I

107TH CONGRESS

1ST SESSION H. R. 1478

To protect the privacy of the individual with respect to the Social Security

number and other personal information, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 4, 2001

Mr. KLECZKA introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker,

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To protect the privacy of the individual with respect to

the Social Security number and other personal information, 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. SHORT TITLE.

4 This Act may be cited as the ‘‘Personal Information

5 Privacy Act of 2001’’.
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1 SEC. 2. CONFIDENTIAL TREATMENT OF CREDIT HEADER

2 INFORMATION.

3 Section 603(d) of the Fair Credit Reporting Act (15

4 U.S.C. 1681a(d)) is amended by inserting after the first

5 sentence the following: ‘‘The term also includes any other

6 identifying information of the consumer, except the name,

7 address, and telephone number of the consumer if listed

8 in a residential telephone directory available in the locality

9 of the consumer.’’.

10 SEC. 3. PROTECTING PRIVACY BY PROHIBITING USE OF

11 THE SOCIAL SECURITY NUMBER FOR COM12 MERCIAL PURPOSES WITHOUT CONSENT.

13 (a) IN GENERAL.—Part A of title XI of the Social

14 Security Act (42 U.S.C. 1301 et seq.) is amended by add15 ing at the end the following:

16 ‘‘PROHIBITION OF CERTAIN MISUSES OF THE SOCIAL

17 SECURITY ACCOUNT NUMBER

18 ‘‘SEC. 1148. (a) PROHIBITION OF COMMERCIAL AC19 QUISITION OR DISTRIBUTION.—No person may buy, sell,

20 offer for sale, take or give in exchange, or pledge or give

21 in pledge any information for the purpose, in whole or in

22 part, of conveying by means of such information any indi23 vidual’s social security account number, or any derivative

24 of such number, without the written consent of such indi25 vidual.
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1 ‘‘(b) PROHIBITION OF USE AS PERSONAL IDENTI2 FICATION NUMBER.—No person may utilize any individ3 ual’s social security account number, or any derivative of

4 such number, for purposes of identification of such indi5 vidual without the written consent of such individual.

6 ‘‘(c) PREREQUISITES FOR CONSENT.—In order for

7 consent to exist under subsection (a) or (b), the person

8 engaged in, or seeking to engage in, an activity described

9 in such subsection shall—

10 ‘‘(1) inform the individual of all the purposes

11 for which the number will be utilized and the per12 sons to whom the number will be known; and

13 ‘‘(2) obtain affirmatively expressed consent in

14 writing.

15 ‘‘(d) EXCEPTIONS.—Nothing in this section shall be

16 construed to prohibit any use of social security account

17 numbers permitted or required under section 205(c)(2) of

18 this Act, section 7(a)(2) of the Privacy Act of 1974 (5

19 U.S.C. 552a note; 88 Stat. 1909), or section 6109(d) of

20 the Internal Revenue Code of 1986.

21 ‘‘(e) CIVIL ACTION IN UNITED STATES DISTRICT

22 COURT; DAMAGES; ATTORNEYS FEES AND COSTS; NON23 EXCLUSIVE NATURE OF REMEDY.—

24 ‘‘(1) IN GENERAL.—Any individual aggrieved

25 by any act of any person in violation of this section
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1 may bring a civil action in a United States district

2 court to recover—

3 ‘‘(A) such preliminary and equitable relief

4 as the court determines to be appropriate; and

5 ‘‘(B) the greater of—

6 ‘‘(i) actual damages; and

7 ‘‘(ii) liquidated damages of $25,000

8 or, in the case of a violation that was will9 ful and resulted in profit or monetary gain,

10 $50,000.

11 ‘‘(2) ATTORNEY’S FEES AND COSTS.—In the

12 case of a civil action brought under paragraph (1)

13 in which the aggrieved individual has substantially

14 prevailed, the court may assess against the respond15 ent a reasonable attorney’s fee and other litigation

16 costs and expenses (including expert fees) reasonably

17 incurred.

18 ‘‘(3) STATUTE OF LIMITATIONS.—No action

19 may be commenced under this subsection more than

20 3 years after the date on which the violation was or

21 should reasonably have been discovered by the ag22 grieved individual.

23 ‘‘(4) NONEXCLUSIVE REMEDY.—The remedy

24 provided under this subsection shall be in addition to

25 any other lawful remedy available to the individual.
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1 ‘‘(f) CIVIL MONEY PENALTIES.—

2 ‘‘(1) IN GENERAL.—Any person who the Com3 missioner of Social Security determines has violated

4 this section shall be subject, in addition to any other

5 penalties that may be prescribed by law, to—

6 ‘‘(A) a civil money penalty of not more

7 than $25,000 for each such violation, and

8 ‘‘(B) a civil money penalty of not more

9 than $500,000, if violations have occurred with

10 such frequency as to constitute a general busi11 ness practice.

12 ‘‘(2) DETERMINATION OF VIOLATIONS.—Any

13 violation committed contemporaneously with respect

14 to the social security account numbers of 2 or more

15 individuals by means of mail, telecommunication, or

16 otherwise shall be treated as a separate violation

17 with respect to each such individual.

18 ‘‘(3) ENFORCEMENT PROCEDURES.—The provi19 sions of section 1128A (other than subsections (a),

20 (b), (f), (h), (i), (j), and (m), and the first sentence

21 of subsection (c)) and the provisions of subsections

22 (d) and (e) of section 205 shall apply to civil money

23 penalties under this subsection in the same manner

24 as such provisions apply to a penalty or proceeding

25 under section 1128A(a), except that, for purposes of
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1 this paragraph, any reference in section 1128A to

2 the Secretary shall be deemed a reference to the

3 Commissioner of Social Security.

4 ‘‘(4) COORDINATION WITH CRIMINAL ENFORCE5 MENT.—The Commissioner of Social Security shall

6 take such actions as are necessary and appropriate

7 to assure proper coordination of the enforcement of

8 the provisions of this section with criminal enforce9 ment under section 1028 of title 18, United States

10 Code (relating to fraud and related activity in con11 nection with identification documents). The Commis12 sioner shall enter into cooperative arrangements with

13 the Federal Trade Commission under section 5 of

14 the Identity Theft and Assumption Deterrence Act

15 of 1998 for purposes of achieving such coordination.

16 ‘‘(g) REGULATION BY STATES.—Nothing in this sec17 tion shall be construed to prohibit any State authority

18 from enacting or enforcing laws consistent with this sec19 tion for the protection of privacy.’’.

20 (b) EFFECTIVE DATE.—The amendment made by

21 subsection (a) applies with respect to violations occurring

22 on and after the date which is 2 years after the date of

23 enactment of this Act.

24 (c) UNFAIR OR DECEPTIVE ACT OR PRACTICE.—Any

25 person who refuses to do business with an individual be-
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1 cause the individual will not consent to that person receiv2 ing the social security number of such individual shall be

3 considered to have committed an unfair or deceptive act

4 or practice in violation of section 5 of the Federal Trade

5 Commission Act (15 U.S.C. 45). Action may be taken

6 under such section 5 against such a person.

7 SEC. 4. REPEAL OF CERTAIN PROVISIONS RELATING TO

8 DISTRIBUTION OF CONSUMER REPORTS IN

9 CONNECTION WITH CERTAIN TRANSACTIONS

10 NOT INITIATED BY THE CONSUMER.

11 (a) IN GENERAL.—Paragraph (1) of section 604(c)

12 of the Fair Credit Reporting Act (15 U.S.C. 1681b(c))

13 is amended by striking ‘‘any credit or insurance trans14 action that is not initiated by the consumer only if—’’ and

15 all that follows through the end of such paragraph and

16 inserting ‘‘any credit or insurance transaction that is not

17 initiated by the consumer only if the consumer provides

18 express written authorization, in accordance with para19 graph (2), to the agency to provide such report in connec20 tion with any such transaction.’’

21 (b) FULL DISCLOSURE REQUIRED.—Paragraph (2)

22 of section 604(c) of the Fair Credit Reporting Act (15

23 U.S.C. 1681b(c)) is amended to read as follows:

24 ‘‘(2) FULL DISCLOSURE REQUIRED.—
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1 ‘‘(A) IN GENERAL.—No authorization re2 ferred to in paragraph (1) with respect to any

3 consumer shall be effective unless the consumer

4 receives a notice before such authorization is

5 provided which fully and fairly discloses, in ac6 cordance with regulations which the Federal

7 Trade Commission and the Board of Governors

8 of the Federal Reserve System shall jointly pre9 scribe, what specifically is being authorized by

10 the consumer and the potential positive and

11 negative effects the provision of such authoriza12 tion will have on the consumer.

13 ‘‘(B) FORM OF NOTICE.—The regulations

14 prescribed pursuant to subparagraph (A) shall

15 require that the notice required under such

16 subparagraph—

17 ‘‘(i) be prominently displayed on a

18 document which is separate from any other

19 document; or

20 ‘‘(ii) if the notice appears on a docu21 ment with other information, be placed in

22 a clear and conspicuous location on such

23 document and appear in type face which is

24 more conspicuous than the type face used
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1 for any other information on such docu2 ment.’’.

3 (c) TECHNICAL AND CONFORMING AMENDMENT.—

4 Subsection (e) of section 604 of the Fair Credit Reporting

5 Act (15 U.S.C. 1681b) is amended to read as follows:

6 ‘‘(e) [Repealed]’’.

7 SEC. 5. SALE OR TRANSFER OF TRANSACTION OR EXPERI8 ENCE INFORMATION PROHIBITED.

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

10 (15 U.S.C. 1681 et seq.) is amended by adding at the end

11 the following new section:

12 ‘‘§ 626. Transaction or experience information

13 ‘‘(a) IN GENERAL.—No person doing business with

14 a consumer may sell, transfer, or otherwise provide to any

15 other person, for the purpose of marketing such informa16 tion to any other person, any transaction or experience

17 information without the consumer’s express written con18 sent.

19 ‘‘(b) TRANSACTION OR EXPERIENCE INFORMATION

20 DEFINED.—For purposes of this section, the term ‘trans21 action or experience information’ means any information

22 identifying the content or subject of 1 or more trans23 actions between the consumer and a person doing business

24 with a consumer, including any component part of any

25 transaction, any brand name involved, or any quantity or
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1 category of merchandise involved in any part of the trans2 action.

3 ‘‘(c) EXCEPTIONS.—Subsection (a) shall not apply

4 with respect to the following:

5 ‘‘(1) Communication of transaction or experi6 ence information solely among persons related by

7 common ownership or affiliated by corporate control.

8 ‘‘(2) Information provided pursuant to the

9 order of a court having jurisdiction to issue such

10 order or pursuant to a subpoena issued in connec11 tion with proceedings before a Federal grand jury.

12 ‘‘(3) Information provided in connection with

13 the licensing or registration by a government agency

14 or department, or any transfer of such license or

15 registration, of any personal property bought, sold,

16 or transferred by the consumer.

17 ‘‘(4) Information required to be provided in

18 connection with any transaction in real estate.

19 ‘‘(5) Information required to be provided in

20 connection with perfecting a security interest in per21 sonal property.

22 ‘‘(6) Information relating to the amount of any

23 transaction or any credit extended in connection

24 with a transaction with a consumer.’’.
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1 (b) TECHNICAL AND CONFORMING AMENDMENT.—

2 Section 603(d)(2)(A) is amended by striking ‘‘(A) any—

3 ’’ and inserting ‘‘(A) subject to section 626, any—’’.

4 (c) CLERICAL AMENDMENT.—The table of sections

5 for the Fair Credit Reporting Act is amended by adding

6 at the end the following new item:

‘‘626. Transaction or experience information.’’.

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