Restoring Unfairly Impaired Credit and Protecting Consumers Act

To amend the Fair Credit Reporting act to restore the impaired credit of victims of predatory activities and unfair consumer reporting practices, to expand access to tools to protect vulnerable consumers from identity theft, fraud, or a related crime, and protect victims from further harm, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Restoring Unfairly Impaired Credit and Protecting Consumers Act (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Findings. Sec. 3. Effective date. Sec. 4. General Bureau rulemaking. Title I—Restoring the impaired credit of victims of predatory activities and unfair consumer reporting practices Sec. 101. Shortens the time period that most adverse credit information stays on consumer reports. Sec. 102. Mandates the expedited removal of fully paid or settled debt from consumer reports. Sec. 103. Imposes restrictions on the appearance of medical collections on consumer reports and requires the expedited removal of fully paid or settled medical collections from consumer reports. Sec. 104. Provides credit restoration for victims of predatory mortgage lending and servicing. Sec. 105. Provides credit relief for private education loans borrowers who were defrauded or mislead by proprietary education institution or career education programs. Sec. 106. Establishes right for victims of financial abuse to have adverse information associated with an abuser’s fraudulent activity removed from their consumer reports. Sec. 107. Prohibits treatment of credit restoration or rehabilitation as adverse information. Title II—Expanding access to tools to protect vulnerable consumers from identity theft, fraud, or a related crime, and protect victims from further harm Sec. 201. Identity theft report definition. Sec. 202. Amendment to protection for files and credit records of protected consumers. Sec. 203. Enhances fraud alert protections. Sec. 204. Amendment to security freezes for consumer reports. Sec. 205. Clarification of information to be included with agency disclosures. Sec. 206. Provides access to fraud records for victims. Sec. 207. Required Bureau to set procedures for reporting identity theft, fraud, and other related crime. Sec. 208. Establishes the right to free credit monitoring and identity theft protection services for certain consumers. Sec. 209. Ensures removal of inquiries resulting from identity theft, fraud, or other related crime from consumer reports. Title III—Miscellaneous Sec. 301. Definitions. Sec. 302. Technical correction related to risk-based pricing notices. Sec. 303. FCRA findings and purpose; voids certain contracts not in the public interest. 2. Findings Congress finds the following: (1) General findings (A) Consumer reporting agencies ( CRAs 15 U.S.C. 1681 FCRA (B) In a December 2012 paper, Key Dimensions and Processes in the U.S. Credit Reporting System: A review for how the nation’s largest credit bureaus manage consumer data Consumer Bureau (C) The 10 largest institutions furnishing credit information to each of the nationwide CRAs account for more than half of all accounts reflected in consumers’ credit files. (D) Consumer reports play an increasingly important role in the lives of American consumers. Most creditors, for example, review these reports to make decisions about whether to extend credit to consumers and what terms and conditions to offer them. As such, information contained in these reports affects whether a person is able to get a private education loan to pay for college costs, to secure a mortgage loan to buy a home, or to obtain a credit card, as well as the terms and conditions under which consumer credit products or services are offered to them. (E) Credit reports are also increasingly used for many noncredit decisions, including by landlords to determine whether to rent an apartment to a prospective tenant and by employers to decide whether to hire potential job applicants or to offer a promotion to existing employees. (F) CRAs have a statutory obligation to verify independently the accuracy and completeness of information included on the reports that they provide. (G) The nationwide CRAs have failed to establish and follow reasonable procedures, as required by existing law, to establish the maximum level of accuracy of information contained on consumer reports. Given the repeated failures of these CRAs to comply with accuracy requirements on their own, legislation is intended to provide them with detailed guidance improving the accuracy and completeness of information contained in consumer reports, including procedures, policies, and practices that these CRAs should already be following to ensure full compliance with their existing obligations. (H) The presence of inaccurate or incomplete information on these reports can result in substantial financial and emotional harm to consumers. Credit reporting errors can lead to the loss of a new employment opportunity or a denial of a promotion in an existing job, stop someone from being able to access credit on favorable terms, prevent a person from obtaining rental housing, or even trigger mental distress. (I) Current industry practices impose an unfair burden of proof on consumers trying to fix errors on their reports. (J) Consumer reports containing inaccurate or incomplete credit information also undermine the ability of creditors and lenders to effectively and accurately underwrite and price credit. (K) Recognizing that credit reporting affects the lives of almost all consumers in this country and that the consequences of errors on a consumer report can be catastrophic for a consumer, the Consumer Bureau began accepting consumer complaints about credit reporting in October 2012. (L) As of February 2017, the Consumer Bureau has handled approximately 185,717 credit reporting complaints, making credit reporting consistently the third most-complained-about subject matter on which the Consumer Bureau accepts consumer complaints. (M) In the Monthly Complaint Report Volume 20 (N) Other common types of credit reporting complaints submitted to the Consumer Bureau related to the improper use of a report, trouble obtaining a report or credit score, CRAs’ investigations, and credit monitoring or identity protection. (O) In the summer 2015 Supervisory Highlights (P) According to the fall 2016 Supervisory Highlights (Q) A February 2014 Consumer Bureau report titled Credit Reporting Complaint Snapshot (R) As evidence that the current system lacks sufficient market incentives for CRAs to develop more robust procedures to increase the accuracy and completeness of information on credit reports, litigation discovery documented by the National Consumer Law Center ( NCLC Automated Injustice: How a Mechanized Dispute System Frustrates Consumers Seeking to Fix Errors in Their Credit Reports (S) Unlike most other business relationships, where consumers can register their satisfaction or unhappiness with a particular credit product or service simply by taking their business elsewhere, consumers have no say in whether their information is included in the CRAs databases and limited legal remedies to hold the CRAs accountable for inaccuracies or poor service. (T) Accordingly, despite the existing statutory mandate for CRAs to follow reasonable procedures to assure the maximum possible accuracy of the information whenever they prepare consumer reports, numerous studies, the high volume of consumer complaints submitted to the Consumer Bureau about incorrect information on consumer reports, and supervisory activities by the Consumer Bureau demonstrate that CRAs continue to skirt their obligations under the law. (2) Private education loans (A) The Consumer Bureau’s October 2014 report titled Annual Report of the CFPB Student Loan Ombudsman (B) Although private student loan holders may allow a borrower to postpone payments while enrolled in school full-time, many limit this option to a certain time period, usually 48 to 66 months. This limited time period may not be sufficient for those who need additional time to obtain their degree or who want to continue their education by pursing a graduate or professional degree. The Consumer Bureau found that borrowers who were unable to make payments often defaulted or had their accounts sent to collections before they were even able to graduate. (3) Deceptive practices at certain proprietary education institutions and career education programs (A) NCLC cited the proliferation of law enforcement actions against many for-profit schools in its June 2014 report, titled Ensuring Educational Integrity: 10 Steps to Improve State Oversight of For-profit Schools (B) The closure and bankruptcy of Corinthian Colleges, which was found to have deceived students by steering them into high-interest student loans based on misleading graduation rates and employment data, is a good example of the problem. Even after its closure, many Corinthian students remained saddled with student loan debt, worthless degrees, and few prospects for employment. (C) Attending a two-year, for-profit college costs, on average, four times as much as attending a community college. Students at for-profit colleges represent only about 11 percent of the total higher education population but a startling 44 percent of all Federal student loan defaults, according to the United States Department of Education ( DOE (D) According to NCLC, a disproportionate number of for-profit students are low-income and people of color. These schools target veterans, working parents, first-generation students, and non-English speaking students, who may be more likely than their public or private nonprofit school counterparts to drop out, incur enormous student debt, and default on this debt. In the 2011–2012 school year, 28 percent of African Americans and 15 percent of Latinos attending four-year institutions were enrolled in a for-profit school, compared to 10 percent of Whites. (E) As highlighted in a press release titled Obama Administration Announces Final Rules to Protect Students from Poor-Performing Career College Programs t (4) Medical debt (A) Research by the Consumer Bureau has found that the inclusion of medical collections on consumer reports has unfairly reduced consumers’ credit scores. (B) The Consumer Bureau’s review of 5 million anonymized credit files from September 2011 to September 2013, for example, found that credit scores may underestimate a person’s creditworthiness by up to 10 points for those who owe medical debt, and may underestimate a person’s creditworthiness by up to 22 points after the medical debt has been paid. For consumers with lower credit scores, especially those on the brink of what is considered subprime, a 10 to 22 point decrease in their credit scores can have a significant impact on their lives, including by affecting whether they are able to qualify for credit and, if so, the terms and conditions under which it is extended to them. (C) The Consumer Bureau found that half of all collections trade lines that appear on consumer reports are related to medical bills claimed to be owed to hospitals and other medical providers. These trade lines affect the reports of nearly 1⁄5 of all consumers in the credit reporting system. (D) The Consumer Bureau has found that there are no objective or enforceable standards that determine when a debt can or should be reported as a collection trade line. Because debt buyers and collectors determine whether, when, and for how long to report a collection account, there is only a limited relationship between the time period reported, the severity of a delinquency, and when or whether a collection trade line appears on a consumer’s credit report. (E) Medical bills can be complex and confusing for many consumers, which results in consumers’ uncertainty about what they owe, to whom, when, or for what, that may cause some people, who ordinarily pay their bills on time, to delay or withhold payments on their medical debts. This uncertainty can also result in medical collections appearing on consumer reports. In a December 2014 report titled Consumer Credit Reports: A Study of Medical and Non-Medical Collections (F) The Consumer Bureau concluded that the presence of medical collections is less predictive of future defaults or serious delinquencies than the presence of a nonmedical collection in a study titled Data Point: Medical Debt and Credit Scores (G) FICO’s latest credit scoring model, FICO 9 (H) VantageScore’s latest credit scoring model, VantageScore 4.0 (I) The three nationwide CRAs entered into a settlement agreement with the New York State attorney general in 2015 to address deficiencies in their dispute resolution process and enhance the accuracy of items on reports. These policy changes will be implemented in a three-phrased rollout, culminating by June 2018. Subsequently, these CRAs entered into a cooperative agreement with 31 State Attorneys General, which was the basis of the creation of the National Consumer Assistance Plan ( NCAP (J) While the CRAs appear to be voluntarily adopting policy changes on a nationwide basis, they are not obligated to do so for consumers who reside in States that are not party to any of the consent orders. (K) As a result of the settlement agreements, the three nationwide CRAs will set a 180-day waiting period before including medical collections on a report and will remove a medical collection from a report once it is paid by an insurance company. While this change will benefit many, once a medical collection appears on a report, it will only be deleted or suppressed if it is found to have been the insurance company’s obligation to pay and the insurer pays it. Given the research showing there is little predictive value in medical debt information, medical collections that are paid or settled should quickly be removed from a report, regardless of who pays or settles this debt. (5) Financial abuse by known persons (A) Financial abuse and exploitation are frequently associated with domestic violence. This type of abuse may result in fraudulent charges to a credit card or having fraudulent accounts created by the abuser in the survivor’s name. Financial abuse may also result in the survivor’s inability to make timely payments on their valid obligations due to loss or changes in income that can occur when their abuser steals from or coerces the survivor to relinquish their paychecks or savings. (B) By racking up substantial debts in the survivor’s name, abusers are able to exercise financial control over their survivors to make it economically difficult for the survivor, whose credit is often destroyed, to escape the situation. (C) Domestic abuse survivors with poor credit are likely to face significant obstacles in establishing financial independence from their abusers. This can be due, in part, because consumer reports may be used when a person attempts to obtain a checking account, housing, insurance, utilities, employment, and even a security clearance as required for certain jobs. (D) Providing documentation of identity ( ID (E) While it is easier for consumers who obtain a police report to remove fraudulent information from their consumer report and prevent it from reappearing in the future, according to the Empire Justice Center, safety and other noncredit concerns may impact the capacity of a survivor of financial abuse committed by a known person to turn to law enforcement to get a police report. (F) According to the Legal Aid Society in New York, domestic abuse survivors, seeking to remove adverse information stemming from financial abuse by contacting their furnishers directly, are likely to face skepticism about claims of ID theft perpetrated by a partner because of an assumption that they are aware of, and may have been complicit in, the activity which the survivor alleges stems from financial abuse. (6) Deceptive and misleading marketing practices (A) The Consumer Bureau’s February 2015 report titled Consumer Voices on Credit Reports and Scores (B) In January 2017, the Consumer Bureau fined TransUnion and Equifax for deceptively marketing credit scores for purchase by consumers as the same credit scores typically used by lenders to determine creditworthiness and for luring consumers into costly subscription services that were advertised as free $1 (C) The Consumer Bureau fined the other nationwide CRA—Experian—in March 2017 for deceiving consumers about the use of credit scores that it marketed and sold to consumers as credit scores that were used by lenders and for illegally advertising its products on web pages that consumers accessed through AnnualCreditReport.com before they obtained their free annual disclosures. Experian was ordered to pay more than $3.7 million in restitution to harmed consumers and a civil monetary penalty of $2.5 million to the Consumer Bureau. (D) The Consumer Bureau’s January and March 2017 consent orders with the three nationwide CRAs show that these CRAs have enticed consumers into purchasing products and services that they may not want or need, in some instances by advertising products or services free (E) Given the ubiquitous use of consumer reports in consumers’ lives and the fact that consumers’ participation in the credit reporting system is involuntary, CRAs should also prioritize providing consumers with the effective means to safeguard their personal and financial information and improve their credit standing, rather than seeking to exploit consumers’ concerns and confusion about credit reporting and scoring, to boost their companies’ profits. (F) Vulnerable consumers, who have legitimate concerns about the security of their personal and financial information, deserve clear, accurate, and transparent information about the credit reporting tools that may be available to them, such as fraud alerts and freezes. (7) Protections for consumers’ credit information (A) Despite heightened awareness, incidents of ID theft continue to rise. In February 2015, the FTC reported that ID theft was the top consumer complaint that it received for the 15th consecutive year. As these incidents increase, consumers experience significant financial loss and emotional distress from the inability to safeguard effectively and inexpensively their credit information from bad actors. (B) According to a Carnegie Mellon study, children are 50 times more likely than adults to have their identities stolen. Child identities are valuable to thieves because most children do not have existing files, and their parents may not notice fraudulent activity until their child applies for a student loan, a job, or a credit card. As a result, the fraudulent activity of the bad actors may go undetected for years. (C) Despite the increasing incidents of children’s ID theft, parents who want to proactively prevent their children from having their identity stolen, may not be able to do so. Only one of the three nationwide CRAs currently allows parents from any State to set up a freeze for a minor child. At the other two nationwide CRAs, parents can only obtain a freeze after a child has become an ID theft victim because, it is only at this point, that these CRAs have an existing credit file for the child. While many States have enacted laws to address this problem, there is no existing Federal law. (D) According to Javelin Strategy & Research’s 2015 Identity Fraud study, $16 billion was stolen by fraudsters from 12.7 million American consumers in 2014. Similarly, the United States Department of Justice found an estimated 7 percent of all residents age 16 or older (about 17.6 million persons) in this country were victims of one or more incidents of ID theft in 2014, and the number of elderly victims age 65 or older (about 86 percent) increased from 2.1 million in 2012 to 2.6 million in 2014. (E) Consumers frequently express concern about the security of their financial information. According to a 2015 MasterCard survey, a majority of consumers (77 percent) have anxiety about the possibility that their financial information and Social Security numbers may be stolen or compromised, with about 55 percent of consumers indicating that they would rather have naked pictures of themselves leaked online than have their financial information stolen. (F) That survey also revealed that consumers’ fears about the online security of their financial information even outweighed consumers’ worries about other physical security dangers such as having their houses robbed (59 percent) or being pickpocketed (46 percent). (G) According to Consumer Reports, roughly 50 million American consumers spent about $3.5 billion in 2010 to purchase products aimed at protecting their identity, with the annual cost of these services ranging from $120 to $300. As risks to consumers’ personal and financial information continue to grow, consumers need additional protections to ensure that they have fair and reasonable access to the full suite of ID theft and fraud prevention measures that may be right for them. 3. Effective date Except as otherwise specified, the amendments made by this Act shall take effect 2 years after the date of the enactment of this Act. 4. General Bureau rulemaking Except as otherwise provided, not later than the end of the 2-year period beginning on the date of the enactment of this Act, the Bureau of Consumer Financial Protection shall issue final rules to implement the amendments made by this Act. I Restoring the impaired credit of victims of predatory activities and unfair consumer reporting practices 101. Shortens the time period that most adverse credit information stays on consumer reports (a) In general Section 605 of the Fair Credit Reporting Act ( 15 U.S.C. 1681c (1) in subsection (a)— (A) by striking Except as authorized under subsection (b), no No (B) in paragraph (1), by striking 10 years 7 years (C) in paragraph (2), by striking Civil suits, civil judgments, and records Records (D) in paragraph (3), by striking seven years 4 years (E) in paragraph (4), by striking seven years 4 years, except as provided in paragraph (8), (10), (11), (12), or (13), or as required by section 605C, 605D, 605E, or 605F (F) in paragraph (5)— (i) by striking , other than records of convictions of crimes (ii) by striking seven years 4 years, except as required by section 605C, 605D, 605E, or 605F (G) by adding at the end the following new paragraphs: (9) Civil suits and civil judgments (except as provided in paragraph (8)) that, from date of entry, antedate the report by more than 4 years or until the governing statute of limitations has expired, whichever is the longer period. (10) A civil suit or civil judgment— (A) brought by a private education loan holder that, from the date of successful completion of credit restoration or rehabilitation in accordance with the requirements of section 605D or 605E, antedates the report by 45 calendar days; or (B) brought by a lender with respect to a covered residential mortgage loan that antedates the report by 45 calendar days. (11) Records of convictions of crimes which antedate the report by more than 7 years. (12) Any other adverse item of information relating to the collection of debt that did not arise from a contract or an agreement to pay by a consumer, including fines, tickets, and other assessments, as determined by the Bureau, excluding tax liability. ; (2) by striking subsection (b) and redesignating subsections (c) through (h) as subsections (b) through (g), respectively; and (3) in subsection (b) (as so redesignated), by striking 7-year period referred to in paragraphs (4) and (6) 4-year period referred to in paragraphs (4) and (5) (b) Conforming amendments The Fair Credit Reporting Act ( 15 U.S.C. 1681 (1) in section 616(d), by striking section 605(g) section 605(f) (2) in section 625(b)(5)(A), by striking section 605(g) section 605(f) 102. Mandates the expedited removal of fully paid or settled debt from consumer reports Section 605(a) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c(a) (13) Any other adverse item of information related to a fully paid or settled debt that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 calendar days. . 103. Imposes restrictions on the appearance of medical collections on consumer reports and requires the expedited removal of fully paid or settled medical collections from consumer reports (a) Removal of fully paid or settled medical debt from consumer reports Section 605(a) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c(a) (14) Any other adverse item of information related to a fully paid or settled debt arising from the receipt of medical services, products, or devices that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 calendar days. . (b) Establishing an extended time period before certain medical debt information may be reported Section 605(a) of such Act is further amended by adding at the end the following new paragraph: (15) Any information related to a debt arising from the receipt of medical services, products, or devices, if the date on which such debt was placed for collection, charged to profit or loss, or subjected to any similar action antedates the report by less than 365 calendar days. . (c) Prohibition on reporting medically necessary procedures Section 605(a) of such Act is further amended by adding at the end the following new paragraph: (16) Any information related to a debt arising from a medically necessary procedure. . (d) Technical amendment Section 604(g)(1)(C) of the Fair Credit Reporting Act ( 15 U.S.C. 1681b(g)(1)(C) devises devices 104. Provides credit restoration for victims of predatory mortgage lending and servicing (a) In general The Fair Credit Reporting Act ( 15 U.S.C. 1681 605C. Credit restoration for victims of predatory mortgage lending (a) In general A consumer reporting agency may not furnish any consumer report containing any adverse item of information relating to a covered residential mortgage loan (including the origination and servicing of such a loan, any loss mitigation activities related to such a loan, and any foreclosure, deed in lieu of foreclosure, or short sale related to such a loan), if the action or inaction to which the item of information relates— (1) resulted from an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity of a financial institution, as determined by the Bureau or a court of competent jurisdiction; or (2) is related to an unfair, deceptive, or abusive act, practice, or a fraudulent, discriminatory, or illegal activity of a financial institution that is the subject of a settlement agreement initiated on behalf of a consumer or consumers and that is between the financial institution and an agency or department of a local, State, or Federal Government, regardless of whether such settlement includes an admission of wrongdoing. (b) Covered residential mortgage loan defined In this section, the term covered residential mortgage loan (1) a manufactured home (as defined in section 603 of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5402 (2) any installment sales contract, land contract, or contract for deed on a residential property; or (3) a reverse mortgage transaction (as defined in section 103 of the Truth in Lending Act). . (b) Table of contents amendment The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605B the following new item: 605C. Credit restoration for victims of predatory mortgage lending. . (c) Effective date The amendments made by this section shall take effect at the end of the 18-month period beginning on the date of the enactment of this Act. 105. Provides credit relief for private education loans borrowers who were defrauded or mislead by proprietary education institution or career education programs (a) In general The Fair Credit Reporting Act ( 15 U.S.C. 1681 605D. Private education loan credit restoration for defrauded student borrowers who attend certain proprietary educational institution or career education programs (a) Process for certification as a qualifying private education loan borrower (1) In general A consumer may submit a request to the Bureau, along with a defraudment claim, to be certified as a qualifying private education loan borrower with respect to a private education loan. (2) Certification The Bureau shall certify a consumer described in paragraph (1) as a qualifying private education loan borrower with respect to a private education loan if the Bureau or a court of competent jurisdiction determines that the consumer has a valid defraudment claim with respect to such loan. (b) Removal of adverse information Upon receipt of a notice described in subsection (d)(5), a consumer reporting agency shall remove any adverse information relating to any private education loan with respect to which a consumer is a qualifying private education loan borrower from any consumer report within 45 calendar days of receipt of such notification. (c) Disclosure The Bureau shall disclose the results of a certification determination in writing to the consumer that provides a clear and concise explanation of the basis for the determination of whether such consumer is a qualifying private education loan borrower with respect to a private education loan and, as applicable, an explanation of the consumer’s right to have adverse information relating to such loan removed from their consumer report by a consumer reporting agency. (d) Procedures The Bureau shall— (1) establish procedures for a consumer to submit a request described in subsection (a); (2) establish procedures to efficiently review, accept, and process such a request; (3) develop ongoing outreach initiatives and education programs to inform consumers of the circumstances under which such consumer may be eligible to be certified as a qualifying private education loan borrower with respect to a private education loan; (4) establish procedures, including the manner, form, and content of the notice informing a private educational loan holder of the prohibition on reporting any adverse information relating to a private education loan with respect to which a consumer is a qualifying private education loan borrower; and (5) establish procedures, including the manner, form, and content of the notice informing a consumer reporting agency of the obligation to remove any adverse information as described in subsection (c). (e) Standardized reporting codes A consumer reporting agency shall develop standardized reporting codes for use by private education loan holders to identify and report a qualifying private education loan borrower’s status of a request to remove any adverse information relating to any private education loan with respect to which such consumer is a qualifying private education loan borrower. A consumer report in which a person furnishes such codes shall be deemed to comply with the requirements for accuracy and completeness required under sections 623(a)(1) and 630. Such codes shall not appear on any report provided to a third party, and shall be removed from the consumer’s credit report upon the successful restoration of the consumer’s credit under this section. (f) Defraudment claim defined For purposes of this section, the term defraudment claim (1) the proprietary educational institution or career education program— (A) engaged in an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity— (i) as defined by State law of the State in which the proprietary educational institution or career education program is headquartered or maintains or maintained significant operations; or (ii) under Federal law; (B) is the subject of an enforcement order, a settlement agreement, a memorandum of understanding, a suspension of tuition assistance, or any other action relating to an unfair, deceptive, or abusive act or practice that is between the proprietary educational institution or career education program and an agency or department of a local, State, or Federal Government; or (C) misrepresented facts to students or accrediting agencies or associations about graduation or gainful employment rates in recognized occupations or failed to provide the coursework necessary for students to successfully obtain a professional certification or degree from the proprietary educational institution or career education program; or (2) the consumer has submitted a valid defense to repayment claim with respect to such loan, as determined by the Secretary of Education. . (b) Table of contents amendment The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605C (as added by section 104) the following new item: 605D. Private education loan credit restoration for defrauded student borrowers who attend certain proprietary educational institution or career education programs. . 106. Establishes right for victims of financial abuse to have adverse information associated with an abuser’s fraudulent activity removed from their consumer reports (a) In general The Fair Credit Reporting Act ( 15 U.S.C. 1681 605E. Financial abuse prevention For a consumer who is the victim of intentionally abusive or harmful financial behavior, as determined by a court of competent jurisdiction including a family court, juvenile court, or other court with personal jurisdiction, that was conducted by a spouse, family or household member, caregiver, or person with whom such consumer had a dating relationship in a manner which resulted in the inclusion of an adverse item of information on the consumer report of the consumer, and the consumer did not participate in or consent to such behavior, the consumer may apply to a court of competent jurisdiction, including a family court, juvenile court, or other court with personal jurisdiction, for an order to require the removal of such adverse information from the consumer’s file maintained by any consumer reporting agency. . (b) Table of contents amendment The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605D the following new item: 605E. Financial abuse prevention. . 107. Prohibits treatment of credit restoration or rehabilitation as adverse information The Fair Credit Reporting Act ( 15 U.S.C. 1681 (1) by adding at the end the following new section: 630. Prohibition of certain factors related to Federal credit restoration or rehabilitation (a) Restriction on credit scoring models A credit scoring model may not— (1) take into consideration, in a manner adverse to a consumer’s credit score or educational credit score, any information in a consumer report concerning the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E; or (2) treat negatively, in a manner adverse to a consumer’s credit score or educational credit score, the absence of payment history data for an existing account, whether the account is open or closed, where the absence of such information is the result of a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E. (b) Restriction on persons obtaining consumer reports A person who obtains a consumer report may not— (1) take into consideration, in a manner adverse to a consumer, any information in a consumer report concerning the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E; or (2) treat negatively the absence of payment history data for an existing account, whether the account is open or closed, where the absence of such information is the result of a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E. (c) Accuracy and completeness If a person who furnishes information to a consumer reporting agency requests the removal of information from a consumer report or a consumer reporting agency removes information from a consumer report in compliance with the requirements under section 605C, 605D, or 605E, or such information was removed pursuant at section 605(a)(11), such report shall be deemed to satisfy the requirements for accuracy and completeness with respect to such information. (d) Prohibition related to adverse actions and risk-Based pricing decisions No person shall use information related to a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E in connection with any determination of— (1) the consumer’s eligibility or continued eligibility for an extension of credit; (2) the terms and conditions offered to a consumer regarding an extension of credit; or (3) an adverse action made for employment purposes. ; and (2) in the table of contents for such Act, by adding at the end the following new item: 630. Prohibition of certain factors related to Federal credit restoration or rehabilitation. . II Expanding access to tools to protect vulnerable consumers from identity theft, fraud, or a related crime, and protect victims from further harm 201. Identity theft report definition Paragraph (4) of section 603(q) of the Fair Credit Reporting Act ( 15 U.S.C. 1681a(q)(4) (4) Identity theft report The term identity theft report (A) that is a standardized affidavit that alleges that a consumer has been a victim of identity theft, fraud, or a related crime, or has been harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, that was developed and made available by the Bureau; or (B) (i) that alleges an identity theft, fraud, or a related crime, or alleges harm from the unauthorized disclosure of the consumer’s financial or personally identifiable information; (ii) that is a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency, including the United States Postal Inspection Service, or such other government agency deemed appropriate by the Bureau; and (iii) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false. . 202. Amendment to protection for files and credit records of protected consumers (a) Amendment to definition of file Section 603(g) of the Fair Credit Reporting Act ( 15 U.S.C. 1681a(g) , except that such term excludes a record created pursuant to section 605A(j) stored (b) Amendment to protection for files and credit records Section 605A(j) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c–1(j) (1) in paragraph (1)— (A) in subparagraph (B)(ii), by striking an incapacitated person or a protected person a person (B) by amending subparagraph (E) to read as follows: (E) The term security freeze (i) has the meaning given in subsection (i)(1)(C); and (ii) with respect to a protected consumer for whom the consumer reporting agency does not have a file, means a record that is subject to a security freeze that a consumer reporting agency is prohibited from disclosing to any person requesting the consumer report for the purpose of opening a new account involving the extension of credit. ; and (2) in paragraph (4)(D), by striking a protected consumer or a protected consumer’s representative under subparagraph (A)(i) a protected consumer described under subparagraph (A)(ii) or a protected consumer’s representative 203. Enhances fraud alert protections Section 605A of the Fair Credit Reporting Act ( 15 U.S.C. 1681c–1 (1) in subsection (a)— (A) in the subsection heading, by striking One-Call One-Year (B) in paragraph (1)— (i) in the paragraph heading, by striking Initial alerts In general (ii) by inserting or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, identity theft, (iii) in subparagraph (A), by striking and (iv) in subparagraph (B)— (I) by inserting 1-year fraud alert (II) by striking the period at the end and inserting ; and (v) by adding at the end the following new subparagraph: (C) upon the expiration of the 1-year period described in subparagraph (A) or a subsequent 1-year period, and in response to a direct request by the consumer or such representative, continue the fraud alert for a period of 1 additional year if the information asserted in this paragraph remains applicable. ; and (C) in paragraph (2)— (i) in the paragraph heading, by inserting and credit or educational credit scores reports (ii) by inserting 1-year fraud alert (iii) in subparagraph (A), by inserting and credit score or educational credit score file (iv) in subparagraph (B), by striking any request described in subparagraph (A) the consumer reporting agency includes the 1-year fraud alert in the file of a consumer (2) in subsection (b)— (A) in the subsection heading, by striking Extended Seven-Year (B) in paragraph (1)— (i) in subparagraph (B)— (I) by striking 5-year period beginning on the date of such request such 7-year period (II) by striking and (ii) in subparagraph (C)— (I) by striking extended 7-year (II) by striking the period at the end and inserting ; and (iii) by adding at the end the following new subparagraph: (D) upon the expiration of such 7-year period or a subsequent 7-year period, and in response to a direct request by the consumer or such representative, continue the fraud alert for a period of 7 additional years if the consumer or such representative submits an updated identity theft report. ; and (C) in paragraph (2)— (i) in the paragraph heading, by inserting and credit or educational credit scores reports (ii) by amending subparagraph (A) to read as follows: (A) disclose to the consumer that the consumer may request a free copy of the file and credit score or educational credit score of the consumer pursuant to section 612(d) during each 12-month period beginning on the date on which the 7-year fraud alert was included in the file and ending on the date of the last day that the 7-year fraud alert applies to the consumer’s file; and ; (3) in subsection (c)— (A) in paragraph (1), by inserting or educational credit score credit score (B) by redesignating paragraphs (1), (2), and (3), as subparagraphs (A), (B), and (C), respectively (and conforming the margins accordingly); (C) by striking Upon the direct request (1) In general Upon the direct request ; and (D) by adding at the end the following new paragraph: (2) Access to free reports and credit or educational credit scores If a consumer reporting agency includes an active duty alert in the file of an active duty military consumer, the consumer reporting agency shall— (A) disclose to the active duty military consumer that the active duty military consumer may request a free copy of the file and credit score or educational credit score of the active duty military consumer pursuant to section 612(d), during each 12-month period beginning on the date that the activity duty military alert is requested and ending on the date of the last day the active duty alert applies to the file of the active duty military consumer; and (B) provide to the active duty military consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A). ; (4) by amending subsection (d) to read as follows: (d) Procedures Each consumer reporting agency described in section 603(p) shall include on the webpage required under subsection (i) policies and procedures to comply with this section, including policies and procedures— (1) that inform consumers of the availability of 1-year fraud alerts, 7-year fraud alerts, active duty alerts, and security freezes (as applicable); (2) that allow consumers to request 1-year fraud alerts, 7-year fraud alerts, and active duty alerts (as applicable) and to place, temporarily lift, or fully remove a security freeze in a simple and easy manner; and (3) for asserting in good faith a suspicion that the consumer has been or is about to become a victim of identity theft, fraud, or a related crime, or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, for a consumer seeking a 1-year fraud alert or security freeze. ; (5) in subsection (e), by inserting 1-year or 7-year fraud alert (6) in subsection (f), by striking or active duty alert active duty alert, or security freeze (as applicable) (7) in subsection (g)— (A) by inserting or has been harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, or to inform such agency of the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E, identity theft, (B) by inserting or security freezes request alerts (8) in subsection (h)— (A) in paragraph (1)— (i) in the paragraph heading, by striking initial 1-year (ii) by striking initial 1-year (B) in paragraph (2)— (i) in the paragraph heading, by striking extended 7-year (ii) by striking extended 7-year (9) in subsection (i)(4)— (A) by striking subparagraphs (E) and (I); and (B) by redesignating subparagraphs (F), (G), (H), and (J) as subparagraphs (E), (F), (G), and (H), respectively. 204. Amendment to security freezes for consumer reports (a) In general Section 605A(i) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c–1(i) (1) by amending the subsection heading to read as follows: Security freezes for consumer reports (2) in paragraph (3)(E), by striking Upon receiving subparagraph (C), Upon receiving a direct request from a consumer for a temporary removal of a security freeze, a consumer reporting agency shall (3) by adding at the end the following: (7) Relation to State law This subsection does not modify or supersede the laws of any State relating to security freezes or other similar actions, except to the extent those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this subsection, a term or provision of a State law is not inconsistent with the provisions of this subsection if the term or provision affords greater protection to the consumer than the protection provided under this subsection as determined by the Bureau. . (b) Amendment to webpage requirements Section 605A(i)(6)(A) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c–1(i)(6)(A) (1) in clause (ii), by striking initial fraud alert 1-year fraud alert (2) in clause (iii), by striking extended fraud alert 7-year fraud alert (3) in clause (iv), by striking fraud (c) Amendment to exceptions for certain persons Section 605A(i)(4)(A) of the Consumer Credit Protection Act ( 15 U.S.C. 1681c–1(i)(4)(A) (A) A person, or the person’s subsidiary, affiliate, agent, subcontractor, or assignee with whom the consumer has, or prior to assignment had, an authorized account, contract, or debtor-creditor relationship for the purposes of reviewing the active account or collecting the financial obligation owed on the account, contract, or debt. . (e) Effective date The amendments made by subsection (a) shall take effect on the date of the enactment of this Act. 205. Clarification of information to be included with agency disclosures Section 609(c)(2) of such Act ( 15 U.S.C. 1681g(c)(2) (1) in subparagraph (B)— (A) by striking consumer reporting agency described in section 603(p) consumer reporting agency described in subsection (p) or (x) of section 603 (B) by striking the agency such an agency (C) by inserting and an Internet website address hours (2) in subparagraph (E), by striking outdated under section 605 or outdated, required to be removed, or 206. Provides access to fraud records for victims Section 609(e) of the Fair Credit Reporting Act ( 15 U.S.C. 1681g(e) (1) in paragraph (1)— (A) by striking resulting from identity theft (B) by striking claim of identity theft claim of fraudulent activity (C) by striking any transaction alleged to be a result of identity theft any fraudulent transaction (2) in paragraph (2)(B)— (A) by striking identity theft, at the election of the business entity fraudulent activity (B) by amending clause (i) to read as follows: (i) a copy of an identity theft report; or ; and (C) by amending clause (ii) to read as follows: (ii) an affidavit of fact that is acceptable to the business entity for that purpose. ; (3) in paragraph (3)(C), by striking identity theft fraudulent activity (4) by striking paragraph (8) and redesignating paragraphs (9) through (13) as paragraphs (8) through (12), respectively; and (5) in paragraph (10) (as so redesignated), by striking or a similar crime , fraud, or a related crime 207. Required Bureau to set procedures for reporting identity theft, fraud, and other related crime Section 621(f)(2) of the Fair Credit Reporting Act ( 15 U.S.C. 1681s(f)(2) (1) in the paragraph heading, by striking Model form Standardized affidavit (2) by striking The Commission The Bureau (3) by striking model form standardized affidavit (4) by inserting after identity theft , fraud, or a related crime, or otherwise are harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, (5) by striking fraud. identity theft, fraud, or other related crime. Such standardized affidavit and procedures shall not include a requirement that a consumer obtain a police report. 208. Establishes the right to free credit monitoring and identity theft protection services for certain consumers (a) Enforcement of credit monitoring for servicemembers (1) In general Subsection (k) of section 605A ( 15 U.S.C. 1681c–1(a) (2) Effective date This subsection and the amendments made by this subsection shall take effect on the date of the enactment of this Act. (b) Free credit monitoring and identity theft protection services for certain consumers Subsection (k) of section 605A ( 15 U.S.C. 1681c–1 (k) Credit monitoring and identity theft protection services (1) In general Upon the direct request of a consumer, a consumer reporting agency described in section 603(p) that maintains a file on the consumer and has received appropriate proof of the identity of the requester (as described in section 1022.123 of title 12, Code of Federal Regulations) shall provide the consumer with credit monitoring and identity theft protection services not later than 1 business day after receiving such request sent by postal mail, toll-free telephone, or secure electronic means as established by the agency. (2) Fees (A) Classes of consumers The Bureau may establish classes of consumers eligible to receive credit monitoring and identity theft protection services free of charge. (B) No fee A consumer reporting agency described in section 603(p) may not charge a consumer a fee to receive credit monitoring and identity theft protection services if the consumer or a representative of the consumer— (i) asserts in good faith a suspicion that the consumer has been or is about to become a victim of identity theft, fraud, or a related crime, or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information; (ii) is unemployed and intends to apply for employment in the 60-day period beginning on the date on which the request is made; (iii) is a recipient of public welfare assistance; (iv) is an active duty military consumer or a member of the National Guard (as defined in section 101(c) of title 10, United States Code); (v) is 65 years of age or older; or (vi) is a member of a class established by the Bureau under subparagraph (A). (3) Bureau rulemaking The Bureau shall issue regulations— (A) to define the scope of credit monitoring and identity theft protection services required under this subsection; and (B) to set a fair and reasonable fee that a consumer reporting agency may charge a consumer (other than a consumer described under paragraph (2)(B)) for such credit monitoring and identity theft protection services. (4) Relation to State law This subsection does not modify or supersede of the laws of any State relating to credit monitoring and identity theft protection services or other similar actions, except to the extent those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this subsection, a term or provision of a State law is not inconsistent with the provisions of this subsection if the term or provision affords greater protection to the consumer than the protection provided under this subsection as determined by the Bureau. . 209. Ensures removal of inquiries resulting from identity theft, fraud, or other related crime from consumer reports Section 605(a) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c(a) (17) Information about inquiries made for a credit report based on requests that the consumer reporting agency verifies were initiated as the result of identity theft, fraud, or other related crime. . III Miscellaneous 301. Definitions Section 603 of the Fair Credit Reporting Act ( 15 U.S.C. 1681a (bb) Definitions related to days (1) Calendar day; day The term calendar day day (2) Business day The term business day . 302. Technical correction related to risk-based pricing notices Section 615(h)(8) of the Fair Credit Reporting Act ( 15 U.S.C. 1681m (1) in subparagraph (A), by striking this section this subsection (2) in subparagraph (B), by striking This section This subsection 303. FCRA findings and purpose; voids certain contracts not in the public interest (a) FCRA findings and purpose Section 602 of the Fair Credit Reporting Act ( 15 U.S.C. 1681(a) (1) in subsection (a)— (A) by amending paragraph (1) to read as follows: (1) Many financial and non-financial decisions affecting consumers’ lives depend upon fair, complete, and accurate credit reporting. Inaccurate and incomplete credit reports directly impair the efficiency of the financial system and undermine the integrity of using credit reports in other circumstances, and unfair credit reporting and credit scoring methods undermine the public confidence which is essential to the continued functioning of the financial services system and the provision of many other consumer products and services. ; and (B) in paragraph (4), by inserting after agencies , furnishers, and credit scoring developers (2) in subsection (b)— (A) by striking It is the purpose of this title to require The purpose of this title is the following: (1) To require ; and (B) by adding at the end the following: (2) To prohibit any practices and procedures with respect to credit reports and credit scores that are not in the public interest. . (b) Voiding of certain contracts not in the public interest The Fair Credit Reporting Act ( 15 U.S.C. 1681 (1) by adding at the end the following new section: 631. Voiding of certain contracts not in the public interest (a) In general Any provision contained in a contract that requires a person to not follow a provision of this title, that is against the public interest, or that otherwise circumvents the purposes of this title shall be null and void. (b) Rule of construction Nothing in subsection (a) shall be construed as affecting other provisions of a contract that are not described under subsection (a). ; and (2) in the table of contents for such Act, by adding at the end the following new item: 631. Voiding of certain contracts not in the public interest. . December 23, 2019 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Summary: Restoring Unfairly Impaired Credit and Protecting Consumers Act This bill revises requirements regarding consumer credit information included by a consumer reporting agency on a credit report, including by requiring removal of adverse information that resulted from specified fraudulent lending activity, shortening the time period adverse information stays on reports, and limiting the inclusion of certain medical debt on reports. The bill also requires a consumer reporting agency to provide free credit monitoring and identity theft protection services to certain consumers, including victims of fraud, active duty military, and those 65 years of age and older.