105 
‘‘(5) REQUIREMENTS FOR CONSUMER REPORTS 
BEARING ON THE CONSUMER’S CREDITWORTHINESS, 
CREDIT STANDING, OR CREDIT CAPACITY.— 
‘‘(A) IN GENERAL.—A person may use a 
consumer report with respect to any consumer 
in which any information contained in the re-
port bears on the consumer’s creditworthiness, 
credit standing, or credit capacity only if— 
‘‘(i) either— 
‘‘(I) the person is required to ob-
tain the report by a Federal, State, or 
local law; or 
‘‘(II) the information contained 
in the report is being used with re-
spect to a national security investiga-
tion (as defined in paragraph (4)(D)); 
‘‘(ii) none of the cost associated with 
obtaining the consumer report will be 
passed on to the consumer to whom the re-
port relates; and 
‘‘(iii) the information contained in the 
consumer report will not be disclosed to 
any other person other than— 
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‘‘(I) in an aggregate format that 
protects a consumer’s personally iden-
tifiable information; or 
‘‘(II) as may be necessary to 
comply with any applicable Federal, 
State, or local equal employment op-
portunity law or regulation. 
‘‘(B) DISCLOSURES.—A person who pro-
cures, or causes to be procured, a consumer re-
port described in subparagraph (A) for employ-
ment purposes shall, in the disclosure made 
pursuant to paragraph (2), include— 
‘‘(i) an explanation that a consumer 
report is being obtained for employment 
purposes; 
‘‘(ii) the reasons for obtaining such a 
report; and 
‘‘(iii) the citation to the applicable 
Federal, State, or local law or regulation 
described in subparagraph (A)(i)(I). 
‘‘(C) ADVERSE ACTIONS.—In using a con-
sumer report described in subparagraph (A) for 
employment purposes and before taking an ad-
verse action based in whole or in part on the re-
port, the person intending to take such adverse 
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action shall, in addition to the information de-
scribed in paragraph (3), provide to the con-
sumer to whom the report relates— 
‘‘(i) the name, address, and telephone 
number of the consumer reporting agency 
that furnished the report (including, for a 
consumer reporting agency that compiles 
and maintains files on consumers on a na-
tionwide basis, a toll-free telephone number 
established by such agency); 
‘‘(ii) the date on which the report was 
furnished; and 
‘‘(iii) the specific factors from the re-
port upon which the adverse action (as de-
fined in section 603(k)(1)(B)(ii)) was 
based. 
‘‘(D) NATIONAL
SECURITY
INVESTIGA-
TIONS.—The requirements of paragraph (4) 
shall apply to a consumer report described 
under subparagraph (A). 
‘‘(E) NON-CIRCUMVENTION.—With respect 
to a consumer report in which any information 
contained in the report bears on the consumer’s 
creditworthiness, credit standing, or credit ca-
pacity, if a person is prohibited from using the 
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108 
consumer report pursuant to subparagraph (A), 
such person may not, directly or indirectly, ei-
ther orally or in writing, require, request, sug-
gest, or cause any employee or prospective em-
ployee to submit such information to the person 
as a condition of employment. 
‘‘(F) NON-WAIVER.—A consumer may not 
waive the requirements of this paragraph with 
respect to a consumer report. 
‘‘(6) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed to require a con-
sumer reporting agency to prevent a Federal, State, 
or local law enforcement agency from accessing in-
formation in a consumer report to which the law en-
forcement agency could otherwise obtain access.’’. 
(b) TECHNICAL AMENDMENT.—The Fair Credit Re-
porting Act (15 U.S.C. 1681 et seq.) is amended by strik-
ing ‘‘section 604(b)(4)(E)(i)’’ each place such term ap-
pears and inserting ‘‘section 604(b)(4)(D)(i)’’. 
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109 
TITLE III—REHABILITATING THE 
CREDIT STANDING OF STRUG-
GLING PRIVATE EDUCATION 
LOAN BORROWERS 
SEC. 301. REMOVES ADVERSE INFORMATION FOR CERTAIN 
DEFAULTED OR DELINQUENT PRIVATE EDU-
CATION 
LOAN 
BORROWERS 
WHO 
DEM-
ONSTRATE A HISTORY OF LOAN REPAYMENT. 
(a) IN GENERAL.—The Fair Credit Reporting Act 
(15 U.S.C. 1681 et seq.), as amended by section 405, is 
further amended by inserting after section 605D the fol-
lowing new section: 
‘‘§ 605E. Credit rehabilitation for private education 
loan borrowers who demonstrate a his-
tory of loan repayment 
‘‘(a) IN GENERAL.—A consumer reporting agency 
may not furnish any consumer report containing any ad-
verse item of information relating to a delinquent or de-
faulted private education loan of a borrower if the bor-
rower has rehabilitated the borrower’s credit with respect 
to such loan by making 9 on-time monthly payments (in 
accordance with the terms and conditions of the bor-
rower’s original loan agreement or any other repayment 
agreement that antedates the original agreement) during 
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a period of 10 consecutive months on such loan after the 
date on which the delinquency or default occurred. 
‘‘(b) INTERRUPTION
OF 10-MONTH PERIOD
FOR 
CERTAIN CONSUMERS FACING UNUSUAL EXTENUATING 
LIFE EVENTS.— 
‘‘(1) PERMISSIBLE INTERRUPTION OF THE 10- 
MONTH PERIOD.—A borrower may stop making con-
secutive monthly payments and be granted a grace 
period after which the 10-month period described in 
subsection (a) shall resume. Such grace period shall 
be provided under the following circumstances: 
‘‘(A) With respect to a borrower who is a 
member of the Armed Forces entitled to incen-
tive pay for the performance of hazardous duty 
under section 301 of title 37, United States 
Code, hazardous duty pay under section 351 of 
such title, or other assignment or special duty 
pay under section 352 of such title, the grace 
period shall begin on the date on which the bor-
rower begins such assignment or duty and end 
on the date that is 6 months after the comple-
tion of such assignment or duty. 
‘‘(B) With respect to a borrower who re-
sides in an area affected by a major disaster or 
emergency declared under the Robert T. Staf-
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ford Disaster Relief and Emergency Assistance 
Act (42 U.S.C. 5121 et seq.), the grace period 
shall begin on the date on which the major dis-
aster or emergency was declared and end on the 
date that is 3 months after such date. 
‘‘(2) OTHER CIRCUMSTANCES.— 
‘‘(A) IN
GENERAL.—The Bureau may 
allow a borrower demonstrating hardship to 
stop making consecutive monthly payments and 
be granted a grace period after which the 10- 
month period described in subsection (a) shall 
resume. 
‘‘(B) BORROWER DEMONSTRATING HARD-
SHIP DEFINED.—In this paragraph, the term 
‘borrower demonstrating hardship’ means a 
borrower or a class of borrowers who, as deter-
mined by the Bureau, is facing or has experi-
enced unusual extenuating life circumstances or 
events that result in severe financial or personal 
barriers such that the borrower or class or bor-
rowers does not have the capacity to comply 
with the requirements of subsection (a). 
‘‘(c) PROCEDURES.—The Bureau shall establish pro-
cedures to implement the credit rehabilitation described 
in this section, including— 
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‘‘(1) the manner, content, and form for request-
ing credit rehabilitation; 
‘‘(2) the method for validating that the bor-
rower is satisfying the requirements of subsection 
(a); 
‘‘(3) the manner, content, and form for noti-
fying the private educational loan holder of— 
‘‘(A) the borrower’s participation in credit 
rehabilitation under subsection (a); 
‘‘(B) the requirements of subsection (d); 
and 
‘‘(C) the restrictions of subsection (f); 
‘‘(4) the manner, content, and form for noti-
fying a consumer reporting agency of— 
‘‘(A) the borrower’s participation in credit 
rehabilitation under subsection (a); and 
‘‘(B) the requirements of subsection (d); 
‘‘(5) the method for verifying whether a bor-
rower qualifies for the grace period described in sub-
section (b); 
‘‘(6) the manner, content, and form of notifying 
a consumer reporting agency and private educational 
loan holder that a borrower was granted a grace pe-
riod; and 
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‘‘(7) the method for a borrower to demonstrate 
that the borrower has successfully satisfied the re-
quirements under subsection (a) and for notifying a 
consumer reporting agency and private educational 
loan holder. 
‘‘(d) STANDARDIZED REPORTING CODES.—A con-
sumer reporting agency shall develop standardized report-
ing codes for use by any private educational loan holder 
to identify and report a borrower’s status of making and 
completing 9 on-time monthly payments during a period 
of 10 consecutive months on a delinquent or defaulted pri-
vate education loan, including codes specifying the grace 
period described in subsection (b) and any agreement to 
modify monthly payments. 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 consumer’s 
completion of the rehabilitation period under this section. 
‘‘(e) ELIMINATING BARRIERS TO CREDIT REHABILI-
TATION.—A consumer report in which a private edu-
cational loan holder furnishes the standardized reporting 
codes described in subsection (d) to a consumer reporting 
agency, or in which a consumer reporting agency includes 
such codes, shall be deemed to comply with the require-
ments for accuracy and completeness required under sec-
tions 623(a)(1) and 630. 
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‘‘(f) PROHIBITION
ON CIVIL ACTIONS
FOR CON-
SUMERS PURSUING REHABILITATION.—A private edu-
cational loan holder may not commence or proceed with 
any civil action against a borrower with respect to a delin-
quent or defaulted loan during the period of rehabilitation 
if the loan holder has been notified— 
‘‘(1) under subsection (c)(3) of a borrower’s in-
tent to participate in rehabilitation; 
‘‘(2) under subsection (c)(6) that a borrower 
was granted the grace period; or 
‘‘(3) under subsection (c)(7) that the borrower 
has successfully satisfied the requirements under 
subsection (a). 
‘‘(g) RULES OF CONSTRUCTION.— 
‘‘(1) APPLICATION TO SUBSEQUENT DEFAULT 
OR DELINQUENCY.—A borrower who satisfies the re-
quirements under subsection (a) shall be eligible for 
additional credit rehabilitation described in sub-
section (a) with respect to any subsequent default or 
delinquency of the borrower on the rehabilitated pri-
vate education loan. 
‘‘(2) INTERRUPTION
OF
THE
CONSECUTIVE 
PAYMENT PERIOD REQUIREMENT.—The grace period 
described in subsection (b)(1)(A) shall not apply if 
any regulation promulgated under section 987 of 
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title 10, United States Code (commonly known as 
the Military Lending Act) or the Servicemembers 
Civil Relief Act (50 U.S.C. App. 501 et seq.) allows 
for a grace period or other interruption of the 10- 
month period described in subsection (a) and such 
grace period or other interruption is longer than the 
period described in subsection (b)(1)(A) or otherwise 
provides greater protection or benefit to the bor-
rower who is a member of the Armed Forces.’’. 
(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 (as 
added by section 405) the following new item: 
‘‘605E. Credit rehabilitation for distressed private education loan borrowers who 
demonstrate a history of loan repayment.’’. 
SEC. 302. PRIVATE EDUCATION LOAN DEFINITIONS. 
Section 603 of the Fair Credit Reporting Act (15 
U.S.C. 1681a) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(z) PRIVATE EDUCATION LOAN DEFINITIONS.— 
The terms ‘private education loan’ and ‘private edu-
cational lender’ have the meanings given such terms, re-
spectively, in section 140(a) of the Truth in Lending 
Act.’’. 
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TITLE IV—RESTORING THE IM-
PAIRED CREDIT OF VICTIMS 
OF PREDATORY ACTIVITIES 
AND UNFAIR CONSUMER RE-
PORTING PRACTICES 
SEC. 401. SHORTENS THE TIME PERIOD THAT MOST AD-
VERSE CREDIT INFORMATION STAYS ON CON-
SUMER REPORTS. 
(a) IN GENERAL.—Section 605 of the Fair Credit 
Reporting Act (15 U.S.C. 1681c) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘Except as authorized 
under subsection (b), no’’ and inserting ‘‘No’’; 
(B) in paragraph (1), by striking ‘‘10 
years’’ and inserting ‘‘7 years’’; 
(C) in paragraph (2), by striking ‘‘Civil 
suits, civil judgments, and records’’ and insert-
ing ‘‘Records’’; 
(D) in paragraph (3), by striking ‘‘seven 
years’’ and inserting ‘‘4 years’’; 
(E) in paragraph (4), by striking ‘‘seven 
years’’ and inserting ‘‘4 years, except as pro-
vided in paragraph (8), (10), (11), (12), or 
(13), or as required by section 605C, 605D, 
605E, or 605F’’; 
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