II

104TH CONGRESS

1ST SESSION S. 709

To amend the Fair Credit Reporting Act, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 6 (legislative day, APRIL 5), 1995

Mr. BOND (for himself and Mr. BRYAN) 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, 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 SECTION 1. TABLE OF CONTENTS.

4 The table of contents for this Act is as follows:

Sec. 1. Table of contents.

TITLE I—AMENDMENTS TO FAIR CREDIT REPORTING ACT

Sec. 101. Short title.

Sec. 102. Definitions.

Sec. 103. Furnishing consumer reports; use for employment purposes.

Sec. 104. Use of consumer reports for prescreening and direct marketing; prohibition on unauthorized or uncertified use of information.

Sec. 105. Consumer consent required to furnish consumer report containing

medical information; furnishing consumer reports for commercial transactions.

Sec. 106. Obsolete information and information contained in consumer reports.

Sec. 107. Compliance procedures.
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Sec. 108. Consumer disclosures.

Sec. 109. Procedures in case of the disputed accuracy of any information in a

consumer’s file.

Sec. 110. Charges for certain disclosures.

Sec. 111. Duties of users of consumer reports.

Sec. 112. Civil liability.

Sec. 113. Responsibilities of persons who furnish information to consumer reporting agencies.

Sec. 114. Investigative consumer reports.

Sec. 115. Increased criminal penalties for obtaining information under false

pretenses.

Sec. 116. Administrative enforcement.

Sec. 117. State enforcement of Fair Credit Reporting Act.

Sec. 118. Federal Reserve Board authority.

Sec. 119. Preemption of State law.

Sec. 120. Action by FTC and Federal Reserve Board.

Sec. 121. Amendment to Fair Debt Collection Practices Act.

Sec. 122. Furnishing consumer reports for certain purposes relating to child

support.

Sec. 123. Disclosure of information and consumer reports to FBI for counterintelligence purposes.

Sec. 124. Effective dates.

Sec. 125. Relationship to other law.

Sec. 126. Technical correction to Depository Institutions Management Interlocks Act.

TITLE II—CREDIT REPAIR ORGANIZATIONS

Sec. 201. Regulation of credit repair organizations.

TITLE III—TRUTH IN LENDING ACT

Sec. 301. Treatment of delivery fees and intangibles taxes.

Sec. 302. Limitations on liability.

1 TITLE I—AMENDMENTS TO FAIR

2 CREDIT REPORTING ACT

3 SEC. 101. SHORT TITLE.

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

5 Reform Act of 1995’’.

6 SEC. 102. DEFINITIONS.

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

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

9 adding at the end the following:

10 ‘‘(k) ADVERSE ACTION.—
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1 ‘‘(1) ACTIONS INCLUDED.—The term ‘adverse

2 action’ means the following:

3 ‘‘(A) A denial or revocation of credit, a de4 nial of an application for an increase of an ex5 isting credit limit, an unfavorable change in the

6 terms of an existing credit arrangement, or a

7 refusal to grant credit in substantially the

8 amount or on substantially the terms requested,

9 except that the term ‘adverse action’ does not

10 include—

11 ‘‘(i) a refusal to extend additional

12 credit under an existing credit arrange13 ment if the applicant is delinquent or oth14 erwise in default as to that account; or

15 ‘‘(ii) a refusal or failure to authorize

16 an account transaction at a point of sale

17 that would exceed a previously established

18 credit limit.

19 ‘‘(B) A denial or cancellation of, an in20 crease in any charge for, or a reduction or

21 other adverse or unfavorable change in the

22 terms of coverage or amount of, any insurance,

23 existing or applied for, in connection with the

24 underwriting of insurance.
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1 ‘‘(C) A denial of employment or any other

2 decision for employment purposes that ad3 versely affects any current or prospective em4 ployee.

5 ‘‘(D) A denial or cancellation of, an in6 crease in any charge for, or any other adverse

7 or unfavorable change in the terms of, any

8 license or benefit described in section

9 604(a)(3)(D).

10 ‘‘(E) An action taken or determination

11 made—

12 ‘‘(i) in connection with an application

13 that was made by, or a transaction that

14 was initiated by, any consumer, or in con15 nection with a review of account informa16 tion under section 604(a)(3)(E)(ii); and

17 ‘‘(ii) that is adverse to the interest of

18 the consumer.

19 ‘‘(2) APPLICABLE FINDINGS, DECISIONS, COM20 MENTARY, AND ORDERS.—For purposes of any de21 termination of whether an action is an adverse ac22 tion under paragraph (1)(A), all appropriate final

23 findings, decisions, commentary, and orders issued

24 under section 701(d)(6) of the Equal Credit Oppor-
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1 tunity Act by the Board of Governors of the Federal

2 Reserve System or any court shall apply.’’.

3 (b) FIRM OFFER OF CREDIT OR INSURANCE.—Sec4 tion 603 of the Fair Credit Reporting Act (15 U.S.C.

5 1681a) is amended by adding after subsection (k) (as

6 added by subsection (a)) the following:

7 ‘‘(l) FIRM OFFER OF CREDIT OR INSURANCE.—The

8 term ‘firm offer of credit or insurance’ means any offer

9 of credit or insurance to a consumer that will be honored

10 if the consumer is determined, based on information in

11 a consumer report on the consumer, to meet the specific

12 criteria used to select the consumer for the offer, except

13 that the offer may be further conditioned on any combina14 tion of the following:

15 ‘‘(1) The consumer being determined, based on

16 information in the consumer’s application for the

17 credit or insurance, to meet specific criteria bearing

18 on creditworthiness that are established—

19 ‘‘(A) before selection of the consumer for

20 the offer; and

21 ‘‘(B) for the purpose of determining

22 whether to extend credit or insurance pursuant

23 to the offer.

24 ‘‘(2) Verification—
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1 ‘‘(A) that the consumer continues to meet

2 the specific criteria used to select the consumer

3 for the offer, by using information in a

4 consumer report on the consumer, information

5 in the consumer’s application for the credit or

6 insurance, or other information bearing on the

7 creditworthiness of the consumer; or

8 ‘‘(B) of the information in the consumer’s

9 application for the credit or insurance, to deter10 mine that the consumer meets the specific cri11 teria bearing on creditworthiness.

12 ‘‘(3) The consumer furnishing any collateral

13 that is a requirement for the extension of the credit

14 or insurance that was—

15 ‘‘(A) established before selection of the

16 consumer for the offer of credit or insurance;

17 and

18 ‘‘(B) disclosed to the consumer in the offer

19 of credit or insurance.’’.

20 (c) CREDIT OR INSURANCE TRANSACTION THAT IS

21 NOT INITIATED BY THE CONSUMER.—Section 603 of the

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

23 by adding after subsection (l) (as added by subsection (b))

24 the following:
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1 ‘‘(m) CREDIT OR INSURANCE TRANSACTION THAT IS

2 NOT INITIATED BY THE CONSUMER.—The term ‘credit or

3 insurance transaction that is not initiated by the

4 consumer’ does not include the use of a consumer report

5 by a person with which the consumer has an account, for

6 purposes of—

7 ‘‘(1) reviewing the account; or

8 ‘‘(2) collecting the account.’’.

9 (d) STATE.—Section 603 of the Fair Credit Report10 ing Act (15 U.S.C. 1681a) is amended by adding after

11 subsection (m) (as added by subsection (c)) the following:

12 ‘‘(n) STATE.—The term ‘State’ means any State, the

13 Commonwealth of Puerto Rico, the District of Columbia,

14 and any territory or possession of the United States.’’.

15 (e) EXCLUSIONS FROM DEFINITION OF CONSUMER

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

17 Act (15 U.S.C. 1681a(d)) is amended in the second sen18 tence, in subparagraph (A)—

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

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

21 the following: ‘‘, (ii) any communication of that in22 formation among persons related by common owner23 ship or affiliated by corporate control, or (iii) any

24 communication of information from an application

25 by a consumer among persons related by common
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1 ownership or affiliated by corporate control if it is

2 clearly and conspicuously disclosed that the informa3 tion may be communicated among such persons and

4 the consumer is given the opportunity, prior to the

5 time that the information is initially communicated,

6 to direct that such information not be communicated

7 among such persons’’;

8 (3) in subparagraph (B), by striking ‘‘or’’ after

9 the semicolon at the end;

10 (4) in subparagraph (C), by striking the period

11 and inserting a semicolon; and

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

13 any communication of information about a consumer

14 among persons who are affiliated by common owner15 ship or common corporate control if one or more

16 of those persons has complied with section

17 615(d)(4)(B) or section 615(e)(3)(B) with respect to

18 a consumer report from which the information is

19 taken and the consumer has not directed in writing

20 that the report may not be communicated among

21 such persons, in accordance with section

22 615(d)(4)(C) or section 615(e)(3)(B).’’.

23 (f) EXCLUSION OF CERTAIN COMMUNICATIONS BY

24 EMPLOYMENT AGENCIES FROM DEFINITION OF
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1 CONSUMER REPORT.—Section 603 of the Fair Credit Re2 porting Act (15 U.S.C. 1681(a)) is amended—

3 (1) in subsection (d) (as amended by subsection

4 (e)), by adding at the end the following: ‘‘The term

5 also does not include a communication described in

6 subsection (o).’’; and

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

8 ‘‘(o) EXCLUDED COMMUNICATIONS.—A communica9 tion is described in this subsection if it is a communica10 tion—

11 ‘‘(1) that, but for the third sentence of sub12 section (d), would be an investigative consumer re13 port;

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

15 the purpose of—

16 ‘‘(A) procuring an employee for the em17 ployer; or

18 ‘‘(B) procuring an opportunity for a natu19 ral person to work for the employer;

20 ‘‘(3) that is made by a person who regularly

21 performs such procurement;

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

23 purpose other than a purpose described in subpara24 graph (A) or (B) of paragraph (2);

25 ‘‘(5) with respect to which—
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1 ‘‘(A) the consumer who is the subject of

2 the communication—

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

4 the nature and scope of the communica5 tion, before the collection of any informa6 tion for the purpose of making the commu7 nication;

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

9 the making of the communication to a pro10 spective employer, before the making of the

11 communication; and

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

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

14 written confirmation of that consent by the

15 person making the communication, not

16 later than 3 business days after the receipt

17 of the consent by that person;

18 ‘‘(B) the person who makes the commu19 nication does not, for the purpose of making

20 the communication, make any inquiry that if

21 made by a prospective employer of the

22 consumer who is the subject of the communica23 tion would violate any applicable Federal or

24 State equal employment opportunity law or reg25 ulation; and
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1 ‘‘(C) the person who makes the commu2 nication—

3 ‘‘(i) discloses in writing to the

4 consumer who is the subject of the commu5 nication, not later than 5 business days

6 after receiving any request from the

7 consumer for such disclosure, the nature

8 and substance of all information in the

9 consumer’s file at the time of the request,

10 except that the sources of information that

11 is acquired solely for use in making the

12 communication and actually used for no

13 other purpose need not be disclosed other

14 than under appropriate discovery proce15 dures in the court in which an action is

16 brought; and

17 ‘‘(ii) notifies the consumer who is the

18 subject of the communication, in writing,

19 of the consumer’s right to request the in20 formation described in clause (i).’’.

21 (g) CONSUMER REPORTING AGENCY THAT COM22 PILES AND MAINTAINS FILES ON A NATIONWIDE

23 BASIS.—Section 603 of the Fair Credit Reporting Act (15

24 U.S.C. 1681a) is amended by adding after subsection (o)

25 (as added by subsection (f)) the following:
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1 ‘‘(p) CONSUMER REPORTING AGENCY THAT COM2 PILES AND MAINTAINS FILES ON CONSUMERS ON A NA3 TIONWIDE BASIS.—The term ‘consumer reporting agency

4 that compiles and maintains files on consumers on a na5 tionwide basis’ means a consumer reporting agency that

6 regularly engages in the practice of assembling or evaluat7 ing, and maintaining, for the purpose of furnishing

8 consumer reports to third parties bearing on a consumer’s

9 creditworthiness, credit standing, or credit capacity, each

10 of the following regarding consumers residing nationwide:

11 ‘‘(1) Public record information.

12 ‘‘(2) Credit account information from persons

13 who furnish that information regularly and in the

14 ordinary course of business.’’.

15 (h) CONFORMING AMENDMENT.—Section 603(d) of

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

17 amended in the first sentence—

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

19 for’’; and

20 (2) by striking ‘‘(1)’’ before ‘‘credit or insur21 ance’’.
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1 SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EM2 PLOYMENT PURPOSES.

3 (a) FURNISHING CONSUMER REPORTS FOR BUSI4 NESS TRANSACTIONS.—Section 604 of the Fair Credit Re5 porting Act (15 U.S.C. 1681b) is amended—

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

7 ‘‘A consumer reporting agency’’; and

8 (2) in subsection (a)(3) (as so designated by

9 paragraph (1)), by striking subparagraph (E) and

10 inserting the following:

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

12 for the information—

13 ‘‘(i) in connection with a business trans14 action that—

15 ‘‘(I) is initiated by the consumer; or

16 ‘‘(II) is a direct marketing transaction

17 for which the furnishing of information

18 from a consumer’s file by the agency is not

19 prohibited under subsection (d); or

20 ‘‘(ii) to review an account to determine

21 whether the consumer continues to meet the

22 terms of the account.’’.

23 (b) FURNISHING AND USING CONSUMER REPORTS

24 FOR EMPLOYMENT PURPOSES.—Section 604 of the Fair

25 Credit Reporting Act (15 U.S.C. 1681b) is amended by

26 adding at the end the following:
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1 ‘‘(b) CONDITIONS FOR FURNISHING AND USING

2 CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—

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

4 reporting agency may furnish a consumer report for

5 employment purposes only if—

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

7 from the agency certifies to the agency that—

8 ‘‘(i) the person has complied with

9 paragraph (2) with respect to the

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

12 consumer report if paragraph (3) becomes

13 applicable; and

14 ‘‘(ii) information from the consumer

15 report will not be used in violation of any

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

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

21 Federal Trade Commission under section

22 609(c)(3).

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

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

2 purposes with respect to any consumer unless—

3 ‘‘(A) a clear and conspicuous disclosure

4 has been made in writing to the consumer at

5 any time before the report is procured or

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

8 report may be obtained for employment pur9 poses; and

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

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

15 purposes, before taking any adverse action based in

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

17 to the consumer to whom the report relates—

18 ‘‘(A) a copy of the report;

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

21 the Federal Trade Commission under section

22 609(c)(3); and

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

24 exceed 5 business days following receipt of the

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

2 consumer and notice in writing of the oppor3 tunity for the consumer to respond in that pe4 riod, except that such an opportunity to re5 spond and notice are not required if the person

6 takes the adverse action based on a reasonable

7 belief that the consumer has engaged in fraudu8 lent or criminal activity that is related to, or

9 that could affect, the consumer’s employment.’’.

10 SEC. 104. USE OF CONSUMER REPORTS FOR

11 PRESCREENING AND DIRECT MARKETING;

12 PROHIBITION ON UNAUTHORIZED OR

13 UNCERTIFIED USE OF INFORMATION.

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

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

16 103) is amended—

17 (1) in subsection (a), by striking ‘‘A consumer

18 reporting agency’’ and inserting ‘‘Subject to sub19 sections (c) and (d), any consumer reporting agen20 cy’’; and

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

22 section 103(b)) the following:

23 ‘‘(c) FURNISHING REPORTS IN CONNECTION WITH

24 CREDIT OR INSURANCE TRANSACTIONS THAT ARE NOT

25 INITIATED BY THE CONSUMER.—
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1 ‘‘(1) IN GENERAL.—A consumer reporting

2 agency may furnish a consumer report relating to

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

4 connection with any credit or insurance transaction

5 that is not initiated by the consumer only if—

6 ‘‘(A) the consumer authorizes the agency

7 to provide such report to such person; or

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

9 offer of credit or insurance;

10 ‘‘(ii) the consumer reporting agency has

11 complied with subsection (e); and

12 ‘‘(iii) there is not in effect an election by

13 the consumer, made in accordance with sub14 section (e), to have the consumer’s name and

15 address excluded from lists of names provided

16 by the agency pursuant to this paragraph.

17 ‘‘(2) LIMITS ON INFORMATION RECEIVED

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

19 pursuant to paragraph (1)(B) only—

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

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

22 consumer and is used by the person solely for

23 the purpose of verifying the identity of the

24 consumer; and
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1 ‘‘(C) other information pertaining to a

2 consumer that does not identify the relationship

3 or experience of the consumer with a particular

4 creditor or other entity.

5 ‘‘(3) INFORMATION REGARDING INQUIRIES.—

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

7 reporting agency shall not furnish to any person a

8 record of inquiries in connection with a credit or in9 surance transaction that is not initiated by a

10 consumer.

11 ‘‘(d) FURNISHING INFORMATION FROM CONSUMER

12 FILES IN CONNECTION WITH DIRECT MARKETING

13 TRANSACTIONS THAT ARE NOT INITIATED BY THE

14 CONSUMER.—

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

16 agency may furnish information from a file relating

17 to a consumer pursuant to subsection (a)(3)(E) in

18 connection with a direct marketing transaction that

19 is not initiated by the consumer only if—

20 ‘‘(A) the consumer authorizes the agency

21 to provide such information to such person; or

22 ‘‘(B)(i) the consumer reporting agency has

23 complied with subsection (e); and

24 ‘‘(ii) there is not in effect an election by

25 the consumer, made in accordance with sub-
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1 section (e), to have the consumer’s name and

2 address excluded from lists of names provided

3 by the agency pursuant to this paragraph.

4 ‘‘(2) LIMITS ON FURNISHING INFORMATION

5 UNDER PARAGRAPH (1)(B).—A consumer reporting

6 agency may furnish, pursuant to paragraph (1)(B),

7 only the name and address of a consumer and other

8 information that would not disclose the credit pay9 ment history, credit limit, credit balance, or any neg10 ative information pretaining to the consumer.

11 ‘‘(3) INFORMATION REGARDING INQUIRIES.—

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

13 reporting agency shall not furnish to any person a

14 record of inquiries in connection with a direct mar15 keting transaction that is not initiated by a

16 consumer.

17 ‘‘(e) ELECTION OF CONSUMER TO BE EXCLUDED

18 FROM LISTS.—

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

20 have the consumer’s name and address excluded

21 from any list provided by a consumer reporting

22 agency under subsection (c)(1)(B) in connection

23 with a credit or insurance transaction that is not ini24 tiated by the consumer or under subsection

25 (d)(1)(B) in connection with a direct marketing
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1 transaction that is not initiated by the consumer, by

2 notifying the agency in accordance with paragraph

3 (2) that the consumer does not consent to any use

4 of consumer reports relating to the consumer in con5 nection with any credit or insurance transaction that

6 is not initiated by the consumer or any direct mar7 keting transaction that is not initiated by the

8 consumer.

9 ‘‘(2) MANNER OF NOTIFICATION.—A consumer

10 shall notify a consumer reporting agency under

11 paragraph (1)—

12 ‘‘(A) through the notification system main13 tained by the agency under paragraph (5); or

14 ‘‘(B) by submitting to the agency a signed

15 notice of election form issued by the agency for

16 purposes of this subparagraph.

17 ‘‘(3) RESPONSE OF AGENCY AFTER NOTIFICA18 TION THROUGH SYSTEM.—Upon receipt of notifica19 tion of the election of a consumer under paragraph

20 (1) through the notification system maintained by

21 the agency under paragraph (5), a consumer report22 ing agency shall—

23 ‘‘(A) inform the consumer that the election

24 is effective only for a 2-year period if the

25 consumer does not submit to the agency a
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1 signed notice of election form issued by the

2 agency for purposes of paragraph (2)(B); and

3 ‘‘(B) provide to the consumer such a form

4 if requested by the consumer, by not later than

5 5 business days after receiving the notification

6 through the system in the case of a request

7 made at the time the consumer provides notifi8 cation through the system.

9 ‘‘(4) EFFECTIVENESS OF ELECTION.—An elec10 tion of a consumer under paragraph (1)—

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

12 consumer reporting agency beginning on the

13 date on which the consumer notifies the agency

14 in accordance with paragraph (2);

15 ‘‘(B) shall be effective with respect to a

16 consumer reporting agency—

17 ‘‘(i) subject to subparagraph (C), dur18 ing the 2-year period beginning on the date

19 on which the consumer notifies the agency

20 of the election, in the case of an election

21 for which a consumer notifies the agency

22 only in accordance with paragraph (2)(A);

23 or

24 ‘‘(ii) until the consumer notifies the

25 agency under subparagraph (C), in the
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1 case of an election for which a consumer

2 notifies the agency in accordance with

3 paragraph (2)(B);

4 ‘‘(C) shall not be effective after the date on

5 which the consumer notifies the agency,

6 through the notification system established by

7 the agency under paragraph (5), that the elec8 tion is no longer effective; and

9 ‘‘(D) shall be effective with respect to each

10 affiliate of the agency.

11 ‘‘(5) NOTIFICATION SYSTEM.—Each consumer

12 reporting agency that, under subsection (c)(1)(B),

13 furnishes a consumer report in connection with a

14 credit or insurance transaction that is not initiated

15 by a consumer or, under or subsection (d)(1)(B),

16 furnishes a consumer report in connection with a di17 rect marketing transaction that is not initiated by a

18 consumer, shall—

19 ‘‘(A) establish and maintain a notification

20 system, including a toll-free telephone number,

21 which permits any consumer whose consumer

22 report is maintained by the agency to notify the

23 agency, with appropriate identification, of the

24 consumer’s election to have the consumer’s

25 name and address excluded from any such list
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1 of names and addresses provided by the agency

2 for such a transaction; and

3 ‘‘(B) publish by not later than 365 days

4 after the date of enactment of the Consumer

5 Reporting Reform Act of 1995, and not less

6 than annually thereafter, in a publication of

7 general circulation in the area served by the

8 agency—

9 ‘‘(i) a notification that information in

10 consumer files maintained by the agency

11 may be used in connection with such trans12 actions; and

13 ‘‘(ii) the address and toll-free tele14 phone number for consumers to use to no15 tify the agency of the consumer’s election

16 under subparagraph (A).

17 Establishment and maintenance of a notification

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

19 publication by a consumer reporting agency on the

20 agency’s own behalf and on behalf of any of its af21 filiates in accordance with this paragraph is deemed

22 to be compliance with this paragraph by each of

23 those affiliates.

24 ‘‘(6) NOTIFICATION SYSTEM BY AGENCIES

25 THAT OPERATE NATIONWIDE.—Each consumer re-
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1 porting agency that compiles and maintains files on

2 consumers on a nationwide basis shall establish and

3 maintain a notification system for purposes of para4 graph (5) jointly with other such consumer reporting

5 agencies.’’.

6 (b) USE OF INFORMATION OBTAINED FROM RE7 PORTS.—Section 604 of the Fair Credit Reporting Act (15

8 U.S.C. 1681b) is amended by adding at the end (as added

9 by subsection (a)) the following:

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

11 PROHIBITED.—A person shall not use or obtain a

12 consumer report for any purpose unless—

13 ‘‘(1) the consumer report is obtained for a pur14 pose for which the consumer report is authorized to

15 be furnished under subsection (a); and

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

17 section 607 by a prospective user of the report

18 through a general or specific certification.’’.

19 SEC. 105. CONSUMER CONSENT REQUIRED TO FURNISH

20 CONSUMER REPORT CONTAINING MEDICAL

21 INFORMATION; FURNISHING CONSUMER RE22 PORTS FOR COMMERCIAL TRANSACTIONS.

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

24 Reporting Act (15 U.S.C. 1681b) (as amended by sections
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1 103 and 104) is amended by adding at the end the follow2 ing:

3 ‘‘(g) FURNISHING REPORTS CONTAINING MEDICAL

4 INFORMATION.—A consumer reporting agency shall not

5 furnish for employment purposes, or in connection with

6 a credit or insurance transaction or a direct marketing

7 transaction, a consumer report that contains medical in8 formation about a consumer, unless the consumer con9 sents to the furnishing of the report.

10 ‘‘(h) FURNISHING CONSUMER REPORTS FOR COM11 MERCIAL TRANSACTIONS.—A consumer reporting agency

12 may furnish a consumer report to a person if the agency

13 has a reasonable belief that the person intends to use the

14 information in connection with a commercial transaction

15 involving the consumer.’’.

16 (b) CONFORMING AMENDMENT.—Section 603(d) of

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

18 amended in the first sentence by striking ‘‘section 604’’

19 and inserting ‘‘section 604(a)’’.

20 SEC. 106. OBSOLETE INFORMATION AND INFORMATION

21 CONTAINED IN CONSUMER REPORTS.

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

23 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c)

24 is amended—
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1 (1) in subsection (a), by striking ‘‘(a) Except as

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

3 the following:

4 ‘‘(a) INFORMATION EXCLUDED FROM CONSUMER

5 REPORTS.—No’’; and

6 (2) by striking subsection (b).

7 (b) CLARIFICATION OF REPORTING PERIOD.—Sec8 tion 605 of the Fair Credit Reporting Act (15 U.S.C.

9 1681c) (as amended by subsection (a)) is amended by add10 ing at the end the following:

11 ‘‘(b) RUNNING OF REPORTING PERIOD.—

12 ‘‘(1) IN GENERAL.—The 7-year period referred

13 to in paragraphs (4) and (6) of subsection (a) shall

14 begin, with respect to any delinquent account that is

15 placed for collection (internally or by referral to a

16 third party, whichever is earlier), charged to profit

17 and loss, or subjected to any similar action, upon the

18 expiration of the 180-day period beginning on the

19 date of the commencement of the delinquency which

20 immediately preceded the collection activity, charge

21 to profit and loss, or similar action.

22 ‘‘(2) EFFECTIVE DATE.—Paragraph (1) shall

23 apply only to items of information added to a

24 consumer report on or after the date that is 455
27

•S 709 IS

1 days after the date of enactment of the Consumer

2 Reporting Reform Act of 1995.’’.

3 (c) ADDITIONAL INFORMATION ON BANKRUPTCY

4 FILINGS REQUIRED.—Section 605 of the Fair Credit Re5 porting Act (15 U.S.C. 1681c) is amended by adding after

6 subsection (b) (as added by subsection (b)) the following:

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

8 Any consumer reporting agency that furnishes a consumer

9 report that contains information regarding any case in10 volving the consumer that arises under title 11, United

11 States Code, shall include in the report an identification

12 of the chapter of such title 11 under which such case

13 arises if provided by the source of the information. If any

14 case arising or filed under title 11, United States Code,

15 is withdrawn by the consumer prior to a final judgment,

16 the consumer reporting agency shall include in the report

17 that such case or filing was withdrawn upon receipt of

18 documentation certifying such withdrawal.’’.

19 (d) INDICATION OF CLOSURE OF ACCOUNT; INDICA20 TION OF DISPUTE BY CONSUMER.—Section 605 of the

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

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

23 the following:

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

25 CONSUMER.—If a consumer reporting agency is notified
28

•S 709 IS

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

2 consumer was voluntarily closed by the consumer, the

3 agency shall indicate that fact in any consumer report that

4 includes information related to the account.

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

6 consumer reporting agency is notified pursuant to section

7 623(a)(3) that information regarding a consumer who was

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

9 agency shall indicate that fact in each consumer report

10 that includes the disputed information.’’.

11 (e) CONFORMING AMENDMENTS.—

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

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

14 by striking ‘‘Obsolete information’’ and insert15 ing ‘‘Requirements relating to information

16 contained in consumer reports’’.

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

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

19 is amended by striking the item relating to section

20 605 and inserting the following:

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

21 SEC. 107. COMPLIANCE PROCEDURES.

22 (a) DISCLOSURE OF CONSUMER REPORTS BY

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

24 (15 U.S.C. 1681e) is amended by adding at the end the

25 following:
29

•S 709 IS

1 ‘‘(c) DISCLOSURE OF CONSUMER REPORTS BY

2 USERS ALLOWED.—A consumer reporting agency may not

3 prohibit a user of a consumer report furnished by the

4 agency on a consumer from disclosing the contents of the

5 report to the consumer, if adverse action against the

6 consumer has been taken by the user based in whole or

7 in part on the report.’’.

8 (b) NOTICE TO USERS AND PROVIDERS OF INFORMA9 TION TO ENSURE COMPLIANCE.—Section 607 of the Fair

10 Credit Reporting Act (15 U.S.C. 1681e) is amended by

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

12 the following:

13 ‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR14 MATION.—

15 ‘‘(1) NOTICE REQUIREMENT.—A consumer re16 porting agency shall provide to any person—

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

18 course of business furnishes information to the

19 agency with respect to any consumer; or

20 ‘‘(B) to whom a consumer report is pro21 vided by the agency;

22 a notice of such person’s responsibilities under this

23 title.
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•S 709 IS

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

2 Trade Commission shall prescribe the content of no3 tices under paragraph (1).’’.

4 (c) RECORD OF IDENTITY OF USERS AND PURPOSES

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

6 Fair Credit Reporting Act (15 U.S.C. 1681e) is amended

7 by adding after subsection (d) (as added by subsection (b))

8 the following:

9 ‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE10 SALE.—

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

12 a consumer report for purposes of reselling the re13 port (or any information in the report) unless the

14 person discloses to the consumer reporting agency

15 that originally furnishes the report—

16 ‘‘(A) the identity of the end-user of the re17 port (or information); and

18 ‘‘(B) each permissible purpose under sec19 tion 604 for which the report is furnished to

20 the end-user of the report (or information).

21 ‘‘(2) RESPONSIBILITIES OF PROCURERS FOR

22 RESALE.—A person who procures a consumer report

23 for purposes of reselling the report (or any informa24 tion in the report) shall—
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•S 709 IS

1 ‘‘(A) establish and comply with reasonable

2 procedures designed to ensure that the report

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

4 a purpose for which the report may be fur5 nished under section 604, including by requir6 ing that each person to which the report (or in7 formation) is resold and that resells or provides

8 the report (or information) to any other per9 son—

10 ‘‘(i) identifies each end user of the re11 sold report (or information);

12 ‘‘(ii) certifies each purpose for which

13 the report (or information) will be used;

14 and

15 ‘‘(iii) certifies that the report (or in16 formation) will be used for no other pur17 pose; and

18 ‘‘(B) before reselling the report, make rea19 sonable efforts to verify the identifications and

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

21 SEC. 108. CONSUMER DISCLOSURES.

22 (a) ALL INFORMATION IN CONSUMER’S FILE RE23 QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the

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

25 amended to read as follows:
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•S 709 IS

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

2 the time of the request, except that nothing in this

3 paragraph shall be construed to require a consumer

4 reporting agency to disclose to a consumer any in5 formation concerning credit scores or any other risk

6 scores or predictors relating to the consumer.’’.

7 (b) MORE INFORMATION CONCERNING RECIPIENTS

8 OF REPORTS REQUIRED.—Section 609(a)(3) of the Fair

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

10 to read as follows:

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

12 each end-user identified under section 607(e)(1))

13 that procured a consumer report—

14 ‘‘(i) for employment purposes during the 2-

15 year period preceding the date on which the re16 quest is made; or

17 ‘‘(ii) for any other purpose during the 1-

18 year period preceding the date on which the re19 quest is made.

20 ‘‘(B) An identification of a person under sub21 paragraph (A) shall include—

22 ‘‘(i) the name of the person or, if applica23 ble, the trade name (written in full) under

24 which such person conducts business; and
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•S 709 IS

1 ‘‘(ii) upon request of the consumer, the ad2 dress and telephone number of the person.’’.

3 (c) INFORMATION REGARDING INQUIRIES.—Section

4 609(a) of the Fair Credit Reporting Act (15 U.S.C.

5 1681g(a)) is amended by adding at the end the following:

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

7 agency during the 1-year period preceding the re8 quest that identified the consumer in connection

9 with a credit or insurance transaction that was not

10 initiated by the consumer.’’.

11 (d) SUMMARY OF RIGHTS REQUIRED TO BE IN12 CLUDED WITH DISCLOSURE.—

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

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

15 by adding at the end the following:

16 ‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN17 CLUDED WITH DISCLOSURE.—

18 ‘‘(1) SUMMARY OF RIGHTS.—A consumer re19 porting agency shall provide to a consumer, with

20 each written disclosure by the agency to the

21 consumer under this section—

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

23 consumer has under this title; and

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

25 agency that compiles and maintains files on
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•S 709 IS

1 consumers on a nationwide basis, a toll-free

2 telephone number established by the agency at

3 which personnel are accessible to consumers

4 during normal business hours.

5 ‘‘(2) SPECIFIC ITEMS REQUIRED TO BE IN6 CLUDED.—The summary of rights required under

7 paragraph (1) shall include—

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

9 rights of consumers under this title;

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

11 may exercise the rights of the consumer under

12 this title;

13 ‘‘(C) a list of all Federal agencies respon14 sible for enforcing any provision of this title

15 and the address and any appropriate phone

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

17 assist the consumer in selecting the appropriate

18 agency;

19 ‘‘(D) a statement that the consumer may

20 have additional rights under State law and that

21 the consumer may wish to contact a State or

22 local consumer protection agency or a State at23 torney general to learn of those rights; and

24 ‘‘(E) a statement that a consumer report25 ing agency is not required to remove accurate
35

•S 709 IS

1 derogatory information from a consumer’s file,

2 unless the information is outdated under sec3 tion 605 or cannot be verified.

4 ‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur5 poses of this subsection and any disclosure by a

6 consumer reporting agency required under this title

7 with respect to consumers’ rights, the Federal Trade

8 Commission (after consultation with each Federal

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

10 the form and content of any such disclosure of the

11 rights of consumers required under this title.’’.

12 (2) TECHNICAL AMENDMENT.—Section

13 606(a)(1)(B) of the Fair Credit Reporting Act (15

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

15 ‘‘and the written summary of the rights of the

16 consumer prepared pursuant to section 609(c)’’ be17 fore the semicolon.

18 (e) FORM OF DISCLOSURES.—

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

20 section 610 of the Fair Credit Reporting Act (15

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

22 ‘‘(a) IN GENERAL.—

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

24 reporting agency shall require, as a condition of
36

•S 709 IS

1 making the disclosures required under section 609,

2 that the consumer furnish proper identification.

3 ‘‘(2) DISCLOSURE IN WRITING.—Except as pro4 vided in subsection (b), the disclosures required to

5 be made under section 609 shall be provided under

6 that section in writing.

7 ‘‘(b) OTHER FORMS OF DISCLOSURE.—

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

9 consumer, a consumer reporting agency may make

10 the disclosures required under 609—

11 ‘‘(A) other than in writing; and

12 ‘‘(B) in such form as may be—

13 ‘‘(i) specified by the consumer in ac14 cordance with paragraph (2); and

15 ‘‘(ii) available from the agency.

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

17 to paragraph (1) that disclosures under section 609

18 shall be made—

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

20 consumer at the place of business of the

21 consumer reporting agency where disclosures

22 are regularly provided, during normal business

23 hours, and on reasonable notice;
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•S 709 IS

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

2 made a written request for disclosure by tele3 phone;

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

5 the agency; or

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

7 is available from the agency.’’.

8 (2) SIMPLIFIED DISCLOSURE.—Not later than

9 90 days after the date of enactment of this Act, each

10 consumer reporting agency shall develop a form on

11 which such consumer reporting agency shall make

12 the disclosures required under section 609(a) of the

13 Fair Credit Reporting Act, for the purpose of maxi14 mizing the comprehensibility and standardization of

15 such disclosures.

16 (3) GOALS.—The Federal Trade Commission

17 shall take appropriate action to assure that the goals

18 of comprehensibility and standardization are

19 achieved in accordance with paragraph (2).

20 (4) CONFORMING AMENDMENTS.—

21 (A) Section 609(a) of the Fair Credit Re22 porting Act (15 U.S.C. 1681h(a)) is amended

23 in the matter preceding paragraph (1) by strik24 ing ‘‘and proper identification of any consumer’’
38

•S 709 IS

1 and inserting ‘‘and subject to section

2 610(a)(1)’’.

3 (B) Section 610 of the Fair Credit Report4 ing Act (15 U.S.C. 1681h) is amended in the

5 section heading by inserting ‘‘and form’’ after

6 ‘‘Conditions’’.

7 (C) The table of sections at the beginning

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

9 1681a et seq.) is amended in the item relating

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

11 ‘‘Conditions’’.

12 SEC. 109. PROCEDURES IN CASE OF THE DISPUTED ACCU13 RACY OF ANY INFORMATION IN A CONSUM14 ER’S FILE.

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

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

17 as follows:

18 ‘‘(a) REINVESTIGATIONS OF DISPUTED INFORMA19 TION.—

20 ‘‘(1) REINVESTIGATION REQUIRED.—

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

22 accuracy of any item of information contained

23 in a consumer’s file at a consumer reporting

24 agency is disputed by the consumer and the

25 consumer notifies the agency directly of such
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1 dispute, the agency shall reinvestigate free of

2 charge and record the current status of the dis3 puted information, or delete the item from the

4 file in accordance with paragraph (5), before

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

6 date on which the agency receives the notice of

7 the dispute from the consumer.

8 ‘‘(B) EXTENSION OF PERIOD TO

9 REINVESTIGATE.—Except as provided in sub10 paragraph (C), the 30-day period described in

11 subparagraph (A) may be extended for not

12 more than 15 additional days if the consumer

13 reporting agency receives information from the

14 consumer during that 30-day period that is rel15 evant to the reinvestigation.

16 ‘‘(C) LIMITATIONS ON EXTENSION OF PE17 RIOD TO REINVESTIGATE.—Subparagraph (B)

18 shall not apply to any reinvestigation in which,

19 during the 30-day period described in subpara20 graph (A), the information that is the subject

21 of the reinvestigation is found to be inaccurate

22 or incomplete or the consumer reporting agency

23 determines that the information cannot be veri24 fied.
40

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1 ‘‘(2) PROMPT NOTICE OF DISPUTE TO FUR2 NISHER OF INFORMATION.—

3 ‘‘(A) IN GENERAL.—Prior to the expiration

4 of the 5-business-day period beginning on the

5 date on which a consumer reporting agency re6 ceives notice of a dispute from any consumer in

7 accordance with paragraph (1), the agency shall

8 provide notification of the dispute to any person

9 who provided any item of information in dis10 pute, at the address and in the manner estab11 lished with the person. The notice shall include

12 all relevant information regarding the dispute

13 that the agency has received from the

14 consumer.

15 ‘‘(B) PROVISION OF OTHER INFORMATION

16 FROM CONSUMER.—The consumer reporting

17 agency shall promptly provide to the person

18 who provided the information in dispute all rel19 evant information regarding the dispute that is

20 received by the agency from the consumer after

21 the period referred to in subparagraph (A) and

22 before the end of the period referred to in para23 graph (1)(A).

24 ‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO25 LOUS OR IRRELEVANT.—
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1 ‘‘(A) IN GENERAL.—Notwithstanding para2 graph (1), a consumer reporting agency may

3 terminate a reinvestigation of information dis4 puted by a consumer under that paragraph if

5 the agency reasonably determines that the dis6 pute by the consumer is frivolous or irrelevant,

7 including by reason of a failure by a consumer

8 to provide sufficient information to investigate

9 the disputed information.

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

11 making any determination in accordance with

12 subparagraph (A) that a dispute is frivolous or

13 irrelevant, a consumer reporting agency shall

14 notify the consumer of such determination not

15 later than 5 business days after making such

16 determination, by mail or, if authorized by the

17 consumer for that purpose, by any other means

18 available to the agency.

19 ‘‘(C) CONTENTS OF NOTICE.—A notice

20 under subparagraph (B) shall include—

21 ‘‘(i) the reasons for the determination

22 under subparagraph (A); and

23 ‘‘(ii) identification of any information

24 required to investigate the disputed infor25 mation, which may consist of a standard-
42

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1 ized form describing the general nature of

2 such information.

3 ‘‘(4) CONSIDERATION OF CONSUMER INFORMA4 TION.—In conducting any reinvestigation under

5 paragraph (1) with respect to disputed information

6 in the file of any consumer, the consumer reporting

7 agency shall review and consider all relevant infor8 mation submitted by the consumer in the period de9 scribed in paragraph (1)(A) with respect to such dis10 puted information.

11 ‘‘(5) TREATMENT OF INACCURATE OR UNVERI12 FIABLE INFORMATION.—

13 ‘‘(A) IN GENERAL.—If, after any

14 reinvestigation under paragraph (1) of any in15 formation disputed by a consumer, an item of

16 the information is found to be inaccurate or in17 complete or cannot be verified, the consumer re18 porting agency shall promptly delete that item

19 of information from the consumer’s file. The in20 formation deleted shall consist solely of the in21 formation that was disputed by the consumer

22 and shall not include any portion of the same

23 item that was not disputed.
43

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1 ‘‘(B) REQUIREMENTS RELATING TO

2 REINSERTION OF PREVIOUSLY DELETED MATE3 RIAL.—

4 ‘‘(i) CERTIFICATION OF ACCURACY OF

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

7 subparagraph (A), the information may

8 not be reinserted in the file by the

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

11 that the information is complete and accu12 rate.

13 ‘‘(ii) NOTICE TO CONSUMER.—If any

14 information that has been deleted from a

15 consumer’s file pursuant to subparagraph

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

17 reporting agency shall notify the consumer

18 of the reinsertion in writing not later than

19 5 business days after the reinsertion or, if

20 authorized by the consumer for that pur21 pose, by any other means available to the

22 agency.

23 ‘‘(iii) ADDITIONAL INFORMATION.—As

24 part of, or in addition to, the notice under

25 clause (ii), a consumer reporting agency
44

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1 shall provide to a consumer in writing not

2 later than 5 business days after the date

3 of the reinsertion—

4 ‘‘(I) a statement that the dis5 puted information has been

6 reinserted;

7 ‘‘(II) the name, business address,

8 and telephone number of any fur9 nisher of information contacted, or of

10 any furnisher of information that con11 tacted the consumer reporting agency,

12 in connection with the reinsertion of

13 such information; and

14 ‘‘(III) a notice that the consumer

15 has the right to add a statement to

16 the consumer’s file disputing the accu17 racy or completeness of the disputed

18 information.

19 ‘‘(C) PROCEDURES TO PREVENT RE20 APPEARANCE.—A consumer reporting agency

21 shall maintain reasonable procedures designed

22 to prevent the reappearance in a consumer’s

23 file, and in consumer reports on the consumer,

24 of information that is deleted pursuant to this

25 paragraph (other than information that is
45

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1 reinserted in accordance with subparagraph

2 (B)(i)).

3 ‘‘(D) AUTOMATED REINVESTIGATION SYS4 TEM.—Any consumer reporting agency that

5 compiles and maintains files on consumers on a

6 nationwide basis shall implement an automated

7 system through which furnishers of information

8 to that consumer reporting agency may report

9 the results of a reinvestigation that finds in10 complete or inaccurate information in a con11 sumer’s file to other such consumer reporting

12 agencies.

13 ‘‘(6) NOTICE OF RESULTS OF

14 REINVESTIGATION.—

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

16 agency shall provide written notice to a

17 consumer of the results of a reinvestigation

18 under this subsection not later than 5 business

19 days after the completion of the reinvestigation,

20 by mail or, if authorized by the consumer for

21 that purpose, by other means available to the

22 agency.

23 ‘‘(B) CONTENTS.—As part of, or in addi24 tion to, the notice under subparagraph (A), a

25 consumer reporting agency shall provide to a
46

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1 consumer in writing prior to the expiration of

2 the 5-day period referred to in subparagraph

3 (A)—

4 ‘‘(i) a statement that the

5 reinvestigation is completed;

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

7 upon the consumer’s file as that file is re8 vised as a result of the reinvestigation;

9 ‘‘(iii) a description or indication of

10 any changes made in the consumer report

11 as a result of those revisions to the con12 sumer’s file;

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

14 consumer, a description of the procedure

15 used to determine the accuracy and com16 pleteness of the information shall be pro17 vided to the consumer by the agency, in18 cluding the name, business address, and

19 telephone number of any furnisher of in20 formation contacted in connection with

21 such information;

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

23 the right to add a statement to the con24 sumer’s file disputing the accuracy or com25 pleteness of the information; and
47

•S 709 IS

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

2 the right to request under subsection (d)

3 that the consumer reporting agency fur4 nish notifications under that subsection.

5 ‘‘(7) DESCRIPTION OF REINVESTIGATION PRO6 CEDURE.—A consumer reporting agency shall pro7 vide to a consumer a description referred to in para8 graph (6)(B)(iv) by not later than 15 days after re9 ceiving a request from the consumer for that de10 scription.

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

12 dispute regarding an item of information in a con13 sumer’s file at a consumer reporting agency is re14 solved in accordance with paragraph (5)(A) by the

15 deletion of the disputed information by not later

16 than 3 business days after the date on which the

17 agency receives notice of the dispute from the

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

19 the agency shall not be required to comply with

20 paragraphs (2), (6), and (7) with respect to that dis21 pute if the agency—

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

23 to the consumer by telephone;

24 ‘‘(B) includes in that notice, or in a writ25 ten notice that accompanies a confirmation and
48

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1 consumer report provided in accordance with

2 subparagraph (C), a statement of the consum3 er’s right to request under subsection (d) that

4 the agency furnish notifications under that sub5 section; and

6 ‘‘(C) provides written confirmation of the

7 deletion and a copy of a consumer report on the

8 consumer that is based on the consumer’s file

9 after the deletion, not later than 5 business

10 days after making the deletion.’’.

11 (b) CONFORMING AMENDMENT.—Section 611(d) of

12 the Fair Credit Reporting Act (15 U.S.C. 1681i(d)) is

13 amended by striking ‘‘The consumer reporting agency

14 shall clearly’’ and all that follows through the end of the

15 subsection.

16 SEC. 110. CHARGES FOR CERTAIN DISCLOSURES.

17 Section 612 of the Fair Credit Reporting Act (15

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

19 ‘‘SEC. 612. CHARGES FOR CERTAIN DISCLOSURES.

20 ‘‘(a) REASONABLE CHARGES ALLOWED FOR CER21 TAIN DISCLOSURES.—Except as provided in subsections

22 (b), (c), and (d), a consumer reporting agency may impose

23 a reasonable charge on a consumer—

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

25 pursuant to section 609, which charge—
49

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1 ‘‘(A) shall not exceed $8; and

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

3 prior to making disclosure; and

4 ‘‘(2) for furnishing pursuant to section 611(d),

5 following a reinvestigation under section 611(a), a

6 statement, codification, or summary to a person des7 ignated by the consumer under that section after the

8 30-day period beginning on the date of notification

9 of the consumer under paragraph (6) or (8) of sec10 tion 611(a) with respect to the reinvestigation, which

11 charge—

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

13 agency would impose on each designated recipi14 ent for a consumer report; and

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

16 prior to furnishing such information.

17 ‘‘(b) FREE CONSUMER REPORT AFTER ADVERSE

18 NOTICE TO CONSUMER.—Each consumer reporting agen19 cy that maintains a file on a consumer shall make all dis20 closures pursuant to section 609 without charge to the

21 consumer if, not later than 60 days after receipt by such

22 consumer of a notification pursuant to section 615, or of

23 a notification from a debt collection agency affiliated with

24 that consumer reporting agency stating that the consum-
50

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1 er’s credit rating may be or has been adversely affected,

2 the consumer makes a request under section 609.

3 ‘‘(c) FREE CONSUMER REPORT UNDER CERTAIN

4 OTHER CIRCUMSTANCES.—Upon the request of the

5 consumer, a consumer reporting agency shall make all dis6 closures pursuant to section 609 once during any 12-

7 month period without charge to that consumer if the

8 consumer certifies in writing that the consumer—

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

10 employment in the 60-day period beginning on the

11 date on which the certification is made;

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

13 or

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

15 consumer at the agency contains inaccurate informa16 tion due to fraud.

17 ‘‘(d) OTHER CHARGES PROHIBITED.—A consumer

18 reporting agency shall not impose any charge on a

19 consumer for providing any notification required by this

20 Act or making any disclosure required by this Act, except

21 as authorized by subsection (a).’’.

22 SEC. 111. DUTIES OF USERS OF CONSUMER REPORTS.

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

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

25 U.S.C. 1681m(a)) is amended to read as follows:
51

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

2 ON THE BASIS OF INFORMATION CONTAINED IN

3 CONSUMER REPORTS.—If any person takes any adverse

4 action with respect to any consumer that is based in whole

5 or in part on any information contained in a consumer

6 report, the person shall—

7 ‘‘(1) provide written or electronic notice of the

8 adverse action to the consumer;

9 ‘‘(2) provide to the consumer in writing or elec10 tronically—

11 ‘‘(A) the name, address, and telephone

12 number of the consumer reporting agency (in13 cluding a toll-free telephone number established

14 by the agency if the agency compiles and main15 tains files on consumers on a nationwide basis)

16 that furnished the report to the person; and

17 ‘‘(B) a statement that the consumer re18 porting agency did not make the decision to

19 take the adverse action and is unable to provide

20 the consumer the specific reasons why the ad21 verse action was taken; and

22 ‘‘(3) provide to the consumer a written or elec23 tronic notice of the consumer’s right—

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

25 copy of a consumer report on the consumer
52

•S 709 IS

1 from the consumer reporting agency referred to

2 in paragraph (2), which notice shall include an

3 indication of the 60-day period under that sec4 tion for obtaining such a copy; and

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

6 consumer reporting agency the accuracy or

7 completeness of any information in a consumer

8 report furnished by the agency.’’.

9 (b) DUTIES OF USERS MAKING CERTAIN CREDIT SO10 LICITATIONS.—Section 615 of the Fair Credit Reporting

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

12 the following:

13 ‘‘(d) DUTIES OF USERS MAKING WRITTEN CREDIT

14 SOLICITATIONS ON THE BASIS OF INFORMATION CON15 TAINED IN CONSUMER FILES.—

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

17 consumer report on any consumer in connection with

18 any credit or insurance transaction that is not initi19 ated by the consumer, that is provided to that per20 son under section 604(c)(1)(B), shall provide with

21 each written solicitation made to the consumer re22 garding the transaction a clear and conspicuous

23 statement that—
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•S 709 IS

1 ‘‘(A) information contained in the consum2 er’s consumer report was used in connection

3 with the transaction;

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

5 credit because the consumer satisfied the cri6 teria for creditworthiness under which the

7 consumer was selected for the offer;

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

9 extended 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 criteria bearing on creditworthiness

13 or 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 or insurance

18 transaction that is not initiated by the

19 consumer; and

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

21 referred to in subparagraph (D) by notifying a

22 notification system established under section

23 604(e).

24 ‘‘(2) DISCLOSURE OF ADDRESS AND TELE25 PHONE NUMBER.—A statement under paragraph (1)
54

•S 709 IS

1 shall include the address and toll-free telephone

2 number of the appropriate notification system estab3 lished under section 604(e).

4 ‘‘(3) MAINTAINING CRITERIA ON FILE.—A per5 son who makes an offer of credit to a consumer

6 under a credit or insurance transaction described in

7 paragraph (1) shall maintain on file the criteria used

8 to select the consumer to receive the offer, all cri9 teria bearing on creditworthiness that are the basis

10 for determining whether or not to extend credit pur11 suant to the offer, and any requirement for the fur12 nishing of collateral as a condition of the extension

13 of credit, until the expiration of the 3-year period

14 beginning on the date on which the offer is made to

15 the consumer.

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

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

18 by a person if—

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

20 ownership or by common corporate control with

21 the person who procured the report;

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

23 clearly and conspicuously disclosed to the

24 consumer to whom the report relates, before the

25 report is provided to the person using the re-
55

•S 709 IS

1 port, that the report might be provided to and

2 used by other persons who are affiliated in the

3 manner described in subparagraph (A) to the

4 person who procured the report; and

5 ‘‘(C) the consumer has been afforded the

6 opportunity to direct in writing that the report

7 may not be communicated among persons who

8 are affiliated in the manner described in sub9 paragraph (A) and has not done so.

10 ‘‘(5) AUTHORITY OF FEDERAL AGENCIES RE11 GARDING UNFAIR OR DECEPTIVE ACTS OR PRAC12 TICES NOT AFFECTED.—This section is not intended

13 to affect the authority of any Federal agency to en14 force a prohibition against unfair or deceptive acts

15 or practices, including the making of false or mis16 leading statements in connection with a credit or in17 surance transaction that is not initiated by the

18 consumer.’’.

19 (c) DUTIES OF USERS MAKING OTHER SOLICITA20 TIONS.—Section 615 of the Fair Credit Reporting Act (15

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

23 ‘‘(e) DUTIES OF USERS MAKING OTHER WRITTEN

24 SOLICITATIONS ON THE BASIS OF INFORMATION CON25 TAINED IN CONSUMER FILES.—
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•S 709 IS

1 ‘‘(1) IN GENERAL.—A person who, in connec2 tion with any direct marketing transaction that is

3 not initiated by a consumer, uses a consumer report

4 on that consumer that is provided to that person

5 under section 604(a)(3)(E)(i)(II), shall provide with

6 the initial written solicitation made to the consumer

7 regarding the transaction a clear and conspicuous

8 statement that—

9 ‘‘(A) information contained in the consum10 er’s consumer report was used in connection

11 with the transaction;

12 ‘‘(B) the consumer has a right to prohibit

13 information contained in the consumer’s file

14 with any consumer reporting agency from being

15 used in connection with any direct marketing

16 transaction that is not initiated by the

17 consumer; and

18 ‘‘(C) the consumer may exercise the right

19 referred to in subparagraph (B) by notifying a

20 notification system established under section

21 604(e).

22 ‘‘(2) DISCLOSURE OF ADDRESS AND TELE23 PHONE NUMBER.—A statement under paragraph (1)

24 shall include the address and toll-free telephone
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•S 709 IS

1 number of the appropriate notification system estab2 lished under section 604(e).

3 ‘‘(3) AUTHORITY OF FEDERAL AGENCIES RE4 GARDING UNFAIR OR DECEPTIVE ACTS OR PRAC5 TICES NOT AFFECTED.—This section is not intended

6 to affect the authority of any Federal agency to en7 force a prohibition against unfair or deceptive acts

8 or practices, including the making of false or mis9 leading statements in connection with a direct mar10 keting transaction that is not initiated by the

11 consumer.’’.

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

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

14 amended by striking ‘‘subsections (a) and (b)’’ and insert15 ing ‘‘this section’’.

16 SEC. 112. CIVIL LIABILITY.

17 (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLI18 ANCE.—Section 616 of the Fair Credit Reporting Act (15

19 U.S.C. 1681n) is amended by striking ‘‘Any consumer re20 porting agency or user of information which’’ and insert21 ing ‘‘(a) IN GENERAL.—Any person who’’.

22 (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON23 COMPLIANCE.—Section 616(1) of the Fair Credit Report24 ing Act (15 U.S.C. 1681n(1)) is amended to read as fol25 lows:
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•S 709 IS

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

2 consumer as a result of the failure or damages of

3 not less than $100 and not more than $1,000; or

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

5 for obtaining a consumer report under false pre6 tenses or knowingly without a permissible purpose,

7 actual damages sustained by the consumer as a re8 sult of the failure or $1,000, whichever is greater;’’.

9 (c) CIVIL LIABILITY FOR KNOWING NONCOMPLI10 ANCE.—Section 616 of the Fair Credit Reporting Act (15

11 U.S.C. 1681n) is amended by adding at the end the follow12 ing:

13 ‘‘(c) CIVIL LIABILITY FOR KNOWING NONCOMPLI14 ANCE.—Any person who obtains a consumer report from

15 a consumer reporting agency under false pretenses or

16 knowingly without a permissible purpose shall be liable to

17 the consumer reporting agency for actual damages sus18 tained by the consumer reporting agency or $1,000,

19 whichever is greater.’’.

20 (d) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI21 ANCE.—Section 617 of the Fair Credit Reporting Act (15

22 U.S.C. 1681o) is amended by striking ‘‘Any consumer re23 porting agency or user of information which’’ and insert24 ing ‘‘(a) IN GENERAL.—Any person who’’.

25 (e) ATTORNEY’S FEES.—
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•S 709 IS

1 (1) WILLFUL NONCOMPLIANCE.—Section 616

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

3 is amended by adding at the end the following:

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

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

6 in connection with an action under this section was filed

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

8 award to the prevailing party attorney’s fees reasonable

9 in relation to the work expended in responding to the

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

11 (2) NEGLIGENT NONCOMPLIANCE.—Section

12 617 of the Fair Credit Reporting Act (15 U.S.C.

13 1681o) is amended by adding at the end the follow14 ing:

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

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

17 in connection with an action under this section was filed

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

19 award to the prevailing party attorney’s fees reasonable

20 in relation to the work expended in responding to the

21 pleading, motion, or other paper.’’.
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1 SEC. 113. RESPONSIBILITIES OF PERSONS WHO FURNISH

2 INFORMATION TO CONSUMER REPORTING

3 AGENCIES.

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

5 (15 U.S.C. 1681 et seq.) is amended—

6 (1) by redesignating section 623 as section 624;

7 and

8 (2) by inserting after section 622 the following:

9 ‘‘SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFOR10 MATION TO CONSUMER REPORTING AGEN11 CIES.

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

13 PROVIDE COMPLETE AND ACCURATE INFORMATION.—

14 ‘‘(1) PROHIBITIONS.—A person shall not fur15 nish any information relating to a consumer to any

16 consumer reporting agency if the person has been

17 notified by the consumer, in a reasonable manner

18 specified by the person for such notices, that the in19 formation is incomplete or inaccurate.

20 ‘‘(2) DUTY TO CORRECT AND UPDATE INFOR21 MATION.—A person who—

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

23 of business furnishes information to one or

24 more consumer reporting agencies about the

25 person’s transactions or experiences with any

26 consumer; and
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•S 709 IS

1 ‘‘(B) has furnished to a consumer report2 ing agency information that the person deter3 mines is not complete or accurate;

4 shall promptly notify the consumer reporting agency

5 of that determination and provide to the agency any

6 corrections to that information, or any additional in7 formation, that is necessary to make the information

8 provided by the person to the agency complete and

9 accurate, and shall not thereafter furnish to the

10 agency any of the information that remains not com11 plete or accurate.

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

13 If the completeness or accuracy of any information

14 furnished by any person to any consumer reporting

15 agency is disputed to such person by a consumer,

16 the person may not furnish the information to any

17 consumer reporting agency without notice that such

18 information is disputed by the consumer.

19 ‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC20 COUNTS.—A person who regularly and in the ordi21 nary course of business furnishes information to a

22 consumer reporting agency regarding a consumer

23 who has a credit account with that person shall no24 tify the agency of the voluntary closure of the ac-
62

•S 709 IS

1 count by the consumer, in information regularly fur2 nished for the period in which the account is closed.

3 ‘‘(5) DUTY TO PROVIDE NOTICE OF DELIN4 QUENCY OF ACCOUNTS.—A person who furnishes in5 formation to a consumer reporting agency regarding

6 a delinquent account being placed for collection,

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

8 action shall, not later than 90 days after furnishing

9 the information, notify the agency of the month and

10 year of the commencement of the delinquency that

11 immediately preceded the action.

12 ‘‘(b) DUTIES OF FURNISHERS OF INFORMATION

13 UPON NOTICE OF DISPUTE.—

14 ‘‘(1) IN GENERAL.—After receiving notice pur15 suant to section 611(a)(2) of a dispute with regard

16 to the completeness or accuracy of any information

17 provided by a person to a consumer reporting agen18 cy, the person shall—

19 ‘‘(A) complete an investigation with respect

20 to the disputed information;

21 ‘‘(B) review all relevant information pro22 vided by the consumer reporting agency pursu23 ant to section 611(a)(2);

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

25 to the consumer reporting agency; and
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•S 709 IS

1 ‘‘(D) if the investigation finds that the in2 formation is incomplete or inaccurate, report

3 those results to all other consumer reporting

4 agencies to which the person furnished the in5 formation and that compile and maintain files

6 on consumers on a nationwide basis.

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

8 investigations, reviews, and reports required under

9 paragraph (1) regarding information provided by the

10 person to a consumer reporting agency, prior to the

11 expiration of the period under section 611(a)(1)

12 within which the consumer reporting agency is re13 quired to complete actions required by that section

14 regarding that information.

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

16 617 do not apply to any failure to comply with subsection

17 (a), except as provided in section 621(c)(1)(B).

18 ‘‘(d) LIMITATION ON ENFORCEMENT.—Subsection

19 (a) shall be enforced exclusively under section 621 by the

20 Federal agencies and officials and the State officials iden21 tified in that section.’’.

22 (b) CONFORMING AMENDMENT.—The table of sec23 tions at the beginning of the Fair Credit Reporting Act

24 (15 U.S.C. 1681a et seq.) is amended by striking the item

25 relating to section 623 and inserting the following:
64

•S 709 IS

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

‘‘624. Relation to State laws.’’.

1 SEC. 114. INVESTIGATIVE CONSUMER REPORTS.

2 Section 606 of the Fair Credit Reporting Act (15

3 U.S.C. 1681d) is amended—

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

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

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

7 the following:

8 ‘‘(2) the person certifies or has certified to the

9 consumer reporting agency that—

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

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

12 ‘‘(B) the person will comply with sub13 section (b).’’;

14 (3) in subsection (b), by striking ‘‘shall’’ the

15 second place such term appears; and

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

17 ‘‘(d) PROHIBITIONS.—

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

19 agency shall not prepare or furnish an investigative

20 consumer report unless the agency has received a

21 certification under subsection (a)(2) from the person

22 who requested the report.

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

24 shall not make an inquiry for the purpose of prepar-
65

•S 709 IS

1 ing an investigative consumer report on a consumer

2 for employment purposes if the making of the in3 quiry by an employer or prospective employer of the

4 consumer would violate any applicable Federal or

5 State equal employment opportunity law or regula6 tion.

7 ‘‘(3) CERTAIN PUBLIC RECORD INFORMA8 TION.—Except as otherwise provided in section 613,

9 a consumer reporting agency shall not furnish an in10 vestigative consumer report that includes informa11 tion that is a matter of public record and that re12 lates to an arrest, indictment, conviction, civil judi13 cial action, tax lien, or outstanding judgment, unless

14 the agency has verified the accuracy of the informa15 tion during the 30-day period ending on the date on

16 which the report is furnished.

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

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

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

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

24 whom the consumer is acquainted or who has knowl25 edge of such item of information, unless—
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•S 709 IS

1 ‘‘(A) the agency has followed reasonable

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

4 independent and direct knowledge of the infor5 mation; or

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

7 possible source of the information.’’.

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

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

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

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

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

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

17 (b) UNAUTHORIZED DISCLOSURES BY OFFICERS OR

18 EMPLOYEES.—Section 620 of the Fair Credit Reporting

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

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

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

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

2 (a) AVAILABLE ENFORCEMENT POWERS.—Section

3 621(a) of the Fair Credit Reporting Act (15 U.S.C.

4 1681s(a))—

5 (1) is amended in the second sentence by strik6 ing ‘‘Act and shall be subject to enforcement by the

7 Federal Trade Commission under section 5(b) there8 of with respect to any consumer reporting agency or

9 person subject to enforcement by the Federal Trade

10 Commission pursuant to this subsection, irrespec11 tive’’ and inserting ‘‘Act. All functions and powers of

12 the Federal Trade Commission under the Federal

13 Trade Commission Act shall be available to the

14 Commission to enforce compliance with this title by

15 any person subject to enforcement by the Federal

16 Trade Commission pursuant to this subsection and

17 not subject to enforcement pursuant to section 8 of

18 the Federal Deposit Insurance Act, irrespective’’;

19 (2) as amended by paragraph (1), is amended

20 by inserting before the third period the following: ‘‘,

21 including the power to enforce the provisions of this

22 title in the same manner as if the violation had been

23 a violation of any Federal Trade Commission trade

24 regulation rule’’; and

25 (3) as amended by paragraph (1), is amended

26 by adding after the third period the following: ‘‘Not-
68

•S 709 IS

1 withstanding the preceding sentence, a court may

2 not impose any civil penalty on a person for a viola3 tion of section 623(a)(1) unless the person has been

4 enjoined from committing the violation, or ordered

5 not to commit the violation, in an action or proceed6 ing brought by or on behalf of the Federal Trade

7 Commission and has violated the injunction or order,

8 and the court may not impose any civil penalty for

9 any violation occurring before the date of the viola10 tion of the injunction or order.’’.

11 (b) AGENCIES RESPONSIBLE FOR ENFORCEMENT.—

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

13 1681s) is amended—

14 (1) in subsection (a), by inserting ‘‘ENFORCE15 MENT BY FEDERAL TRADE COMMISSION.—’’ before

16 ‘‘Compliance with the requirements’’; and

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

18 preceding paragraph (1) and inserting the following:

19 ‘‘(b) ENFORCEMENT BY OTHER AGENCIES.—Compli20 ance with the requirements imposed under this title with

21 respect to consumer reporting agencies, persons who use

22 consumer reports from such agencies, persons who furnish

23 information to such agencies, and users of information

24 that are subject to subsection (d) or (e) of section 615

25 shall be enforced under—’’.
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1 SEC. 117. STATE ENFORCEMENT OF FAIR CREDIT REPORT2 ING ACT.

3 Section 621 of the Fair Credit Reporting Act (15

4 U.S.C. 1681s) is amended—

5 (1) by redesignating subsection (c) as sub6 section (d); and

7 (2) by inserting after subsection (b) the follow8 ing:

9 ‘‘(c) STATE ACTION FOR VIOLATIONS.—

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

11 such other remedies as are provided under State

12 law, if the chief law enforcement officer of a State,

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

14 reason to believe that any person has violated or is

15 violating this title, the State—

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

17 violation in any appropriate United States dis18 trict court or in any other court of competent

19 jurisdiction;

20 ‘‘(B) subject to paragraph (5), may bring

21 an action on behalf of the residents of the State

22 to recover—

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

24 liable to such residents under sections 616

25 and 617 as a result of the violation;
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•S 709 IS

1 ‘‘(ii) in the case of a violation of sec2 tion 623(a), damages for which the person

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

4 such residents as a result of the violation;

5 or

6 ‘‘(iii) damages of not more than

7 $1,000 for each willful or negligent viola8 tion; and

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

10 under subparagraph (A) or (B), shall be award11 ed the costs of the action and reasonable attor12 ney fees as determined by the court.

13 ‘‘(2) RIGHTS OF FEDERAL REGULATORS.—The

14 State shall serve prior written notice of any action

15 under paragraph (1) upon the Federal Trade Com16 mission or the appropriate Federal regulator deter17 mined under subsection (b) and provide the Commis18 sion or appropriate Federal regulator with a copy of

19 its complaint, except in any case in which such prior

20 notice is not feasible, in which case the State shall

21 serve such notice immediately upon instituting such

22 action. The Federal Trade Commission or appro23 priate Federal regulator shall have the right—

24 ‘‘(A) to intervene in the action;
71

•S 709 IS

1 ‘‘(B) upon so intervening, to be heard on

2 all matters arising therein;

3 ‘‘(C) to remove the action to the appro4 priate United States district court; and

5 ‘‘(D) to file petitions for appeal.

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

7 of bringing any action under this subsection, nothing

8 in this subsection shall prevent the chief law enforce9 ment officer, or an official or agency designated by

10 a State, from exercising the powers conferred on the

11 chief law enforcement officer or such official by the

12 laws of such State to conduct investigations or to

13 administer oaths or affirmations or to compel the at14 tendance of witnesses or the production of documen15 tary and other evidence.

16 ‘‘(4) LIMITATION ON STATE ACTION WHILE

17 FEDERAL ACTION PENDING.—If the Federal Trade

18 Commission or the appropriate Federal regulator

19 has instituted a civil action or an administrative ac20 tion under section 8 of the Federal Deposit Insur21 ance Act for a violation of this title, no State may,

22 during the pendency of such action, bring an action

23 under this section against any defendant named in

24 the complaint of the Commission or the appropriate
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•S 709 IS

1 Federal regulator for any violation of this title that

2 is alleged in that complaint.

3 ‘‘(5) LIMITATIONS ON STATE ACTIONS FOR VIO4 LATION OF SECTION 623(a)(1).—

5 ‘‘(A) VIOLATION OF INJUNCTION RE6 QUIRED.—A State may not bring an action

7 against a person under paragraph (1)(B) for a

8 violation of section 623(a)(1), unless—

9 ‘‘(i) the person has been enjoined

10 from committing the violation, in an action

11 brought by the State under paragraph

12 (1)(A); and

13 ‘‘(ii) the person has violated the in14 junction.

15 ‘‘(B) LIMITATION ON DAMAGES RECOVER16 ABLE.—In an action against a person under

17 paragraph (1)(B) for a violation of section

18 623(a)(1), a State may not recover any dam19 ages incurred before the date of the violation of

20 an injunction on which the action is based.’’.

21 SEC. 118. FEDERAL RESERVE BOARD AUTHORITY.

22 Section 621 of the Fair Credit Reporting Act (15

23 U.S.C. 1681s) is amended by adding after subsection (d)

24 (as redesignated by section 117) the following:
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1 ‘‘(e) INTERPRETIVE AUTHORITY.—The Board of

2 Governors of the Federal Reserve System may issue inter3 pretations of any provision of this title as such provision

4 may apply to any persons identified under paragraph (1),

5 (2), and (3) of subsection (b), or to the holding companies

6 and affiliates of such persons, in consultation with Federal

7 agencies identified in paragraphs (1), (2), and (3) of sub8 section (b).’’.

9 SEC. 119. PREEMPTION OF STATE LAW.

10 Section 624 of the Fair Credit Reporting Act (as re11 designated by section 113(a)) is amended—

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

13 IN GENERAL.—Except as provided in subsections

14 (b) and (c), this title’’; and

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

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

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

18 ‘‘(1) with respect to any subject matter regu19 lated under—

20 ‘‘(A) subsection (c) or (e) of section 604,

21 relating to the prescreening of consumer re22 ports;

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

24 which a consumer reporting agency must take

25 any action, including the provision of notifica-
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1 tion to a consumer or other person, in any pro2 cedure related to the disputed accuracy of infor3 mation in a consumer’s file, except that this

4 subparagraph does not apply to any State law

5 in effect on the date of enactment of the

6 Consumer Reporting Reform Act of 1995;

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

8 of a person who takes any adverse action with

9 respect to a consumer on the basis of informa10 tion contained in a consumer report;

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

12 of persons who use a consumer report of a

13 consumer in connection with any credit or in14 surance transaction that is not initiated by the

15 consumer and that consists of a firm offer of

16 credit or insurance;

17 ‘‘(E) section 615(e), relating to the duties

18 of persons who use a consumer report of a

19 consumer in connection with any direct market20 ing transaction that is not initiated by the

21 consumer;

22 ‘‘(F) section 605, relating to information

23 contained in consumer reports, except that this

24 subparagraph does not apply to any State law
75

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1 in effect on the date of enactment of the

2 Consumer Reporting Reform Act of 1995; or

3 ‘‘(G) section 623(b)(2), relating to the

4 time by which a person must take any action

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

6 to an investigation of information furnished by

7 the person to a consumer reporting agency, ex8 cept that this subparagraph does not apply to

9 any State law in effect on the date of enact10 ment of the Consumer Reporting Reform Act of

11 1995;

12 ‘‘(2) with respect to the exchange of informa13 tion among persons affiliated by common ownership

14 or common corporate control; or

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

16 any disclosure required to be made under section

17 609(c).

18 ‘‘(c) DEFINITION OF FIRM OFFER OF CREDIT OR IN19 SURANCE.—Notwithstanding any definition of the term

20 ‘firm offer of credit or insurance’ (or any equivalent term)

21 under the laws of any State, the definition of that term

22 contained in section 603(l) shall be construed to apply in

23 the enforcement and interpretation of the laws of any

24 State governing consumer reports.

25 ‘‘(d) LIMITATIONS.—Subsections (b) and (c)—
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•S 709 IS

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

2 consent judgment between any State Attorney Gen3 eral and any consumer reporting agency in effect on

4 the date of enactment of the Consumer Reporting

5 Reform Act of 1995; and

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

7 (including any provision of a State constitution)

8 that—

9 ‘‘(A) is enacted after January 1, 2004;

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

11 intended to supplement this Act; and

12 ‘‘(C) gives greater protection to consumers

13 than is provided under this Act.’’.

14 SEC. 120. ACTION BY FTC AND FEDERAL RESERVE BOARD.

15 (a) MODIFICATION OF REQUIREMENTS BY FTC AND

16 FEDERAL RESERVE BOARD AUTHORIZED.—

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

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

19 by adding after subsection (e) (as added by section

20 118) the following:

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

23 ‘‘(1) IN GENERAL.—If the Federal Trade Com24 mission considers such action necessary for the pro25 tection of consumers, the Commission may, after
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1 consultation with appropriate State regulatory and

2 law enforcement agencies, promulgate regulations in

3 accordance with section 553 of title 5, United States

4 Code, to impose, with respect to consumer reporting

5 agencies and all other persons subject to this title

6 other than any person described in paragraph (1),

7 (2), or (3) of subsection (b), requirements—

8 ‘‘(A) that are more stringent than those

9 imposed under—

10 ‘‘(i) section 611, relating to the time

11 by which a consumer reporting agency

12 must take any action, including the provi13 sion of notification to a consumer or other

14 person, in any procedure related to the dis15 puted accuracy of information in a con16 sumer’s file;

17 ‘‘(ii) section 615(a), relating to the

18 duties of a person who takes any adverse

19 action with respect to a consumer on the

20 basis of information contained in a

21 consumer report;

22 ‘‘(iii) section 615(d), relating to the

23 duties of persons who use a consumer re24 port on a consumer in connection with any

25 credit or insurance transaction that is not
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1 initiated by the consumer and that consists

2 of a firm offer of credit or insurance; or

3 ‘‘(iv) section 623(b)(2), relating to the

4 time by which a person must take any ac5 tion required under section 623(b)(1) with

6 respect to an investigation of information

7 furnished by the person to a consumer re8 porting agency; and

9 ‘‘(B) with respect to the form and content

10 of any disclosure required to be made under

11 section 609(c).

12 ‘‘(2) FEDERAL RESERVE BOARD AUTHORITY.—

13 If the Board of Governors of the Federal Reserve

14 System determines such action to be necessary for

15 the protection of consumers, the Board may pre16 scribe regulations imposing on persons described in

17 paragraph (1), (2), or (3) of subsection (b) or on the

18 holding companies and affiliates of such persons,

19 any requirement described in paragraph (1) of this

20 subsection.’’.

21 (2) CONFORMING AMENDMENTS.—

22 (A) The section heading and section des23 ignation for section 621 of the Fair Credit Re24 porting Act (15 U.S.C. 1681s) are amended to

25 read as follows:
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1 ‘‘SEC. 621. ADMINISTRATIVE ENFORCEMENT AND AUTHORI2 TIES; STATE ACTIONS.’’.

3 (B) The table of sections at the beginning

4 of the Fair Credit Reporting Act is amended by

5 striking the item relating to section 621 and in6 serting the following:

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

7 (b) DEADLINE TO PRESCRIBE MATTERS.—The Fed8 eral Trade Commission shall prescribe all matters required

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

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

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

12 of this Act.

13 SEC. 121. AMENDMENT TO FAIR DEBT COLLECTION PRAC14 TICES ACT.

15 Section 807(11) of the Fair Debt Collection Practices

16 Act (15 U.S.C. 1692e), relating to certain practices con17 stituting prohibited representations, is amended to read

18 as follows:

19 ‘‘(11) The failure to disclose clearly, in any

20 written communication made to collect a debt or to

21 obtain information about a consumer, that the debt

22 collector is attempting to collect a debt and that any

23 information obtained will be used for that purpose,

24 except that this paragraph does not apply to a com25 munication—
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1 ‘‘(A) to acquire location information in ac2 cordance with section 804;

3 ‘‘(B) made solely to acknowledge receipt of

4 monies or payments;

5 ‘‘(C) that consists solely of information re6 quested by the consumer or the consumer’s at7 torney; or

8 ‘‘(D) that is a formal pleading made in

9 connection with a legal action.’’.

10 SEC. 122. FURNISHING CONSUMER REPORTS FOR CERTAIN

11 PURPOSES RELATING TO CHILD SUPPORT.

12 Section 604(a) of the Fair Credit Reporting Act (15

13 U.S.C. 1681b) is amended (as so designated by section

14 103) by adding at the end the following:

15 ‘‘(4) In response to a request by the head of a

16 department, agency, or office of any State or any

17 political subdivision of any State that is responsible

18 under law for enforcing child support orders (or an

19 official authorized by the head of any such depart20 ment, agency, or office), if the person making the re21 quest certifies to the consumer reporting agency

22 that—

23 ‘‘(A) the consumer report is needed to es24 tablish an individual’s capacity to make child
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1 support payments, or to determine the appro2 priate level of such payments;

3 ‘‘(B) the person has provided not less than

4 10 days prior written notice to the consumer

5 whose report is requested, by certified or reg6 istered mail to the last known address of the

7 consumer, that the report will be requested; and

8 ‘‘(C) the consumer report obtained pursu9 ant to this paragraph will be kept confidential,

10 will be used solely for establishing child support

11 payment obligations, and will not be used in

12 connection with any other civil, administrative,

13 or criminal proceeding or for any other pur14 pose.’’.

15 SEC. 123. DISCLOSURE OF INFORMATION AND CONSUMER

16 REPORTS TO FBI FOR COUNTERINTEL17 LIGENCE PURPOSES.

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

19 (15 U.S.C. 1681 et seq.) is amended by adding after sec20 tion 624 (as redesignated by section 113(a)) the following:

21 ‘‘SEC. 625. DISCLOSURES TO FBI FOR COUNTERINTEL22 LIGENCE PURPOSES.

23 ‘‘(a) IDENTITY OF FINANCIAL INSTITUTIONS.—Not24 withstanding section 604 or any other provision of this

25 title, a consumer reporting agency shall furnish to the
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1 Federal Bureau of Investigation the names and addresses

2 of all financial institutions (as that term is defined in sec3 tion 1101 of the Right to Financial Privacy Act of 1978)

4 at which a consumer maintains or has maintained an ac5 count, to the extent that information is in the files of the

6 agency, when presented with a written request for that

7 information, signed by the Director of the Federal Bureau

8 of Investigation, or the Director’s designee, that certifies

9 compliance with this section. The Director or the Direc10 tor’s designee may make such a certification only if the

11 Director or the Director’s designee has determined in writ12 ing that—

13 ‘‘(1) such information is necessary for the con14 duct of an authorized foreign counterintelligence in15 vestigation; and

16 ‘‘(2) there are specific and articulable facts giv17 ing reason to believe that the consumer—

18 ‘‘(A) is a foreign power (as defined in sec19 tion 101 of the Foreign Intelligence Surveil20 lance Act of 1978) or a person who is not a

21 United States person (as defined in such sec22 tion 101) and is an official of a foreign power;

23 or

24 ‘‘(B) is an agent of a foreign power and is

25 engaging or has engaged in international terror-
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1 ism (as that term is defined in section 101(c)

2 of the Foreign Intelligence Surveillance Act of

3 1978) or clandestine intelligence activities that

4 involve or may involve a violation of criminal

5 statutes of the United States.

6 ‘‘(b) IDENTIFYING INFORMATION.—Notwithstanding

7 the provisions of section 604 or any other provision of this

8 title, a consumer reporting agency shall furnish identifying

9 information respecting a consumer, limited to name, ad10 dress, former addresses, places of employment, or former

11 places of employment, to the Federal Bureau of Investiga12 tion when presented with a written request, signed by the

13 Director or the Director’s designee, that certifies compli14 ance with this subsection. The Director or the Director’s

15 designee may make such a certification only if the Director

16 or the Director’s designee has determined in writing

17 that—

18 ‘‘(1) such information is necessary to the con19 duct of an authorized counterintelligence investiga20 tion; and

21 ‘‘(2) there is information giving reason to be22 lieve that the consumer has been, or is about to be,

23 in contact with a foreign power or an agent of a for24 eign power (as defined in section 101 of the Foreign

25 Intelligence Surveillance Act of 1978).
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1 ‘‘(c) COURT ORDER FOR DISCLOSURE OF CONSUMER

2 REPORTS.—Notwithstanding section 604 or any other

3 provision of this title, if requested in writing by the Direc4 tor of the Federal Bureau of Investigation, or a designee

5 of the Director, a court may issue an order ex parte direct6 ing a consumer reporting agency to furnish a consumer

7 report to the Federal Bureau of Investigation, upon a

8 showing in camera that—

9 ‘‘(1) the consumer report is necessary for the

10 conduct of an authorized foreign counterintelligence

11 investigation; 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 Sur19 veillance Act of 1978) or clandestine intel20 ligence activities that involve or may involve a

21 violation of criminal statutes of the United

22 States.

23 The terms of an order issued under this subsection shall

24 not disclose that the order is issued for purposes of a

25 counterintelligence investigation.
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1 ‘‘(d) CONFIDENTIALITY.—No consumer reporting

2 agency or officer, employee, or agent of a consumer report3 ing agency shall disclose to any person, other than those

4 officers, employees, or agents of a consumer reporting

5 agency necessary to fulfill the requirement to disclose in6 formation to the Federal Bureau of Investigation under

7 this section, that the Federal Bureau of Investigation has

8 sought or obtained the identity of financial institutions or

9 a consumer report respecting any consumer under sub10 section (a), (b), or (c) and no consumer reporting agency

11 or officer, employee, or agent of a consumer reporting

12 agency shall include in any consumer report any informa13 tion that would indicate that the Federal Bureau of Inves14 tigation has sought or obtained such information or a

15 consumer report.

16 ‘‘(e) PAYMENT OF FEES.—The Federal Bureau of

17 Investigation shall, subject to the availability of appropria18 tions, pay to the consumer reporting agency assembling

19 or providing reports or information in accordance with

20 procedures established under this section, a fee for reim21 bursement for such costs as are reasonably necessary and

22 that have been directly incurred in searching, reproducing,

23 or transporting books, papers, records, or other data re24 quired or requested to be produced under this section.
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1 ‘‘(f) LIMIT ON DISSEMINATION.—The Federal Bu2 reau of Investigation may not disseminate information ob3 tained pursuant to this section outside of the Federal Bu4 reau of Investigation, except to the Department of Justice

5 as may be necessary for the approval or conduct of a for6 eign counterintelligence investigation, or, if the informa7 tion concerns a person subject to the Uniform Code of

8 Military Justice, to appropriate investigative authorities

9 within the military department concerned as may be nec10 essary for the conduct of a joint foreign counterintel11 ligence investigation.

12 ‘‘(g) RULES OF CONSTRUCTION.—Nothing in this

13 section shall be construed to prohibit information from

14 being furnished by the Federal Bureau of Investigation

15 pursuant to a subpoena or court order, or in connection

16 with a judicial or administrative proceeding to enforce this

17 Act. Nothing in this section shall be construed to authorize

18 or permit the withholding of information from the Con19 gress.

20 ‘‘(h) REPORTS TO CONGRESS.—On a semiannual

21 basis, the Attorney General of the United States shall fully

22 inform—

23 ‘‘(1) the Permanent Select Committee on Intel24 ligence and the Committee on Banking and Finan25 cial Services of the House of Representatives; and
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1 ‘‘(2) the Select Committee on Intelligence and

2 the Committee on Banking, Housing, and Urban Af3 fairs of the Senate;

4 concerning all requests made pursuant to subsections (a),

5 (b), and (c).

6 ‘‘(i) DAMAGES.—Any agency or department of the

7 United States obtaining or disclosing any consumer re8 ports, records, or information contained therein in viola9 tion of this section is liable to the consumer to whom such

10 consumer reports, records, or information relate in an

11 amount equal to the sum of—

12 ‘‘(1) $100, without regard to the volume of

13 consumer reports, records, or information involved;

14 ‘‘(2) any actual damages sustained by the

15 consumer as a result of the disclosure;

16 ‘‘(3) if the violation is found to have been will17 ful or intentional, such punitive damages as a court

18 may allow; and

19 ‘‘(4) in the case of any successful action to en20 force liability under this subsection, the costs of the

21 action, together with reasonable attorney fees, as de22 termined by the court.

23 ‘‘(j) DISCIPLINARY ACTIONS FOR VIOLATIONS.—If a

24 court determines that any agency or department of the

25 United States has violated any provision of this section
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1 and the court finds that the circumstances surrounding

2 the violation raise questions of whether or not an officer

3 or employee of the agency or department acted willfully

4 or intentionally with respect to the violation, the agency

5 or department shall promptly initiate a proceeding to de6 termine whether or not disciplinary action is warranted

7 against the officer or employee that was responsible for

8 the violation.

9 ‘‘(k) GOOD-FAITH EXCEPTION.—Notwithstanding

10 any other provision of this title, any consumer reporting

11 agency or agent or employee thereof making disclosure of

12 consumer reports or identifying information pursuant to

13 this subsection in good-faith reliance upon a certification

14 of the Federal Bureau of Investigation pursuant to provi15 sions of this section shall not be liable to any person for

16 such disclosure under this title, the constitution of any

17 State, or any law or regulation of any State or any politi18 cal subdivision of any State.

19 ‘‘(l) LIMITATION OF REMEDIES.—Notwithstanding

20 any other provision of this title, the remedies and sanc21 tions set forth in this section shall be the only judicial

22 remedies and sanctions for violation of this section.

23 ‘‘(m) INJUNCTIVE RELIEF.—In addition to any other

24 remedy contained in this section, injunctive relief shall be

25 available to require compliance with the procedures of this
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1 section. In the event of any successful action under this

2 subsection, costs together with reasonable attorney fees,

3 as determined by the court, may be recovered.’’.

4 (b) CONFORMING AMENDMENT.—The table of sec5 tions at the beginning of the Fair Credit Reporting Act

6 (15 U.S.C. 1681a et seq.) (as amended by section 114(b))

7 is amended by adding after the item relating to section

8 624 the following:

‘‘625. Disclosures to FBI for counterintelligence purposes.’’.

9 (c) REPEAL.—

10 (1) IN GENERAL.—Section 625 of the Fair

11 Credit Reporting Act (as added by this section) is

12 repealed.

13 (2) CONFORMING AMENDMENT.—The table of

14 sections at the beginning of the Fair Credit Report15 ing Act (15 U.S.C. 1681a et seq.) (as amended by

16 this Act) is amended by striking the item relating to

17 section 625.

18 SEC. 124. EFFECTIVE DATES.

19 (a) IN GENERAL.—Except as provided in subsections

20 (b) and (c), the amendments made by this title shall take

21 effect 365 days after the date of enactment of this Act.

22 (b) EXCEPTIONS.—

23 (1) The amendment made by section 121 shall

24 take effect 90 days after the date of enactment of

25 this Act.
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1 (2) The amendments made by subsections (a)

2 and (b) of section 123 shall take effect on the date

3 of enactment of this Act.

4 (3) Subsection (c) of section 123 shall take ef5 fect on the date that is 5 years after the date of en6 actment of this Act.

7 (c) EARLY COMPLIANCE.—With respect to any per8 son or other entity that is subject to the requirements of

9 this Act, if the Federal Trade Commission makes a deter10 mination that such person or entity is in compliance with

11 any provision of this Act prior to the effective date speci12 fied in subsection (a), each of the corresponding provisions

13 of this Act shall be fully applicable to such person or

14 entity.

15 SEC. 125. RELATIONSHIP TO OTHER LAW.

16 Nothing in this title or the amendments made by this

17 Act shall be considered to supersede or otherwise affect

18 section 2721 of title 18, United States Code, with respect

19 to motor vehicle records for surveys, marketing, or solici20 tations.

21 SEC. 126. TECHNICAL CORRECTION TO DEPOSITORY INSTI22 TUTIONS MANAGEMENT INTERLOCKS ACT.

23 Section 209(c)(1)(C) of the Depository Institution

24 Management Interlocks Act (12 U.S.C. 3207(c)(1)(C)) is
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1 amended by inserting ‘‘or institutions’’ after ‘‘newly char2 tered institutions’’.

3 TITLE II—CREDIT REPAIR

4 ORGANIZATIONS

5 SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZA6 TIONS.

7 Title IV of the Consumer Credit Protection Act is

8 amended to read as follows:

9 ‘‘TITLE IV—CREDIT REPAIR

10 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.

11 ‘‘SEC. 401. SHORT TITLE.

12 ‘‘This title may be cited as the ‘Credit Repair Organi13 zations Act’.

14 ‘‘SEC. 402. FINDINGS AND PURPOSES.

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

16 findings:

17 ‘‘(1) Consumers have a vital interest in estab18 lishing and maintaining their creditworthiness and
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1 credit standing in order to obtain and use credit. As

2 a result, consumers who have experienced credit

3 problems may seek assistance from credit repair or4 ganizations which offer to improve the credit stand5 ing of such consumers.

6 ‘‘(2) Certain advertising and business practices

7 of some companies engaged in the business of credit

8 repair services have worked a financial hardship

9 upon consumers, particularly those of limited eco10 nomic means and those who are inexperienced in

11 credit matters.

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

13 follows:

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

15 services of credit repair organizations are provided

16 with the information necessary to make an informed

17 decision regarding the purchase of such services.

18 ‘‘(2) To protect the public from unfair or decep19 tive advertising and business practices by credit re20 pair organizations.

21 ‘‘SEC. 403. DEFINITIONS.

22 ‘‘For purposes of this title, the following definitions

23 shall apply:

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

25 an individual.
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1 ‘‘(2) CONSUMER CREDIT TRANSACTION.—The

2 term ‘consumer credit transaction’ means any trans3 action in which credit is offered or extended to an

4 individual for personal, family, or household pur5 poses.

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

7 term ‘credit repair organization’—

8 ‘‘(A) means any person who uses any in9 strumentality of interstate commerce or the

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

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

12 perform) any service, in return for the payment

13 of money or other valuable consideration, for

14 the express or implied purpose of—

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

16 record, credit history, or credit rating; or

17 ‘‘(ii) providing advice or assistance to

18 any consumer with regard to any activity

19 or service described in clause (i); and

20 ‘‘(B) does not include—

21 ‘‘(i) any nonprofit organization that is

22 exempt from taxation under section

23 501(c)(3) of the Internal Revenue Code of

24 1986;
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1 ‘‘(ii) any attorney-at-law who is a

2 member of the bar of the highest court of

3 any State or otherwise licensed under the

4 laws of any State, with respect to services

5 rendered that are within the scope of regu6 lations applicable to members of such bar

7 or such licensees; or

8 ‘‘(iii) any creditor (as defined in sec9 tion 103 of the Truth in Lending Act),

10 with respect to any consumer, to the extent

11 the creditor is assisting the consumer to

12 restructure any debt owed by the consumer

13 to the creditor.

14 ‘‘(4) CREDIT.—The term ‘credit’ has the same

15 meaning as in section 103(e).

16 ‘‘SEC. 404. PROHIBITED PRACTICES.

17 ‘‘(a) IN GENERAL.—No person may—

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

19 any consumer to make any statement, that is untrue

20 or misleading (or that, upon the exercise of reason21 able care, should be known by the credit repair orga22 nization, officer, employee, agent, or other person to

23 be untrue or misleading) with respect to any con24 sumer’s creditworthiness, credit standing, or credit

25 capacity to—
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1 ‘‘(A) any consumer reporting agency (as

2 such term is defined in section 603(f)); or

3 ‘‘(B) any person—

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

5 consumer; or

6 ‘‘(ii) to whom the consumer has ap7 plied or is applying for an extension of

8 credit;

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

10 any consumer to make any statement, the intended

11 effect of which is to alter the consumer’s identifica12 tion to prevent the display of the consumer’s credit

13 record, history, or rating for the purpose of conceal14 ing adverse information that is accurate and not ob15 solete to—

16 ‘‘(A) any consumer reporting agency; or

17 ‘‘(B) any person—

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

19 consumer; or

20 ‘‘(ii) to whom the consumer has ap21 plied or is applying for an extension of

22 credit;

23 ‘‘(3) make or use any untrue or misleading rep24 resentation of the services of the credit repair orga25 nization; or
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1 ‘‘(4) engage, directly or indirectly, in any act,

2 practice, or course of business that constitutes or re3 sults in the commission of, or an attempt to commit,

4 a fraud or deception on any person in connection

5 with the offer or sale of the services of the credit re6 pair organization.

7 ‘‘(b) PAYMENT IN ADVANCE.—No credit repair orga8 nization may charge or receive any money or other valu9 able consideration for the performance of any service that

10 the credit repair organization has agreed to perform for

11 any consumer before such service is fully performed.

12 ‘‘SEC. 405. DISCLOSURES.

13 ‘‘(a) DISCLOSURE REQUIRED.—Any credit repair or14 ganization shall provide any consumer with the following

15 written statement before any contract or agreement be16 tween the consumer and the credit repair organization is

17 executed:

18 ‘‘ ‘Consumer Credit File Rights

19 Under State and Federal Law

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

21 in your credit report by contacting the credit bureau di22 rectly. However, neither you nor any ‘‘credit repair’’ com23 pany or credit repair organization has the right to have

24 accurate, current, and verifiable information removed

25 from your credit report. The credit bureau must remove
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1 accurate, negative information from your report only if the

2 information is over 7 years old. Bankruptcy information

3 can be reported for 10 years.

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

5 report from a credit bureau. You may be charged a rea6 sonable fee. There is no fee, however, if you have been

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

8 dwelling because of information in your credit report dur9 ing the preceding 60-day period. The credit bureau must

10 provide someone to help you interpret the information in

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

12 of your credit report if you are unemployed and intend

13 to apply for employment in the next 60 days, if you are

14 a recipient of public welfare assistance, or if you have rea15 son to believe that there is inaccurate information in your

16 credit report due to fraud.

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

18 that violates the Credit Repair Organization Act. This law

19 prohibits deceptive practices by credit repair organiza20 tions.

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

22 credit repair organization for any reason within 3 business

23 days from the date on which you signed the contract.
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1 ‘‘ ‘Credit bureaus are required to follow reasonable

2 procedures to ensure that the information they report is

3 accurate. However, mistakes may occur.

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

5 writing that you dispute the accuracy of information in

6 your credit file. The credit bureau must then reinvestigate

7 and modify or remove inaccurate or incomplete informa8 tion. The credit bureau may not charge any fee for this

9 service. Any pertinent information and copies of all docu10 ments you have concerning an error should be given to

11 the credit bureau.

12 ‘‘ ‘If the credit bureau’s reinvestigation does not re13 solve the dispute to your satisfaction, you may send a brief

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

15 explaining why you think the record is inaccurate. The

16 credit bureau must include a summary of your statement

17 about disputed information with any report the credit bu18 reau issues about you.

19 ‘‘ ‘The Federal Trade Commission regulates credit

20 bureaus and credit repair organizations. For more infor21 mation contact:
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1 The Public Reference Branch

2 Federal Trade Commission

3 Washington, D.C. 20580’.

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

5 written statement required under this section shall be pro6 vided as a document that is separate from any written

7 contract or other agreement between the credit repair or8 ganization and the consumer or any other written material

9 provided to the consumer.

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

11 ‘‘(1) IN GENERAL.—The credit repair organiza12 tion shall maintain a copy of the statement signed

13 by the consumer acknowledging receipt of the state14 ment.

15 ‘‘(2) MAINTENANCE FOR 2 YEARS.—The copy

16 of any consumer’s statement shall be maintained in

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

18 which the statement is signed by the consumer.

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

20 ‘‘(a) WRITTEN CONTRACTS REQUIRED.—No services

21 may be provided by any credit repair organization for any

22 consumer—

23 ‘‘(1) unless a written and dated contract (for

24 the purchase of such services) that meets the re-
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1 quirements of subsection (b) has been signed by the

2 consumer; or

3 ‘‘(2) before the end of the 3-business-day period

4 beginning on the date on which the contract is

5 signed.

6 ‘‘(b) TERMS AND CONDITIONS OF CONTRACT.—No

7 contract referred to in subsection (a) meets the require8 ments of this subsection unless such contract includes the

9 following information (in writing):

10 ‘‘(1) The terms and conditions of payment, in11 cluding the total amount of all payments to be made

12 by the consumer to the credit repair organization or

13 to any other person.

14 ‘‘(2) A full and detailed description of the serv15 ices to be performed by the credit repair organiza16 tion for the consumer, including—

17 ‘‘(A) all guarantees of performance; and

18 ‘‘(B) an estimate of—

19 ‘‘(i) the date by which the perform20 ance of the services (to be performed by

21 the credit repair organization or any other

22 person) will be complete; or

23 ‘‘(ii) the length of the period nec24 essary to perform such services.
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1 ‘‘(3) The credit repair organization’s name and

2 principal business address.

3 ‘‘(4) A conspicuous statement in bold face type,

4 in immediate proximity to the space reserved for the

5 consumer’s signature on the contract, which reads as

6 follows: ‘You may cancel this contract without pen7 alty or obligation at any time before midnight of the

8 third business day after the date on which you

9 signed the contract. See the attached notice of can10 cellation form for an explanation of this right.’.

11 ‘‘SEC. 407. RIGHT TO CANCEL CONTRACT.

12 ‘‘(a) IN GENERAL.—Any consumer may cancel any

13 contract with any credit repair organization without pen14 alty or obligation by notifying the credit repair organiza15 tion of the consumer’s intention to do so at any time be16 fore midnight of the third business day that begins after

17 the date on which the contract or agreement between the

18 consumer and the credit repair organization is executed

19 or would, but for this subsection, become enforceable

20 against the parties.

21 ‘‘(b) CANCELLATION FORM AND OTHER INFORMA22 TION.—Each contract shall be accompanied by a form, in

23 duplicate, that has the heading ‘Notice of Cancellation’

24 and contains in bold face type the following statement:
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1 ‘‘ ‘You may cancel this contract, without any

2 penalty or obligation, at any time before midnight of

3 the third day that begins after the date on which the

4 contract is signed by you.

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

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

7 other written notice to [ name of credit repair

8 organization ] at [ address of credit repair

9 organization ] before midnight on [ date ]

10 ‘‘ ‘I hereby cancel this transaction,

11 [ date ]

12 [ purchaser’s signature ].’.

13 ‘‘(c) CONSUMER COPY OF CONTRACT REQUIRED.—

14 Any consumer who enters into any contract with any cred15 it repair organization shall be given, by the organization—

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

17 disclosure statement required under section 405; and

18 ‘‘(2) a copy of any other document the credit

19 repair organization requires the consumer to sign,

20 at the time the contract or the other document is signed.

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

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

23 any consumer of any protection provided by or any right

24 of the consumer under this title—

25 ‘‘(1) shall be treated as void; and
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1 ‘‘(2) may not be enforced by any Federal or

2 State court or any other person.

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

4 by any person to obtain a waiver from any consumer of

5 any protection provided by or any right of the consumer

6 under this title shall be treated as a violation of this title.

7 ‘‘(c) CONTRACTS NOT IN COMPLIANCE.—Any con8 tract for services that does not comply with the applicable

9 provisions of this title—

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

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

12 State court or any other person.

13 ‘‘SEC. 409. CIVIL LIABILITY.

14 ‘‘(a) LIABILITY ESTABLISHED.—Any person who

15 fails to comply with any provision of this title with respect

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

17 amount equal to the sum of the amounts determined

18 under each of the following paragraphs:

19 ‘‘(1) ACTUAL DAMAGES.—The greater of—

20 ‘‘(A) the amount of any actual damage

21 sustained by such person as a result of such

22 failure; or

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

24 credit repair organization.

25 ‘‘(2) PUNITIVE DAMAGES.—
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1 ‘‘(A) INDIVIDUAL ACTIONS.—In the case of

2 any action by an individual, such additional

3 amount as the court may allow.

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

5 class action, the sum of—

6 ‘‘(i) the aggregate of the amount that

7 the court may allow for each named plain8 tiff; and

9 ‘‘(ii) the aggregate of the amount that

10 the court may allow for each other class

11 member, without regard to any minimum

12 individual recovery.

13 ‘‘(3) ATTORNEYS’ FEES.—In the case of any

14 successful action to enforce any liability under para15 graph (1) or (2), the costs of the action, together

16 with reasonable attorneys’ fees.

17 ‘‘(b) FACTORS TO BE CONSIDERED IN AWARDING

18 PUNITIVE DAMAGES.—In determining the amount of any

19 liability of any credit repair organization under subsection

20 (a)(2), the court shall consider, among other relevant fac21 tors—

22 ‘‘(1) the frequency and persistence of non23 compliance by the credit repair organization;

24 ‘‘(2) the nature of the noncompliance;
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1 ‘‘(3) the extent to which such noncompliance

2 was intentional; and

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

4 of consumers adversely affected.

5 ‘‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.

6 ‘‘(a) IN GENERAL.—Compliance with the require7 ments imposed under this title with respect to credit repair

8 organizations shall be enforced under the Federal Trade

9 Commission Act by the Federal Trade Commission.

10 ‘‘(b) VIOLATIONS OF THIS TITLE TREATED AS VIO11 LATIONS OF FEDERAL TRADE COMMISSION ACT.—

12 ‘‘(1) IN GENERAL.—For the purpose of the ex13 ercise by the Federal Trade Commission of the Com14 mission’s functions and powers under the Federal

15 Trade Commission Act, any violation of any require16 ment or prohibition imposed under this title with re17 spect to credit repair organizations shall constitute

18 an unfair or deceptive act or practice in commerce

19 in violation of section 5(a) of the Federal Trade

20 Commission Act.

21 ‘‘(2) ENFORCEMENT AUTHORITY UNDER OTHER

22 LAW.—All functions and powers of the Federal

23 Trade Commission under the Federal Trade Com24 mission Act shall be available to the Commission to

25 enforce compliance with this title by any person sub-
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1 ject to enforcement by the Federal Trade Commis2 sion pursuant to this subsection, including the power

3 to enforce the provisions of this title in the same

4 manner as if the violation had been a violation of

5 any Federal Trade Commission trade regulation

6 rule, without regard to whether the credit repair or7 ganization—

8 ‘‘(A) is engaged in commerce; or

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

10 the Federal Trade Commission Act.

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

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

13 such other remedies as are provided under State

14 law, if the chief law enforcement officer of a State,

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

16 reason to believe that any person has violated or is

17 violating this title, the State—

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

19 violation;

20 ‘‘(B) may bring an action on behalf of the

21 residents of the State to recover damages for

22 which the person is liable to such residents

23 under section 409 as a result of the violation;

24 and
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1 ‘‘(C) in the case of any successful action

2 under subparagraph (A) or (B), shall be award3 ed the costs of the action and reasonable attor4 ney fees as determined by the court.

5 ‘‘(2) RIGHTS OF COMMISSION.—

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

7 shall serve prior written notice of any civil ac8 tion under paragraph (1) upon the Federal

9 Trade Commission and provide the Commission

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

11 in which such prior notice is not feasible, in

12 which case the State shall serve such notice im13 mediately upon instituting such action.

14 ‘‘(B) INTERVENTION.—The Commission

15 shall have the right—

16 ‘‘(i) to intervene in any action re17 ferred to in subparagraph (A);

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

19 on all matters arising in the action; and

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

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

22 of bringing any action under this subsection, nothing

23 in this subsection shall prevent the chief law enforce24 ment officer, or an official or agency designated by

25 a State, from exercising the powers conferred on the
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1 chief law enforcement officer or such official by the

2 laws of such State to conduct investigations or to

3 administer oaths or affirmations or to compel the at4 tendance of witnesses or the production of documen5 tary and other evidence.

6 ‘‘(4) LIMITATION.—If the Federal Trade Com7 mission has instituted a civil action for violation of

8 this title, no State may, during the pendency of such

9 action, bring an action under this section against

10 any defendant named in the complaint of the Com11 mission for any violation of this title that is alleged

12 in that complaint.

13 ‘‘SEC. 411. STATUTE OF LIMITATIONS.

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

15 may be brought before the later of—

16 ‘‘(1) the end of the 2-year period beginning on

17 the date of the occurrence of the violation involved;

18 or

19 ‘‘(2) in any case in which any credit repair or20 ganization has materially and willfully misrepre21 sented any information that—

22 ‘‘(A) the credit repair organization is re23 quired, by any provision of this title, to disclose

24 to any consumer; and
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1 ‘‘(B) is material to the establishment of

2 the credit repair organization’s liability to the

3 consumer under this title,

4 the end of the 2-year period beginning on the date

5 of the discovery by the consumer of the misrepresen6 tation.

7 ‘‘SEC. 412. RELATION TO STATE LAW.

8 ‘‘This title shall not annul, alter, affect, or exempt

9 any person subject to the provisions of this title from com10 plying with any law of any State except to the extent that

11 such law is inconsistent with any provision of this title,

12 and then only to the extent of the inconsistency.

13 ‘‘SEC. 413. EFFECTIVE DATE.

14 ‘‘This title shall apply after the expiration of the 6-

15 month period beginning on the date of enactment of the

16 Credit Repair Organizations Act, except with respect to

17 contracts entered into by a credit repair organization be18 fore the end of such period.’’.

19 TITLE III—TRUTH IN LENDING

20 ACT

21 SEC. 301. TREATMENT OF DELIVERY FEES AND INTANGI22 BLES TAXES.

23 (a) IN GENERAL.—Section 106(a) of the Truth in

24 Lending Act (15 U.S.C. 1605) is amended by adding at

25 the end the following:
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1 ‘‘(6) Taxes levied on security instruments or on

2 documents evidencing indebtedness if such taxes

3 must be paid as a precondition to recording the in4 strument securing the evidence of indebtedness.’’.

5 (b) EXCLUDED FEES.—Section 106(e) of the Truth

6 in Lending Act (15 U.S.C. 1605(e)) is amended by insert7 ing ‘‘, if bona fide and reasonable’’ before the colon.

8 (c) FEES FOR DELIVERY CHARGES.—Section 106(e)

9 of the Truth in Lending Act (15 U.S.C. 1605(e)) is

10 amended by adding at the end the following:

11 ‘‘(7) FEES FOR DELIVERY CHARGES.—Fees for

12 delivery charges imposed by third parties (including

13 settlement agents, attorneys, and escrow and title

14 companies) if the creditor does not retain the

15 charges and the fees do not exceed $20 per delivery,

16 or $50 per consumer transaction.’’.

17 (d) APPLICABILITY.—The amendments made by this

18 section shall apply to any consumer credit transaction con19 summated on or after February 1, 1996.

20 SEC. 302. LIMITATIONS ON LIABILITY.

21 (a) IN GENERAL.—Chapter 2 of the Truth in Lend22 ing Act (15 U.S.C. 1631 et seq.) is amended by adding

23 at the end the following:
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1 ‘‘SEC. 139. CERTAIN LIMITATIONS ON LIABILITY.

2 ‘‘(a) IN GENERAL.—For any transaction con3 summated prior to February 1, 1996, a creditor or as4 signee shall have no civil or criminal liability under this

5 title, nor shall a consumer have extended rescission rights

6 under section 125, due to a creditor’s improper disclosure

7 of—

8 ‘‘(1) delivery charges actually and reasonably

9 imposed by the creditor, or any delivery charges im10 posed by third parties (including settlement agents,

11 attorneys, and escrow and title companies), if the

12 creditor does not retain the charges; or

13 ‘‘(2) taxes levied on security instruments or

14 documents evidencing indebtedness.

15 ‘‘(b) APPLICABILITY.—Subsection (a) does not apply

16 to—

17 ‘‘(1) any individual action or counterclaim

18 brought under this title filed prior to October 1,

19 1995, that alleged (prior to such date) improper dis20 closure of delivery charges or taxes;

21 ‘‘(2) any class action brought under this title in

22 which a class was certified prior to October 1, 1995,

23 that alleged (prior to such date) improper disclosure

24 of delivery charges or taxes;

25 ‘‘(3) the named individual plaintiffs in any class

26 action filed under this title prior to October 1, 1995,
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1 that alleged (prior to such date) improper disclosure

2 of delivery charges or taxes; or

3 ‘‘(4) any consumer credit transaction in which

4 a notice of rescission was sent to the creditor prior

5 to October 1, 1995.’’.

6 (b) AMENDMENT TO THE TABLE OF SECTIONS.—The

7 table of sections for chapter 2 of the Truth in Lending

8 Act (15 U.S.C. 1631 et seq.) is amended by inserting after

9 the item relating to section 138 the following:

‘‘139. Certain limitations on liability.’’.

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