II

106TH CONGRESS

2D SESSION S. 3063

To amend the Fair Credit Reporting Act to provide for disclosure of creditscoring information by creditors and consumer reporting agencies.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 18, 2000

Mr. SCHUMER introduced the following bill; which was read twice and referred

to the Committee on Banking, Housing, and Urban Affairs

A BILL

To amend the Fair Credit Reporting Act to provide for

disclosure of credit-scoring information by creditors and

consumer reporting agencies.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Consumer Credit Score

5 Disclosure Act of 2000’’.

6 SEC. 2. DEFINITIONS.

7 Section 603 of the Fair Credit Reporting Act (15

8 U.S.C. 1681a) is amended by adding at the end the fol9 lowing:
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1 ‘‘(q) DEFINITIONS RELATING TO CREDIT SCORES.—

2 In this title—

3 ‘‘(1) when used in connection with an applica4 tion for an extension of credit for a consumer pur5 pose that is to be secured by a dwelling—

6 ‘‘(A) the term ‘credit score’—

7 ‘‘(i) means a numerical value or cat8 egorization derived from a statistical tool

9 or modeling system used to predict the

10 likelihood of certain credit behaviors, in11 cluding default; and

12 ‘‘(ii) does not include—

13 ‘‘(I) any mortgage score or rating

14 of an automated underwriting system

15 that considers 1 or more factors in

16 addition to credit information, includ17 ing the loan-to-value ratio, the

18 amount of down payment, or the fi19 nancial assets of a consumer; or

20 ‘‘(II) other elements of the un21 derwriting process or underwriting de22 cision; and

23 ‘‘(B) the term ‘key factors’ means all rel24 evant elements or reasons affecting the credit

25 score for a consumer, listed in the order of their
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1 importance, based on their respective effects on

2 the credit score; and

3 ‘‘(2) the terms ‘creditor’ and ‘dwelling’ have the

4 same meanings as in section 103 of the Truth in

5 Lending Act.’’.

6 SEC. 3. DUTIES OF CONSUMER REPORTING AGENCIES TO

7 DISCLOSE CREDIT SCORES.

8 (a) IN GENERAL.—Section 609(a) of the Fair Credit

9 Reporting Act (15 U.S.C. 1681g(a)) is amended by adding

10 at the end the following:

11 ‘‘(6) In connection with an application for an

12 extension of credit for a consumer purpose that is to

13 be secured by a dwelling—

14 ‘‘(A) the current, or most recent, credit

15 score of the consumer that was previously cal16 culated by the agency;

17 ‘‘(B) the range of possible credit scores

18 under the model used;

19 ‘‘(C) the key factors, if any, not to exceed

20 4, that adversely affected the credit score of the

21 consumer in the model used;

22 ‘‘(D) the date on which the credit score

23 was created; and

24 ‘‘(E) the name of the person or entity that

25 provided the credit score or the credit file on
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1 the basis of which the credit score was cre2 ated.’’.

3 (b) LIMITATIONS ON REQUIRED PROVISION OF

4 CREDIT SCORE.—Section 609 of the Fair Credit Report5 ing Act (15 U.S.C. 1681g) is amended by adding at the

6 end the following:

7 ‘‘(d) LIMITATIONS ON REQUIRED PROVISION OF

8 CREDIT SCORE.—

9 ‘‘(1) IN GENERAL.—Subsection (a)(6) may not

10 be construed—

11 ‘‘(A) to compel a consumer reporting agen12 cy to develop or disclose a credit score if the

13 agency does not, in the ordinary course of its

14 business—

15 ‘‘(i) distribute scores that are used in

16 connection with extensions of credit se17 cured by residential real property; or

18 ‘‘(ii) develop credit scores that assist

19 creditors in understanding the general

20 credit behavior of the consumer and pre21 dicting future credit behavior;

22 ‘‘(B) to require a consumer reporting

23 agency that distributes credit scores developed

24 by another person or entity to provide a further

25 explanation of those scores, or to process a dis-
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1 pute arising pursuant to section 611(a), except

2 that the consumer reporting agency shall be re3 quired to provide to the consumer the name and

4 information for contacting the person or entity

5 that developed the score;

6 ‘‘(C) to require a consumer reporting agen7 cy to maintain credit scores in its files; or

8 ‘‘(D) to compel disclosure of a credit score,

9 except upon specific request of the consumer,

10 except that if a consumer requests the credit

11 file and not the credit score, then the consumer

12 shall be provided with the credit file and a

13 statement that the consumer may request and

14 obtain a credit score.

15 ‘‘(2) PROVISION OF SCORING MODEL.—In com16 plying with subsection (a)(6) and this subsection, a

17 consumer reporting agency shall supply to the

18 consumer—

19 ‘‘(A) a credit score that is derived from a

20 credit scoring model that is widely distributed

21 to users of credit scores by that consumer re22 porting agency in connection with any extension

23 of credit secured by a dwelling; or

24 ‘‘(B) a credit score that assists the con25 sumer in understanding the credit scoring as-
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1 sessment of the credit behavior of the consumer

2 and predictions about future credit behavior.’’.

3 (c) CONFORMING AMENDMENT.—Section 609(a)(1)

4 of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1))

5 is amended by inserting before the period ‘‘, other than

6 as provided in paragraph (6)’’.

7 SEC. 4. DUTIES OF USERS OF CREDIT SCORES.

8 (a) IN GENERAL.—Section 615 of the Fair Credit

9 Reporting Act (15 U.S.C. 1681m) is amended by adding

10 at the end the following:

11 ‘‘(e) DUTIES OF USERS OF CREDIT SCORES.—

12 ‘‘(1) DISCLOSURES.—Any person that makes or

13 arranges extensions of credit for consumer purposes

14 that are to be secured by a dwelling and that uses

15 credit scores for that purpose, shall be required to

16 provide to the consumer to whom the credit score re17 lates, as soon as is reasonably practicable after such

18 use—

19 ‘‘(A) a copy of the information described in

20 section 609(a)(6) that was obtained from a con21 sumer reporting agency or that was developed

22 and used by that user of the credit score infor23 mation; or

24 ‘‘(B) if the user of the credit score infor25 mation obtained such information from a third
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1 party that developed such information, (other

2 than a consumer reporting agency or the user

3 itself) only—

4 ‘‘(i) a copy of the information de5 scribed in section 609(a)(6) provided to

6 the user by the person or entity that devel7 oped the credit score; and

8 ‘‘(ii) a notice that generally describes

9 credit scores, their use, and the sources

10 and kinds of data used to generate credit

11 scores.

12 ‘‘(2) RULE OF CONSTRUCTION.—This sub13 section may not be construed to require the user of

14 a credit score described in paragraph (1)—

15 ‘‘(A) to explain to the consumer the infor16 mation provided pursuant to section 609(a)(6),

17 unless that information was developed by the

18 user;

19 ‘‘(B) to disclose any information other

20 than a credit score or the key factors required

21 to be disclosed under section 609(a)(6)(C);

22 ‘‘(C) to disclose any credit score or related

23 information obtained by the user after a trans24 action occurs; or
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1 ‘‘(D) to provide more than 1 disclosure

2 under this subsection to any 1 consumer per

3 credit transaction.

4 ‘‘(3) LIMITATION.—Except as otherwise pro5 vided in this subsection, the obligation of a user of

6 a credit score under this subsection shall be limited

7 solely to providing a copy of the information that

8 was received from the consumer reporting agency or

9 other person. A user of a credit score has no liability

10 under this subsection for the content of credit score

11 information received from a consumer reporting

12 agency or for the omission of any information within

13 the report provided by the consumer reporting agen14 cy.’’.

15 (b) CONFORMING AMENDMENT.—Section 615 of the

16 Fair Credit Reporting Act (15 U.S.C. 1681m) is amended

17 in the section heading, by adding at the end ‘‘and credit

18 scores’’.

19 SEC. 5. CONTRACTUAL LIABILITY.

20 Section 616 of the Fair Credit Reporting Act (15

21 U.S.C. 1681n) is amended by adding at the end the fol22 lowing:

23 ‘‘(d) USE OF CREDIT SCORES.—Any provision of any

24 contract that prohibits the disclosure of a credit score by

25 a consumer reporting agency or a person who makes or
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1 arranges extensions of credit to the consumer to whom

2 the credit score relates is void. A user of a credit score

3 shall not have liability under any such contractual provi4 sion for disclosure of a credit score.’’.

5 SEC. 6. RELATION TO STATE LAWS.

6 Section 624(b)(1) of the Fair Credit Reporting Act

7 (15 U.S.C. 1681t(b)(1)) is amended—

8 (1) in subparagraph (E), by striking ‘‘or’’ at

9 the end; and

10 (2) by adding at the end the following new sub11 paragraphs:

12 ‘‘(G) section 609(a)(6), relating to the dis13 closure of credit scores by consumer reporting

14 agencies; or

15 ‘‘(H) section 615(e), relating to the duties

16 of users of credit scores to disclose credit score

17 information to consumers;’’.

18 SEC. 7. EFFECTIVE DATE.

19 This Act and the amendments made by this Act shall

20 become effective 180 days after the date of enactment of

21 this Act.

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