting Act

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

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

21 and inserting ‘‘fined under title 18, United States Code,

22 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 sen3 tence of section 621(a) of the Fair Credit Reporting Act

4 (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 the

9 Federal Trade Commission pursuant to this sub10 section, irrespective’’ and inserting ‘‘Act. All functions

11 and powers of the Federal Trade Commission under

12 the Federal Trade Commission Act shall be available

13 to the Commission to enforce compliance with this

14 title by any person subject to enforcement by the Fed15 eral Trade Commission pursuant to this subsection

16 and not subject to enforcement pursuant to section 8

17 of the Federal Deposit Insurance Act, irrespective’’;

18 and

19 (2) by inserting ‘‘, including the power to enforce

20 the provisions of this title in the same manner as if

21 the violation had been a violation of any Federal

22 Trade Commission trade regulation rule’’ before the

23 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 pre5 ceding 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, and persons who

10 furnish information to such agencies shall be enforced

11 under—’’.

12 SEC. 117. STATE ENFORCEMENT OF FAIR CREDIT REPORT13 ING ACT.

14 Section 621 of the Fair Credit Reporting Act (15

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

16 as subsection (d) and inserting after subsection (b) the fol17 lowing new subsection:

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

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

20 such other remedies as are provided under State law,

21 whenever the chief law enforcement officer of a State,

22 or an official or agency designated by a State, has

23 reason to believe that any person has violated or is

24 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 ju4 risdiction;

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)(1), damages for which the per12 son would, but for section 623(c), be liable

13 to such residents as a result of the violation;

14 or

15 ‘‘(iii) damages of not more than $1,000

16 for each willful or negligent violation; and

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

18 under subparagraph (A) or (B), shall be award19 ed the costs of the action and reasonable attorney

20 fees as determined by the court.

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

22 serve prior written notice of any such action upon the

23 Federal Trade Commission or the appropriate Fed24 eral regulator determined under subsection (b) and

25 provide the Commission or appropriate Federal regu-
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1 lator with a copy of its complaint, except in any case

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

3 the State shall serve such notice immediately upon in4 stituting such action. The Commission or appropriate

5 Federal regulator shall have the right (A) to intervene

6 in the action, (B) upon so intervening, to be heard on

7 all matters arising therein, and (C) to file petitions

8 for appeal.

9 ‘‘(3) INVESTIGATORY POWERS.—For purposes of

10 bringing any action under this subsection, nothing in

11 this subsection shall prevent the chief law enforcement

12 officer, or an official or agency designated by a State,

13 from exercising the powers conferred on the chief law

14 enforcement officer or such official by the laws of such

15 State to conduct investigations or to administer oaths

16 or affirmations or to compel the attendance of wit17 nesses or the production of documentary and other

18 evidence.

19 ‘‘(4) LIMITATION.—Whenever the Federal Trade

20 Commission or the appropriate Federal regulator has

21 instituted a civil action for violation of this title, no

22 State may, during the pendency of such action, bring

23 an action under this section against any defendant

24 named in the complaint of the Commission or the ap-
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1 propriate Federal regulator for any violation of this

2 title that is alleged in that complaint.’’.

3 SEC. 118. FEDERAL RESERVE BOARD AUTHORITY.

4 Section 621 of the Fair Credit Reporting Act (15

5 U.S.C. 1681s), is further amended by adding after sub6 section (d) (as redesignated by section 117) the following

7 new subsection:

8 ‘‘(e) INTERPRETIVE AUTHORITY.—The Federal Reserve

9 Board may issue interpretations of any provision of this

10 title as it may apply to any persons identified under sub11 section (b) (1), (2), and (3), or to the holding companies

12 and affiliates of such persons, in consultation with Federal

13 agencies identified in subsection (b) (1), (2), and (3).’’.

14 SEC. 119. ESTABLISHMENT OF TOLL-FREE TELEPHONE

15 NUMBER.

16 Section 607 of the Fair Credit Reporting Act (15

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

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

19 subsection:

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

21 NUMBER.—Each consumer reporting agency that compiles

22 and maintains files on consumers on a nationwide basis

23 shall establish (and thereafter maintain) a toll-free tele24 phone number for the purpose of making agency personnel
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1 accessible to consumers for communicating with the agen2 cy.’’.

3 SEC. 120. PREEMPTION OF STATE LAW.

4 Section 624 of the Fair Credit Reporting Act, as redes5 ignated by section 113(a) of this Act, is further amended—

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

7 GENERAL.—Except as provided in subsection (b), this

8 title’’; and

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

10 ‘‘(b) EXCEPTIONS.—No requirement or prohibition

11 may be imposed under the laws of any State—

12 ‘‘(1) with respect to any subject matter regulated

13 under—

14 ‘‘(A) section 604(d), relating to the

15 prescreening of consumer reports;

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

17 which a consumer reporting agency must take

18 any action, including the provision of notifica19 tion to a consumer or other person, in any pro20 cedure related to the disputed accuracy of infor21 mation in a consumer’s file;

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

23 a person who takes any adverse action with re24 spect to a consumer on the basis of information

25 contained in a consumer report;
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1 ‘‘(D) section 615(d), relating to the duties of

2 persons who use a consumer report of a

3 consumer in connection with any credit trans4 action which is not initiated by the consumer

5 and which consists of a firm offer of credit; or

6 ‘‘(E) section 605, relating to obsolete infor7 mation;

8 ‘‘(2) with respect to the exchange of information

9 among persons affiliated by common ownership or

10 common corporate control; or

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

12 disclosure required to be made under section 609(c);

13 except that this subsection does not affect the applicability

14 of any State law in effect on the date of the enactment of

15 the Consumer Reporting Reform Act of 1994, or any settle16 ment, agreement, or consent judgment between any State

17 attorney general and any consumer reporting agency in ef18 fect on the date of enactment of the Consumer Reporting

19 Reform Act of 1994.’’.

20 SEC. 121. ACTION BY FTC.

21 (a) MODIFICATION OF REQUIREMENTS BY FTC AU22 THORIZED.—

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

24 Reporting Act (15 U.S.C. 1681s), is further amended
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1 by adding after subsection (e) (as added by section

2 118 of this Act) the following:

3 ‘‘(f) MODIFICATION OF REQUIREMENTS BY FTC AU4 THORIZED.—If it considers such action necessary for the

5 protection of consumers, the Federal Trade Commission

6 may, after consultation with each Federal agency referred

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

8 and law enforcement agencies, promulgate regulations in

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

10 to impose requirements—

11 ‘‘(1) that are more stringent than those imposed

12 under—

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

14 which a consumer reporting agency must take

15 any action, including the provision of notifica16 tion to a consumer or other person, in any pro17 cedure related to the disputed accuracy of infor18 mation in a consumer’s file;

19 ‘‘(B) section 615(a), relating to the duties of

20 a person who takes any adverse action with re21 spect to a consumer on the basis of information

22 contained in a consumer report; or

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

24 persons who use a consumer report on a

25 consumer in connection with any credit trans-
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1 action which is not initiated by the consumer

2 and that consists of a firm offer of credit; and

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

4 disclosure required to be made under section 609(c).’’.

5 (2) CLERICAL AMENDMENTS.—

6 (A) The heading for section 621 of the Fair

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

8 amended to read as follows:

9 ‘‘§ 621. Administrative enforcement and authorities;

10 State actions’’.

11 (B) The table of contents at the beginning

12 of the Fair Credit Reporting Act is amended by

13 striking the item relating to section 621 and in14 serting the following:

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

15 (b) DEADLINE TO PRESCRIBE MATTERS.—The Federal

16 Trade Commission shall prescribe all matters required by

17 this title (including the amendments made by this title) to

18 be prescribed by that Commission, before the end of the 300-

19 day period beginning on the date of the enactment of this

20 Act.

21 SEC. 122. EFFECTIVE DATES OF AMENDMENTS.

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

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

24 after the 455-day period beginning on the date of the enact25 ment of this Act.
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1 (b) EXCEPTIONS.—

2 (1) NOTIFICATION SYSTEM.—Section 604(d)(3) of

3 the Fair Credit Reporting Act, as amended by section

4 104(a), shall be effective after the 365-day period be5 ginning on the date of the enactment of this Act.

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

7 affect the authority of the Federal Trade Commission

8 to prescribe matters under the amendments made by

9 this title.

10 SEC. 123. FURNISHING CONSUMER REPORTS TO FEDERAL

11 BUREAU OF INVESTIGATION FOR COUNTER12 INTELLIGENCE PURPOSES.

13 (a) PERMISSIBLE PURPOSE.—Section 604 of the Fair

14 Credit Reporting Act (15 U.S.C. 1681b) is amended in sub15 section (a) (as designated by section 103(a)(1) of this Act)

16 by adding at the end the following:

17 ‘‘(4) To the Federal Bureau of Investigation in re18 sponse to a court order issued under section 625.’’.

19 (b) REQUIREMENTS FOR FEDERAL BUREAU OF INVES20 TIGATION TO OBTAIN AND USE CONSUMER REPORTS.—

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

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

23 at the end the following new section:
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1 ‘‘§ 625. Requirements for Federal Bureau of Investiga2 tion to obtain and use consumer reports

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

4 Director of the Federal Bureau of Investigation or a des5 ignee of the Director, a court may issue an order ex parte

6 directing a consumer reporting agency to furnish a

7 consumer report to the Federal Bureau of Investigation,

8 upon a showing in camera that—

9 ‘‘(1) the consumer report is necessary for the con10 duct of an authorized foreign counterintelligence in11 vestigation; and

12 ‘‘(2) there are specific and articulable facts giv13 ing reason to believe that the consumer whose

14 consumer report is sought—

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

16 ‘‘(B) is engaging or has engaged in inter17 national terrorism (as that term is defined in

18 section 101(c) of the Foreign Intelligence Surveil19 lance Act of 1978 (50 U.S.C. 1801(c))) or clan20 destine intelligence activities that involve or may

21 involve a violation of criminal statutes of the

22 United States.

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

24 FEDERAL BUREAU OF INVESTIGATION.—
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1 ‘‘(1) LIMITATION ON USE AND FURNISHING OF

2 CONSUMER REPORTS BY FBI.—The Federal Bureau of

3 Investigation—

4 ‘‘(A) shall not use a consumer report pro5 cured under section 604(a)(4) for any purpose

6 other than the investigation for which the

7 consumer report was procured; and

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

9 or any information obtained from the consumer

10 report to any other person, except to an officer

11 or employee of the Department of Justice as nec12 essary for approval or conduct of the investiga13 tion.

14 ‘‘(2) LIMITATION ON FURTHER DISSEMINATION

15 BY DEPARTMENT OF JUSTICE.—An officer or employee

16 of the Department of Justice shall not provide a

17 consumer report or information obtained from a

18 consumer report to any person except for purposes of

19 the investigation for which the consumer report was

20 procured under section 604(a)(4).

21 ‘‘(3) NOTIFICATION REGARDING COMPLETION OF

22 INVESTIGATION.—The Federal Bureau of Investiga23 tion, within 6 months after the completion of an in24 vestigation for which a consumer report is procured

25 under section 604(a)(4), shall notify the consumer re-
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1 porting agency that furnished the report that the in2 vestigation is completed.

3 ‘‘(4) FURNISHING INFORMATION PURSUANT TO

4 SUBPOENA, COURT ORDER, OR ENFORCEMENT PRO5 CEEDING NOT PROHIBITED.—Nothing in paragraph

6 (1) or (2) shall be construed to prohibit the furnishing

7 of information pursuant to a subpoena or court order,

8 or in connection with a court proceeding to enforce

9 this title.

10 ‘‘(c) PROHIBITIONS ON DISCLOSURE.—

11 ‘‘(1) COURT OFFICER OR EMPLOYEE.—An officer

12 or employee of a court shall not disclose to any person

13 that the Federal Bureau of Investigation has sought

14 or obtained a consumer report under section

15 604(a)(4), except to the court or another officer or em16 ployee of the court in connection with the issuance of

17 an order under subsection (a) with respect to the re18 port.

19 ‘‘(2) CONSUMER REPORTING AGENCY OFFICER OR

20 EMPLOYEE.—An officer or employee of a consumer re21 porting agency shall not disclose to any person that

22 the Federal Bureau of Investigation has sought or ob23 tained a consumer report under section 604(a)(4), ex24 cept—
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1 ‘‘(A) for the purpose of furnishing the report

2 to the Federal Bureau of Investigation; or

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

4 of the court in connection with the issuance of an

5 order under subsection (a) with respect to the re6 port.

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

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

9 under title 18, United States Code, or imprisoned not

10 more than 2 years, or both.

11 ‘‘(d) DISCLOSURE TO CONSUMER.—

12 ‘‘(1) NOTICE OF COMPLETION OF INVESTIGATION

13 REQUIRED.—Notwithstanding section 609(a)(3) and

14 subject to paragraph (2), a consumer reporting agen15 cy shall not disclose under that section the identity of

16 the Federal Bureau of Investigation or that the agen17 cy has furnished a consumer report to the Federal

18 Bureau of Investigation, unless the consumer report19 ing agency has received from the Federal Bureau of

20 Investigation a notice under subsection (b)(3) of the

21 completion of the investigation with respect to which

22 the report was furnished.

23 ‘‘(2) DISCLOSURES REQUIRED.—A consumer re24 porting agency shall include with a disclosure to a

25 consumer under section 609(a) information in its files
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1 on the consumer regarding the furnishing of a

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

3 the Federal Bureau of Investigation with respect to

4 an investigation for which the consumer reporting

5 agency received from the Federal Bureau of Investiga6 tion a notice of completion of the investigation in the

7 year preceding the request from the consumer for the

8 disclosure.

9 ‘‘(e) CIVIL LIABILITY FOR VIOLATIONS.—For each vio10 lation of subsection (b) (1) or (2) with respect to a consumer

11 report on a consumer, the Federal Bureau of Investigation

12 or the Department of Justice, respectively, is liable to the

13 consumer for an amount equal to the sum of—

14 ‘‘(1) the greater of—

15 ‘‘(A) actual damages sustained by the

16 consumer as a result of the violation and such

17 amount of punitive damages as the court may

18 allow; or

19 ‘‘(B) $500; plus

20 ‘‘(2) in a successful action to enforce any liabil21 ity under this section, the costs of the action and rea22 sonable attorneys’ fees as determined by the court.

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

24 action to enjoin a violation of this section.
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1 ‘‘(g) EXCLUSIVE REMEDIES.—No action for relief for

2 a violation of subsection (b) (1) or (2) may be brought ex3 cept under subsection (e) or (f).

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

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

6 Select Committee on Intelligence and the Committee on

7 Banking, Finance and Urban Affairs of the House of Rep8 resentatives and the Select Committee on Intelligence and

9 the Committee on Banking, Housing, and Urban Affairs

10 of the Senate concerning all requests made by the Director

11 of the Federal Bureau of Investigation or a designee of the

12 Director for a court to issue an order under this section

13 directing a consumer reporting agency to furnish a

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

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions at the beginning of the Fair Credit Reporting

17 Act (15 U.S.C. 1681a et seq.), as amended by section

18 113(b) of this Act, is further amended by adding at

19 the end the following:

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

consumer reports.’’.

20 (c) REPEAL OF PROVISIONS.—

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

22 Fair Credit Reporting Act, as amended by this sec23 tion, are repealed:

24 (A) Section 604(a)(4).
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1 (B) Section 625.

2 (C) In the table of contents at the beginning

3 of the Fair Credit Reporting Act, the item relat4 ing to section 625.

5 (2) EFFECTIVE DATE.—Paragraph (1) shall take

6 effect on the date that is 5 years after the date of the

7 enactment of this Act.

8 TITLE II—CREDIT REPAIR

9 ORGANIZATIONS

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

12 Title IV of the Consumer Credit Protection Act is

13 amended to read as follows:

14 ‘‘TITLE IV—CREDIT REPAIR

15 ORGANIZATIONS

‘‘Sec.

‘‘401. Short title.

‘‘402. Findings and purposes.

‘‘403. Definitions.

‘‘404. Prohibited practices.

‘‘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.

16 ‘‘SEC. 401. SHORT TITLE.

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

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

3 findings:

4 ‘‘(1) Consumers have a vital interest in establish5 ing and maintaining their creditworthiness and cred6 it standing in order to obtain and use credit. As a

7 result, consumers who have experienced credit prob8 lems may seek assistance from credit repair organiza9 tions which offer to improve the credit standing of

10 such consumers.

11 ‘‘(2) Certain advertising and business practices

12 of some companies engaged in the business of credit

13 repair services have worked a financial hardship

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

16 matters.

17 ‘‘(b) PURPOSES.—The purposes of this title are as fol18 lows:

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

20 services of credit repair organizations are provided

21 with the information necessary to make an informed

22 decision regarding the purchase of such services.

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

2 ‘‘For purposes of this title—

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

4 an individual.

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

6 term ‘consumer credit transaction’ means any trans7 action in which credit is offered or extended to an in8 dividual for personal, family, or household purposes.

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

10 ‘credit repair organization’—

11 ‘‘(A) means any person who uses any in12 strumentality of interstate commerce or the

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

14 that such person can or will sell, provide, or per15 form) any service, in return for the payment of

16 money or other valuable consideration, for the

17 express or implied purpose of—

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

19 record, credit history, or credit rating; or

20 ‘‘(ii) providing advice or assistance to

21 any consumer with regard to any activity

22 or service described in clause (i); and

23 ‘‘(B) does not include—

24 ‘‘(i) any nonprofit organization which

25 is exempt from taxation under section
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1 501(c)(3) of the Internal Revenue Code of

2 1986; or

3 ‘‘(ii) any attorney-at-law who is a

4 member of the bar of the highest court of

5 any State or otherwise licensed under the

6 laws of any State, with respect to services

7 rendered which are within the scope of regu8 lations applicable to members of such bar or

9 such licensees.

10 ‘‘(4) CREDIT.—The term ‘credit’ has the mean11 ing given to such term in section 103(e) of this Act.

12 ‘‘SEC. 404. PROHIBITED PRACTICES.

13 ‘‘(a) IN GENERAL.—No person may—

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

15 any consumer to make any statement, which is un16 true or misleading (or which, upon the exercise of rea17 sonable care, should be known by the credit repair or18 ganization, officer, employee, agent, or other person to

19 be untrue or misleading) with respect to any consum20 er’s creditworthiness, credit standing, or credit capac21 ity to—

22 ‘‘(A) any consumer reporting agency (as de23 fined in section 603(f) of this Act); or

24 ‘‘(B) any person—
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1 ‘‘(i) who has extended credit to the

2 consumer; or

3 ‘‘(ii) to whom the consumer has ap4 plied or is applying for an extension of

5 credit;

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

7 any consumer to make any statement, the intended ef8 fect of which is to alter the consumer’s identification

9 to prevent the display of the consumer’s credit record,

10 history, or rating for the purpose of concealing ad11 verse information that is accurate and not obsolete

12 to—

13 ‘‘(A) any consumer reporting agency;

14 ‘‘(B) any person—

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

16 consumer; or

17 ‘‘(ii) to whom the consumer has ap18 plied or is applying for an extension of

19 credit;

20 ‘‘(3) make or use any untrue or misleading rep21 resentation of the services of the credit repair organi22 zation; or

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

24 practice, or course of business that constitutes or re25 sults in the commission of, or an attempt to commit,
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1 a fraud or deception on any person in connection

2 with the offer or sale of the services of the credit re3 pair organization.

4 ‘‘(b) PAYMENT IN ADVANCE.—No credit repair organi5 zation may charge or receive any money or other valuable

6 consideration for the performance of any service which the

7 credit repair organization has agreed to perform for any

8 consumer before such service is fully performed.

9 ‘‘SEC. 405. DISCLOSURES.

10 ‘‘(a) DISCLOSURE REQUIRED.—Any credit repair or11 ganization shall provide any consumer with the following

12 written statement before any contract or agreement between

13 the consumer and the credit repair organization is executed:

14 ‘‘ ‘Consumer Credit File Rights

15 Under State and Federal Law

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

17 in your credit report by contacting the credit bureau di18 rectly. However, neither you nor any ‘‘credit repair’’ com19 pany or credit repair organization has the right to have

20 accurate, current, and verifiable information removed from

21 your credit report. The credit bureau must remove accurate,

22 negative information from your report only if it is over 7

23 years old. Bankruptcy information can be reported for 10

24 years.
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1 ‘‘ ‘You have a right to obtain a copy of your credit

2 report from a credit bureau. You may be charged a reason3 able fee. There is no fee, however, if you have been turned

4 down for credit, employment, insurance, or a rental dwell5 ing because of information in your credit report within the

6 preceding 60 days. The credit bureau must provide someone

7 to help you interpret the information in your credit file.

8 A copy of your credit report is available to you at no charge

9 once a year upon request.

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

11 that violates the Credit Repair Organization Act. This law

12 prohibits deceptive practices by credit repair organizations.

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

14 credit repair organization for any reason within 3 business

15 days from the date you signed it.

16 ‘‘ ‘Credit bureaus are required to follow reasonable pro17 cedures to ensure that the information they report is accu18 rate. However, mistakes may occur.

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

20 writing that you dispute the accuracy of information in

21 your credit file. The credit bureau must then reinvestigate

22 and modify or remove inaccurate or incomplete informa23 tion. The credit bureau may not charge any fee for this

24 service. Any pertinent information and copies of all docu-
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1 ments you have concerning an error should be given to the

2 credit bureau.

3 ‘‘ ‘If the credit bureau’s reinvestigation does not resolve

4 the dispute to your satisfaction, you may send a brief state5 ment to the credit bureau, to be kept in your file, explaining

6 why you think the record is inaccurate. The credit bureau

7 must include a summary of your statement about disputed

8 information with any report it issues about you.

9 ‘‘ ‘The Federal Trade Commission regulates credit bu10 reaus and credit repair organizations. For more informa11 tion contact:

12 The Public Reference Branch

13 Federal Trade Commission

14 Washington, D.C. 20580’.

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

16 written statement required under this section shall be pro17 vided as a document which is separate from any written

18 contract or other agreement between the credit repair orga19 nization and the consumer or any other written material

20 provided to the consumer.

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

22 ‘‘(1) IN GENERAL.—The credit repair organiza23 tion shall maintain a copy of the statement signed by

24 the consumer acknowledging receipt of the statement.
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1 ‘‘(2) MAINTENANCE FOR 2 YEARS.—The copy of

2 any consumer’s statement shall be maintained in the

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

4 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 the

10 purchase of such services) which meets the require11 ments 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 con16 tract referred to in subsection (a) meets the requirements

17 of this subsection unless such contract includes the following

18 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 organization

25 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 performance

4 of the services (to be performed by the credit

5 repair organization or any other person)

6 will be complete; or

7 ‘‘(ii) the length of the period necessary

8 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 before

24 midnight of the 3rd business day which begins after the date

25 on which the contract or agreement between the consumer
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1 and the credit repair organization is executed or would, but

2 for this subsection, become enforceable against the parties.

3 ‘‘(b) CANCELLATION FORM AND OTHER INFORMA4 TION.—Each contract shall be accompanied by a form, in

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

6 and contains in bold face type the following statement:

7 ‘‘ ‘You may cancel this contract, without any

8 penalty or obligation, at any time before midnight of

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

10 is signed by you.

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

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

13 other written notice to [ name of credit repair

14 organization ] at [ address of credit repair

15 organization ] before midnight on [ date ]

16 ‘‘ ‘I hereby cancel this transaction,

17 [ date ]

18 [ purchaser’s signature ].’.

19 ‘‘(c) CONSUMER COPY OF CONTRACT REQUIRED.—Any

20 consumer who enters into any contract with any credit re21 pair organization shall be given, by the organization—

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

23 disclosure statement required under section 405; and

24 ‘‘(2) a copy of any other document the credit re25 pair organization requires the consumer to sign,
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1 at the time the contract or the other document is signed.

2 ‘‘SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

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

4 any consumer of any protection provided by or any right

5 of the consumer under this title—

6 ‘‘(1) shall be treated as void; and

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

8 State court or any other person.

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

10 any person to obtain a waiver from any consumer of any

11 protection provided by or any right of the consumer under

12 this title shall be treated as a violation of this title.

13 ‘‘(c) CONTRACTS NOT IN COMPLIANCE.—Any contract

14 for services which does not comply with the applicable pro15 visions of this title—

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

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

18 State court or any other person.

19 ‘‘SEC. 409. CIVIL LIABILITY.

20 ‘‘(a) LIABILITY ESTABLISHED.—Any person who fails

21 to comply with any provision of this title with respect to

22 any other person shall be liable to such person in an

23 amount equal to the sum of the amounts determined under

24 each of the following paragraphs:

25 ‘‘(1) ACTUAL DAMAGES.—The greater of—
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1 ‘‘(A) the amount of any actual damage sus2 tained by such person as a result of such failure;

3 or

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

5 credit repair organization.

6 ‘‘(2) PUNITIVE DAMAGES.—

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

8 any action by an individual, such additional

9 amount as the court may allow.

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

11 class action, the sum of—

12 ‘‘(i) the aggregate of the amount which

13 the court may allow for each named plain14 tiff; and

15 ‘‘(ii) the aggregate of the amount which

16 the court may allow for each other class

17 member, without regard to any minimum

18 individual recovery.

19 ‘‘(3) ATTORNEYS’ FEES.—In the case of any suc20 cessful action to enforce any liability under para21 graph (1) or (2), the costs of the action, together with

22 reasonable attorneys’ fees.

23 ‘‘(b) FACTORS TO BE CONSIDERED IN AWARDING PU24 NITIVE DAMAGES.—In determining the amount of any li25 ability of any credit repair organization under subsection
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1 (a)(2), the court shall consider, among other relevant fac2 tors—

3 ‘‘(1) the frequency and persistence of noncompli4 ance by the credit repair organization;

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

6 ‘‘(3) the extent to which such noncompliance was

7 intentional; and

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

9 of consumers adversely affected.

10 ‘‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.

11 ‘‘(a) IN GENERAL.—Compliance with the requirements

12 imposed under this title with respect to credit repair orga13 nizations shall be enforced under the Federal Trade Com14 mission Act by the Federal Trade Commission.

15 ‘‘(b) VIOLATIONS OF THIS TITLE TREATED AS VIOLA16 TIONS OF FEDERAL TRADE COMMISSION ACT.—

17 ‘‘(1) IN GENERAL.—For the purpose of the exer18 cise by the Federal Trade Commission of the Commis19 sion’s functions and powers under the Federal Trade

20 Commission Act, any violation of any requirement or

21 prohibition imposed under this title with respect to

22 credit repair organizations shall constitute an unfair

23 or deceptive act or practice in commerce in violation

24 of section 5(a) of the Federal Trade Commission Act.
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1 ‘‘(2) ENFORCEMENT AUTHORITY UNDER OTHER

2 LAW.—All functions and powers of the Federal Trade

3 Commission under the Federal Trade Commission Act

4 shall be available to the Commission to enforce com5 pliance with this title by any person subject to en6 forcement by the Federal Trade Commission pursuant

7 to this subsection, including the power to enforce the

8 provisions of this title in the same manner as if the

9 violation had been a violation of any Federal Trade

10 Commission trade regulation rule, without regard to

11 whether the credit repair organization—

12 ‘‘(A) is engaged in commerce; or

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

14 the Federal Trade Commission Act.

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

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

17 such other remedies as are provided under State law,

18 whenever the chief law enforcement officer of a State,

19 or an official or agency designated by a State, has

20 reason to believe that any person has violated or is

21 violating this title, the State—

22 ‘‘(A) may bring an action to enjoin such

23 violation;

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

25 residents to recover damages for which the person
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1 is liable to such residents under section 409 as

2 a result of the violation; and

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

4 under subparagraph (A) or (B), shall be award5 ed the costs of the action and reasonable attorney

6 fees as determined by the court.

7 ‘‘(2) RIGHTS OF COMMISSION.—

8 ‘‘(A) NOTICE TO COMMISSION.—The State

9 shall serve prior written notice of any civil ac10 tion under paragraph (1) upon the Federal

11 Trade Commission and provide the Commission

12 with a copy of its complaint, except in any case

13 where such prior notice is not feasible, in which

14 case the State shall serve such notice imme15 diately upon instituting such action.

16 ‘‘(B) INTERVENTION.—The Commission

17 shall have the right—

18 ‘‘(i) to intervene in any action referred

19 to in subparagraph (A);

20 ‘‘(ii) upon so intervening, to be heard

21 on all matters arising in the action; and

22 ‘‘(iii) to file petitions for appeal.

23 ‘‘(3) INVESTIGATORY POWERS.—For purposes of

24 bringing any action under this subsection, nothing in

25 this subsection shall prevent the chief law enforcement
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1 officer, or an official or agency designated by a State,

2 from exercising the powers conferred on the chief law

3 enforcement officer or such official by the laws of such

4 State to conduct investigations or to administer oaths

5 or affirmations or to compel the attendance of wit6 nesses or the production of documentary and other

7 evidence.

8 ‘‘(4) LIMITATION.—Whenever the Federal Trade

9 Commission has instituted a civil action for violation

10 of this title, no State may, during the pendency of

11 such action, bring an action under this section

12 against any defendant named in the complaint of the

13 Commission for any violation of this title that is al14 leged in that complaint.

15 ‘‘SEC. 411. STATUTE OF LIMITATIONS.

16 ‘‘Any action to enforce any liability under this title

17 may be brought before the later of—

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

19 the date of the occurrence of the violation involved; or

20 ‘‘(2) in any case in which any credit repair or21 ganization has materially and willfully misrepre22 sented any information which—

23 ‘‘(A) the credit repair organization is re24 quired, by any provision of this title, to disclose

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

2 credit repair organization’s liability to the

3 consumer under this title,

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

5 the discovery by the consumer of the misrepresenta6 tion.

7 ‘‘SEC. 412. RELATION TO STATE LAW.

8 ‘‘This title shall not annul, alter, affect, or exempt any

9 person subject to the provisions of this title from complying

10 with any law of any State except to the extent that such

11 law is inconsistent with any provision of this title, and then

12 only to the extent of the inconsistency.

13 ‘‘SEC. 413. EFFECTIVE DATE.

14 ‘‘This title shall apply after the end of the 6-month

15 period beginning on the date of the enactment of the Credit

16 Repair Organizations Act, except with respect to contracts

17 entered into by a credit repair organization before the end

18 of such period.’’.

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