‘‘(A) subsection (c) or (d) of section 604,
relating to the prescreening of consumer re-
ports;
‘‘(B) section 611, relating to the time by
which a consumer reporting agency must take
any action, including the provision of notifica-
tion to a consumer or other person, in any pro-
cedure related to the disputed accuracy of infor-
mation in a consumer’s file, except that this
subparagraph does not apply to any State law
in effect on the date of the enactment of the
Consumer Reporting Reform Act of 1994;
‘‘(C) section 615(a), relating to the duties
of a person who takes any adverse action with
respect to a consumer on the basis of informa-
tion contained in a consumer report;
‘‘(D) section 615(d), relating to the duties
of persons who use a consumer report of a
consumer in connection with any credit trans-
action which is not initiated by the consumer
and which consists of a firm offer of credit;
‘‘(E) section 605, relating to obsolete in-
formation, except that this subparagraph does
not apply to any State law in effect on the date
of the enactment of the Consumer Reporting
Reform Act of 1994; or
‘‘(F) section 623(b)(2), relating to the
time by which a person must take any action
required under section 623(b)(1) with respect
to an investigation of information furnished by
the person to a consumer reporting agency, ex-
cept that this subparagraph does not apply to
any State law in effect on the date of the enact-
ment of the Consumer Reporting Reform Act of
1994;
‘‘(2) with respect to the exchange of informa-
tion among persons affiliated by common ownership
or common corporate control, except that this para-
graph does not apply to section 2480e (a) and (c)(1)
of title 9, Vermont Statutes Annotated (as in effect
on the date of the enactment of the Consumer Re-
porting Reform Act of 1994); or
‘‘(3) with respect to the form and content of
any disclosure required to be made under section
609(c).
‘‘(c) DEFINITION OF FIRM OFFER OF CREDIT.—Not-
withstanding any definition of the term ‘firm offer of cred-
it’ (or any equivalent term) under the laws of any State,
the definition of that term contained in section 603(l) shall
be construed to apply in the enforcement and interpreta-
tion of the laws of any State governing consumer reports.
‘‘(d) LIMITATIONS.—Subsections (b) and (c)—
‘‘(1) do not affect any settlement, agreement, or
consent judgment between any State Attorney Gen-
eral and any consumer reporting agency in effect on
the date of the enactment of the Consumer Report-
ing Reform Act of 1994; and
‘‘(2) do not apply to any provision of State law
(including any provision of a State constitution)
that—
‘‘(A) is enacted after January 1, 2003;
‘‘(B) states explicitly that the provision is
intended to supplement this Act; and
‘‘(C) gives greater protection to consumers
than is provided under this Act.’’.
SEC. 120. ACTION BY FTC AND FEDERAL RESERVE BOARD.
(a) MODIFICATION OF REQUIREMENTS BY FTC AND
FEDERAL RESERVE BOARD AUTHORIZED.—
(1) IN
GENERAL.—Section 621 of the Fair
Credit Reporting Act (15 U.S.C. 1681s), is further
amended by adding after subsection (e) (as added by
section 118 of this Act) the following new sub-
section:
‘‘(f) MODIFICATION OF REQUIREMENTS BY FTC AU-
THORIZED.—
‘‘(1) IN GENERAL.—If the Federal Trade Com-
mission considers such action necessary for the pro-
tection of consumers, the Commission may, after
consultation with appropriate State regulatory and
law enforcement agencies, promulgate regulations in
accordance with section 553 of title 5, United States
Code, to impose, with respect to consumer reporting
agencies and all other persons subject to this title
other than any person described in paragraph (1),
(2), or (3) of subsection (b), requirements—
‘‘(A) that are more stringent than those
imposed under—
‘‘(i) section 611, relating to the time
by which a consumer reporting agency
must take any action, including the provi-
sion of notification to a consumer or other
person, in any procedure related to the dis-
puted accuracy of information in a con-
sumer’s file;
‘‘(ii) section 615(a), relating to the
duties of a person who takes any adverse
action with respect to a consumer on the
basis of information contained in a
consumer report;
‘‘(iii) section 615(d), relating to the
duties of persons who use a consumer re-
port on a consumer in connection with any
credit transaction which is not initiated by
the consumer and that consists of a firm
offer of credit; or
‘‘(iv) section 623(b)(2), relating to the
time by which a person must take any ac-
tion required under section 623(b)(1) with
respect to an investigation of information
furnished by the person to a consumer re-
porting agency; and
‘‘(B) with respect to the form and content
of any disclosure required to be made under
section 609(c).
‘‘(2) FEDERAL RESERVE BOARD AUTHORITY.—
If the Board of Governors of the Federal Reserve
System determines such action to be necessary for
the protection of consumers, the Board may pre-
scribe regulations imposing on persons described in
paragraph (1), (2), or (3) of subsection (b) or on the
holding companies and affiliates of such persons,
any requirement described in paragraph (1) of this
subsection.’’.
(2) CLERICAL AMENDMENTS.—
(A) The heading for section 621 of the
Fair Credit Reporting Act (15 U.S.C. 1681s) is
amended to read as follows:
‘‘§ 621. Administrative enforcement and authorities;
State actions’’.
(B) The table of contents at the beginning
of the Fair Credit Reporting Act is amended by
striking the item relating to section 621 and in-
serting the following new item:
‘‘621. Administrative enforcement and authorities; State actions.’’.
(b) DEADLINE TO PRESCRIBE MATTERS.—The Fed-
eral Trade Commission shall prescribe all matters required
by this title (including the amendments made by this title)
to be prescribed by that Commission, before the end of
the 300-day period beginning on the date of the enactment
of this Act.
SEC. 121. AMENDMENT TO FAIR DEBT COLLECTION PRAC-
TICES ACT.
Section 807(11) of the Fair Debt Collection Practices
Act (15 U.S.C. 1692e), relating to certain practices con-
stituting prohibited representations, is amended to read
as follows:
‘‘(11) The failure to disclose clearly, in any
written communication made to collect a debt or to
obtain information about a consumer, that the debt
collector is attempting to collect a debt and that any
information obtained will be used for that purpose,
except that this paragraph does not apply to a com-
munication—
‘‘(A) to acquire location information in ac-
cordance with section 804;
‘‘(B) made solely to acknowledge receipt of
monies or payments; or
‘‘(C) that consists solely of information re-
quested by the consumer or the consumer’s at-
torney.’’.
SEC. 122. FURNISHING CONSUMER REPORTS FOR CERTAIN
PURPOSES RELATING TO CHILD SUPPORT.
Section 604(a) of the Fair Credit Reporting Act (15
U.S.C. 1681b) is amended in subsection (a) (as designated
by section 103(a)(1) of this Act) by adding at the end
the following:
‘‘(4) In response to a request by the head of a
department, agency, or office of any State or any
political subdivision of any State that is responsible
under law for enforcing child support orders (or an
official authorized by the head of any such depart-
ment, agency, or office), if the person making the re-
quest certifies to the consumer reporting agency
that—
‘‘(A) the consumer report is needed to es-
tablish an individual’s capacity to make child
support payments, or to determine the appro-
priate level of such payments;
‘‘(B) the person has provided at least 10
days prior written notice to the consumer whose
report is requested, by certified or registered
mail to the last known address of the consumer,
that the report will be requested; and
‘‘(C) the consumer report obtained pursu-
ant to this paragraph will be kept confidential,
will be used solely for establishing child support
payment obligations, and will not be used in
connection with any other civil, administrative,
or criminal proceeding or for any other pur-
pose.’’.
SEC. 123. DISCLOSURE OF INFORMATION AND CONSUMER
REPORTS 
TO 
FBI 
FOR 
COUNTERINTEL-
LIGENCE PURPOSES.
(a) IN GENERAL.—The Fair Credit Reporting Act
(15 U.S.C. 1681 et seq.) is amended by adding after sec-
tion 624, as redesignated by section 113(a) of this Act,
the following new section:
‘‘§ 625. Disclosures to FBI for counterintelligence
purposes
‘‘(a) IDENTITY OF FINANCIAL INSTITUTIONS.—Not-
withstanding section 604 or any other provision of this
title, a consumer reporting agency shall furnish to the
Federal Bureau of Investigation the names and addresses
of all financial institutions (as that term is defined in sec-
tion 1101 of the Right to Financial Privacy Act of 1978)
at which a consumer maintains or has maintained an ac-
count, to the extent that information is in the files of the
agency, when presented with a written request for that
information, signed by the Director of the Federal Bureau
of Investigation, or the Director’s designee, which certifies
compliance with this section. The Director or the Direc-
tor’s designee may make such a certification only if the
Director or the Director’s designee has determined in writ-
ing that—
‘‘(1) such information is necessary for the con-
duct of an authorized foreign counterintelligence in-
vestigation; and
‘‘(2) there are specific and articulable facts giv-
ing reason to believe that the consumer—
‘‘(A) is a foreign power (as defined in sec-
tion 101 of the Foreign Intelligence Surveil-
lance Act of 1978) or a person who is not a
United States person (as defined in such sec-
tion 101) and is an official of a foreign power;
or
‘‘(B) is an agent of a foreign power and is
engaging or has engaged in international terror-
ism (as that term is defined in section 101(c)
of the Foreign Intelligence Surveillance Act of
1978) or clandestine intelligence activities that
involve or may involve a violation of criminal
statutes of the United States.
‘‘(b) IDENTIFYING INFORMATION.—Notwithstanding
the provisions of section 604 or any other provision of this
title, a consumer reporting agency shall furnish identifying
information respecting a consumer, limited to name, ad-
dress, former addresses, places of employment, or former
places of employment, to the Federal Bureau of Investiga-
tion when presented with a written request, signed by the
Director or the Director’s designee, which certifies compli-
ance with this subsection. The Director or the Director’s
designee may make such a certification only if the Director
or the Director’s designee has determined in writing
that—
‘‘(A) such information is necessary to the
conduct of an authorized counterintelligence in-
vestigation; and
‘‘(B) there is information giving reason to
believe that the consumer has been, or is about
to be, in contact with a foreign power or an
agent of a foreign power (as defined in section
101 of the Foreign Intelligence Surveillance Act
of 1978).
‘‘(c) COURT ORDER FOR DISCLOSURE OF CONSUMER
REPORTS.—Notwithstanding section 604 or any other
provision of this title, if requested in writing by the Direc-
tor of the Federal Bureau of Investigation, or a designee
of the Director, a court may issue an order ex parte direct-
ing a consumer reporting agency to furnish a consumer
report to the Federal Bureau of Investigation, upon a
showing in camera that—
‘‘(1) the consumer report is necessary for the
conduct of an authorized foreign counterintelligence
investigation; and
‘‘(2) there are specific and articulable facts giv-
ing reason to believe that the consumer whose
consumer report is sought—
‘‘(A) is an agent of a foreign power; and
‘‘(B) is engaging or has engaged in inter-
national terrorism (as that term is defined in
section 101(c) of the Foreign Intelligence Sur-
veillance Act of 1978) or clandestine intel-
ligence activities that involve or may involve a
violation of criminal statutes of the United
States.
The terms of an order issued under this subsection shall
not disclose that the order is issued for purposes of a
counterintelligence investigation.
‘‘(d) CONFIDENTIALITY.—No consumer reporting
agency or officer, employee, or agent of a consumer report-
ing agency shall disclose to any person, other than those
officers, employees, or agents of a consumer reporting
agency necessary to fulfill the requirement to disclose in-
formation to the Federal Bureau of Investigation under
this section, that the Federal Bureau of Investigation has
sought or obtained the identity of financial institutions or
a consumer report respecting any consumer under sub-
section (a), (b), or (c) and no consumer reporting agency
or officer, employee, or agent of a consumer reporting
agency shall include in any consumer report any informa-
tion that would indicate that the Federal Bureau of Inves-
tigation has sought or obtained such information or a
consumer report.
‘‘(e) PAYMENT OF FEES.—The Federal Bureau of
Investigation shall, subject to the availability of appropria-
tions, pay to the consumer reporting agency assembling
or providing reports or information in accordance with
procedures established under this section, a fee for reim-
bursement for such costs as are reasonably necessary and
which have been directly incurred in searching, reproduc-
ing, or transporting books, papers, records, or other data
required or requested to be produced under this section.
‘‘(f) LIMIT ON DISSEMINATION.—The Federal Bu-
reau of Investigation may not disseminate information ob-
tained pursuant to this section outside of the Federal Bu-
reau of Investigation, except to the Department of Justice
as may be necessary for the approval or conduct of a for-
eign counterintelligence investigation, or, where the infor-
mation concerns a person subject to the Uniform Code of
Military Justice, to appropriate investigative authorities
within the military department concerned as may be nec-
essary for the conduct of a joint foreign counterintel-
ligence investigation.
‘‘(g) RULES OF CONSTRUCTION.—Nothing in this
section shall be construed to prohibit information from
being furnished by the Federal Bureau of Investigation
pursuant to a subpoena or court order, or in connection
with a judicial or administrative proceeding to enforce the
provisions of this Act. Nothing in this section shall be con-
strued to authorize or permit the withholding of informa-
tion from the Congress.
‘‘(h) REPORTS
TO CONGRESS.—On a semiannual
basis, the Attorney General of the United States shall fully
inform the Permanent Select Committee on Intelligence
and the Committee on Banking, Finance and Urban Af-
fairs of the House of Representatives, and the Select Com-
mittee on Intelligence and the Committee on Banking,
Housing, and Urban Affairs of the Senate concerning all
requests made pursuant to subsections (a), (b), and (c).
‘‘(i) DAMAGES.—Any agency or department of the
United States obtaining or disclosing any consumer re-
ports, records, or information contained therein in viola-
tion of this section is liable to the consumer to whom such
consumer reports, records, or information relate in an
amount equal to the sum of—
‘‘(1) $100, without regard to the volume of
consumer reports, records, or information involved;
‘‘(2) any actual damages sustained by the
consumer as a result of the disclosure;
‘‘(3) if the violation is found to have been will-
ful or intentional, such punitive damages as a court
may allow; and
‘‘(4) in the case of any successful action to en-
force liability under this subsection, the costs of the
action, together with reasonable attorney fees, as de-
termined by the court.
‘‘(j) DISCIPLINARY ACTIONS FOR VIOLATIONS.—If a
court determines that any agency or department of the
United States has violated any provision of this section
and the court finds that the circumstances surrounding
the violation raise questions of whether or not an officer
or employee of the agency or department acted willfully
or intentionally with respect to the violation, the agency
or department shall promptly initiate a proceeding to de-
termine whether or not disciplinary action is warranted
against the officer or employee who was responsible for
the violation.
‘‘(k) GOOD-FAITH
EXCEPTION.—Notwithstanding
any other provision of this title, any consumer reporting
agency or agent or employee thereof making disclosure of
consumer reports or identifying information pursuant to
this subsection in good-faith reliance upon a certification
of the Federal Bureau of Investigation pursuant to provi-
sions of this section shall not be liable to any person for
such disclosure under this title, the constitution of any
State, or any law or regulation of any State or any politi-
cal subdivision of any State.
‘‘(l) LIMITATION
OF REMEDIES.—Notwithstanding
any other provision of this title, the remedies and sanc-
tions set forth in this section shall be the only judicial
remedies and sanctions for violation of this section.
‘‘(m) INJUNCTIVE RELIEF.—In addition to any other
remedy contained in this section, injunctive relief shall be
available to require compliance with the procedures of this
section. In the event of any successful action under this
subsection, costs together with reasonable attorney fees,
as determined by the court, may be recovered.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of the Fair Credit Reporting Act (15
U.S.C. 1681a et seq.), as amended by section 114(b) of
this Act, is further amended by adding after the item re-
lating to section 624 the following:
‘‘625. Disclosures to FBI for counterintelligence purposes.’’.
(c) REPEAL OF PROVISIONS.—The following provi-
sions of the Fair Credit Reporting Act, as amended by
this section, are repealed:
(1) Section 625.
(2) In the table of contents at the beginning of
the Fair Credit Reporting Act, the item relating to
section 625.
SEC. 124. EFFECTIVE DATES.
(a) IN GENERAL.—Except as provided in subsection
(b), the amendments and repeals made by this title shall
take effect 365 days after the date of the enactment of
this Act.
(b) EXCEPTIONS.—
(1) The amendment made by section 121 shall
take effect 90 days after the date of the enactment
of this Act.
(2) The amendments made by subsections (a)
and (b) of section 123 shall take effect on the date
of the enactment of this Act.
(3) Subsection (c) of section 123 shall take ef-
fect on the date that is 5 years after the date of the
enactment of this Act.
SEC. 125. RELATIONSHIP TO OTHER LAW.
Nothing in this title or the amendments made by this
Act shall be considered to supersede or otherwise affect
section 2721 of title 18, United States Code, with respect
to motor vehicle records for surveys, marketing, or solici-
tations.
SEC. 126. SENSE OF SENATE.
It is the sense of the Senate that—
(1) individuals should generally be judged for
credit worthiness based on their own credit worthi-
ness and not on the zip code or neighborhood in
which they live; and
(2) the Federal Trade Commission after con-
sultation with the appropriate Federal banking agen-
cies shall report to the Committee on Banking,
Housing, and Urban Affairs of the Senate within 6
months as to whether and how the location of the
residence of an applicant for unsecured credit is con-
sidered by many companies and financial institutions
in deciding whether an applicant should be granted
credit.
SEC. 127. TECHNICAL CORRECTION TO DEPOSITORY INSTI-
TUTIONS MANAGEMENT INTERLOCKS ACT.
Section 209(c)(1)(C) of the Depository Institution
Management Interlocks Act (12 U.S.C. 3207(c)(1)(C), as
added by section 338(b) of the Riegle Community Devel-
opment and Regulatory Improvement Act of 1994) is
amended by inserting ‘‘or institutions’’ after ‘‘newly char-
tered institutions’’.
TITLE II—CREDIT REPAIR
ORGANIZATIONS
SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZA-
TIONS.
Title IV of the Consumer Credit Protection Act is
amended to read as follows:
‘‘TITLE IV—CREDIT REPAIR
ORGANIZATIONS
‘‘Sec.
‘‘401. Short title.
‘‘402. Findings and purposes.
‘‘403. Definitions.
‘‘404. Prohibited practices.
‘‘405. Disclosures.
‘‘406. Credit repair organizations contracts.
‘‘407. Right to cancel contract.
‘‘408. Noncompliance with this title.
‘‘409. Civil liability.
‘‘410. Administrative enforcement.
‘‘411. Statute of limitations.
‘‘412. Relation to State law.
‘‘413. Effective date.
‘‘SEC. 401. SHORT TITLE.
‘‘This title may be cited as the ‘Credit Repair Organi-
zations Act’.
‘‘SEC. 402. FINDINGS AND PURPOSES.
‘‘(a) FINDINGS.—The Congress makes the following
findings:
‘‘(1) Consumers have a vital interest in estab-
lishing and maintaining their creditworthiness and
credit standing in order to obtain and use credit. As
a result, consumers who have experienced credit
problems may seek assistance from credit repair or-
ganizations which offer to improve the credit stand-
ing of such consumers.
‘‘(2) Certain advertising and business practices
of some companies engaged in the business of credit
repair services have worked a financial hardship
upon consumers, particularly those of limited eco-
nomic means and who are inexperienced in credit
matters.
‘‘(b) PURPOSES.—The purposes of this title are as
follows:
‘‘(1) To ensure that prospective buyers of the
services of credit repair organizations are provided
with the information necessary to make an informed
decision regarding the purchase of such services.
‘‘(2) To protect the public from unfair or decep-
tive advertising and business practices by credit re-
pair organizations.
‘‘SEC. 403. DEFINITIONS.
‘‘For purposes of this title—
‘‘(1) CONSUMER.—The term ‘consumer’ means
an individual.
‘‘(2) CONSUMER
CREDIT
TRANSACTION.—The
term ‘consumer credit transaction’ means any trans-
action in which credit is offered or extended to an
individual for personal, family, or household pur-
poses.
‘‘(3) CREDIT
REPAIR
ORGANIZATION.—The
term ‘credit repair organization’—
‘‘(A) means any person who uses any in-
strumentality of interstate commerce or the
mails to sell, provide, or perform (or represent
that such person can or will sell, provide, or
perform) any service, in return for the payment
of money or other valuable consideration, for
the express or implied purpose of—
‘‘(i) improving any consumer’s credit
record, credit history, or credit rating; or
‘‘(ii) providing advice or assistance to
any consumer with regard to any activity
or service described in clause (i); and
‘‘(B) does not include—
‘‘(i) any nonprofit organization which
is exempt from taxation under section
501(c)(3) of the Internal Revenue Code of
1986;
‘‘(ii) any attorney-at-law who is a
member of the bar of the highest court of
any State or otherwise licensed under the
laws of any State, with respect to services
rendered which are within the scope of reg-
ulations applicable to members of such bar
or such licensees; or
‘‘(iii) any creditor (as defined in sec-
tion 103 of the Truth in Lending Act),
with respect to any consumer, to the extent
the creditor is assisting the consumer to
restructure any debt owed by the consumer
to the creditor.
‘‘(4) CREDIT.—The term ‘credit’ has the mean-
ing given to such term in section 103(e) of this Act.
‘‘SEC. 404. PROHIBITED PRACTICES.
‘‘(a) IN GENERAL.—No person may—
‘‘(1) make any statement, or counsel or advise
any consumer to make any statement, which is un-
true or misleading (or which, upon the exercise of
reasonable care, should be known by the credit re-
pair organization, officer, employee, agent, or other
person to be untrue or misleading) with respect to
any consumer’s creditworthiness, credit standing, or
credit capacity to—
‘‘(A) any consumer reporting agency (as
defined in section 603(f) of this Act); or
‘‘(B) any person—
‘‘(i) who has extended credit to the
consumer; or
‘‘(ii) to whom the consumer has ap-
plied or is applying for an extension of
credit;
‘‘(2) make any statement, or counsel or advise
any consumer to make any statement, the intended
effect of which is to alter the consumer’s identifica-
tion to prevent the display of the consumer’s credit
record, history, or rating for the purpose of conceal-
ing adverse information that is accurate and not ob-
solete to—
‘‘(A) any consumer reporting agency;
‘‘(B) any person—
‘‘(i) who has extended credit to the
consumer; or
‘‘(ii) to whom the consumer has ap-
plied or is applying for an extension of
credit;
‘‘(3) make or use any untrue or misleading rep-
resentation of the services of the credit repair orga-
nization; or
‘‘(4) engage, directly or indirectly, in any act,
practice, or course of business that constitutes or re-
sults in the commission of, or an attempt to commit,
a fraud or deception on any person in connection
with the offer or sale of the services of the credit re-
pair organization.
‘‘(b) PAYMENT IN ADVANCE.—No credit repair orga-
nization may charge or receive any money or other valu-
able consideration for the performance of any service
which the credit repair organization has agreed to perform
for any consumer before such service is fully performed.
‘‘SEC. 405. DISCLOSURES.
‘‘(a) DISCLOSURE REQUIRED.—Any credit repair or-
ganization shall provide any consumer with the following
written statement before any contract or agreement be-
tween the consumer and the credit repair organization is
executed:
‘‘ ‘Consumer Credit File Rights
Under State and Federal Law
‘‘ ‘You have a right to dispute inaccurate information
in your credit report by contacting the credit bureau di-
rectly. However, neither you nor any ‘‘credit repair’’ com-
pany or credit repair organization has the right to have
accurate, current, and verifiable information removed
from your credit report. The credit bureau must remove
accurate, negative information from your report only if it
is over 7 years old. Bankruptcy information can be re-
ported for 10 years.
‘‘ ‘You have a right to obtain a copy of your credit
report from a credit bureau. You may be charged a rea-
sonable fee. There is no fee, however, if you have been
turned down for credit, employment, insurance, or a rental
dwelling because of information in your credit report with-
in the preceding 60 days. The credit bureau must provide
100
someone to help you interpret the information in your
credit file. You are entitled to receive a free copy of your
credit report if you are unemployed and intend to apply
for employment in the next 60 days, if you are a recipient
of public welfare assistance, or if you have reason to be-
lieve that there is inaccurate information in your credit
report due to fraud.
‘‘ ‘You have a right to sue a credit repair organization
that violates the Credit Repair Organization Act. This law
prohibits deceptive practices by credit repair organiza-
tions.
‘‘ ‘You have the right to cancel your contract with any
credit repair organization for any reason within 3 business
days from the date you signed it.
‘‘ ‘Credit bureaus are required to follow reasonable
procedures to ensure that the information they report is
accurate. However, mistakes may occur.
‘‘ ‘You may, on your own, notify a credit bureau in
writing that you dispute the accuracy of information in
your credit file. The credit bureau must then reinvestigate
and modify or remove inaccurate or incomplete informa-
tion. The credit bureau may not charge any fee for this
service. Any pertinent information and copies of all docu-
ments you have concerning an error should be given to
the credit bureau.
101
‘‘ ‘If the credit bureau’s reinvestigation does not re-
solve the dispute to your satisfaction, you may send a brief
statement to the credit bureau, to be kept in your file,
explaining why you think the record is inaccurate. The
credit bureau must include a summary of your statement
about disputed information with any report it issues about
you.
‘‘ ‘The Federal Trade Commission regulates credit
bureaus and credit repair organizations. For more infor-
mation contact:
The Public Reference Branch
Federal Trade Commission
Washington, D.C. 20580’.
‘‘(b) SEPARATE STATEMENT REQUIREMENT.—The
written statement required under this section shall be pro-
vided as a document which is separate from any written
contract or other agreement between the credit repair or-
ganization and the consumer or any other written material
provided to the consumer.
‘‘(c) RETENTION OF COMPLIANCE RECORDS.—
‘‘(1) IN GENERAL.—The credit repair organiza-
tion shall maintain a copy of the statement signed
by the consumer acknowledging receipt of the state-
ment.
102
‘‘(2) MAINTENANCE FOR 2 YEARS.—The copy
of any consumer’s statement shall be maintained in
the organization’s files for 2 years after the date on
which the statement is signed by the consumer.
‘‘SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.
‘‘(a) WRITTEN CONTRACTS REQUIRED.—No services
may be provided by any credit repair organization for any
consumer—
‘‘(1) unless a written and dated contract (for
the purchase of such services) which meets the re-
quirements of subsection (b) has been signed by the
consumer; or
‘‘(2) before the end of the 3-business-day period
beginning on the date the contract is signed.
‘‘(b) TERMS AND CONDITIONS OF CONTRACT.—No
contract referred to in subsection (a) meets the require-
ments of this subsection unless such contract includes the
following information (in writing):
‘‘(1) The terms and conditions of payment, in-
cluding the total amount of all payments to be made
by the consumer to the credit repair organization or
to any other person.
‘‘(2) A full and detailed description of the serv-
ices to be performed by the credit repair organiza-
tion for the consumer, including—
103
‘‘(A) all guarantees of performance; and
‘‘(B) an estimate of—
‘‘(i) the date by which the perform-
ance of the services (to be performed by
the credit repair organization or any other
person) will be complete; or
‘‘(ii) the length of the period nec-
essary to perform such services.
‘‘(3) The credit repair organization’s name and
principal business address.
‘‘(4) A conspicuous statement in bold face type,
in immediate proximity to the space reserved for the
consumer’s signature on the contract, which reads as
follows: ‘You may cancel this contract without pen-
alty or obligation at any time before midnight of the
3rd business day after the date on which you signed
the contract. See the attached notice of cancellation
form for an explanation of this right.’.
‘‘SEC. 407. RIGHT TO CANCEL CONTRACT.
‘‘(a) IN GENERAL.—Any consumer may cancel any
contract with any credit repair organization without pen-
alty or obligation by notifying the credit repair organiza-
tion of the consumer’s intention to do so at any time be-
fore midnight of the 3rd business day which begins after
the date on which the contract or agreement between the
104
consumer and the credit repair organization is executed
or would, but for this subsection, become enforceable
against the parties.
‘‘(b) CANCELLATION FORM AND OTHER INFORMA-
TION.—Each contract shall be accompanied by a form, in
duplicate, which has the heading ‘Notice of Cancellation’
and contains in bold face type the following statement:
‘‘ ‘You may cancel this contract, without any
penalty or obligation, at any time before midnight of
the 3rd day which begins after the date the contract
is signed by you.
‘‘ ‘To cancel this contract, mail or deliver a
signed, dated copy of this cancellation notice, or any
other written notice to [ name of credit repair
organization ] 
at 
[ address 
of 
credit 
repair
organization ] before midnight on [ date ]
‘‘ ‘I hereby cancel this transaction,
[ date ]
[ purchaser’s signature ].’.
‘‘(c) CONSUMER COPY OF CONTRACT REQUIRED.—
Any consumer who enters into any contract with any cred-
it repair organization shall be given, by the organization—
‘‘(1) a copy of the completed contract and the
disclosure statement required under section 405; and
105
‘‘(2) a copy of any other document the credit
repair organization requires the consumer to sign,
at the time the contract or the other document is signed.
‘‘SEC. 408. NONCOMPLIANCE WITH THIS TITLE.
‘‘(a) CONSUMER WAIVERS INVALID.—Any waiver by
any consumer of any protection provided by or any right
of the consumer under this title—
‘‘(1) shall be treated as void; and
‘‘(2) may not be enforced by any Federal or
State court or any other person.
‘‘(b) ATTEMPT TO OBTAIN WAIVER.—Any attempt
by any person to obtain a waiver from any consumer of
any protection provided by or any right of the consumer
under this title shall be treated as a violation of this title.
‘‘(c) CONTRACTS NOT IN COMPLIANCE.—Any con-
tract for services which does not comply with the applica-
ble provisions of this title—
‘‘(1) shall be treated as void; and
‘‘(2) may not be enforced by any Federal or
State court or any other person.
‘‘SEC. 409. CIVIL LIABILITY.
‘‘(a) LIABILITY ESTABLISHED.—Any person who
fails to comply with any provision of this title with respect
to any other person shall be liable to such person in an
106
amount equal to the sum of the amounts determined
under each of the following paragraphs:
‘‘(1) ACTUAL DAMAGES.—The greater of—
‘‘(A) the amount of any actual damage
sustained by such person as a result of such
failure; or
‘‘(B) any amount paid by the person to the
credit repair organization.
‘‘(2) PUNITIVE DAMAGES.—
‘‘(A) INDIVIDUAL ACTIONS.—In the case of
any action by an individual, such additional
amount as the court may allow.
‘‘(B) CLASS ACTIONS.—In the case of a
class action, the sum of—
‘‘(i) the aggregate of the amount
which the court may allow for each named
plaintiff; and
‘‘(ii) the aggregate of the amount
which the court may allow for each other
class member, without regard to any mini-
mum individual recovery.
‘‘(3) ATTORNEYS’ FEES.—In the case of any
successful action to enforce any liability under para-
graph (1) or (2), the costs of the action, together
with reasonable attorneys’ fees.
107
‘‘(b) FACTORS TO BE CONSIDERED IN AWARDING
PUNITIVE DAMAGES.—In determining the amount of any
liability of any credit repair organization under subsection
(a)(2), the court shall consider, among other relevant fac-
tors—
‘‘(1) the frequency and persistence of non-
compliance by the credit repair organization;
‘‘(2) the nature of the noncompliance;
‘‘(3) the extent to which such noncompliance
was intentional; and
‘‘(4) in the case of any class action, the number
of consumers adversely affected.
‘‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.
‘‘(a) IN GENERAL.—Compliance with the require-
ments imposed under this title with respect to credit repair
organizations shall be enforced under the Federal Trade
Commission Act by the Federal Trade Commission.
‘‘(b) VIOLATIONS OF THIS TITLE TREATED AS VIO-
LATIONS OF FEDERAL TRADE COMMISSION ACT.—
‘‘(1) IN GENERAL.—For the purpose of the ex-
ercise by the Federal Trade Commission of the Com-
mission’s functions and powers under the Federal
Trade Commission Act, any violation of any require-
ment or prohibition imposed under this title with re-
spect to credit repair organizations shall constitute
108
an unfair or deceptive act or practice in commerce
in violation of section 5(a) of the Federal Trade
Commission Act.
‘‘(2) ENFORCEMENT AUTHORITY UNDER OTHER
LAW.—All functions and powers of the Federal
Trade Commission under the Federal Trade Com-
mission Act shall be available to the Commission to
enforce compliance with this title by any person sub-
ject to enforcement by the Federal Trade Commis-
sion pursuant to this subsection, including the power
to enforce the provisions of this title in the same
manner as if the violation had been a violation of
any Federal Trade Commission trade regulation
rule, without regard to whether the credit repair or-
ganization—
‘‘(A) is engaged in commerce; or
‘‘(B) meets any other jurisdictional tests in
the Federal Trade Commission Act.
‘‘(c) STATE ACTION FOR VIOLATIONS.—
‘‘(1) AUTHORITY OF STATES.—In addition to
such other remedies as are provided under State
law, whenever the chief law enforcement officer of a
State, or an official or agency designated by a State,
has reason to believe that any person has violated or
is violating this title, the State—
109
‘‘(A) may bring an action to enjoin such
violation;
‘‘(B) may bring an action on behalf of its
residents to recover damages for which the per-
son is liable to such residents under section 409
as a result of the violation; and
‘‘(C) in the case of any successful action
under subparagraph (A) or (B), shall be award-
ed the costs of the action and reasonable attor-
ney fees as determined by the court.
‘‘(2) RIGHTS OF COMMISSION.—
‘‘(A) NOTICE TO COMMISSION.—The State
shall serve prior written notice of any civil ac-
tion under paragraph (1) upon the Federal
Trade Commission and provide the Commission
with a copy of its complaint, except in any case
where such prior notice is not feasible, in which
case the State shall serve such notice imme-
diately upon instituting such action.
‘‘(B) INTERVENTION.—The Commission
shall have the right—
‘‘(i) to intervene in any action re-
ferred to in subparagraph (A);
‘‘(ii) upon so intervening, to be heard
on all matters arising in the action; and
110
‘‘(iii) to file petitions for appeal.
‘‘(3) INVESTIGATORY
POWERS.—For purposes
of bringing any action under this subsection, nothing
in this subsection shall prevent the chief law enforce-
ment officer, or an official or agency designated by
a State, from exercising the powers conferred on the
chief law enforcement officer or such official by the
laws of such State to conduct investigations or to
administer oaths or affirmations or to compel the at-
tendance of witnesses or the production of documen-
tary and other evidence.
‘‘(4) 
LIMITATION.—Whenever 
the 
Federal
Trade Commission has instituted a civil action for
violation of this title, no State may, during the pend-
ency of such action, bring an action under this sec-
tion against any defendant named in the complaint
of the Commission for any violation of this title that
is alleged in that complaint.
‘‘SEC. 411. STATUTE OF LIMITATIONS.
‘‘Any action to enforce any liability under this title
may be brought before the later of—
‘‘(1) the end of the 2-year period beginning on
the date of the occurrence of the violation involved;
or
111
‘‘(2) in any case in which any credit repair or-
ganization has materially and willfully misrepre-
sented any information which—
‘‘(A) the credit repair organization is re-
quired, by any provision of this title, to disclose
to any consumer; and
‘‘(B) is material to the establishment of
the credit repair organization’s liability to the
consumer under this title,
the end of the 2-year period beginning on the date
of the discovery by the consumer of the misrepresen-
tation.
‘‘SEC. 412. RELATION TO STATE LAW.
‘‘This title shall not annul, alter, affect, or exempt
any person subject to the provisions of this title from com-
plying with any law of any State except to the extent that
such law is inconsistent with any provision of this title,
and then only to the extent of the inconsistency.
‘‘SEC. 413. EFFECTIVE DATE.
‘‘This title shall apply after the end of the 6-month
period beginning on the date of the enactment of the Cred-
it Repair Organizations Act, except with respect to con-
tracts entered into by a credit repair organization before
the end of such period.’’.
112
TITLE III—TRUTH IN LENDING
ACT
SEC. 301. TREATMENT OF DELIVERY FEES AND INTANGI-
BLES TAXES.
(a) IN GENERAL.—Section 106(a) of the Truth in
Lending Act (15 U.S.C. 1605) is amended by adding at
the end the following new paragraph:
‘‘(6) Taxes levied on security instruments or on
documents evidencing indebtedness if such taxes
must be paid as a precondition to recording the in-
strument securing the evidence of indebtedness.’’.
(b) EXCLUDED FEES.—Section 106(e) of the Truth
in Lending Act (15 U.S.C. 1605(e)) is amended by insert-
ing ‘‘, if bona fide and reasonable’’ before the colon.
(c) FEES FOR DELIVERY CHARGES.—Section 106(e)
of the Truth in Lending Act (15 U.S.C. 1605(e)) is
amended by adding at the end the following new para-
graph:
‘‘(7) Fees for delivery charges imposed by third
parties (including settlement agents, attorneys, and
escrow and title companies) if the creditor does not
retain the charges and the fees do not exceed $20
per delivery, or $50 per consumer transaction.’’.
113
(d) APPLICABILITY.—The amendments made by this
section shall apply to all consumer credit transactions con-
summated on or after February 1, 1995.
SEC. 302. LIMITATIONS ON LIABILITY.
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by adding
at the end the following new section:
‘‘SEC. 139. CERTAIN LIMITATIONS ON LIABILITY.
‘‘(a) IN GENERAL.—For transactions consummated
prior to February 1, 1995, a creditor or assignee shall
have no civil or criminal liability under this title, nor shall
a consumer have extended rescission rights under section
125, due to a creditor’s improper disclosure of—
‘‘(1) delivery charges actually and reasonably
imposed by the creditor, or any delivery charges im-
posed by third parties (including settlement agents,
attorneys, and escrow and title companies), if the
creditor does not retain the charges; or
‘‘(2) taxes levied on security instruments or
documents evidencing indebtedness.
‘‘(b) APPLICABILITY.—Subsection (a) does not apply
to—
‘‘(1) any individual action or counterclaim
brought under this title filed prior to October 1,
114
1994, that alleged (prior to such date) improper dis-
closure of delivery charges or taxes;
‘‘(2) any class action brought under this title in
which a class was certified prior to October 1, 1994,
that alleged (prior to such date) improper disclosure
of delivery charges or taxes;
‘‘(3) the named individual plaintiffs in any class
action filed under this title prior to October 1, 1994,
that alleged (prior to such date) improper disclosure
of delivery charges or taxes; or
‘‘(4) any consumer credit transaction in which
a notice of rescission was sent to the creditor prior
to October 1, 1994.’’.
(b) AMENDMENT TO THE TABLE OF SECTIONS.—The
table of sections for chapter 2 of the Truth in Lending
Act is amended by inserting after the item relating to sec-
tion 138 the following:
‘‘139. Certain limitations on liability.’’.
TITLE IV—DISASTER RELIEF
SEC. 401. DEPOSITORY INSTITUTIONS DISASTER RELIEF.
(a) TRUTH IN LENDING ACT; EXPEDITED FUNDS
AVAILABILITY ACT.—
(1) TRUTH IN LENDING ACT.—During the 240-
day period beginning on the date of enactment of
this Act, the Board of Governors of the Federal Re-
serve System may make exceptions to the Truth in
115
Lending Act for transactions within an area in
which the President, pursuant to section 401 of the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act, has determined, on or after July 1,
1994, that a major disaster exists, or within an area
determined to be eligible for disaster relief under
other Federal law by reason of damage related to
the 1994 flooding in Georgia, Alabama, and Florida
resulting from Tropical Storm Alberto, if the Board
determines that the exception can reasonably be ex-
pected to alleviate hardships to the public resulting
from such disaster that outweigh possible adverse ef-
fects.
(2) EXPEDITED
FUNDS
AVAILABILITY
ACT.—
During the 240-day period beginning on the date of
enactment of this Act, the Board of Governors of
the Federal Reserve System may make exceptions to
the Expedited Funds Availability Act for depository
institution offices located within any area referred to
in paragraph (1) of this section if the Board deter-
mines that the exception can reasonably be expected
to alleviate hardships to the public resulting from
such disaster that outweigh possible adverse effects.
116
(3) TIME LIMIT ON EXCEPTIONS.—Any excep-
tion made under this subsection shall expire not
later than July 1, 1995.
(4) PUBLICATION
REQUIRED.—The Board of
Governors of the Federal Reserve System shall pub-
lish in the Federal Register a statement that—
(A) describes any exception made under
this subsection; and
(B) explains how the exception can reason-
ably be expected to produce benefits to the pub-
lic that outweigh possible adverse effects.
(b) DEPOSIT OF INSURANCE PROCEEDS.—
(1) IN
GENERAL.—The appropriate Federal
banking agency may, by order, permit an insured de-
pository institution to subtract from the institution’s
total assets, in calculating compliance with the lever-
age limit prescribed under section 38 of the Federal
Deposit Insurance Act, an amount not exceeding the
qualifying amount attributable to insurance pro-
ceeds, if the agency determines that—
(A) the institution—
(i) had its principal place of business
within an area in which the President, pur-
suant to section 401 of the Robert T. Staf-
ford Disaster Relief and Emergency Assist-
117
ance Act, has determined, on or after July
1, 1994, that a major disaster exists, or
within an area determined to be eligible for
disaster relief under other Federal law by
reason of damage related to the 1994
flooding in Georgia, Alabama, and Florida
resulting from Tropical Storm Alberto, on
the day before the date of any such deter-
mination;
(ii) derives more than 60 percent of
its total deposits from persons who nor-
mally reside within, or whose principal
place of business is normally within, areas
of intense devastation caused by the major
disaster;
(iii) was adequately capitalized (as de-
fined in section 38 of the Federal Deposit
Insurance Act) before the major disaster;
and
(iv) has an acceptable plan for manag-
ing the increase in its total assets and total
deposits; and
(B) the subtraction is consistent with the
purpose of section 38 of the Federal Deposit
Insurance Act.
118
(2) TIME LIMIT ON EXCEPTIONS.—Any excep-
tion made under this subsection shall expire not
later than July 1, 1995.
(3) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
(A) 
APPROPRIATE
FEDERAL
BANKING
AGENCY.—The 
term 
‘‘appropriate 
Federal
banking agency’’ has the same meaning as in
section 3 of the Federal Deposit Insurance Act.
(B) INSURED DEPOSITORY INSTITUTION.—
The term ‘‘insured depository institution’’ has
the same meaning as in section 3 of the Federal
Deposit Insurance Act.
(C) LEVERAGE LIMIT.—The term ‘‘lever-
age limit’’ has the same meaning as in section
38 of the Federal Deposit Insurance Act.
(D) QUALIFYING AMOUNT ATTRIBUTABLE
TO INSURANCE PROCEEDS.—The term ‘‘qualify-
ing amount attributable to insurance proceeds’’
means the amount (if any) by which the institu-
tion’s total assets exceed the institution’s aver-
age total assets during the calendar quarter
ending before the date of any determination re-
ferred to in paragraph (1)(A)(i), because of the
deposit of insurance payments or governmental
119
assistance made with respect to damage caused
by, or other costs resulting from, the major dis-
aster.
(c) BANKING
AGENCY
PUBLICATION
REQUIRE-
MENTS.—
(1) IN
GENERAL.—A qualifying regulatory
agency may take any of the following actions with
respect to depository institutions or other regulated
entities whose principal place of business is within,
or with respect to transactions or activities within,
an area in which the President, pursuant to section
401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, has determined, on or
after July 1, 1994, that a major disaster exists, or
within an area determined to be eligible for disaster
relief under other Federal law by reason of damage
related to the 1994 flooding in Georgia, Alabama,
and Florida resulting from Tropical Storm Alberto,
if the agency determines that the action would facili-
tate recovery from the major disaster:
(A) PROCEDURE.—Exercising the agency’s
authority under provisions of law other than
this subsection without complying with—
(i) any requirement of section 553 of
title 5, United States Code; or
120
(ii) any provision of law that requires
notice or opportunity for hearing or sets
maximum or minimum time limits with re-
spect to agency action.
(B) PUBLICATION REQUIREMENTS.—Mak-
ing exceptions, with respect to institutions or
other entities for which the agency is the pri-
mary Federal regulator, to—
(i) any publication requirement with
respect to establishing branches or other
deposit-taking facilities; or
(ii) any similar publication require-
ment.
(2) PUBLICATION
REQUIRED.—A qualifying
regulatory agency shall publish in the Federal Reg-
ister a statement that—
(A) describes any action taken under this
subsection; and
(B) explains the need for the action.
(3) QUALIFYING
REGULATORY
AGENCY
DE-
FINED.—For purposes of this subsection, the term
‘‘qualifying regulatory agency’’ means—
(A) the Board of Governors of the Federal
Reserve System;
(B) the Comptroller of the Currency;
121
(C) the Director of the Office of Thrift Su-
pervision;
(D) the Federal Deposit Insurance Cor-
poration;
(E) the Financial Institutions Examination
Council;
(F) the National Credit Union Administra-
tion; and
(G) with respect to chapter 53 of title 31,
United States Code, the Secretary of the Treas-
ury.
(4) EXPIRATION.—Any exception made under
this subsection shall expire not later than July 1,
1995.
(d) SENSE OF THE CONGRESS.—It is the sense of
the Congress that the Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, the Di-
rector of the Office of Thrift Supervision, the Federal De-
posit Insurance Corporation, and the National Credit
Union Administration should encourage depository insti-
tutions to meet the financial services needs of their com-
munities and customers located in areas affected by the
1994 flooding in Georgia, Alabama, and Florida resulting
from Tropical Storm Alberto.
122
(e) OTHER AUTHORITY NOT AFFECTED.—No provi-
sion of this section shall be construed as limiting the au-
thority of any department or agency under any other pro-
vision of law.
Passed the House of Representatives October 5,
1994.
Attest:
DONNALD K. ANDERSON,
Clerk.
HR 5178 FRS——2
HR 5178 FRS——3
HR 5178 FRS——4
HR 5178 FRS——5
HR 5178 FRS——6
HR 5178 FRS——7
HR 5178 FRS——8
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