I

104TH CONGRESS

1ST SESSION H. R. 561

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

IN THE HOUSE OF REPRESENTATIVES

JANUARY 18, 1995

Mr. GONZALEZ (for himself, Mr. VENTO, Mr. SCHUMER, Mr. FRANK of Massachusetts, Mr. KENNEDY of Massachusetts, Mr. FLAKE, Mr. MFUME,

Ms. WATERS, Ms. ROYBAL-ALLARD, Mr. BARRETT of Wisconsin, and Mr.

HINCHEY) introduced the following bill; which was referred to the Committee on Banking and Financial Services

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. Amendments relating to use of consumer reports for prescreening;

prohibition on unauthorized or uncertified use of information.

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

medical information.
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Sec. 106. Amendments relating to obsolete information and information contained in consumer reports.

Sec. 107. Amendments relating to compliance procedures.

Sec. 108. Amendments relating to consumer disclosures.

Sec. 109. Amendments relating to procedures in case of the disputed accuracy

of any information in a consumer’s file.

Sec. 110. Amendment relating to charges for disclosure.

Sec. 111. Amendments relating to duties of users of consumer reports and duties of affiliates sharing certain information.

Sec. 112. Amendments relating to civil liability.

Sec. 113. Amendments relating to 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 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’’.
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1 SEC. 102. DEFINITIONS.

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

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

4 adding at the end the following new subsection:

5 ‘‘(k)(1) The term ‘adverse action’ means the follow6 ing:

7 ‘‘(A) A denial or revocation of credit, a denial

8 of an application for an increase of an existing credit

9 limit, an unfavorable change in the terms of an ex10 isting credit arrangement, or a refusal to grant cred11 it in substantially the amount or on substantially the

12 terms requested; except that the term ‘adverse ac13 tion’ does not include—

14 ‘‘(i) a refusal to extend additional credit

15 under an existing credit arrangement if the ap16 plicant is delinquent or otherwise in default as

17 to that account, or

18 ‘‘(ii) a refusal or failure to authorize an ac19 count transaction at a point of sale which would

20 exceed a previously established credit limit.

21 ‘‘(B) A denial or cancellation of, an increase in

22 any charge for, or a reduction or other adverse or

23 unfavorable change in the terms of coverage or

24 amount of, any insurance, existing or applied for, in

25 connection with the underwriting of insurance.
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1 ‘‘(C) A denial of employment or any other deci2 sion for employment purposes which adversely af3 fects any current or prospective employee.

4 ‘‘(D) A denial or cancellation of, an increase in

5 any charge for, or any other adverse or unfavorable

6 change in the terms of, any license or benefit de7 scribed in section 604(a)(3)(D).

8 ‘‘(E) An action taken or determination made—

9 ‘‘(i) in connection with an application

10 which was made by, or a transaction which was

11 initiated by, any consumer, or in connection

12 with a review of account information under sec13 tion 604(a)(3)(E)(ii); and

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

15 consumer.

16 ‘‘(2) For purposes of any determination of whether

17 an action is an adverse action under paragraph (1)(A),

18 all appropriate final findings, decisions, commentary, and

19 orders issued under section 701(d)(6) of the Equal Credit

20 Opportunity Act by the Board of Governors of the Federal

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

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

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

24 amended by adding after subsection (k) (as added by sub25 section (a) of this section) the following:
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1 ‘‘(l) The term ‘firm offer of credit’ means any offer

2 of credit to a consumer that will be honored if the

3 consumer is determined, based on information in a

4 consumer report on the consumer, to meet the specific cri5 teria used to select the consumer for the offer, except that

6 the offer may be further conditioned solely on any com7 bination of the following:

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

9 information in the consumer’s application for the

10 credit, to meet specific criteria bearing on credit11 worthiness that are established—

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

13 the offer; and

14 ‘‘(B) for the purpose of determining

15 whether to extend credit pursuant to the offer.

16 ‘‘(2) Verification—

17 ‘‘(A) that the consumer continues to meet

18 the specific criteria used to select the consumer

19 for the offer, by using information in a

20 consumer report on the consumer, information

21 in the consumer’s application for the credit, or

22 other information bearing on the creditworthi23 ness of the consumer; or

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

25 application for the credit, to determine that the
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1 consumer meets the specific criteria bearing on

2 creditworthiness.

3 ‘‘(3) The consumer furnishing any collateral

4 that is a requirement for the extension of the credit

5 that was—

6 ‘‘(A) established before selection of the

7 consumer for the offer of credit; and

8 ‘‘(B) described to the consumer in the

9 offer of credit.’’.

10 (c) CREDIT TRANSACTION WHICH IS NOT INITIATED

11 BY THE CONSUMER.—Section 603 of the Fair Credit Re12 porting Act (15 U.S.C. 1681a) is further amended by add13 ing after subsection (l) (as added by subsection (b) of this

14 section) the following:

15 ‘‘(m) The term ‘credit transaction which is not initi16 ated by the consumer’ does not include the use of a

17 consumer report by a person with which the consumer has

18 an account, for purposes of—

19 ‘‘(1) reviewing the account; or

20 ‘‘(2) collecting the account.’’.

21 (d) STATE.—Section 603 of the Fair Credit Report22 ing Act (15 U.S.C. 1681a) is further amended by adding

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

24 section) the following:
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1 ‘‘(n) The term ‘State’ means any State, the Common2 wealth of Puerto Rico, the District of Columbia, and any

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

4 (e) EXCLUSIONS FROM DEFINITION OF CONSUMER

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

6 Act (15 U.S.C. 1681a(d)) is amended in the second sen7 tence in clause (A)—

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

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

10 the following: ‘‘, (ii) any communication of that in11 formation among persons related by common owner12 ship or affiliated by corporate control, or (iii) any

13 communication of information from a credit applica14 tion by a consumer among persons related by com15 mon ownership or affiliated by corporate control if

16 it is clearly and conspicuously disclosed that the in17 formation may be communicated among such per18 sons and the consumer is given the opportunity,

19 prior to the time that the information is initially

20 communicated, to direct that such information not

21 be communicated among such persons’’;

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

23 semicolon at the end;

24 (4) in clause (C) by striking the period and in25 serting a semicolon; and
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1 (5) by adding at the end the following: ‘‘or (D)

2 any communication of information about a consumer

3 between persons who are affiliated by common own4 ership or common corporate control and in connec5 tion with a credit transaction which is not initiated

6 by the consumer, or an insurance transaction which

7 is not initiated by the consumer, if either of those

8 persons has complied with section 615(d)(4)(B) with

9 respect to a consumer report from which the infor10 mation is taken and the consumer has consented to

11 use of the report for the transaction, or with respect

12 to existing customers, the consumer has not directed

13 in writing that the report may not be used for

14 the transaction, in accordance with section

15 615(d)(4)(C).’’.

16 (f) EXCLUSION OF CERTAIN COMMUNICATIONS BY

17 EMPLOYMENT AGENCIES FROM DEFINITION OF

18 CONSUMER REPORT.—Section 603 of the Fair Credit Re19 porting Act (15 U.S.C. 1681(a)) is further amended—

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

21 (e) of this section, by adding at the end the follow22 ing: ‘‘The term also does not include a communica23 tion described in subsection (o).’’; and

24 (2) by adding at the end the following:
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1 ‘‘(o) A communication is described in this subsection

2 if it is a communication—

3 ‘‘(1) that, but for the 3rd sentence of sub4 section (d), would be an investigative consumer re5 port;

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

7 the purpose of—

8 ‘‘(A) procuring an employee for the em9 ployer, or

10 ‘‘(B) procuring an opportunity for a natu11 ral person to work for the employer;

12 ‘‘(3) that is made by a person that regularly

13 performs such procurement;

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

15 purpose other than a purpose described in para16 graph (2) (A) or (B);

17 ‘‘(5) with respect to which—

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

19 the communication—

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

21 the nature and scope of the communica22 tion, before the collection of any informa23 tion for the purpose of making the commu24 nication;
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1 ‘‘(ii) consents orally or in writing to

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

4 communication; and

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

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

7 written confirmation of that consent by the

8 person making the communication, within

9 3 business days after the receipt of the

10 consent by that person;

11 ‘‘(B) the person that makes the commu12 nication does not, for the purpose of making

13 the communication, make any inquiry that if

14 made by a prospective employer of the

15 consumer who is the subject of the communica16 tion would violate any applicable Federal or

17 State equal employment opportunity law or reg18 ulation; and

19 ‘‘(C) the person that makes the commu20 nication—

21 ‘‘(i) discloses in writing to the

22 consumer who is the subject of the commu23 nication, within 5 business days after re24 ceiving any request from the consumer for

25 such disclosure, the nature and substance
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1 of all information in the consumer’s file at

2 the time of the request, except that the

3 sources of information that is acquired

4 solely for use in making the communica5 tion and actually used for no other purpose

6 need not be disclosed other than under ap7 propriate discovery procedures in the court

8 in which an action is brought; and

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

10 subject of the communication, in writing,

11 of the consumer’s right to request the in12 formation described in clause (i).’’.

13 (g) CONSUMER REPORTING AGENCY THAT COM14 PILES AND MAINTAINS FILES ON A NATIONWIDE

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

16 U.S.C. 1681a) is further amended by adding after sub17 section (o) (as added by subsection (f) of this section) the

18 following:

19 ‘‘(p) The term ‘consumer reporting agency that com20 piles and maintains files on consumers on a nationwide

21 basis’ means a consumer reporting agency that regularly

22 engages in the practice of assembling or evaluating, and

23 maintaining, for the purpose of furnishing consumer re24 ports to third parties bearing on a consumer’s credit-
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1 worthiness, credit standing, or credit capacity, each of the

2 following regarding consumers residing nationwide:

3 ‘‘(1) Public record information.

4 ‘‘(2) Credit account information from persons

5 who furnish that information regularly and in the

6 ordinary course of business.’’.

7 (h) CLERICAL AMENDMENT.—Section 603(d) of the

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

9 amended in the first sentence—

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

11 for’’; and

12 (2) by striking ‘‘(1)’’ before ‘‘credit or insur13 ance’’.

14 SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EM15 PLOYMENT PURPOSES.

16 (a) FURNISHING CONSUMER REPORTS FOR BUSI17 NESS TRANSACTIONS.—Section 604 of the Fair Credit Re18 porting Act (15 U.S.C. 1681b) is amended—

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

20 ‘‘A consumer reporting agency’’; and

21 (2) in subsection (a)(3) (as designated by para22 graph (1) of this subsection) by striking subpara23 graph (E) and inserting the following:

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

25 for the information—
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1 ‘‘(i) in connection with a business trans2 action that is initiated by the consumer; or

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

4 whether the consumer continues to meet the

5 terms of the account.’’.

6 (b) FURNISHING AND USING CONSUMER REPORTS

7 FOR EMPLOYMENT PURPOSES.—Section 604 of the Fair

8 Credit Reporting Act (15 U.S.C. 1681b) is further amend9 ed by adding at the end the following new subsection:

10 ‘‘(b) CONDITIONS FOR FURNISHING AND USING

11 CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—

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

13 reporting agency may furnish a consumer report for

14 employment purposes only if—

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

16 from the agency certifies to the agency that—

17 ‘‘(i) the person has complied with

18 paragraph (2) with respect to the

19 consumer report, and the person will com20 ply with paragraph (3) with respect to the

21 consumer report if paragraph (3) becomes

22 applicable; and

23 ‘‘(ii) information from the consumer

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

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

6 Federal Trade Commission under section

7 609(c)(3).

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

9 may not procure a consumer report, or cause a

10 consumer report to be procured, for employment

11 purposes with respect to any consumer unless—

12 ‘‘(A) a clear and conspicuous disclosure

13 has been made in writing to the consumer at

14 any time before the report is procured or

15 caused to be procured, in a document that con16 sists solely of the disclosure, that a consumer

17 report may be obtained for employment pur18 poses; and

19 ‘‘(B) the consumer has authorized in writ20 ing the procurement of the report by that per21 son.

22 ‘‘(3) CONDITIONS ON USE FOR ADVERSE AC23 TIONS.—In using a consumer report for employment

24 purposes, before taking any adverse action based in
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1 whole or in part on the report a person shall provide

2 to the consumer to whom the report relates—

3 ‘‘(A) a copy of the report;

4 ‘‘(B) a description in writing of the con5 sumer’s rights under this title, as prescribed by

6 the Federal Trade Commission under section

7 609(c)(3); and

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

9 exceed 5 business days following receipt of the

10 report by the consumer) to respond to any in11 formation in the report that is disputed by the

12 consumer and notice in writing of the oppor13 tunity for the consumer to respond in that pe14 riod, except that such an opportunity to re15 spond and notice are not required if the person

16 takes the adverse action based on a reasonable

17 belief that the consumer has engaged in fraudu18 lent or criminal activity that is related to, or

19 that could affect, the consumer’s employment.

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

21 paragraph (1), a consumer reporting agency may

22 furnish information bearing on the creditworthiness

23 of a consumer, and a person may use such informa24 tion, for employment purposes that do not relate to
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1 employment of an individual in an executive or ad2 ministrative position, only if—

3 ‘‘(A) the employment requires or is ex4 pected to require a security clearance issued by

5 an agency of the United States or any State as

6 a condition for employment;

7 ‘‘(B) the employment requires or is ex8 pected to require the individual to be covered by

9 a fidelity bond; or

10 ‘‘(C) the employment requires or is ex11 pected to require the individual, on a regular

12 basis and as part of the normal duties of em13 ployment—

14 ‘‘(i) to handle or otherwise have ac15 cess to substantial amounts of cash or

16 other things of value of the employer: or

17 ‘‘(ii) to engage in any conduct or ac18 tivity with respect to which the employee

19 has a fiduciary duty.

20 ‘‘(5) EXECUTIVE OR ADMINISTRATIVE POSITION

21 DEFINED.—

22 ‘‘(A) IN GENERAL.—For purposes of para23 graph (4), the term ‘executive or administrative

24 position’ means any position—
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1 ‘‘(i) for which compensation is on a

2 salary basis and not an hourly basis; and

3 ‘‘(ii) having policy making, manage4 rial, professional, or supervisory respon5 sibilities.

6 ‘‘(B) APPLICATION OF EXISTING FIND7 INGS, ETC.—For purposes of determining under

8 subparagraph (A)(ii) whether a position has

9 policy making, managerial, professional, or su10 pervisory responsibilities, all appropriate final

11 administrative and judicial findings, decisions,

12 commentary, and orders issued under the Fed13 eral Election Campaign Act of 1971, or the reg14 ulations issued under that Act, shall apply.’’.

15 SEC. 104. AMENDMENTS RELATING TO USE OF CONSUMER

16 REPORTS FOR PRESCREENING; PROHIBITION

17 ON UNAUTHORIZED OR UNCERTIFIED USE OF

18 INFORMATION.

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

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

21 103, is further amended—

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

23 reporting agency’’ and inserting ‘‘Subject to sub24 section (c), any consumer reporting agency’’; and
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1 (2) by adding after subsection (b) (as added by

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

3 ‘‘(c) FURNISHING REPORTS IN CONNECTION WITH

4 CREDIT TRANSACTIONS NOT INITIATED BY THE

5 CONSUMER.—

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

7 agency may furnish a consumer report relating to

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

9 connection with any credit transaction which is not

10 initiated by the consumer only if—

11 ‘‘(A) the consumer authorizes the agency

12 to provide such report to such person; or

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

14 offer of credit;

15 ‘‘(ii) the consumer reporting agency has

16 complied with subsection (d); and

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

18 the consumer, made in accordance with sub19 section (d), to have the consumer’s name and

20 address excluded from lists of names provided

21 by the agency pursuant to this paragraph.

22 ‘‘(2) LIMITS ON INFORMATION RECEIVED

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

24 pursuant to paragraph (1)(B) only—

25 ‘‘(A) the name and address of a consumer;
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1 ‘‘(B) an identifier that is not unique to the

2 consumer and is used by the person solely for

3 the purpose of verifying the identity of the

4 consumer; and

5 ‘‘(C) information pertaining to a consumer

6 that is not identified or identifiable with the

7 consumer.

8 ‘‘(3) INFORMATION REGARDING INQUIRIES.—

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

10 reporting agency shall not furnish to any person a

11 record of inquiries in connection with credit trans12 actions which are not initiated by a consumer.

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

14 FROM LISTS.—

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

16 have the consumer’s name and address excluded

17 from any list provided by a consumer reporting

18 agency in connection with a credit transaction which

19 is not initiated by the consumer, by notifying the

20 agency in accordance with paragraph (2) that the

21 consumer does not consent to any use of consumer

22 reports relating to the consumer in connection with

23 any credit transaction which is not initiated by the

24 consumer.
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1 ‘‘(2) MANNER OF NOTIFICATION.—A consumer

2 shall notify a consumer reporting agency under

3 paragraph (1)—

4 ‘‘(A) through the notification system main5 tained by the agency under paragraph (5), or

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

7 notice of election form issued by the agency for

8 purposes of this subparagraph.

9 ‘‘(3) RESPONSE OF AGENCY AFTER NOTIFICA10 TION THROUGH SYSTEM.—Upon receipt of notifica11 tion of the election of a consumer under paragraph

12 (1) through the notification system maintained by

13 the agency under paragraph (5), a consumer report14 ing agency shall—

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

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

17 consumer does not submit to the agency a

18 signed notice of election form issued by the

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

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

21 if requested by the consumer, by not later than

22 5 business days after receiving the notification

23 through the system in the case of a request

24 made at the time the consumer provides notifi25 cation through the system.
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1 ‘‘(4) EFFECTIVENESS OF ELECTION.—An elec2 tion of a consumer under paragraph (1)—

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

4 consumer reporting agency beginning on the

5 date the consumer notifies the agency in ac6 cordance with paragraph (2);

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

8 consumer reporting agency—

9 ‘‘(i) subject to subparagraph (C), for

10 the 2-year period beginning on the date the

11 consumer notifies the agency of the elec12 tion, in the case of an election for which a

13 consumer notifies the agency only in ac14 cordance with paragraph (2)(A); or

15 ‘‘(ii) until the consumer notifies the

16 agency under subparagraph (C), in the

17 case of an election for which a consumer

18 notifies the agency in accordance with

19 paragraph (2)(B);

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

21 which the consumer notifies the agency,

22 through the notification system established by

23 the agency under paragraph (5), that the elec24 tion is no longer effective; and
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1 ‘‘(D) shall be effective with respect to each

2 affiliate of the agency.

3 ‘‘(5) NOTIFICATION SYSTEM, GENERALLY.—

4 Each consumer reporting agency which furnishes a

5 consumer report in connection with any credit trans6 action which is not initiated by a consumer, shall—

7 ‘‘(A) establish and maintain a notification

8 system, including a toll-free telephone number,

9 which permits any consumer whose consumer

10 report is maintained by the agency to notify the

11 agency, with appropriate identification, of the

12 consumer’s election to have the consumer’s

13 name and address excluded from any list of

14 names and addresses provided by the agency for

15 such a transaction; and

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

17 after the date of the enactment of the

18 Consumer Reporting Reform Act of 1995, and

19 at least annually thereafter, in a publication of

20 general circulation in the area served by the

21 agency—

22 ‘‘(i) a notification that information in

23 consumer files maintained by the agency

24 may be used in connection with such trans25 actions; and
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1 ‘‘(ii) the address and toll-free tele2 phone number for consumers to use to no3 tify the agency of the consumer’s election

4 under subparagraph (A).

5 Establishment and maintenance of a notification

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

7 publication by a consumer reporting agency on its

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

9 accordance with this paragraph is deemed to be

10 compliance with this paragraph by each of those af11 filiates.

12 ‘‘(6) NOTIFICATION SYSTEM BY AGENCIES

13 WHICH OPERATE NATIONWIDE.—Each consumer re14 porting agency which compiles and maintains files

15 on consumers on a nationwide basis shall establish

16 and maintain a notification system for purposes of

17 paragraph (5) jointly with other such consumer re18 porting agencies.’’.

19 (b) FURNISHING CONSUMER REPORTS FOR CERTAIN

20 DIRECT MARKETING TRANSACTIONS PROHIBITED.—Sec21 tion 604 of the Fair Credit Reporting Act (15 U.S.C.

22 1681b) is further amended by adding after subsection (d)

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

24 new subsection:
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1 ‘‘(e) FURNISHING CONSUMER REPORTS FOR CER2 TAIN DIRECT MARKETING TRANSACTIONS PROHIB3 ITED.—Except as provided in subsection (a)(2) and sub4 section (c), a consumer reporting agency may not furnish

5 a consumer report for use for a direct marketing trans6 action which is not initiated by the consumer to whom the

7 report relates.’’.

8 (c) USE OF INFORMATION OBTAINED FROM RE9 PORTS.—Section 604 of the Fair Credit Reporting Act (15

10 U.S.C. 1681b) is further amended by adding after sub11 section (e) (as added by subsection (b) of this section) the

12 following new subsection:

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

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

15 consumer report for any purpose unless—

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

17 consumer report is authorized to be furnished under

18 subsection (a); and

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

20 section 607 by a prospective user of the report

21 through a general or specific certification.’’.
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1 SEC. 105. CONSUMER CONSENT REQUIRED TO FURNISH

2 CONSUMER REPORT CONTAINING MEDICAL

3 INFORMATION.

4 Section 604 of the Fair Credit Reporting Act (15

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

6 further amended by adding at the end the following:

7 ‘‘(f) FURNISHING REPORTS CONTAINING MEDICAL

8 INFORMATION.—A consumer reporting agency shall not

9 furnish for employment purposes, or in connection with

10 a credit transaction, a consumer report which contains

11 medical information about a consumer, unless the

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

13 SEC. 106. AMENDMENTS RELATING TO OBSOLETE INFOR14 MATION AND INFORMATION CONTAINED IN

15 CONSUMER REPORTS.

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

17 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c)

18 is amended—

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

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

21 ‘‘(a) INFORMATION EXCLUDED FROM CONSUMER

22 REPORTS.—No’’; and

23 (2) by striking subsection (b).

24 (b) CLARIFICATION OF REPORTING PERIOD.—Sec25 tion 605 of the Fair Credit Reporting Act (15 U.S.C.
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1 1681c), as amended by subsection (a), is further amended

2 by adding at the end the following new subsection:

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

4 year period referred to in paragraphs (4) and (6) of sub5 section (a) shall begin, with respect to any delinquent ac6 count which is placed for collection (internally or by refer7 ral to a 3d party, whichever is earlier), charged to profit

8 and loss, or subjected to any similar action, upon the expi9 ration of the 180-day period beginning on the date of the

10 commencement of the delinquency which immediately pre11 ceded the collection activity, charge to profit and loss, or

12 similar action.

13 ‘‘(2) Paragraph (1) applies only to items of informa14 tion added to a consumer report on or after the date that

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

16 Consumer Reporting Reform Act of 1995.’’.

17 (c) ADDITIONAL INFORMATION ON BANKRUPTCY

18 FILINGS REQUIRED.—Section 605 of the Fair Credit Re19 porting Act (15 U.S.C. 1681c) is further amended by add20 ing after subsection (b) (as added by subsection (b) of this

21 section) the following new subsection:

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

23 Any consumer reporting agency which furnishes a

24 consumer report which contains information regarding

25 any case involving the consumer which arises under title
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1 11, United States Code, shall include in the report an

2 identification of the chapter of such title 11 under which

3 such case arises if provided by the source of the informa4 tion. If any case arising or filed under title 11, United

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

6 judgment, the consumer reporting agency shall include in

7 the report that such case or filing was withdrawn upon

8 receipt of documentation certifying such withdrawal.’’.

9 (d) INDICATION OF CLOSURE OF ACCOUNT; INDICA10 TION OF DISPUTE BY CONSUMER.—Section 605 of the

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

12 amended by adding after subsection (c) (as added by sub13 section (c) of this section) the following new subsections:

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

15 CONSUMER.—If a consumer reporting agency is notified

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

17 consumer was voluntarily closed by the consumer, the

18 agency shall indicate that fact in any consumer report that

19 includes information related to the account.

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

21 consumer reporting agency is notified pursuant to section

22 623(a)(3) that information regarding a consumer that was

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

24 agency shall indicate that fact in each consumer report

25 that includes the disputed information.’’.
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1 (e) NOTATION ON CONSUMER REPORT.—Section 605

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

3 further amended by adding at the end the following new

4 subsection:

5 ‘‘(f) CERTAIN ACCOUNT INFORMATION.—A consumer

6 reporting agency, upon the written request of a consumer,

7 and subject to the submission of appropriate documenta8 tion by the consumer, shall include with any information

9 regarding a failure of the consumer to make any payment

10 on an account of the consumer, a statement (in such form

11 as the Federal Trade Commission shall prescribe) that

12 during the period when the account in question became

13 due, the consumer was receiving assistance pursuant to

14 a declaration of a disaster by the President under the Rob15 ert T. Stafford Disaster Relief and Emergency Assistance

16 Act, or unemployment compensation under the laws of any

17 State (or, but for the exhaustion of benefits, would be enti18 tled to receive such compensation).’’.

19 (f) CLERICAL AMENDMENTS.—

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

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

22 by striking ‘‘Obsolete information’’ and insert23 ing ‘‘Requirements relating to information

24 contained in consumer reports’’.
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1 (2) The table of sections at the beginning of the

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

3 is amended by striking the item relating to section

4 605 and inserting the following:

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

5 SEC. 107. AMENDMENTS RELATING TO COMPLIANCE PRO6 CEDURES.

7 (a) DISCLOSURE OF CONSUMER REPORTS BY

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

9 (15 U.S.C. 1681e) is amended by adding at the end the

10 following new subsection:

11 ‘‘(c) DISCLOSURE OF CONSUMER REPORTS BY

12 USERS ALLOWED.—A consumer reporting agency may not

13 prohibit a user of a consumer report furnished by the

14 agency on a consumer from disclosing the contents of the

15 report to the consumer, if adverse action against the

16 consumer has been taken, or is contemplated, by the user

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

18 (b) NOTICE TO USERS AND PROVIDERS OF INFORMA19 TION TO ENSURE COMPLIANCE.—Section 607 of the Fair

20 Credit Reporting Act (15 U.S.C. 1681e) is further amend21 ed by adding after subsection (c) (as added by subsection

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

23 ‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR24 MATION.—
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•HR 561 IH

1 ‘‘(1) NOTICE REQUIREMENT.—A consumer re2 porting agency shall provide to any person—

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

4 course of business furnishes information to the

5 agency with respect to any consumer; or

6 ‘‘(B) to whom a consumer report is pro7 vided by the agency;

8 a notice of such person’s responsibilities under this

9 title.

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

11 Trade Commission shall prescribe the content of no12 tices under paragraph (1).’’.

13 (c) RECORD OF IDENTITY OF USERS AND PURPOSES

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

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

16 amended by adding after subsection (d) (as added by sub17 section (b) of this section) the following new subsection:

18 ‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE19 SALE.—

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

21 a consumer report for purposes of reselling the re22 port (or any information in the report) unless the

23 person discloses to the consumer reporting agency

24 which originally furnishes the report—
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1 ‘‘(A) the identity of the end-user of the re2 port (or information), and

3 ‘‘(B) each permissible purpose under sec4 tion 604 for which the report is furnished to

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

6 ‘‘(2) RESPONSIBILITIES OF PROCURERS FOR

7 RESALE.—A person which procures a consumer re8 port for purposes of reselling the report (or any in9 formation in the report) shall—

10 ‘‘(A) establish and comply with reasonable

11 procedures designed to ensure that the report

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

13 a purpose for which the report may be fur14 nished under section 604, including by requir15 ing that each person to which the report (or

16 information) is resold and which resells or pro17 vides the report (or information) to any other

18 person—

19 ‘‘(i) identifies each end user of the re20 sold report (or information);

21 ‘‘(ii) certifies each purpose for which

22 the report (or information) will be used;

23 and
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•HR 561 IH

1 ‘‘(iii) certifies that the report (or in2 formation) will be used for no other pur3 pose; and

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

5 reasonable efforts to verify the identifications

6 and certifications made under subparagraph

7 (A).’’.

8 SEC. 108. AMENDMENTS RELATING TO CONSUMER DISCLO9 SURES.

10 (a) ALL INFORMATION IN CONSUMER’S FILE RE11 QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the

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

13 amended to read as follows:

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

15 the time of the request.’’.

16 (b) MORE INFORMATION CONCERNING RECIPIENTS

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

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

19 to read as follows:

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

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

22 who procured a consumer report—

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

24 year period preceding the request; or
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•HR 561 IH

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

2 year period preceding the request.

3 ‘‘(B) An identification of a person under sub4 paragraph (A) shall include—

5 ‘‘(i) the name of the person or, if applica6 ble, the trade name (written in full) under

7 which such person conducts business; and

8 ‘‘(ii) upon request of the consumer, the ad9 dress and telephone number of the person.’’.

10 (c) DISCLOSURE OF PERMISSIBLE PURPOSES.—Sec11 tion 609(a) of the Fair Credit Reporting Act (15 U.S.C.

12 1681g(a)) is further amended by adding at the end the

13 following:

14 ‘‘(4) The permissible purpose under section

15 604, by category, for which each person identified

16 under paragraph (3) procured a consumer report.’’.

17 (d) INFORMATION REGARDING INQUIRIES.—Section

18 609(a) of the Fair Credit Reporting Act (15 U.S.C.

19 1681g(a)) is amended by adding after paragraph (4) (as

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

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

22 agency in the 1-year period preceding the request

23 that identified the consumer in connection with a

24 credit transaction which was not initiated by the

25 consumer.’’.
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1 (e) SUMMARY OF RIGHTS REQUIRED TO BE IN2 CLUDED WITH DISCLOSURE.—

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

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

5 by adding at the end the following new subsection:

6 ‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN7 CLUDED WITH DISCLOSURE.—

8 ‘‘(1) SUMMARY OF RIGHTS.—A consumer re9 porting agency shall provide to a consumer, with

10 each written disclosure by the agency to the

11 consumer under this section—

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

13 consumer has under this title; and

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

15 agency that compiles and maintains files on

16 consumers on a nationwide basis, a toll-free

17 telephone number established by the agency at

18 which personnel are accessible to consumers

19 during normal business hours.

20 ‘‘(2) SPECIFIC ITEMS REQUIRED TO BE IN21 CLUDED.—The summary of rights required under

22 paragraph (1) shall include—

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

24 rights of consumers under this title;
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1 ‘‘(B) an explanation of how the consumer

2 may exercise the rights of the consumer under

3 this title;

4 ‘‘(C) a list of all Federal agencies respon5 sible for enforcing any provision of this title

6 and the address and any appropriate phone

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

8 assist the consumer in selecting the appropriate

9 agency;

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

11 have additional rights under State law and that

12 the consumer may wish to contact a State or

13 local consumer protection agency or a State at14 torney general to learn of those rights; and

15 ‘‘(E) a statement that a consumer report16 ing agency is not required to remove accurate

17 derogatory information from a consumer’s file,

18 unless the information is outdated under sec19 tion 605 or cannot be verified.

20 ‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur21 poses of this subsection and any disclosure by a

22 consumer reporting agency required under this title

23 with respect to consumers’ rights, the Federal Trade

24 Commission (after consultation with each Federal

25 agency referred to in section 621(b)) shall prescribe
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1 the form and content of any disclosure of the rights

2 of consumers required under this title.’’.

3 (2) TECHNICAL AMENDMENT.—Section

4 606(a)(1)(B) of the Fair Credit Reporting Act (15

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

6 ‘‘and the written summary of the rights of the

7 consumer prepared pursuant to section 609(c)’’ be8 fore the semicolon.

9 (f) FORM OF DISCLOSURES.—

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

11 section 610 of the Fair Credit Reporting Act (15

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

13 ‘‘(a) IN GENERAL.—

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

15 reporting agency shall require, as a condition of

16 making the disclosures required under section 609,

17 that the consumer furnish proper identification.

18 ‘‘(2) DISCLOSURE IN WRITING.—Except as pro19 vided in subsection (b), the disclosures required to

20 be made under section 609 shall be provided under

21 that section in writing.

22 ‘‘(b) OTHER FORMS OF DISCLOSURE.—

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

24 consumer, a consumer reporting agency may make

25 the disclosures required under 609—
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1 ‘‘(A) other than in writing; and

2 ‘‘(B) in such form as may be—

3 ‘‘(i) specified by the consumer in ac4 cordance with paragraph (2); and

5 ‘‘(ii) available from the agency.

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

7 to paragraph (1) that disclosures under section 609

8 shall be made—

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

10 consumer at the place of business of the

11 consumer reporting agency where disclosures

12 are regularly provided, during normal business

13 hours, and on reasonable notice;

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

15 made a written request for disclosure by tele16 phone;

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

18 the agency; or

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

20 is available from the agency.’’.

21 (2) SIMPLIFIED DISCLOSURE.—Not later than

22 90 days after the date of enactment of this Act, each

23 consumer reporting agency shall develop a form on

24 which such consumer reporting agency shall make

25 the disclosures required under section 609(a) of the
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•HR 561 IH

1 Fair Credit Reporting Act, for the purpose of maxi2 mizing the comprehensibility and standardization of

3 such disclosures.

4 (3) GOALS.—The Federal Trade Commission

5 shall take appropriate action to assure that the goals

6 of comprehensibility and standardization are

7 achieved in accordance with paragraph (2).

8 (4) CONFORMING AMENDMENTS.—

9 (A) Section 609(a) of the Fair Credit Re10 porting Act (15 U.S.C. 1681h(a)) is amended

11 in the matter preceding paragraph (1) by strik12 ing ‘‘and proper identification of any consumer’’

13 and inserting ‘‘and subject to section

14 610(a)(1)’’.

15 (B) Section 610 of the Fair Credit Report16 ing Act (15 U.S.C. 1681h) is amended in the

17 heading for the section by inserting ‘‘and

18 form’’ after ‘‘Conditions’’.

19 (C) The table of sections at the beginning

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

21 1681a et seq.) is amended in the item relating

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

23 ‘‘Conditions’’.
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1 SEC. 109. AMENDMENTS RELATING TO PROCEDURES IN

2 CASE OF THE DISPUTED ACCURACY OF ANY

3 INFORMATION IN A CONSUMER’S FILE.

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

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

6 as follows:

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

9 ‘‘(1) REINVESTIGATION REQUIRED.—

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

11 accuracy of any item of information contained

12 in a consumer’s file at a consumer reporting

13 agency is disputed by the consumer and the

14 consumer notifies the agency directly of such

15 dispute, the agency shall reinvestigate free of

16 charge and record the current status of the dis17 puted information, or delete the item from the

18 file in accordance with paragraph (5), before

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

20 date the agency receives the notice of the dis21 pute from the consumer.

22 ‘‘(B) EXTENSION OF PERIOD TO

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

25 subparagraph (A) may be extended for up to,

26 but for no more than, 15 additional days if the
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1 consumer reporting agency receives information

2 from the consumer within that 30-day period

3 that is relevant to the reinvestigation.

4 ‘‘(C) LIMITATIONS ON EXTENSION OF PE5 RIOD TO REINVESTIGATE.—Subparagraph (B)

6 shall not apply to any reinvestigation in which,

7 in the 30-day period described in subparagraph

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

9 reinvestigation is found to be inaccurate or in10 complete or the consumer reporting agency de11 termines that the information cannot be veri12 fied.

13 ‘‘(2) PROMPT NOTICE OF DISPUTE TO FUR14 NISHER OF INFORMATION.—

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

16 5-business-day period beginning on the date a

17 consumer reporting agency receives notice of a

18 dispute from any consumer in accordance with

19 paragraph (1), the agency shall provide notifi20 cation of the dispute to any person that pro21 vided any item of information in dispute, at the

22 address and in the manner established with the

23 person. The notice shall include all relevant in24 formation regarding the dispute that the agency

25 has received from the consumer.
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1 ‘‘(B) PROVISION OF OTHER INFORMATION

2 FROM CONSUMER.—The consumer reporting

3 agency shall promptly provide to the person

4 that provided the information in dispute all rel5 evant information regarding the dispute that is

6 received by the agency from the consumer after

7 the period referred to in subparagraph (A) and

8 before the end of the period referred to in para9 graph (1)(A).

10 ‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO11 LOUS OR IRRELEVANT.—

12 ‘‘(A) IN GENERAL.—Notwithstanding para13 graph (1), a consumer reporting agency may

14 terminate a reinvestigation of information dis15 puted by a consumer under that paragraph if

16 the agency reasonably determines that the dis17 pute by the consumer is frivolous or irrelevant,

18 including by reason of a failure by a consumer

19 to provide sufficient information to investigate

20 the disputed information.

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

22 making any determination in accordance with

23 subparagraph (A) that a dispute is frivolous or

24 irrelevant, a consumer reporting agency shall

25 notify the consumer within 5 business days of
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1 such determination, by mail or, if authorized by

2 the consumer for that purpose, by any other

3 means available to the agency.

4 ‘‘(C) CONTENTS OF NOTICE.—A notice

5 under subparagraph (B) shall include—

6 ‘‘(i) the reasons for the determination

7 under subparagraph (A); and

8 ‘‘(ii) identification of any information

9 required to investigate the disputed infor10 mation, which may consist of a standard11 ized form describing the general nature of

12 such information.

13 ‘‘(4) CONSIDERATION OF CONSUMER INFORMA14 TION.—In conducting any reinvestigation under

15 paragraph (1) with respect to disputed information

16 in the file of any consumer, the consumer reporting

17 agency shall review and consider all relevant infor18 mation submitted by the consumer in the period de19 scribed in paragraph (1)(A) with respect to such dis20 puted information.

21 ‘‘(5) TREATMENT OF INACCURATE OR UNVERI22 FIABLE INFORMATION.—

23 ‘‘(A) IN GENERAL.—If, after any

24 reinvestigation under paragraph (1) of any in25 formation disputed by a consumer, an item of
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1 the information is found to be inaccurate or in2 complete or cannot be verified, the consumer re3 porting agency shall promptly delete that item

4 of information from the consumer’s file. The in5 formation deleted shall consist solely of the in6 formation that was disputed by the consumer

7 and shall not include any portion of the same

8 item that was not disputed.

9 ‘‘(B) REQUIREMENTS RELATING TO

10 REINSERTION OF PREVIOUSLY DELETED MATE11 RIAL.—

12 ‘‘(i) CERTIFICATION OF ACCURACY OF

13 INFORMATION.—If any information is de14 leted from a consumer’s file pursuant to

15 subparagraph (A), the information may

16 not be reinserted in the file by the

17 consumer reporting agency unless the per18 son who furnishes the information certifies

19 that the information is complete and accu20 rate.

21 ‘‘(ii) NOTICE TO CONSUMER.—If any

22 information which has been deleted from a

23 consumer’s file pursuant to subparagraph

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

25 reporting agency shall notify the consumer
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1 of the reinsertion in writing within 5 busi2 ness days after the reinsertion or, if au3 thorized by the consumer for that purpose,

4 by any other means available to the agen5 cy.

6 ‘‘(iii) ADDITIONAL INFORMATION.—As

7 part of or in addition to the notice under

8 clause (ii), a consumer reporting agency

9 shall provide to a consumer in writing

10 within 5 business days after the date of

11 the reinsertion—

12 ‘‘(I) a statement that the dis13 puted information has been

14 reinserted;

15 ‘‘(II) the name, business address,

16 and telephone number of any fur17 nisher of information contacted, or of

18 any furnisher of information which

19 contacted the consumer reporting

20 agency, in connection with the

21 reinsertion of such information; and

22 ‘‘(III) a notice that the consumer

23 has the right to add a statement to

24 the consumer’s file disputing the accu-
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1 racy or completeness of the disputed

2 information.

3 ‘‘(C) PROCEDURES TO PREVENT RE4 APPEARANCE.—A consumer reporting agency

5 shall maintain reasonable procedures designed

6 to prevent the reappearance in a consumer’s

7 file, and in consumer reports on the consumer,

8 of information that is deleted pursuant to this

9 paragraph (other than information that is

10 reinserted in accordance with subparagraph

11 (B)(i)).

12 ‘‘(D) FREE CONSUMER REPORT DURING

13 12-MONTH PERIOD AFTER DELETION OF INFOR14 MATION.—Upon the request of a consumer, a

15 consumer reporting agency shall make all dis16 closures pursuant to section 609 without charge

17 to that consumer at least once during the 12-

18 month period after the consumer receives a no19 tification under paragraph (6) or paragraph (8)

20 of the deletion of information that is found to

21 be inaccurate or cannot be verified.

22 ‘‘(E) AUTOMATED REINVESTIGATION SYS23 TEM.—

24 ‘‘(i) IN GENERAL.—Any consumer re25 porting agency that compiles and main-
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1 tains files on consumers on a nationwide

2 basis shall implement an automated system

3 through which furnishers of information to

4 that consumer reporting agency may re5 port the results of a reinvestigation that

6 finds incomplete or inaccurate information

7 in a consumer’s file to other such

8 consumer reporting agencies.

9 ‘‘(ii) NATIONWIDE CONSUMER RE10 PORTING AGENCIES.—A consumer report11 ing agency that compiles and maintains

12 files on consumers on a nationwide basis

13 shall report the results of a reinvestigation

14 initiated by a consumer under section 611

15 that finds in the consumer’s file informa16 tion that is incomplete or inaccurate or in17 formation that cannot be verified, to any

18 other consumer reporting agency that com19 piles and maintains files on consumers on

20 a nationwide basis and—

21 ‘‘(I) to which a consumer report

22 on the consumer was provided within

23 the preceding 2-year period for pur24 poses of resale by that other agency;

25 or
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1 ‘‘(II) to which a consumer report

2 on the consumer was provided within

3 the preceding 7-year period for pur4 poses of merging that report to that

5 other agency’s proprietary files.

6 ‘‘(iii) ACTION REQUIRED UPON RE7 CEIPT OF REPORT.—If a consumer report8 ing agency receives a report under clause

9 (ii), the agency shall—

10 ‘‘(I) change the data in its files

11 in accordance with the report;

12 ‘‘(II) delete data from its propri13 etary files in accordance with the re14 port; or

15 ‘‘(III) reinvestigate the disputed

16 data that is the subject of the report

17 in accordance with section 611, with

18 the source of that data.

19 ‘‘(6) NOTICE OF RESULTS OF

20 REINVESTIGATION.—

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

22 agency shall provide written notice to a

23 consumer of the results of a reinvestigation

24 under this subsection within 5 business days

25 after the completion of the reinvestigation, by
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1 mail or, if authorized by the consumer for that

2 purpose, by other means available to the agen3 cy.

4 ‘‘(B) CONTENTS.—As part of or in addi5 tion to the notice under subparagraph (A), a

6 consumer reporting agency shall provide to a

7 consumer in writing within the 5-day period

8 referred to in subparagraph (A)—

9 ‘‘(i) a statement that the reinves10 tigation is completed;

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

12 upon the consumer’s file as that file is re13 vised as a result of the reinvestigation;

14 ‘‘(iii) a description or indication of

15 any changes made in the consumer report

16 as a result of those revisions to the con17 sumer’s file;

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

19 consumer, a description of the procedure

20 used to determine the accuracy and com21 pleteness of the information shall be pro22 vided to the consumer by the agency, in23 cluding the name, business address, and

24 telephone number of any furnisher of in-
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1 formation contacted in connection with

2 such information;

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

4 the right to add a statement to the con5 sumer’s file disputing the accuracy or com6 pleteness of the information; and

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

8 the right to request under subsection (d)

9 that the consumer reporting agency fur10 nish notifications under that subsection.

11 ‘‘(7) DESCRIPTION OF REINVESTIGATION PRO12 CEDURE.—A consumer reporting agency shall pro13 vide to a consumer a description referred to in para14 graph (6)(B)(iv) by not later than 15 days after re15 ceiving a request from the consumer for that de16 scription.

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

18 dispute regarding an item of information in a con19 sumer’s file at a consumer reporting agency is re20 solved in accordance with paragraph (5)(A) by the

21 deletion of the disputed information by not later

22 than 3 business days after the date on which the

23 agency receives notice of the dispute from the

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

25 the agency shall not be required to comply with
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1 paragraphs (2), (6), and (7) with respect to that dis2 pute if the agency—

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

4 to the consumer by telephone;

5 ‘‘(B) includes in that notice, or in a writ6 ten notice that accompanies a confirmation and

7 consumer report provided in accordance with

8 subparagraph (C), a statement of the consum9 er’s right to request under subsection (d) that

10 the agency furnish notifications under that sub11 section; and

12 ‘‘(C) provides written confirmation of the

13 deletion and a copy of a consumer report on the

14 consumer which is based on the consumer’s file

15 after the deletion, within 5 business days after

16 making the deletion.’’.

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

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

19 1681i(d)) is amended by striking ‘‘The consumer report20 ing agency shall clearly’’ and all that follows through the

21 end of the subsection.

22 SEC. 110. AMENDMENT RELATING TO CHARGES FOR DIS23 CLOSURE.

24 Section 612 of the Fair Credit Reporting Act (15

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

2 ‘‘(a) REASONABLE CHARGES ALLOWED FOR CER3 TAIN DISCLOSURES.—Except as provided in subsections

4 (b), (c), (d), and (e), a consumer reporting agency may

5 impose a reasonable charge on a consumer—

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

7 pursuant to section 609, which—

8 ‘‘(A) shall not exceed $8; and

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

10 prior to making disclosure; and

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

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

13 statement, codification, or summary to a person des14 ignated by the consumer under that section after the

15 30-day period beginning on the date of notification

16 of the consumer under section 611(a)(6) or (8) with

17 respect to the reinvestigation, which—

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

19 agency would impose on each designated recipi20 ent for a consumer report; and

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

22 prior to furnishing such information.

23 ‘‘(b) FREE CONSUMER REPORT AFTER ADVERSE

24 NOTICE TO CONSUMER.—Each consumer reporting agen25 cy that maintains a file on a consumer shall make all dis26 closures pursuant to section 609 without charge to the
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1 consumer if, within 60 days after receipt by such

2 consumer of a notification pursuant to section 615 or of

3 a notification from a debt collection agency affiliated with

4 that consumer reporting agency stating that the consum5 er’s credit rating may be or has been adversely affected,

6 the consumer makes a request under section 609.

7 ‘‘(c) FREE CONSUMER REPORT UNDER CERTAIN

8 OTHER CIRCUMSTANCES.—Upon the request of the

9 consumer, a consumer reporting agency shall make all dis10 closures pursuant to section 609 without charge to that

11 consumer if the consumer certifies in writing that the

12 consumer—

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

14 employment in the 60-day period beginning on the

15 date the certification is made;

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

17 or

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

19 consumer at the agency contains inaccurate informa20 tion due to fraud.

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

22 reporting agency shall not impose any charge on a

23 consumer for providing any notification required by this

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

25 as authorized by subsection (a).
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1 ‘‘(e) ANNUAL CONSUMER REPORT UPON REQUEST

2 AT SPECIFIED CHARGE.—

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

4 of a consumer, a consumer reporting agency that

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

7 month period, at the charge specified in paragraph

8 (2).

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

11 that does not exceed the lesser of—

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

13 consumer reporting agency in making the dis14 closures; or

15 ‘‘(B) $3.’’.

16 SEC. 111. AMENDMENTS RELATING TO DUTIES OF USERS

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

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

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

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

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

23 ON THE BASIS OF INFORMATION CONTAINED IN

24 CONSUMER REPORTS.—If any person takes any adverse

25 action with respect to any consumer which is based in
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1 whole or in part on any information contained in a

2 consumer report, the person shall—

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

4 to the consumer;

5 ‘‘(2) provide to the consumer in writing—

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

7 number of the consumer reporting agency (in8 cluding a toll-free telephone number established

9 by the agency if the agency compiles and main10 tains files on consumers on a nationwide basis)

11 which furnished the report to the person; and

12 ‘‘(B) a statement that the consumer re13 porting agency did not make the decision to

14 take the adverse action and is unable to provide

15 the consumer the specific reasons why the ad16 verse action was taken; and

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

18 the consumer’s right—

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

20 copy of a consumer report on the consumer

21 from the consumer reporting agency referred to

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

23 indication of the 60-day period under that sec24 tion for obtaining such a copy; and
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1 ‘‘(B) to dispute, under section 611, with a

2 consumer reporting agency the accuracy or

3 completeness of any information in a consumer

4 report furnished by the agency.’’.

5 (b) DUTIES OF USERS WHO MAKE CERTAIN CREDIT

6 SOLICITATIONS.—Section 615 of the Fair Credit Report7 ing Act (15 U.S.C. 1681m) is amended by adding at the

8 end the following new subsection:

9 ‘‘(d) DUTIES OF USERS WHO MAKE WRITTEN CRED10 IT SOLICITATIONS ON THE BASIS OF INFORMATION CON11 TAINED IN CONSUMER FILES.—

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

13 consumer report on any consumer in connection with

14 any credit transaction which is not initiated by the

15 consumer and which consists of a firm offer of credit

16 shall provide with any written solicitation made to

17 the consumer regarding the transaction a clear and

18 conspicuous statement that—

19 ‘‘(A) information contained in the consum20 er’s consumer report was used in connection

21 with the transaction;

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

23 credit because the consumer satisfied the cri24 teria for creditworthiness under which the

25 consumer was selected for the offer;
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1 ‘‘(C) if applicable, the credit may not be

2 extended if, after the consumer responds to the

3 offer, the consumer does not meet the criteria

4 used to select the consumer for the offer or any

5 applicable criteria bearing on creditworthiness

6 or does not furnish any required collateral;

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

8 information contained in the consumer’s file

9 with any consumer reporting agency from being

10 used in connection with any credit transaction

11 which is not initiated by the consumer; and

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

13 referred to in subparagraph (D) by notifying a

14 notification system established under section

15 604(d).

16 ‘‘(2) DISCLOSURE OF ADDRESS AND TELE17 PHONE NUMBER.—A statement under paragraph (1)

18 shall include the address and toll-free telephone

19 number of the appropriate notification system estab20 lished under section 604(d).

21 ‘‘(3) MAINTAINING CRITERIA ON FILE.—A per22 son who makes an offer of credit to a consumer

23 under a credit transaction described in paragraph

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

25 the consumer to receive the offer, all criteria bearing
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1 on creditworthiness that are the basis for determin2 ing whether or not to extend credit pursuant to the

3 offer, and any requirement for the furnishing of col4 lateral as a condition of the extension of credit, until

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

6 on which the offer is made to the consumer.

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

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

9 by a person if—

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

11 ownership or by common corporate control with

12 the person who procured the report;

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

14 clearly and conspicuously disclosed to the

15 consumer to whom the report relates, before the

16 report is provided to the person using the re17 port, that the report might be provided to and

18 used by other persons who are affiliated in the

19 manner described in subparagraph (A) to the

20 person who procured the report; and

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

22 is—

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

24 writing, or
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1 ‘‘(ii) with respect to existing cus2 tomers, the consumer has been afforded

3 the opportunity to direct in writing that

4 the report may not be provided to or used

5 by persons who are affiliated in the man6 ner described in subparagraph (A) and has

7 not done so.

8 ‘‘(5) AUTHORITY OF FEDERAL AGENCIES RE9 GARDING UNFAIR OR DECEPTIVE ACTS OR PRAC10 TICES NOT AFFECTED.—This title is not intended to

11 affect the authority of any Federal agency to enforce

12 a prohibition against unfair or deceptive acts or

13 practices, including the making of false or mislead14 ing statements in connection with credit transactions

15 not initiated by the consumer.’’.

16 (c) DUTIES OF PERSON TAKING CERTAIN ACTIONS

17 BASED ON INFORMATION PROVIDED BY AFFILIATE.—

18 Section 615 of the Fair Credit Reporting Act (15 U.S.C.

19 1681m) is further amended by adding after subsection (d),

20 as added by subsection (b) of this section, the following

21 new subsection:

22 ‘‘(e) DUTIES OF PERSON TAKING CERTAIN ACTIONS

23 BASED ON INFORMATION PROVIDED BY AFFILIATE.—

24 ‘‘(1) DUTIES, GENERALLY.—If a person takes

25 an action described in paragraph (2) with respect to
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1 a consumer based in whole or in part on information

2 described in paragraph (3), the person shall—

3 ‘‘(A) notify the consumer in writing of the

4 action, including a statement that the consumer

5 may obtain the information in accordance with

6 subparagraph (B) and may contact the toll-free

7 telephone number required by subparagraph

8 (C);

9 ‘‘(B) upon a written request from the

10 consumer received within 60 days after trans11 mittal of the notice required by subparagraph

12 (A), disclose to the consumer in writing the na13 ture of the information upon which the action

14 is based by not later than 30 days after receipt

15 of the request; and

16 ‘‘(C) make available a toll-free telephone

17 number at which personnel are available to

18 communicate with the consumer regarding the

19 action during normal business hours.

20 ‘‘(2) ACTION DESCRIBED.—An action referred

21 to in paragraph (1) is—

22 ‘‘(A) an adverse action described in section

23 603(k)(1)(A) taken in connection with a trans24 action initiated by the consumer, or any adverse
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1 action described in section 603(k)(1) (B) or

2 (C);

3 ‘‘(B) a denial of any other transaction ini4 tiated by the consumer for personal, family, or

5 household purposes; or

6 ‘‘(C) an increase in any charge for a trans7 action described in subparagraph (B).

8 ‘‘(3) INFORMATION DESCRIBED.—Information

9 referred to in paragraph (1)—

10 ‘‘(A) except as provided in subparagraph

11 (B), is information that—

12 ‘‘(i) is furnished to the person taking

13 the action by a person related by common

14 ownership or affiliated by common cor15 porate control to the person taking the ac16 tion; and

17 ‘‘(ii) bears on the consumer’s credit

18 worthiness, credit standing, credit capacity,

19 character, general reputation, personal

20 characteristics, or mode of living; and

21 ‘‘(B) does not include—

22 ‘‘(i) information solely as to trans23 actions or experiences between the

24 consumer and the person furnishing the in25 formation; or
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1 ‘‘(ii) information in a consumer re2 port.’’.

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

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

5 amended by striking ‘‘subsections (a) and (b)’’ and insert6 ing ‘‘this section’’.

7 SEC. 112. AMENDMENTS RELATING TO CIVIL LIABILITY.

8 (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLI9 ANCE, GENERALLY.—Section 616 of the Fair Credit Re10 porting Act (15 U.S.C. 1681n) is amended by striking

11 ‘‘Any consumer reporting agency or user of information

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

13 who’’.

14 (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON15 COMPLIANCE.—Section 616(1) of the Fair Credit Report16 ing Act (15 U.S.C. 1681n(1)) is amended to read as fol17 lows:

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

19 consumer as a result of the failure or damages of no

20 less than $100 and no more than $1,000; or

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

22 for obtaining a consumer report under false pre23 tenses or knowingly without a permissible purpose,

24 actual damages sustained by the consumer as a re25 sult of the failure or $1,000, whichever is greater;’’.
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1 (c) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI2 ANCE.—Section 617 of the Fair Credit Reporting Act

3 (15 U.S.C. 1681o) is amended by striking ‘‘Any consumer

4 reporting agency or user of information which’’ and insert5 ing ‘‘(a) IN GENERAL.—Any person who’’.

6 (d) ATTORNEY’S FEES.—

7 (1) WILLFUL NONCOMPLIANCE.—Section 616

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

9 is amended by adding at the end the following:

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

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

12 in connection with an action under this section was filed

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

14 award to the prevailing party attorney’s fees reasonable

15 in relation to the work expended in responding to the

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

17 (2) NEGLIGENT NONCOMPLIANCE.—Section

18 617 of the Fair Credit Reporting Act (15 U.S.C.

19 1681o) is amended by adding at the end the follow20 ing:

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

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

23 in connection with an action under this section was filed

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

25 award to the prevailing party attorney’s fees reasonable
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1 in relation to the work expended in responding to the

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

3 SEC. 113. AMENDMENTS RELATING TO RESPONSIBILITIES

4 OF PERSONS WHO FURNISH INFORMATION

5 TO CONSUMER REPORTING AGENCIES.

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

7 (15 U.S.C. 1681 et seq.) is amended by redesignating sec8 tion 623 as section 624 and inserting after section 622

9 the following new section:

10 ‘‘§ 623. Responsibilities of furnishers of information

11 to consumer reporting agencies

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 to any consumer reporting

16 agency if the person knows or should have known

17 the information is incomplete or inaccurate.

18 ‘‘(2) DUTY TO CORRECT AND UPDATE INFOR19 MATION.—A person who—

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

21 of business furnishes information to one or

22 more consumer reporting agencies about the

23 person’s transactions or experiences with any

24 consumer; and
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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-
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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, by not later than 90 days after furnish9 ing the information, notify the agency of the month

10 and year of the commencement of the delinquency

11 which 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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•HR 561 IH

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, before the

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

12 which the consumer reporting agency is required to

13 complete actions required by that section regarding

14 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) may be enforced exclusively under section 621 by the

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

22 (b) CLERICAL AMENDMENT.—The table of sections

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

24 U.S.C. 1681a et seq.) is amended by striking the item re25 lating to section 623 and inserting the following:
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‘‘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 sec15 ond place it 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-
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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 which includes informa11 tion which is a matter of public record and which 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 within the 30-day period ending on the date the

16 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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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 further

20 amended by inserting before the 3rd period the fol21 lowing: ‘‘, including the power to enforce the provi22 sions of this title in the same manner as if the viola23 tion had been a violation of any Federal Trade Com24 mission trade regulation rule’’; and

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

26 amended by adding after the 3rd period the follow-
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1 ing: ‘‘Notwithstanding the preceding sentence, a

2 court may not impose any civil penalty on a person

3 for a violation of section 623(a)(1) unless the person

4 has been enjoined from committing the violation, or

5 ordered not to commit the violation, in an action or

6 proceeding brought by or on behalf of the Federal

7 Trade Commission and has violated the injunction

8 or order, and the court may not impose any civil

9 penalty for any violation occurring before the date of

10 the violation 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 who are subject to section 615(e) shall be enforced

25 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 by redesignating subsection (c)

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

6 following new subsection:

7 ‘‘(c) STATE ACTION FOR VIOLATIONS.—

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

9 such other remedies as are provided under State

10 law, whenever the chief law enforcement officer of a

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

12 has reason to believe that any person has violated or

13 is violating this title, the State—

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

15 violation in any appropriate United States dis16 trict court or in any other court of competent

17 jurisdiction;

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

19 an action on behalf of its residents to recover—

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

21 liable to such residents under sections 616

22 and 617 as a result of the violation;

23 ‘‘(ii) in the case of a violation of sec24 tion 623(a), damages for which the person

25 would, but for section 623(c), be liable to
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1 such residents as a result of the violation;

2 or

3 ‘‘(iii) damages of not more than

4 $1,000 for each willful or negligent viola5 tion; and

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

7 under subparagraph (A) or (B), shall be award8 ed the costs of the action and reasonable attor9 ney fees as determined by the court.

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

11 State shall serve prior written notice of any such ac12 tion upon the Federal Trade Commission or the ap13 propriate Federal regulator determined under sub14 section (b) and provide the Commission or appro15 priate Federal regulator with a copy of its com16 plaint, except in any case where such prior notice is

17 not feasible, in which case the State shall serve such

18 notice immediately upon instituting such action. The

19 Federal Trade Commission or appropriate Federal

20 regulator shall have the right (A) to intervene in the

21 action, (B) upon so intervening, to be heard on all

22 matters arising therein, (C) to remove the action to

23 the appropriate United States district court, and (D)

24 to file petitions for appeal.
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1 ‘‘(3) INVESTIGATORY POWERS.—For purposes

2 of bringing any action under this subsection, nothing

3 in this subsection shall prevent the chief law enforce4 ment officer, or an official or agency designated by

5 a State, from exercising the powers conferred on the

6 chief law enforcement officer or such official by the

7 laws of such State to conduct investigations or to

8 administer oaths or affirmations or to compel the at9 tendance of witnesses or the production of documen10 tary and other evidence.

11 ‘‘(4) LIMITATION ON STATE ACTION WHILE

12 FEDERAL ACTION PENDING.—Whenever the Federal

13 Trade Commission or the appropriate Federal regu14 lator has instituted a civil action or an administra15 tive action under section 8 of the Federal Deposit

16 Insurance Act for a violation of this title, no State

17 may, during the pendency of such action, bring an

18 action under this section against any defendant

19 named in the complaint of the Commission or the

20 appropriate Federal regulator for any violation of

21 this title that is alleged in that complaint.

22 ‘‘(5) LIMITATIONS ON STATE ACTIONS FOR VIO23 LATION OF SECTION 621(a)(1).—

24 ‘‘(A) VIOLATION OF INJUNCTION RE25 QUIRED.—A State may not bring an action
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1 against a person under paragraph (1)(B) for a

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

3 ‘‘(i) the person has been enjoined

4 from committing the violation, in an action

5 brought by the State under paragraph

6 (1)(A); and

7 ‘‘(ii) the person has violated the in8 junction.

9 ‘‘(B) LIMITATION ON DAMAGES RECOVER10 ABLE.—In an action against a person under

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

12 623(a)(1), a State may not recover any dam13 ages incurred before the date of the violation of

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

15 SEC. 118. FEDERAL RESERVE BOARD AUTHORITY.

16 Section 621 of the Fair Credit Reporting Act (15

17 U.S.C. 1681s), is further amended by adding after sub18 section (d) (as redesignated by section 117) the following

19 new subsection:

20 ‘‘(e) INTERPRETIVE AUTHORITY.—The Board of

21 Governors of the Federal Reserve System may issue inter22 pretations of any provision of this title as it may apply

23 to any persons identified under paragraph (1), (2), and

24 (3) of subsection (b), or to the holding companies and af25 filiates of such persons, in consultation with Federal agen-
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1 cies identified in paragraphs (1), (2), and (3) of subsection

2 (b).’’.

3 SEC. 119. PREEMPTION OF STATE LAW.

4 Section 624 of the Fair Credit Reporting Act, as re5 designated by section 113(a) of this Act, is further amend6 ed—

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

8 IN GENERAL.—Except as provided in subsections

9 (b) and (c), this title’’; and

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

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

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

13 ‘‘(1) with respect to any subject matter regu14 lated under—

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

16 relating to the prescreening of consumer re17 ports;

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

19 which a consumer reporting agency must take

20 any action, including the provision of notifica21 tion to a consumer or other person, in any pro22 cedure related to the disputed accuracy of infor23 mation in a consumer’s file, except that this

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

2 Consumer Reporting Reform Act of 1995;

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

4 of a person who takes any adverse action with

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

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

8 of persons who use a consumer report of a

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

11 and which consists of a firm offer of credit;

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

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

15 of the enactment of the Consumer Reporting

16 Reform Act of 1995; or

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

18 time by which a person must take any action

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

20 to an investigation of information furnished by

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

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

25 1995;
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1 ‘‘(2) with respect to the exchange of informa2 tion among persons affiliated by common ownership

3 or common corporate control, except that this para4 graph does not apply to section 2480e (a) and (c)(1)

5 of title 9, Vermont Statutes Annotated (as in effect

6 on the date of the enactment of the Consumer Re7 porting Reform Act of 1995); or

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

9 any disclosure required to be made under section

10 609(c).

11 ‘‘(c) DEFINITION OF FIRM OFFER OF CREDIT.—Not12 withstanding any definition of the term ‘firm offer of cred13 it’ (or any equivalent term) under the laws of any State,

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

15 be construed to apply in the enforcement and interpreta16 tion of the laws of any State governing consumer reports.

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

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

19 consent judgment between any State Attorney Gen20 eral and any consumer reporting agency in effect on

21 the date of the enactment of the Consumer Report22 ing Reform Act of 1995; and

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

24 (including any provision of a State constitution)

25 that—
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1 ‘‘(A) is enacted after January 1, 2003;

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

3 intended to supplement this Act; and

4 ‘‘(C) gives greater protection to consumers

5 than is provided under this Act.’’.

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

7 (a) MODIFICATION OF REQUIREMENTS BY FTC AND

8 FEDERAL RESERVE BOARD AUTHORIZED.—

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

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

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

12 section 118 of this Act) the following new sub13 section:

14 ‘‘(f) MODIFICATION OF REQUIREMENTS BY FTC AU15 THORIZED.—

16 ‘‘(1) IN GENERAL.—If the Federal Trade Com17 mission considers such action necessary for the pro18 tection of consumers, the Commission may, after

19 consultation with appropriate State regulatory and

20 law enforcement agencies, promulgate regulations in

21 accordance with section 553 of title 5, United States

22 Code, to impose, with respect to consumer reporting

23 agencies and all other persons subject to this title

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

25 (2), or (3) of subsection (b), requirements—
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1 ‘‘(A) that are more stringent than those

2 imposed under—

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

4 by which a consumer reporting agency

5 must take any action, including the provi6 sion of notification to a consumer or other

7 person, in any procedure related to the dis8 puted accuracy of information in a con9 sumer’s file;

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

11 duties of a person who takes any adverse

12 action with respect to a consumer on the

13 basis of information contained in a

14 consumer report;

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

16 duties of persons who use a consumer re17 port on a consumer in connection with any

18 credit transaction which is not initiated by

19 the consumer and that consists of a firm

20 offer of credit; or

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

22 time by which a person must take any ac23 tion required under section 623(b)(1) with

24 respect to an investigation of information
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1 furnished by the person to a consumer re2 porting agency; and

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

4 of any disclosure required to be made under

5 section 609(c).

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

7 If the Board of Governors of the Federal Reserve

8 System determines such action to be necessary for

9 the protection of consumers, the Board may pre10 scribe regulations imposing on persons described in

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

12 holding companies and affiliates of such persons any

13 requirement described in paragraph (1) of this sub14 section.’’.

15 (2) CLERICAL AMENDMENTS.—

16 (A) The heading for section 621 of the

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

18 amended to read as follows:

19 ‘‘§ 621. Administrative enforcement and authorities;

20 State actions’’.

21 (B) The table of contents at the beginning

22 of the Fair Credit Reporting Act is amended by

23 striking the item relating to section 621 and in24 serting the following new item:

‘‘621. Administrative enforcement and authorities; State actions.’’.
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1 (b) DEADLINE TO PRESCRIBE MATTERS.—The Fed2 eral Trade Commission shall prescribe all matters required

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

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

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

6 of this Act.

7 SEC. 121. AMENDMENT TO FAIR DEBT COLLECTION PRAC8 TICES ACT.

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

10 Act (15 U.S.C. 1692e), relating to certain practices con11 stituting prohibited representations, is amended to read

12 as follows:

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

14 written communication made to collect a debt or to

15 obtain information about a consumer, that the debt

16 collector is attempting to collect a debt and that any

17 information obtained will be used for that purpose,

18 except that this paragraph does not apply to a com19 munication—

20 ‘‘(A) to acquire location information in ac21 cordance with section 804;

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

23 monies or payments; or
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1 ‘‘(C) that consists solely of information re2 quested by the consumer or the consumer’s at3 torney.’’.

4 SEC. 122. FURNISHING CONSUMER REPORTS FOR CERTAIN

5 PURPOSES RELATING TO CHILD SUPPORT.

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

7 U.S.C. 1681b) is amended in subsection (a) (as designated

8 by section 103(a)(1) of this Act) by adding at the end

9 the following:

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

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

12 political subdivision of any State that is responsible

13 under law for enforcing child support orders (or an

14 official authorized by the head of any such depart15 ment, agency, or office), if the person making the re16 quest certifies to the consumer reporting agency

17 that—

18 ‘‘(A) the consumer report is needed to es19 tablish an individual’s capacity to make child

20 support payments, or to determine the appro21 priate level of such payments;

22 ‘‘(B) the person has provided at least 10

23 days prior written notice to the consumer whose

24 report is requested, by certified or registered
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1 mail to the last known address of the consumer,

2 that the report will be requested; and

3 ‘‘(C) the consumer report obtained pursu4 ant to this paragraph will be kept confidential,

5 will be used solely for establishing child support

6 payment obligations, and will not be used in

7 connection with any other civil, administrative,

8 or criminal proceeding or for any other pur9 pose.’’.

10 SEC. 123. DISCLOSURE OF INFORMATION AND CONSUMER

11 REPORTS TO FBI FOR COUNTERINTEL12 LIGENCE PURPOSES.

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

14 (15 U.S.C. 1681 et seq.) is amended by adding after sec15 tion 624, as redesignated by section 113(a) of this Act,

16 the following new section:

17 ‘‘§ 625. Disclosures to FBI for counterintelligence

18 purposes

19 ‘‘(a) IDENTITY OF FINANCIAL INSTITUTIONS.—Not20 withstanding section 604 or any other provision of this

21 title, a consumer reporting agency shall furnish to the

22 Federal Bureau of Investigation the names and addresses

23 of all financial institutions (as that term is defined in sec24 tion 1101 of the Right to Financial Privacy Act of 1978)

25 at which a consumer maintains or has maintained an ac-
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1 count, to the extent that information is in the files of the

2 agency, when presented with a written request for that

3 information, signed by the Director of the Federal Bureau

4 of Investigation, or the Director’s designee, which certifies

5 compliance with this section. The Director or the Direc6 tor’s designee may make such a certification only if the

7 Director or the Director’s designee has determined in writ8 ing that—

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

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

14 ‘‘(A) is a foreign power (as defined in sec15 tion 101 of the Foreign Intelligence Surveil16 lance Act of 1978) or a person who is not a

17 United States person (as defined in such sec18 tion 101) and is an official of a foreign power;

19 or

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

21 engaging or has engaged in international terror22 ism (as that term is defined in section 101(c)

23 of the Foreign Intelligence Surveillance Act of

24 1978) or clandestine intelligence activities that
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1 involve or may involve a violation of criminal

2 statutes of the United States.

3 ‘‘(b) IDENTIFYING INFORMATION.—Notwithstanding

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

5 title, a consumer reporting agency shall furnish identifying

6 information respecting a consumer, limited to name, ad7 dress, former addresses, places of employment, or former

8 places of employment, to the Federal Bureau of Investiga9 tion when presented with a written request, signed by the

10 Director or the Director’s designee, which certifies compli11 ance with this subsection. The Director or the Director’s

12 designee may make such a certification only if the Director

13 or the Director’s designee has determined in writing

14 that—

15 ‘‘(A) such information is necessary to the

16 conduct of an authorized counterintelligence in17 vestigation; and

18 ‘‘(B) there is information giving reason to

19 believe that the consumer has been, or is about

20 to be, in contact with a foreign power or an

21 agent of a foreign power (as defined in section

22 101 of the Foreign Intelligence Surveillance Act

23 of 1978).

24 ‘‘(c) COURT ORDER FOR DISCLOSURE OF CONSUMER

25 REPORTS.—Notwithstanding section 604 or any other
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1 provision of this title, if requested in writing by the Direc2 tor of the Federal Bureau of Investigation, or a designee

3 of the Director, a court may issue an order ex parte direct4 ing a consumer reporting agency to furnish a consumer

5 report to the Federal Bureau of Investigation, upon a

6 showing in camera that—

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

8 conduct of an authorized foreign counterintelligence

9 investigation; and

10 ‘‘(2) there are specific and articulable facts giv11 ing reason to believe that the consumer whose

12 consumer report is sought—

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

14 ‘‘(B) is engaging or has engaged in inter15 national terrorism (as that term is defined in

16 section 101(c) of the Foreign Intelligence Sur17 veillance Act of 1978) or clandestine intel18 ligence activities that involve or may involve a

19 violation of criminal statutes of the United

20 States.

21 The terms of an order issued under this subsection shall

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

23 counterintelligence investigation.

24 ‘‘(d) CONFIDENTIALITY.—No consumer reporting

25 agency or officer, employee, or agent of a consumer report-
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1 ing agency shall disclose to any person, other than those

2 officers, employees, or agents of a consumer reporting

3 agency necessary to fulfill the requirement to disclose in4 formation to the Federal Bureau of Investigation under

5 this section, that the Federal Bureau of Investigation has

6 sought or obtained the identity of financial institutions or

7 a consumer report respecting any consumer under sub8 section (a), (b), or (c) and no consumer reporting agency

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

10 agency shall include in any consumer report any informa11 tion that would indicate that the Federal Bureau of Inves12 tigation has sought or obtained such information or a

13 consumer report.

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

15 Investigation shall, subject to the availability of appropria16 tions, pay to the consumer reporting agency assembling

17 or providing reports or information in accordance with

18 procedures established under this section, a fee for reim19 bursement for such costs as are reasonably necessary and

20 which have been directly incurred in searching, reproduc21 ing, or transporting books, papers, records, or other data

22 required or requested to be produced under this section.

23 ‘‘(f) LIMIT ON DISSEMINATION.—The Federal Bu24 reau of Investigation may not disseminate information ob25 tained pursuant to this section outside of the Federal Bu-
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1 reau of Investigation, except to the Department of Justice

2 as may be necessary for the approval or conduct of a for3 eign counterintelligence investigation, or, where the infor4 mation concerns a person subject to the Uniform Code of

5 Military Justice, to appropriate investigative authorities

6 within the military department concerned as may be nec7 essary for the conduct of a joint foreign counterintel8 ligence investigation.

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

10 section shall be construed to prohibit information from

11 being furnished by the Federal Bureau of Investigation

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

13 with a judicial or administrative proceeding to enforce the

14 provisions of this Act. Nothing in this section shall be con15 strued to authorize or permit the withholding or informa16 tion from the Congress.

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

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

19 inform the Permanent Select Committee on Intelligence

20 and the Committee on Banking, Finance and Urban Af21 fairs of the House of Representatives, and the Select Com22 mittee on Intelligence and the Committee on Banking,

23 Housing, and Urban Affairs of the Senate concerning all

24 requests made pursuant to subsections (a), (b), and (c).
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1 ‘‘(i) DAMAGES.—Any agency or department of the

2 United States obtaining or disclosing any consumer re3 ports, records, or information contained therein in viola4 tion of this section is liable to the consumer to whom such

5 consumer reports, records, or information relate in an

6 amount equal to the sum of—

7 ‘‘(1) $100, without regard to the volume of

8 consumer reports, records, or information involved;

9 ‘‘(2) any actual damages sustained by the

10 consumer as a result of the disclosure;

11 ‘‘(3) if the violation is found to have been will12 ful or intentional, such punitive damages as a court

13 may allow; and

14 ‘‘(4) in the case of any successful action to en15 force liability under this subsection, the costs of the

16 action, together with reasonable attorney fees, as de17 termined by the court.

18 ‘‘(j) DISCIPLINARY ACTIONS FOR VIOLATIONS.—If a

19 court determines that any agency or department of the

20 United States has violated any provision of this section

21 and the court finds that the circumstances surrounding

22 the violation raise questions of whether or not an officer

23 or employee of the agency or department acted willfully

24 or intentionally with respect to the violation, the agency

25 or department shall promptly initiate a proceeding to de-
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1 termine whether or not disciplinary action is warranted

2 against the officer or employee who was responsible for

3 the violation.

4 ‘‘(k) GOOD-FAITH EXCEPTION.—Notwithstanding

5 any other provision of this title, any consumer reporting

6 agency or agent or employee thereof making disclosure of

7 consumer reports or identifying information pursuant to

8 this subsection in good-faith reliance upon a certification

9 of the Federal Bureau of Investigation pursuant to provi10 sions of this section shall not be liable to any person for

11 such disclosure under this title, the constitution of any

12 State, or any law or regulation of any State or any politi13 cal subdivision of any State.

14 ‘‘(l) LIMITATION OF REMEDIES.—Notwithstanding

15 any other provision of this title, the remedies and sanc16 tions set forth in this section shall be the only judicial

17 remedies and sanctions for violation of this section.

18 ‘‘(m) INJUNCTIVE RELIEF.—In addition to any other

19 remedy contained in this section, injunctive relief shall be

20 available to require compliance with the procedures of this

21 section. In the event of any successful action under this

22 subsection, costs together with reasonable attorney fees,

23 as determined by the court, may be recovered.’’.

24 (b) CLERICAL AMENDMENT.—The table of sections

25 at the beginning of the Fair Credit Reporting Act (15
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1 U.S.C. 1681a et seq.), as amended by section 114(b) of

2 this Act, is further amended by adding after the item re3 lating to section 624 the following:

‘‘625. Disclosures to FBI for counterintelligence purposes.’’.

4 (c) REPEAL OF PROVISIONS.—The following provi5 sions of the Fair Credit Reporting Act, as amended by

6 this section, are repealed:

7 (1) Section 625.

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

9 the Fair Credit Reporting Act, the item relating to

10 section 625.

11 SEC. 124. EFFECTIVE DATES.

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

13 (b), the amendments and repeals made by this title shall

14 take effect 365 days after the date of the enactment of

15 this Act.

16 (b) EXCEPTIONS.—

17 (1) The amendment made by section 121 shall

18 take effect 90 days after the date of the enactment

19 of this Act.

20 (2) The amendments made by subsections (a)

21 and (b) of section 123 shall take effect on the date

22 of the enactment of this Act.

23 (3) Subsection (c) of section 123 shall take ef24 fect on the date that is 5 years after the date of the

25 enactment of this Act.
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1 SEC. 125. RELATIONSHIP TO OTHER LAW.

2 Nothing in this title or the amendments made by this

3 Act shall be considered to supersede or otherwise affect

4 section 2721 of title 18, United States Code, with respect

5 to motor vehicle records for surveys, marketing, or solici6 tations.

7 SEC. 126. TECHNICAL CORRECTION TO DEPOSITORY INSTI8 TUTIONS MANAGEMENT INTERLOCKS ACT.

9 Section 209(c)(1)(C) of the Depository Institution

10 Management Interlocks Act (12 U.S.C. 3207(c)(1)(C), as

11 added by section 338(b) of the Riegle Community Devel12 opment and Regulatory Improvement Act of 1994) is

13 amended by inserting ‘‘or institutions’’ after ‘‘newly char14 tered institutions’’.

15 TITLE II—CREDIT REPAIR

16 ORGANIZATIONS

17 SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZA18 TIONS.

19 Title IV of the Consumer Credit Protection Act is

20 amended to read as follows:

21 ‘‘TITLE IV—CREDIT REPAIR

22 ORGANIZATIONS

‘‘Sec.

‘‘401. Short title.

‘‘402. Findings and purposes.

‘‘403. Definitions.

‘‘404. Prohibited practices.

‘‘405. Disclosures.

‘‘406. Credit repair organizations contracts.
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‘‘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.

1 ‘‘SEC. 401. SHORT TITLE.

2 ‘‘This title may be cited as the ‘Credit Repair Organi3 zations Act’.

4 ‘‘SEC. 402. FINDINGS AND PURPOSES.

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

6 findings:

7 ‘‘(1) Consumers have a vital interest in estab8 lishing and maintaining their creditworthiness and

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

10 a result, consumers who have experienced credit

11 problems may seek assistance from credit repair or12 ganizations which offer to improve the credit stand13 ing of such consumers.

14 ‘‘(2) Certain advertising and business practices

15 of some companies engaged in the business of credit

16 repair services have worked a financial hardship

17 upon consumers, particularly those of limited eco18 nomic means and who are inexperienced in credit

19 matters.

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

21 follows:
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1 ‘‘(1) To ensure that prospective buyers of the

2 services of credit repair organizations are provided

3 with the information necessary to make an informed

4 decision regarding the purchase of such services.

5 ‘‘(2) To protect the public from unfair or decep6 tive advertising and business practices by credit re7 pair organizations.

8 ‘‘SEC. 403. DEFINITIONS.

9 ‘‘For purposes of this title—

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

11 an individual.

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

13 term ‘consumer credit transaction’ means any trans14 action in which credit is offered or extended to an

15 individual for personal, family, or household pur16 poses.

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

18 term ‘credit repair organization’—

19 ‘‘(A) means any person who uses any in20 strumentality of interstate commerce or the

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

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

23 perform) any service, in return for the payment

24 of money or other valuable consideration, for

25 the express or implied purpose of—
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1 ‘‘(i) improving any consumer’s credit

2 record, credit history, or credit rating; or

3 ‘‘(ii) providing advice or assistance to

4 any consumer with regard to any activity

5 or service described in clause (i); and

6 ‘‘(B) does not include—

7 ‘‘(i) any nonprofit organization which

8 is exempt from taxation under section

9 501(c)(3) of the Internal Revenue Code of

10 1986;

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

12 member of the bar of the highest court of

13 any State or otherwise licensed under the

14 laws of any State, with respect to services

15 rendered which are within the scope of reg16 ulations applicable to members of such bar

17 or such licensees; or

18 ‘‘(iii) any creditor (as defined in sec19 tion 103 of the Truth in Lending Act),

20 with respect to any consumer, to the extent

21 the creditor is assisting the consumer to

22 restructure any debt owed by the consumer

23 to the creditor.

24 ‘‘(4) CREDIT.—The term ‘credit’ has the mean25 ing given to such term in section 103(e) of this Act.
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1 ‘‘SEC. 404. PROHIBITED PRACTICES.

2 ‘‘(a) IN GENERAL.—No person may—

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

4 any consumer to make any statement, which is un5 true or misleading (or which, upon the exercise of

6 reasonable care, should be known by the credit re7 pair organization, officer, employee, agent, or other

8 person to be untrue or misleading) with respect to

9 any consumer’s creditworthiness, credit standing, or

10 credit capacity to—

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

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

13 ‘‘(B) any person—

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

15 consumer; or

16 ‘‘(ii) to whom the consumer has ap17 plied or is applying for an extension of

18 credit;

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

20 any consumer to make any statement, the intended

21 effect of which is to alter the consumer’s identifica22 tion to prevent the display of the consumer’s credit

23 record, history, or rating for the purpose of conceal24 ing adverse information that is accurate and not ob25 solete to—

26 ‘‘(A) any consumer reporting agency;
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1 ‘‘(B) any person—

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

3 consumer; or

4 ‘‘(ii) to whom the consumer has ap5 plied or is applying for an extension of

6 credit;

7 ‘‘(3) make or use any untrue or misleading rep8 resentation of the services of the credit repair orga9 nization; or

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

11 practice, or course of business that constitutes or re12 sults in the commission of, or an attempt to commit,

13 a fraud or deception on any person in connection

14 with the offer or sale of the services of the credit re15 pair organization.

16 ‘‘(b) PAYMENT IN ADVANCE.—No credit repair orga17 nization may charge or receive any money or other valu18 able consideration for the performance of any service

19 which the credit repair organization has agreed to perform

20 for any consumer before such service is fully performed.

21 ‘‘SEC. 405. DISCLOSURES.

22 ‘‘(a) DISCLOSURE REQUIRED.—Any credit repair or23 ganization shall provide any consumer with the following

24 written statement before any contract or agreement be-
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1 tween the consumer and the credit repair organization is

2 executed:

3 ‘‘ ‘Consumer Credit File Rights

4 Under State and Federal Law

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

6 in your credit report by contacting the credit bureau di7 rectly. However, neither you nor any ‘‘credit repair’’ com8 pany or credit repair organization has the right to have

9 accurate, current, and verifiable information removed

10 from your credit report. The credit bureau must remove

11 accurate, negative information from your report only if it

12 is over 7 years old. Bankruptcy information can be re13 ported for 10 years.

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

15 report from a credit bureau. You may be charged a rea16 sonable fee. There is no fee, however, if you have been

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

18 dwelling because of information in your credit report with19 in the preceding 60 days. The credit bureau must provide

20 someone to help you interpret the information in your

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

22 credit report if you are unemployed and intend to apply

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

24 of public welfare assistance, or if you have reason to be-
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1 lieve that there is inaccurate information in your credit

2 report due to fraud.

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

4 that violates the Credit Repair Organization Act. This law

5 prohibits deceptive practices by credit repair organiza6 tions.

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

8 credit repair organization for any reason within 3 business

9 days from the date you signed it.

10 ‘‘ ‘Credit bureaus are required to follow reasonable

11 procedures to ensure that the information they report is

12 accurate. However, mistakes may occur.

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

14 writing that you dispute the accuracy of information in

15 your credit file. The credit bureau must then reinvestigate

16 and modify or remove inaccurate or incomplete informa17 tion. The credit bureau may not charge any fee for this

18 service. Any pertinent information and copies of all docu19 ments you have concerning an error should be given to

20 the credit bureau.

21 ‘‘ ‘If the credit bureau’s reinvestigation does not re22 solve the dispute to your satisfaction, you may send a brief

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

24 explaining why you think the record is inaccurate. The

25 credit bureau must include a summary of your statement
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1 about disputed information with any report it issues about

2 you.

3 ‘‘ ‘The Federal Trade Commission regulates credit

4 bureaus and credit repair organizations. For more infor5 mation contact:

6 ‘‘‘The Public Reference Branch

7 ‘‘‘Federal Trade Commission

8 ‘‘‘Washington, D.C. 20580’.

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

10 written statement required under this section shall be pro11 vided as a document which is separate from any written

12 contract or other agreement between the credit repair or13 ganization and the consumer or any other written material

14 provided to the consumer.

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

16 ‘‘(1) IN GENERAL.—The credit repair organiza17 tion shall maintain a copy of the statement signed

18 by the consumer acknowledging receipt of the state19 ment.

20 ‘‘(2) MAINTENANCE FOR 2 YEARS.—The copy

21 of any consumer’s statement shall be maintained in

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

23 which the statement is signed by the consumer.
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1 ‘‘SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

2 ‘‘(a) WRITTEN CONTRACTS REQUIRED.—No services

3 may be provided by any credit repair organization for any

4 consumer—

5 ‘‘(1) unless a written and dated contract (for

6 the purchase of such services) which meets the re7 quirements of subsection (b) has been signed by the

8 consumer; or

9 ‘‘(2) before the end of the 3-business-day period

10 beginning on the date the contract is signed.

11 ‘‘(b) TERMS AND CONDITIONS OF CONTRACT.—No

12 contract referred to in subsection (a) meets the require13 ments of this subsection unless such contract includes the

14 following information (in writing):

15 ‘‘(1) The terms and conditions of payment, in16 cluding the total amount of all payments to be made

17 by the consumer to the credit repair organization or

18 to any other person.

19 ‘‘(2) A full and detailed description of the serv20 ices to be performed by the credit repair organiza21 tion for the consumer, including—

22 ‘‘(A) all guarantees of performance; and

23 ‘‘(B) an estimate of—

24 ‘‘(i) the date by which the perform25 ance of the services (to be performed by
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1 the credit repair organization or any other

2 person) will be complete; or

3 ‘‘(ii) the length of the period nec4 essary to perform such services.

5 ‘‘(3) The credit repair organization’s name and

6 principal business address.

7 ‘‘(4) A conspicuous statement in bold face type,

8 in immediate proximity to the space reserved for the

9 consumer’s signature on the contract, which reads as

10 follows: ‘You may cancel this contract without pen11 alty or obligation at any time before midnight of the

12 3rd business day after the date on which you signed

13 the contract. See the attached notice of cancellation

14 form for an explanation of this right.’.

15 ‘‘SEC. 407. RIGHT TO CANCEL CONTRACT.

16 ‘‘(a) IN GENERAL.—Any consumer may cancel any

17 contract with any credit repair organization without pen18 alty or obligation by notifying the credit repair organiza19 tion of the consumer’s intention to do so at any time be20 fore midnight of the 3rd business day which begins after

21 the date on which the contract or agreement between the

22 consumer and the credit repair organization is executed

23 or would, but for this subsection, become enforceable

24 against the parties.
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1 ‘‘(b) CANCELLATION FORM AND OTHER INFORMA2 TION.—Each contract shall be accompanied by a form, in

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

4 and contains in bold face type the following statement:

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

6 penalty or obligation, at any time before midnight of

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

8 is signed by you.

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

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

11 other written notice to [ name of credit repair

12 organization ] at [ address of credit repair

13 organization ] before midnight on [ date ]

14 ‘‘ ‘I hereby cancel this transaction,

15 [ date ]

16 [ purchaser’s signature ].’.

17 ‘‘(c) CONSUMER COPY OF CONTRACT REQUIRED.—

18 Any consumer who enters into any contract with any cred19 it repair organization shall be given, by the organization—

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

21 disclosure statement required under section 405; and

22 ‘‘(2) a copy of any other document the credit

23 repair organization requires the consumer to sign,

24 at the time the contract or the other document is signed.
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1 ‘‘SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

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

3 any consumer of any protection provided by or any right

4 of the consumer under this title—

5 ‘‘(1) shall be treated as void; and

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

7 State court or any other person.

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

9 by any person to obtain a waiver from any consumer of

10 any protection provided by or any right of the consumer

11 under this title shall be treated as a violation of this title.

12 ‘‘(c) CONTRACTS NOT IN COMPLIANCE.—Any con13 tract for services which does not comply with the applica14 ble provisions of this title—

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

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

17 State court or any other person.

18 ‘‘SEC. 409. CIVIL LIABILITY.

19 ‘‘(a) LIABILITY ESTABLISHED.—Any person who

20 fails to comply with any provision of this title with respect

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

22 amount equal to the sum of the amounts determined

23 under each of the following paragraphs:

24 ‘‘(1) ACTUAL DAMAGES.—The greater of—
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1 ‘‘(A) the amount of any actual damage

2 sustained by such person as a result of such

3 failure; or

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

5 credit repair organization.

6 ‘‘(2) PUNITIVE DAMAGES.—

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

8 any action by an individual, such additional

9 amount as the court may allow.

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

11 class action, the sum of—

12 ‘‘(i) the aggregate of the amount

13 which the court may allow for each named

14 plaintiff; and

15 ‘‘(ii) the aggregate of the amount

16 which the court may allow for each other

17 class member, without regard to any mini18 mum individual recovery.

19 ‘‘(3) ATTORNEYS’ FEES.—In the case of any

20 successful action to enforce any liability under para21 graph (1) or (2), the costs of the action, together

22 with reasonable attorneys’ fees.

23 ‘‘(b) FACTORS TO BE CONSIDERED IN AWARDING

24 PUNITIVE DAMAGES.—In determining the amount of any

25 liability of any credit repair organization under subsection
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1 (a)(2), the court shall consider, among other relevant fac2 tors—

3 ‘‘(1) the frequency and persistence of non4 compliance by the credit repair organization;

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

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

7 was intentional; and

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

9 of consumers adversely affected.

10 ‘‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.

11 ‘‘(a) IN GENERAL.—Compliance with the require12 ments imposed under this title with respect to credit repair

13 organizations shall be enforced under the Federal Trade

14 Commission Act by the Federal Trade Commission.

15 ‘‘(b) VIOLATIONS OF THIS TITLE TREATED AS VIO16 LATIONS OF FEDERAL TRADE COMMISSION ACT.—

17 ‘‘(1) IN GENERAL.—For the purpose of the ex18 ercise by the Federal Trade Commission of the Com19 mission’s functions and powers under the Federal

20 Trade Commission Act, any violation of any require21 ment or prohibition imposed under this title with re22 spect to credit repair organizations shall constitute

23 an unfair or deceptive act or practice in commerce

24 in violation of section 5(a) of the Federal Trade

25 Commission Act.
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1 ‘‘(2) ENFORCEMENT AUTHORITY UNDER OTHER

2 LAW.—All functions and powers of the Federal

3 Trade Commission under the Federal Trade Com4 mission Act shall be available to the Commission to

5 enforce compliance with this title by any person sub6 ject to enforcement by the Federal Trade Commis7 sion pursuant to this subsection, including the power

8 to enforce the provisions of this title in the same

9 manner as if the violation had been a violation of

10 any Federal Trade Commission trade regulation

11 rule, without regard to whether the credit repair or12 ganization—

13 ‘‘(A) is engaged in commerce; or

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

15 the Federal Trade Commission Act.

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

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

18 such other remedies as are provided under State

19 law, whenever the chief law enforcement officer of a

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

21 has reason to believe that any person has violated or

22 is violating this title, the State—

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

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

2 residents to recover damages for which the per3 son is liable to such residents under section 409

4 as a result of the violation; and

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

6 under subparagraph (A) or (B), shall be award7 ed the costs of the action and reasonable attor8 ney fees as determined by the court.

9 ‘‘(2) RIGHTS OF COMMISSION.—

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

11 shall serve prior written notice of any civil ac12 tion under paragraph (1) upon the Federal

13 Trade Commission and provide the Commission

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

15 where such prior notice is not feasible, in which

16 case the State shall serve such notice imme17 diately upon instituting such action.

18 ‘‘(B) INTERVENTION.—The Commission

19 shall have the right—

20 ‘‘(i) to intervene in any action re21 ferred to in subparagraph (A);

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

23 on all matters arising in the action; and

24 ‘‘(iii) to file petitions for appeal.
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1 ‘‘(3) INVESTIGATORY POWERS.—For purposes

2 of bringing any action under this subsection, nothing

3 in this subsection shall prevent the chief law enforce4 ment officer, or an official or agency designated by

5 a State, from exercising the powers conferred on the

6 chief law enforcement officer or such official by the

7 laws of such State to conduct investigations or to

8 administer oaths or affirmations or to compel the

9 attendance of witnesses or the production of docu10 mentary and other evidence.

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

12 Trade Commission has instituted a civil action for

13 violation of this title, no State may, during the pend14 ency of such action, bring an action under this sec15 tion against any defendant named in the complaint

16 of the Commission for any violation of this title that

17 is alleged in that complaint.

18 ‘‘SEC. 411. STATUTE OF LIMITATIONS.

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

20 may be brought before the later of—

21 ‘‘(1) the end of the 2-year period beginning on

22 the date of the occurrence of the violation involved;

23 or
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1 ‘‘(2) in any case in which any credit repair or2 ganization has materially and willfully misrepre3 sented any information which—

4 ‘‘(A) the credit repair organization is re5 quired, by any provision of this title, to disclose

6 to any consumer; and

7 ‘‘(B) is material to the establishment of

8 the credit repair organization’s liability to the

9 consumer under this title,

10 the end of the 2-year period beginning on the date

11 of the discovery by the consumer of the misrepresen12 tation.

13 ‘‘SEC. 412. RELATION TO STATE LAW.

14 ‘‘This title shall not annul, alter, affect, or exempt

15 any person subject to the provisions of this title from com16 plying with any law of any State except to the extent that

17 such law is inconsistent with any provision of this title,

18 and then only to the extent of the inconsistency.

19 ‘‘SEC. 413. EFFECTIVE DATE.

20 ‘‘This title shall apply after the end of the 6-month

21 period beginning on the date of the enactment of the Cred22 it Repair Organizations Act, except with respect to con23 tracts entered into by a credit repair organization before

24 the end of such period.’’.
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1 TITLE III—TRUTH IN LENDING

2 ACT

3 SEC. 301. TREATMENT OF DELIVERY FEES AND INTANGI4 BLES TAXES.

5 (a) IN GENERAL.—Section 106(a) of the Truth in

6 Lending Act (15 U.S.C. 1605) is amended by adding at

7 the end the following new paragraph:

8 ‘‘(6) Taxes levied on security instruments or on

9 documents evidencing indebtedness if such taxes

10 must be paid as a precondition to recording the in11 strument securing the evidence of indebtedness.’’.

12 (b) EXCLUDED FEES.—Section 106(e) of the Truth

13 in Lending Act (15 U.S.C. 1605(e)) is amended by insert14 ing ‘‘, if bona fide and reasonable’’ before the colon.

15 (c) FEES FOR DELIVERY CHARGES.—Section 106(e)

16 of the Truth in Lending Act (15 U.S.C. 1605(e)) is

17 amended by adding at the end the following new para18 graph:

19 ‘‘(7) Fees for delivery charges imposed by third

20 parties (including settlement agents, attorneys, and

21 escrow and title companies) if the creditor does not

22 retain the charges and the fees do not exceed $20

23 per delivery, or $50 per consumer transaction.’’.
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1 (d) APPLICABILITY.—The amendments made by this

2 section shall apply to all consumer credit transactions con3 summated on or after February 1, 1995.

4 SEC. 302. LIMITATIONS ON LIABILITY.

5 (a) IN GENERAL.—Chapter 2 of the Truth in Lend6 ing Act (15 U.S.C. 1631 et seq.) is amended by adding

7 at the end the following new section:

8 ‘‘SEC. 139. CERTAIN LIMITATIONS ON LIABILITY.

9 ‘‘(a) IN GENERAL.—For transactions consummated

10 prior to February 1, 1995, a creditor or assignee shall

11 have no civil or criminal liability under this title, nor shall

12 a consumer have extended rescission rights under section

13 125, due to a creditor’s improper disclosure of—

14 ‘‘(1) delivery charges actually and reasonably

15 imposed by the creditor, or any delivery charges im16 posed by third parties (including settlement agents,

17 attorneys, and escrow and title companies), if the

18 creditor does not retain the charges; or

19 ‘‘(2) taxes levied on security instruments or

20 documents evidencing indebtedness.

21 ‘‘(b) APPLICABILITY.—Subsection (a) does not apply

22 to—

23 ‘‘(1) any individual action or counterclaim

24 brought under this title filed prior to October 1,
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1 1994, that alleged (prior to such date) improper dis2 closure of delivery charges or taxes;

3 ‘‘(2) any class action brought under this title in

4 which a class was certified prior to October 1, 1994,

5 that alleged (prior to such date) improper disclosure

6 of delivery charges or taxes;

7 ‘‘(3) the named individual plaintiffs in any class

8 action filed under this title prior to October 1, 1994,

9 that alleged (prior to such date) improper disclosure

10 of delivery charges or taxes; or

11 ‘‘(4) any consumer credit transaction in which

12 a notice of rescission was sent to the creditor prior

13 to October 1, 1994.’’.

14 (b) AMENDMENT TO THE TABLE OF SECTIONS.—The

15 table of sections for chapter 2 of the Truth in Lending

16 Act is amended by inserting after the item relating to sec17 tion 138 the following:

‘‘139. Certain limitations on liability.’’.

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