1075
(1) through the notification system maintained by
the agency under paragraph (5), a consumer report-
ing agency shall—
‘‘(A) inform the consumer that the election
is effective only for the 2-year period following
the election if the consumer does not submit to
the agency a signed notice of election form is-
sued by the agency for purposes of paragraph
(2)(B); and
‘‘(B) provide to the consumer a notice of
election form, if requested by the consumer, not
later than 5 business days after receipt of the
notification of the election through the system
established under paragraph (5), in the case of
a request made at the time the consumer pro-
vides notification through the system.
‘‘(4) EFFECTIVENESS OF ELECTION.—An elec-
tion of a consumer under paragraph (1)—
‘‘(A) shall be effective with respect to a
consumer reporting agency beginning 5 busi-
ness days after the date on which the consumer
notifies the agency in accordance with para-
graph (2);
‘‘(B) shall be effective with respect to a
consumer reporting agency—
1076
‘‘(i) subject to subparagraph (C), dur-
ing the 2-year period beginning 5 business
days after the date on which the consumer
notifies the agency of the election, in the
case of an election for which a consumer
notifies the agency only in accordance with
paragraph (2)(A); or
‘‘(ii) until the consumer notifies the
agency under subparagraph (C), in the
case of an election for which a consumer
notifies the agency in accordance with
paragraph (2)(B);
‘‘(C) shall not be effective after the date on
which the consumer notifies the agency,
through the notification system established by
the agency under paragraph (5), that the elec-
tion is no longer effective; and
‘‘(D) shall be effective with respect to each
affiliate of the agency.
‘‘(5) NOTIFICATION SYSTEM.—
‘‘(A) IN
GENERAL.—Each consumer re-
porting agency that, under subsection (c)(1)(B),
furnishes a consumer report in connection with
a credit or insurance transaction that is not ini-
tiated by a consumer shall—
1077
‘‘(i) establish and maintain a notifica-
tion system, including a toll-free telephone
number, which permits any consumer
whose consumer report is maintained by
the agency to notify the agency, with ap-
propriate identification, of the consumer’s
election to have the consumer’s name and
address excluded from any such list of
names and addresses provided by the agen-
cy for such a transaction; and
‘‘(ii) publish by not later than 365
days after the date of enactment of the
Consumer Credit Reporting Reform Act of
1996, and not less than annually there-
after, in a publication of general circula-
tion in the area served by the agency—
‘‘(I) a notification that informa-
tion in consumer files maintained by
the agency may be used in connection
with such transactions; and
‘‘(II) the address and toll-free
telephone number for consumers to
use to notify the agency of the con-
sumer’s election under clause (i).
1078
‘‘(B) ESTABLISHMENT AND MAINTENANCE
AS
COMPLIANCE.—Establishment and mainte-
nance of a notification system (including a toll-
free telephone number) and publication by a
consumer reporting agency on the agency’s own
behalf and on behalf of any of its affiliates in
accordance with this paragraph is deemed to be
compliance with this paragraph by each of
those affiliates.
‘‘(6) NOTIFICATION
SYSTEM
BY
AGENCIES
THAT OPERATE NATIONWIDE.—Each consumer re-
porting agency that compiles and maintains files on
consumers on a nationwide basis shall establish and
maintain a notification system for purposes of para-
graph (5) jointly with other such consumer reporting
agencies.’’.
(b) USE
OF INFORMATION OBTAINED FROM RE-
PORTS.—Section 604 of the Fair Credit Reporting Act (15
U.S.C. 1681b) (as amended by subsection (a) of this sec-
tion) is amended by adding at the end the following new
subsection:
‘‘(f) CERTAIN USE OR OBTAINING OF INFORMATION
PROHIBITED.—A person shall not use or obtain a
consumer report for any purpose unless—
1079
‘‘(1) the consumer report is obtained for a pur-
pose for which the consumer report is authorized to
be furnished under this section; and
‘‘(2) the purpose is certified in accordance with
section 607 by a prospective user of the report
through a general or specific certification.’’.
(c) FTC GUIDELINES REGARDING PRESCREENING
FOR INSURANCE TRANSACTIONS.—The Federal Trade
Commission may issue such guidelines as it deems nec-
essary with respect to the use of consumer reports in con-
nection with insurance transactions that are not initiated
by the consumer pursuant to section 604(c) of the Fair
Credit Reporting Act, as added by subsection (a) of this
section.
SEC. 2405. CONSUMER CONSENT REQUIRED TO FURNISH
CONSUMER REPORT CONTAINING MEDICAL
INFORMATION.
Section 604 of the Fair Credit Reporting Act (15
U.S.C. 1681b) is amended by adding at the end the follow-
ing new subsection:
‘‘(g) FURNISHING REPORTS CONTAINING MEDICAL
INFORMATION.—A consumer reporting agency shall not
furnish for employment purposes, or in connection with
a credit or insurance transaction or a direct marketing
transaction, a consumer report that contains medical in-
1080
formation about a consumer, unless the consumer con-
sents to the furnishing of the report.’’.
SEC. 2406. OBSOLETE INFORMATION AND INFORMATION
CONTAINED IN CONSUMER REPORTS.
(a) AMENDMENT TO LARGE-DOLLAR EXCEPTION.—
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) is amended—
(1) by inserting ‘‘INFORMATION
EXCLUDED
FROM CONSUMER REPORTS.—’’ after ‘‘(a)’’;
(2) in subsection (b)—
(A) 
in 
paragraph 
(1), 
by 
striking
‘‘$50,000’’ and inserting ‘‘$150,000’’;
(B) 
in 
paragraph 
(2), 
by 
striking
‘‘$50,000’’ and inserting ‘‘$150,000’’; and
(C) 
in 
paragraph 
(3), 
by 
striking
‘‘$20,000’’ and inserting ‘‘$75,000’’.
(b) CLARIFICATION OF REPORTING PERIOD.—Sec-
tion 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) (as amended by subsection (a) of this section) is
amended by adding at the end the following new sub-
section:
‘‘(c) RUNNING OF REPORTING PERIOD.—
‘‘(1) IN GENERAL.—The 7-year period referred
to in paragraphs (4) and (6) of subsection (a) shall
begin, with respect to any delinquent account that is
1081
placed for collection (internally or by referral to a
third party, whichever is earlier), charged to profit
and loss, or subjected to any similar action, upon the
expiration of the 180-day period beginning on the
date of the commencement of the delinquency which
immediately preceded the collection activity, charge
to profit and loss, or similar action.
‘‘(2) EFFECTIVE
DATE.—Paragraph (1) shall
apply only to items of information added to the file
of a consumer on or after the date that is 455 days
after the date of enactment of the Consumer Credit
Reporting Reform Act of 1996.’’.
(c) ADDITIONAL INFORMATION
ON BANKRUPTCY
FILINGS REQUIRED.—Section 605 of the Fair Credit Re-
porting Act (15 U.S.C. 1681c) is amended by adding at
the end the following new subsection:
‘‘(d) INFORMATION REQUIRED TO BE DISCLOSED.—
Any consumer reporting agency that furnishes a consumer
report that contains information regarding any case in-
volving the consumer that arises under title 11, United
States Code, shall include in the report an identification
of the chapter of such title 11 under which such case
arises if provided by the source of the information. If any
case arising or filed under title 11, United States Code,
is withdrawn by the consumer before a final judgment, the
1082
consumer reporting agency shall include in the report that
such case or filing was withdrawn upon receipt of docu-
mentation certifying such withdrawal.’’.
(d) INDICATION OF CLOSURE OF ACCOUNT; INDICA-
TION OF DISPUTE BY CONSUMER.—Section 605 of the
Fair Credit Reporting Act (15 U.S.C. 1681c) is amended
by adding at the end the following new subsections:
‘‘(e) INDICATION
OF CLOSURE
OF ACCOUNT
BY
CONSUMER.—If a consumer reporting agency is notified
pursuant to section 623(a)(4) that a credit account of a
consumer was voluntarily closed by the consumer, the
agency shall indicate that fact in any consumer report that
includes information related to the account.
‘‘(f) INDICATION OF DISPUTE BY CONSUMER.—If a
consumer reporting agency is notified pursuant to section
623(a)(3) that information regarding a consumer who was
furnished to the agency is disputed by the consumer, the
agency shall indicate that fact in each consumer report
that includes the disputed information.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 605 of the Fair Credit Reporting
Act (15 U.S.C. 1681c) is amended in the section
heading, by striking ‘‘OBSOLETE INFORMA-
TION’’ and inserting ‘‘REQUIREMENTS RE-
1083
LATING TO INFORMATION CONTAINED
IN CONSUMER REPORTS’’.
(2) The table of sections for the Fair Credit
Reporting Act (15 U.S.C. 1681a et seq.) is amended
by striking the item relating to section 605 and in-
serting the following:
‘‘605. Requirements relating to information contained in consumer reports.’’.
SEC. 2407. COMPLIANCE PROCEDURES.
(a) DISCLOSURE
OF
CONSUMER
REPORTS
BY
USERS.—Section 607 of the Fair Credit Reporting Act
(15 U.S.C. 1681e) is amended by adding at the end the
following new subsection:
‘‘(c) DISCLOSURE
OF
CONSUMER
REPORTS
BY
USERS ALLOWED.—A consumer reporting agency may not
prohibit a user of a consumer report furnished by the
agency on a consumer from disclosing the contents of the
report to the consumer, if adverse action against the
consumer has been taken by the user based in whole or
in part on the report.’’.
(b) NOTICE TO USERS AND PROVIDERS OF INFORMA-
TION TO ENSURE COMPLIANCE.—Section 607 of the Fair
Credit Reporting Act (15 U.S.C. 1681e) is amended by
adding after subsection (c) (as added by subsection (a)
of this section) the following new subsection:
‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR-
MATION.—
1084
‘‘(1) NOTICE REQUIREMENT.—A consumer re-
porting agency shall provide to any person—
‘‘(A) who regularly and in the ordinary
course of business furnishes information to the
agency with respect to any consumer; or
‘‘(B) to whom a consumer report is pro-
vided by the agency;
a notice of such person’s responsibilities under this
title.
‘‘(2) CONTENT
OF
NOTICE.—The Federal
Trade Commission shall prescribe the content of no-
tices under paragraph (1), and a consumer reporting
agency shall be in compliance with this subsection if
it provides a notice under paragraph (1) that is sub-
stantially similar to the Federal Trade Commission
prescription under this paragraph.’’.
(c) RECORD OF IDENTITY OF USERS AND PURPOSES
CERTIFIED BY USERS OF REPORTS.—Section 607 of the
Fair Credit Reporting Act (15 U.S.C. 1681e) is amended
by adding after subsection (d) (as added by subsection (b)
of this section) the following new subsection:
‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE-
SALE.—
‘‘(1) DISCLOSURE.—A person may not procure
a consumer report for purposes of reselling the re-
1085
port (or any information in the report) unless the
person discloses to the consumer reporting agency
that originally furnishes the report—
‘‘(A) the identity of the end-user of the re-
port (or information); and
‘‘(B) each permissible purpose under sec-
tion 604 for which the report is furnished to
the end-user of the report (or information).
‘‘(2) RESPONSIBILITIES
OF
PROCURERS
FOR
RESALE.—A person who procures a consumer report
for purposes of reselling the report (or any informa-
tion in the report) shall—
‘‘(A) establish and comply with reasonable
procedures designed to ensure that the report
(or information) is resold by the person only for
a purpose for which the report may be fur-
nished under section 604, including by requir-
ing that each person to which the report (or in-
formation) is resold and that resells or provides
the report (or information) to any other per-
son—
‘‘(i) identifies each end user of the re-
sold report (or information);
1086
‘‘(ii) certifies each purpose for which
the report (or information) will be used;
and
‘‘(iii) certifies that the report (or in-
formation) will be used for no other pur-
pose; and
‘‘(B) before reselling the report, make rea-
sonable efforts to verify the identifications and
certifications made under subparagraph (A).’’.
SEC. 2408. CONSUMER DISCLOSURES.
(a) ALL INFORMATION IN CONSUMER’S FILE RE-
QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the
Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is
amended to read as follows:
‘‘(1) All information in the consumer’s file at
the time of the request, except that nothing in this
paragraph shall be construed to require a consumer
reporting agency to disclose to a consumer any in-
formation concerning credit scores or any other risk
scores or predictors relating to the consumer.’’.
(b) MORE INFORMATION CONCERNING RECIPIENTS
OF REPORTS REQUIRED.—Section 609(a)(3) of the Fair
Credit Reporting Act (15 U.S.C. 1681g(a)) is amended
to read as follows:
1087
‘‘(3)(A) Identification of each person (including
each end-user identified under section 607(e)(1))
that procured a consumer report—
‘‘(i) for employment purposes, during the
2-year period preceding the date on which the
request is made; or
‘‘(ii) for any other purpose, during the 1-
year period preceding the date on which the re-
quest is made.
‘‘(B) An identification of a person under sub-
paragraph (A) shall include—
‘‘(i) the name of the person or, if applica-
ble, the trade name (written in full) under
which such person conducts business; and
‘‘(ii) upon request of the consumer, the ad-
dress and telephone number of the person.’’.
(c) INFORMATION REGARDING INQUIRIES.—Section
609(a) of the Fair Credit Reporting Act (15 U.S.C.
1681g(a)) is amended by adding at the end the following
new paragraph:
‘‘(5) A record of all inquiries received by the
agency during the 1-year period preceding the re-
quest that identified the consumer in connection
with a credit or insurance transaction that was not
initiated by the consumer.’’.
1088
(d) SUMMARY OF RIGHTS REQUIRED TO BE IN-
CLUDED WITH DISCLOSURE.—
(1) IN
GENERAL.—Section 609 of the Fair
Credit Reporting Act (15 U.S.C. 1681g) is amended
by adding at the end the following new subsection:
‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN-
CLUDED WITH DISCLOSURE.—
‘‘(1) SUMMARY OF RIGHTS.—A consumer re-
porting agency shall provide to a consumer, with
each written disclosure by the agency to the
consumer under this section—
‘‘(A) a written summary of all of the rights
that the consumer has under this title; and
‘‘(B) in the case of a consumer reporting
agency that compiles and maintains files on
consumers on a nationwide basis, a toll-free
telephone number established by the agency, at
which personnel are accessible to consumers
during normal business hours.
‘‘(2) SPECIFIC
ITEMS
REQUIRED
TO
BE
IN-
CLUDED.—The summary of rights required under
paragraph (1) shall include—
‘‘(A) a brief description of this title and all
rights of consumers under this title;
1089
‘‘(B) an explanation of how the consumer
may exercise the rights of the consumer under
this title;
‘‘(C) a list of all Federal agencies respon-
sible for enforcing any provision of this title
and the address and any appropriate phone
number of each such agency, in a form that will
assist the consumer in selecting the appropriate
agency;
‘‘(D) a statement that the consumer may
have additional rights under State law and that
the consumer may wish to contact a State or
local consumer protection agency or a State at-
torney general to learn of those rights; and
‘‘(E) a statement that a consumer report-
ing agency is not required to remove accurate
derogatory information from a consumer’s file,
unless the information is outdated under sec-
tion 605 or cannot be verified.
‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur-
poses of this subsection and any disclosure by a
consumer reporting agency required under this title
with respect to consumers’ rights, the Federal Trade
Commission (after consultation with each Federal
agency referred to in section 621(b)) shall prescribe
1091
making the disclosures required under section 609,
that the consumer furnish proper identification.
‘‘(2) DISCLOSURE IN WRITING.—Except as pro-
vided in subsection (b), the disclosures required to
be made under section 609 shall be provided under
that section in writing.
‘‘(b) OTHER FORMS OF DISCLOSURE.—
‘‘(1) 
IN
GENERAL.—If 
authorized 
by 
a
consumer, a consumer reporting agency may make
the disclosures required under 609—
‘‘(A) other than in writing; and
‘‘(B) in such form as may be—
‘‘(i) specified by the consumer in ac-
cordance with paragraph (2); and
‘‘(ii) available from the agency.
‘‘(2) FORM.—A consumer may specify pursuant
to paragraph (1) that disclosures under section 609
shall be made—
‘‘(A) in person, upon the appearance of the
consumer at the place of business of the
consumer reporting agency where disclosures
are regularly provided, during normal business
hours, and on reasonable notice;
1092
‘‘(B) by telephone, if the consumer has
made a written request for disclosure by tele-
phone;
‘‘(C) by electronic means, if available from
the agency; or
‘‘(D) by any other reasonable means that
is available from the agency.’’.
(2) SIMPLIFIED DISCLOSURE.—Not later than
90 days after the date of enactment of this Act, each
consumer reporting agency shall develop a form on
which such consumer reporting agency shall make
the disclosures required under section 609(a) of the
Fair Credit Reporting Act, for the purpose of maxi-
mizing the comprehensibility and standardization of
such disclosures.
(3) GOALS.—The Federal Trade Commission
shall take appropriate action to assure that the goals
of 
comprehensibility 
and 
standardization 
are
achieved in accordance with paragraph (2).
(4) DEFAMATION.—Section 610(e) of the Fair
Credit Reporting Act (15 U.S.C. 1681h(e)) is
amended by inserting ‘‘or based on information dis-
closed by a user of a consumer report to or for a
consumer against whom the user has taken adverse
1093
action, based in whole or in part on the report’’ be-
fore ‘‘except’’.
(5) CONFORMING
AMENDMENTS.—The Fair
Credit Reporting Act (15 U.S.C. 1681 et seq.) is
amended—
(A) in section 609(a), in the matter pre-
ceding paragraph (1), by striking ‘‘and proper
identification of any consumer’’ and inserting ‘‘,
and subject to section 610(a)(1)’’;
(B) in section 610, in the section heading,
by inserting ‘‘AND FORM’’ after ‘‘CONDI-
TIONS’’; and
(C) in the table of sections at the begin-
ning of that Act, in the item relating to section
610, by inserting ‘‘and form’’ after ‘‘condi-
tions’’.
SEC. 2409. PROCEDURES IN CASE OF THE DISPUTED ACCU-
RACY OF ANY INFORMATION IN A CONSUM-
ER’S FILE.
(a) IN GENERAL.—Section 611(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681i(a)) is amended to read
as follows:
‘‘(a) REINVESTIGATIONS
OF DISPUTED INFORMA-
TION.—
‘‘(1) REINVESTIGATION REQUIRED.—
1094
‘‘(A) IN GENERAL.—If the completeness or
accuracy of any item of information contained
in a consumer’s file at a consumer reporting
agency is disputed by the consumer and the
consumer notifies the agency directly of such
dispute, the agency shall reinvestigate free of
charge and record the current status of the dis-
puted information, or delete the item from the
file in accordance with paragraph (5), before
the end of the 30-day period beginning on the
date on which the agency receives the notice of
the dispute from the consumer.
‘‘(B) EXTENSION OF PERIOD TO REINVES-
TIGATE.—Except as provided in subparagraph
(C), the 30-day period described in subpara-
graph (A) may be extended for not more than
15 additional days if the consumer reporting
agency receives information from the consumer
during that 30-day period that is relevant to
the reinvestigation.
‘‘(C) LIMITATIONS ON EXTENSION OF PE-
RIOD TO REINVESTIGATE.—Subparagraph (B)
shall not apply to any reinvestigation in which,
during the 30-day period described in subpara-
graph (A), the information that is the subject
1095
of the reinvestigation is found to be inaccurate
or incomplete or the consumer reporting agency
determines that the information cannot be veri-
fied.
‘‘(2) PROMPT
NOTICE
OF
DISPUTE
TO
FUR-
NISHER OF INFORMATION.—
‘‘(A) IN GENERAL.—Before the expiration
of the 5-business-day period beginning on the
date on which a consumer reporting agency re-
ceives notice of a dispute from any consumer in
accordance with paragraph (1), the agency shall
provide notification of the dispute to any person
who provided any item of information in dis-
pute, at the address and in the manner estab-
lished with the person. The notice shall include
all relevant information regarding the dispute
that 
the 
agency 
has 
received 
from 
the
consumer.
‘‘(B) PROVISION OF OTHER INFORMATION
FROM
CONSUMER.—The consumer reporting
agency shall promptly provide to the person
who provided the information in dispute all rel-
evant information regarding the dispute that is
received by the agency from the consumer after
the period referred to in subparagraph (A) and
1096
before the end of the period referred to in para-
graph (1)(A).
‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO-
LOUS OR IRRELEVANT.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a consumer reporting agency may
terminate a reinvestigation of information dis-
puted by a consumer under that paragraph if
the agency reasonably determines that the dis-
pute by the consumer is frivolous or irrelevant,
including by reason of a failure by a consumer
to provide sufficient information to investigate
the disputed information.
‘‘(B) NOTICE OF DETERMINATION.—Upon
making any determination in accordance with
subparagraph (A) that a dispute is frivolous or
irrelevant, a consumer reporting agency shall
notify the consumer of such determination not
later than 5 business days after making such
determination, by mail or, if authorized by the
consumer for that purpose, by any other means
available to the agency.
‘‘(C) CONTENTS
OF
NOTICE.—A notice
under subparagraph (B) shall include—
1097
‘‘(i) the reasons for the determination
under subparagraph (A); and
‘‘(ii) identification of any information
required to investigate the disputed infor-
mation, which may consist of a standard-
ized form describing the general nature of
such information.
‘‘(4) CONSIDERATION OF CONSUMER INFORMA-
TION.—In conducting any reinvestigation under
paragraph (1) with respect to disputed information
in the file of any consumer, the consumer reporting
agency shall review and consider all relevant infor-
mation submitted by the consumer in the period de-
scribed in paragraph (1)(A) with respect to such dis-
puted information.
‘‘(5) TREATMENT OF INACCURATE OR UNVERI-
FIABLE INFORMATION.—
‘‘(A) IN GENERAL.—If, after any reinves-
tigation under paragraph (1) of any informa-
tion disputed by a consumer, an item of the in-
formation is found to be inaccurate or incom-
plete or cannot be verified, the consumer re-
porting agency shall promptly delete that item
of information from the consumer’s file or mod-
1098
ify that item of information, as appropriate,
based on the results of the reinvestigation.
‘‘(B) REQUIREMENTS
RELATING
TO
RE-
INSERTION
OF
PREVIOUSLY
DELETED
MATE-
RIAL.—
‘‘(i) CERTIFICATION OF ACCURACY OF
INFORMATION.—If any information is de-
leted from a consumer’s file pursuant to
subparagraph (A), the information may
not be reinserted in the file by the
consumer reporting agency unless the per-
son who furnishes the information certifies
that the information is complete and accu-
rate.
‘‘(ii) NOTICE TO CONSUMER.—If any
information that has been deleted from a
consumer’s file pursuant to subparagraph
(A) is reinserted in the file, the consumer
reporting agency shall notify the consumer
of the reinsertion in writing not later than
5 business days after the reinsertion or, if
authorized by the consumer for that pur-
pose, by any other means available to the
agency.
1099
‘‘(iii) ADDITIONAL INFORMATION.—As
part of, or in addition to, the notice under
clause (ii), a consumer reporting agency
shall provide to a consumer in writing not
later than 5 business days after the date of
the reinsertion—
‘‘(I) a statement that the dis-
puted 
information 
has 
been 
re-
inserted;
‘‘(II) the business name and ad-
dress of any furnisher of information
contacted and the telephone number
of such furnisher, if reasonably avail-
able, or of any furnisher of informa-
tion that contacted the consumer re-
porting agency, in connection with the
reinsertion of such information; and
‘‘(III) a notice that the consumer
has the right to add a statement to
the consumer’s file disputing the accu-
racy or completeness of the disputed
information.
‘‘(C) PROCEDURES
TO
PREVENT
RE-
APPEARANCE.—A consumer reporting agency
shall maintain reasonable procedures designed
1100
to prevent the reappearance in a consumer’s
file, and in consumer reports on the consumer,
of information that is deleted pursuant to this
paragraph (other than information that is re-
inserted in accordance with subparagraph
(B)(i)).
‘‘(D) AUTOMATED REINVESTIGATION SYS-
TEM.—Any consumer reporting agency that
compiles and maintains files on consumers on a
nationwide basis shall implement an automated
system through which furnishers of information
to that consumer reporting agency may report
the results of a reinvestigation that finds in-
complete or inaccurate information in a con-
sumer’s file to other such consumer reporting
agencies.
‘‘(6) NOTICE
OF
RESULTS
OF
REINVESTIGA-
TION.—
‘‘(A) IN GENERAL.—A consumer reporting
agency shall provide written notice to a
consumer of the results of a reinvestigation
under this subsection not later than 5 business
days after the completion of the reinvestigation,
by mail or, if authorized by the consumer for
1101
that purpose, by other means available to the
agency.
‘‘(B) CONTENTS.—As part of, or in addi-
tion to, the notice under subparagraph (A), a
consumer reporting agency shall provide to a
consumer in writing before the expiration of the
5-day period referred to in subparagraph (A)—
‘‘(i) a statement that the reinvestiga-
tion is completed;
‘‘(ii) a consumer report that is based
upon the consumer’s file as that file is re-
vised as a result of the reinvestigation;
‘‘(iii) a notice that, if requested by the
consumer, a description of the procedure
used to determine the accuracy and com-
pleteness of the information shall be pro-
vided to the consumer by the agency, in-
cluding the business name and address of
any furnisher of information contacted in
connection with such information and the
telephone number of such furnisher, if rea-
sonably available;
‘‘(iv) a notice that the consumer has
the right to add a statement to the con-
1102
sumer’s file disputing the accuracy or com-
pleteness of the information; and
‘‘(v) a notice that the consumer has
the right to request under subsection (d)
that the consumer reporting agency fur-
nish notifications under that subsection.
‘‘(7) DESCRIPTION OF REINVESTIGATION PRO-
CEDURE.—A consumer reporting agency shall pro-
vide to a consumer a description referred to in para-
graph (6)(B)(iv) by not later than 15 days after re-
ceiving a request from the consumer for that de-
scription.
‘‘(8) EXPEDITED DISPUTE RESOLUTION.—If a
dispute regarding an item of information in a con-
sumer’s file at a consumer reporting agency is re-
solved in accordance with paragraph (5)(A) by the
deletion of the disputed information by not later
than 3 business days after the date on which the
agency receives notice of the dispute from the
consumer in accordance with paragraph (1)(A), then
the agency shall not be required to comply with
paragraphs (2), (6), and (7) with respect to that dis-
pute if the agency—
‘‘(A) provides prompt notice of the deletion
to the consumer by telephone;
1103
‘‘(B) includes in that notice, or in a writ-
ten notice that accompanies a confirmation and
consumer report provided in accordance with
subparagraph (C), a statement of the consum-
er’s right to request under subsection (d) that
the agency furnish notifications under that sub-
section; and
‘‘(C) provides written confirmation of the
deletion and a copy of a consumer report on the
consumer that is based on the consumer’s file
after the deletion, not later than 5 business
days after making the deletion.’’.
(b) CONFORMING AMENDMENT.—Section 611(d) of
the Fair Credit Reporting Act (15 U.S.C. 1681i(d)) is
amended by striking ‘‘The consumer reporting agency
shall clearly’’ and all that follows through the end of the
subsection.
SEC. 2410. CHARGES FOR CERTAIN DISCLOSURES.
Section 612 of the Fair Credit Reporting Act (15
U.S.C. 1681j) is amended to read as follows:
‘‘SEC. 612. CHARGES FOR CERTAIN DISCLOSURES.
‘‘(a) REASONABLE CHARGES ALLOWED FOR CER-
TAIN DISCLOSURES.—
‘‘(1) IN GENERAL.—Except as provided in sub-
sections (b), (c), and (d), a consumer reporting
1104
agency may impose a reasonable charge on a
consumer—
‘‘(A) for making a disclosure to the
consumer pursuant to section 609, which
charge—
‘‘(i) shall not exceed $8; and
‘‘(ii) 
shall 
be 
indicated 
to 
the
consumer before making the disclosure;
and
‘‘(B) for furnishing, pursuant to section
611(d), following a reinvestigation under sec-
tion 611(a), a statement, codification, or sum-
mary to a person designated by the consumer
under that section after the 30-day period be-
ginning on the date of notification of the
consumer under paragraph (6) or (8) of section
611(a) with respect to the reinvestigation,
which charge—
‘‘(i) shall not exceed the charge that
the agency would impose on each des-
ignated recipient for a consumer report;
and
‘‘(ii) 
shall 
be 
indicated 
to 
the
consumer before furnishing such informa-
tion.
1105
‘‘(2) MODIFICATION OF AMOUNT.—The Federal
Trade Commission shall increase the amount re-
ferred to in paragraph (1)(A)(i) on January 1 of
each year, based proportionally on changes in the
Consumer Price Index, with fractional changes
rounded to the nearest fifty cents.
‘‘(b) FREE DISCLOSURE AFTER ADVERSE NOTICE
TO CONSUMER.—Each consumer reporting agency that
maintains a file on a consumer shall make all disclosures
pursuant to section 609 without charge to the consumer
if, not later than 60 days after receipt by such consumer
of a notification pursuant to section 615, or of a notifica-
tion from a debt collection agency affiliated with that
consumer reporting agency stating that the consumer’s
credit rating may be or has been adversely affected, the
consumer makes a request under section 609.
‘‘(c) FREE DISCLOSURE UNDER CERTAIN OTHER
CIRCUMSTANCES.—Upon the request of the consumer, a
consumer reporting agency shall make all disclosures pur-
suant to section 609 once during any 12-month period
without charge to that consumer if the consumer certifies
in writing that the consumer—
‘‘(1) is unemployed and intends to apply for
employment in the 60-day period beginning on the
date on which the certification is made;
1106
‘‘(2) is a recipient of public welfare assistance;
or
‘‘(3) has reason to believe that the file on the
consumer at the agency contains inaccurate informa-
tion due to fraud.
‘‘(d) OTHER CHARGES PROHIBITED.—A consumer
reporting agency shall not impose any charge on a
consumer for providing any notification required by this
title or making any disclosure required by this title, except
as authorized by subsection (a).’’.
SEC. 2411. DUTIES OF USERS OF CONSUMER REPORTS.
(a) DUTIES OF USERS TAKING ADVERSE ACTIONS.—
Section 615(a) of the Fair Credit Reporting Act (15
U.S.C. 1681m(a)) is amended to read as follows:
‘‘(a) DUTIES OF USERS TAKING ADVERSE ACTIONS
ON
THE
BASIS
OF
INFORMATION
CONTAINED
IN
CONSUMER REPORTS.—If any person takes any adverse
action with respect to any consumer that is based in whole
or in part on any information contained in a consumer
report, the person shall—
‘‘(1) provide oral, written, or electronic notice of
the adverse action to the consumer;
‘‘(2) provide to the consumer orally, in writing,
or electronically—
1107
‘‘(A) the name, address, and telephone
number of the consumer reporting agency (in-
cluding a toll-free telephone number established
by the agency if the agency compiles and main-
tains files on consumers on a nationwide basis)
that furnished the report to the person; and
‘‘(B) a statement that the consumer re-
porting agency did not make the decision to
take the adverse action and is unable to provide
the consumer the specific reasons why the ad-
verse action was taken; and
‘‘(3) provide to the consumer an oral, written,
or electronic notice of the consumer’s right—
‘‘(A) to obtain, under section 612, a free
copy of a consumer report on the consumer
from the consumer reporting agency referred to
in paragraph (2), which notice shall include an
indication of the 60-day period under that sec-
tion for obtaining such a copy; and
‘‘(B) to dispute, under section 611, with a
consumer reporting agency the accuracy or
completeness of any information in a consumer
report furnished by the agency.’’.
(b) DUTIES OF USERS MAKING CERTAIN CREDIT SO-
LICITATIONS.—Section 615 of the Fair Credit Reporting
1108
Act (15 U.S.C. 1681m) is amended by adding at the end
the following new subsection:
‘‘(d) DUTIES OF USERS MAKING WRITTEN CREDIT
OR INSURANCE SOLICITATIONS ON THE BASIS OF INFOR-
MATION CONTAINED IN CONSUMER FILES.—
‘‘(1) IN
GENERAL.—Any person who uses a
consumer report on any consumer in connection with
any credit or insurance transaction that is not initi-
ated by the consumer, that is provided to that per-
son under section 604(c)(1)(B), shall provide with
each written solicitation made to the consumer re-
garding the transaction a clear and conspicuous
statement that—
‘‘(A) information contained in the consum-
er’s consumer report was used in connection
with the transaction;
‘‘(B) the consumer received the offer of
credit or insurance because the consumer satis-
fied the criteria for credit worthiness or insur-
ability under which the consumer was selected
for the offer;
‘‘(C) if applicable, the credit or insurance
may not be extended if, after the consumer re-
sponds to the offer, the consumer does not meet
the criteria used to select the consumer for the
1109
offer or any applicable criteria bearing on credit
worthiness or insurability or does not furnish
any required collateral;
‘‘(D) the consumer has a right to prohibit
information contained in the consumer’s file
with any consumer reporting agency from being
used in connection with any credit or insurance
transaction that is not initiated by the
consumer; and
‘‘(E) the consumer may exercise the right
referred to in subparagraph (D) by notifying a
notification system established under section
604(e).
‘‘(2) DISCLOSURE
OF
ADDRESS
AND
TELE-
PHONE NUMBER.—A statement under paragraph (1)
shall include the address and toll-free telephone
number of the appropriate notification system estab-
lished under section 604(e).
‘‘(3) MAINTAINING CRITERIA ON FILE.—A per-
son who makes an offer of credit or insurance to a
consumer under a credit or insurance transaction
described in paragraph (1) shall maintain on file the
criteria used to select the consumer to receive the
offer, all criteria bearing on credit worthiness or in-
surability, as applicable, that are the basis for deter-
1110
mining whether or not to extend credit or insurance
pursuant to the offer, and any requirement for the
furnishing of collateral as a condition of the exten-
sion of credit or insurance, until the expiration of
the 3-year period beginning on the date on which the
offer is made to the consumer.
‘‘(4) AUTHORITY OF FEDERAL AGENCIES RE-
GARDING
UNFAIR
OR
DECEPTIVE
ACTS
OR
PRAC-
TICES NOT AFFECTED.—This section is not intended
to affect the authority of any Federal or State agen-
cy to enforce a prohibition against unfair or decep-
tive acts or practices, including the making of false
or misleading statements in connection with a credit
or insurance transaction that is not initiated by the
consumer.’’.
(c) DUTIES OF USERS MAKING OTHER SOLICITA-
TIONS.—Section 615 of the Fair Credit Reporting Act (15
U.S.C. 1681m) is amended by adding at the end the fol-
lowing new subsection:
‘‘(e)
(d) CONFORMING AMENDMENT.—Section 615(c) of
the Fair Credit Reporting Act (15 U.S.C. 1681m(c)) is
amended by striking ‘‘subsections (a) and (b)’’ and insert-
ing ‘‘this section’’.
1111
(e) DUTIES OF PERSON TAKING CERTAIN ACTIONS
BASED ON INFORMATION PROVIDED BY AFFILIATE.—
Section 615(b) of the Fair Credit Reporting Act (15
U.S.C. 1681m(b)) is amended—
(1) by striking ‘‘(b) Whenever credit’’ and in-
serting the following:
‘‘(b) ADVERSE ACTION BASED ON INFORMATION OB-
TAINED FROM THIRD PARTIES OTHER THAN CONSUMER
REPORTING AGENCIES.—
‘‘(1) IN GENERAL.—Whenever credit’’;
(2) by adding at the end the following new
paragraph:
‘‘(2) DUTIES OF PERSON TAKING CERTAIN AC-
TIONS BASED ON INFORMATION PROVIDED BY AF-
FILIATE.—
‘‘(A) DUTIES, GENERALLY.—If a person
takes an action described in subparagraph (B)
with respect to a consumer, based in whole or
in part on information described in subpara-
graph (C), the person shall—
‘‘(i) notify the consumer of the action,
including a statement that the consumer
may obtain the information in accordance
with clause (ii); and
1112
‘‘(ii) upon a written request from the
consumer received within 60 days after
transmittal of the notice required by clause
(i), disclose to the consumer the nature of
the information upon which the action is
based by not later than 30 days after re-
ceipt of the request.
‘‘(B) ACTION DESCRIBED.—An action re-
ferred to in subparagraph (A) is an adverse ac-
tion described in section 603(k)(1)(A), taken in
connection with a transaction initiated by the
consumer, or any adverse action described in
clause (i) or (ii) of section 603(k)(1)(B).
‘‘(C) INFORMATION DESCRIBED.—Informa-
tion referred to in subparagraph (A)—
‘‘(i) except as provided in clause (ii),
is information that—
‘‘(I) is furnished to the person
taking the action by a person related
by common ownership or affiliated by
common corporate control to the per-
son taking the action; and
‘‘(II) bears on the credit worthi-
ness, credit standing, credit capacity,
character, general reputation, per-
1113
sonal characteristics, or mode of living
of the consumer; and
‘‘(ii) does not include—
‘‘(I) information solely as to
transactions or experiences between
the consumer and the person furnish-
ing the information; or
‘‘(II) information in a consumer
report.’’.
SEC. 2412. CIVIL LIABILITY.
(a) CIVIL LIABILITY
FOR WILLFUL NONCOMPLI-
ANCE.—Section 616 of the Fair Credit Reporting Act (15
U.S.C. 1681n) is amended by striking ‘‘Any consumer re-
porting agency or user of information which’’ and insert-
ing ‘‘(a) IN GENERAL.—Any person who’’.
(b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON-
COMPLIANCE.—Section 616(a)(1) of the Fair Credit Re-
porting Act (15 U.S.C. 1681n(1)), as so designated by
subsection (a) of this section, is amended to read as fol-
lows:
‘‘(1)(A) any actual damages sustained by the
consumer as a result of the failure or damages of
not less than $100 and not more than $1,000; or
‘‘(B) in the case of liability of a natural person
for obtaining a consumer report under false pre-
1114
tenses or knowingly without a permissible purpose,
actual damages sustained by the consumer as a re-
sult of the failure or $1,000, whichever is greater;’’.
(c) CIVIL LIABILITY
FOR KNOWING NONCOMPLI-
ANCE.—Section 616 of the Fair Credit Reporting Act (15
U.S.C. 1681n) is amended by adding at the end the follow-
ing new subsection:
‘‘(b) CIVIL LIABILITY FOR KNOWING NONCOMPLI-
ANCE.—Any person who obtains a consumer report from
a consumer reporting agency under false pretenses or
knowingly without a permissible purpose shall be liable to
the consumer reporting agency for actual damages sus-
tained by the consumer reporting agency or $1,000,
whichever is greater.’’.
(d) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI-
ANCE.—Section 617 of the Fair Credit Reporting Act (15
U.S.C. 1681o) is amended by striking ‘‘Any consumer re-
porting agency or user of information which’’ and insert-
ing ‘‘(a) IN GENERAL.—Any person who’’.
(e) ATTORNEY’S FEES.—
(1) WILLFUL
NONCOMPLIANCE.—Section 616
of the Fair Credit Reporting Act (15 U.S.C. 1681n)
is amended by adding at the end the following new
subsection:
1115
‘‘(c) ATTORNEY’S FEES.—Upon a finding by the
court that an unsuccessful pleading, motion, or other
paper filed in connection with an action under this section
was filed in bad faith or for purposes of harassment, the
court shall award to the prevailing party attorney’s fees
reasonable in relation to the work expended in responding
to the pleading, motion, or other paper.’’.
(2) 
NEGLIGENT
NONCOMPLIANCE.—Section
617 of the Fair Credit Reporting Act (15 U.S.C.
1681o) is amended by adding at the end the follow-
ing new subsection:
‘‘(b) ATTORNEY’S FEES.—On a finding by the court
that an unsuccessful pleading, motion, or other paper filed
in connection with an action under this section was filed
in bad faith or for purposes of harassment, the court shall
award to the prevailing party attorney’s fees reasonable
in relation to the work expended in responding to the
pleading, motion, or other paper.’’.
SEC. 2413. RESPONSIBILITIES OF PERSONS WHO FURNISH
INFORMATION TO CONSUMER REPORTING
AGENCIES.
(a) IN GENERAL.—The Fair Credit Reporting Act
(15 U.S.C. 1681 et seq.) is amended—
(1) by redesignating section 623 as section 624;
and
1116
(2) by inserting after section 622 the following:
‘‘SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFOR-
MATION TO CONSUMER REPORTING AGEN-
CIES.
‘‘(a) DUTY OF FURNISHERS OF INFORMATION TO
PROVIDE ACCURATE INFORMATION.—
‘‘(1) PROHIBITION.—
‘‘(A) REPORTING INFORMATION WITH AC-
TUAL KNOWLEDGE OF ERRORS.—A person shall
not furnish any information relating to a
consumer to any consumer reporting agency if
the person knows or consciously avoids knowing
that the information is inaccurate.
‘‘(B) REPORTING
INFORMATION
AFTER
NOTICE
AND
CONFIRMATION
OF
ERRORS.—A
person shall not furnish information relating to
a consumer to any consumer reporting agency
if—
‘‘(i) the person has been notified by
the consumer, at the address specified by
the person for such notices, that specific
information is inaccurate; and
‘‘(ii) the information is, in fact, inac-
curate.
1117
‘‘(C) NO ADDRESS REQUIREMENT.—A per-
son who clearly and conspicuously specifies to
the consumer an address for notices referred to
in subparagraph (B) shall not be subject to
subparagraph (A); however, nothing in subpara-
graph (B) shall require a person to specify such
an address.
‘‘(2) DUTY TO CORRECT AND UPDATE INFOR-
MATION.—A person who—
‘‘(A) regularly and in the ordinary course
of business furnishes information to one or
more consumer reporting agencies about the
person’s transactions or experiences with any
consumer; and
‘‘(B) has furnished to a consumer report-
ing agency information that the person deter-
mines is not complete or accurate,
shall promptly notify the consumer reporting agency
of that determination and provide to the agency any
corrections to that information, or any additional in-
formation, that is necessary to make the information
provided by the person to the agency complete and
accurate, and shall not thereafter furnish to the
agency any of the information that remains not com-
plete or accurate.
1118
‘‘(3) DUTY TO PROVIDE NOTICE OF DISPUTE.—
If the completeness or accuracy of any information
furnished by any person to any consumer reporting
agency is disputed to such person by a consumer,
the person may not furnish the information to any
consumer reporting agency without notice that such
information is disputed by the consumer.
‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC-
COUNTS.—A person who regularly and in the ordi-
nary course of business furnishes information to a
consumer reporting agency regarding a consumer
who has a credit account with that person shall no-
tify the agency of the voluntary closure of the ac-
count by the consumer, in information regularly fur-
nished for the period in which the account is closed.
‘‘(5) DUTY
TO
PROVIDE
NOTICE
OF
DELIN-
QUENCY OF ACCOUNTS.—A person who furnishes in-
formation to a consumer reporting agency regarding
a delinquent account being placed for collection,
charged to profit or loss, or subjected to any similar
action shall, not later than 90 days after furnishing
the information, notify the agency of the month and
year of the commencement of the delinquency that
immediately preceded the action.
1119
‘‘(b) DUTIES
OF FURNISHERS
OF INFORMATION
UPON NOTICE OF DISPUTE.—
‘‘(1) IN GENERAL.—After receiving notice pur-
suant to section 611(a)(2) of a dispute with regard
to the completeness or accuracy of any information
provided by a person to a consumer reporting agen-
cy, the person shall—
‘‘(A) conduct an investigation with respect
to the disputed information;
‘‘(B) review all relevant information pro-
vided by the consumer reporting agency pursu-
ant to section 611(a)(2);
‘‘(C) report the results of the investigation
to the consumer reporting agency; and
‘‘(D) if the investigation finds that the in-
formation is incomplete or inaccurate, report
those results to all other consumer reporting
agencies to which the person furnished the in-
formation and that compile and maintain files
on consumers on a nationwide basis.
‘‘(2) DEADLINE.—A person shall complete all
investigations, reviews, and reports required under
paragraph (1) regarding information provided by the
person to a consumer reporting agency, before the
expiration of the period under section 611(a)(1)
1120
within which the consumer reporting agency is re-
quired to complete actions required by that section
regarding that information.
‘‘(c) LIMITATION ON LIABILITY.—Sections 616 and
617 do not apply to any failure to comply with subsection
(a), except as provided in section 621(c)(1)(B).
‘‘(d) LIMITATION
ON ENFORCEMENT.—Subsection
(a) shall be enforced exclusively under section 621 by the
Federal agencies and officials and the State officials iden-
tified in that section.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions at the beginning of the Fair Credit Reporting Act
(15 U.S.C. 1681a et seq.) is amended by striking the item
relating to section 623 and inserting the following:
‘‘623. Responsibilities of furnishers of information to consumer reporting agen-
cies.
‘‘624. Relation to State laws.’’.
SEC. 2414. INVESTIGATIVE CONSUMER REPORTS.
Section 606 of the Fair Credit Reporting Act (15
U.S.C. 1681d) is amended—
(1) in subsection (a)(1), by striking ‘‘or’’ at the
end and inserting ‘‘and’’;
(2) by striking subsection (a)(2) and inserting
the following:
‘‘(2) the person certifies or has certified to the
consumer reporting agency that—
1121
‘‘(A) the person has made the disclosures
to the consumer required by paragraph (1); and
‘‘(B) the person will comply with sub-
section (b).’’;
(3) in subsection (b), by striking ‘‘shall’’ the
second place such term appears; and
(4) by adding at the end the following new sub-
section:
‘‘(d) PROHIBITIONS.—
‘‘(1) CERTIFICATION.—A consumer reporting
agency shall not prepare or furnish an investigative
consumer report unless the agency has received a
certification under subsection (a)(2) from the person
who requested the report.
‘‘(2) INQUIRIES.—A consumer reporting agency
shall not make an inquiry for the purpose of prepar-
ing an investigative consumer report on a consumer
for employment purposes if the making of the in-
quiry by an employer or prospective employer of the
consumer would violate any applicable Federal or
State equal employment opportunity law or regula-
tion.
‘‘(3) CERTAIN
PUBLIC
RECORD
INFORMA-
TION.—Except as otherwise provided in section 613,
a consumer reporting agency shall not furnish an in-
1122
vestigative consumer report that includes informa-
tion that is a matter of public record and that re-
lates to an arrest, indictment, conviction, civil judi-
cial action, tax lien, or outstanding judgment, unless
the agency has verified the accuracy of the informa-
tion during the 30-day period ending on the date on
which the report is furnished.
‘‘(4) CERTAIN
ADVERSE
INFORMATION.—A
consumer reporting agency shall not prepare or fur-
nish an investigative consumer report on a consumer
that contains information that is adverse to the in-
terest of the consumer and that is obtained through
a personal interview with a neighbor, friend, or asso-
ciate of the consumer or with another person with
whom the consumer is acquainted or who has knowl-
edge of such item of information, unless—
‘‘(A) the agency has followed reasonable
procedures to obtain confirmation of the infor-
mation, from an additional source that has
independent and direct knowledge of the infor-
mation; or
‘‘(B) the person interviewed is the best
possible source of the information.’’.
1123
SEC. 2415. INCREASED CRIMINAL PENALTIES FOR OBTAIN-
ING 
INFORMATION 
UNDER 
FALSE 
PRE-
TENSES.
(a) OBTAINING INFORMATION UNDER FALSE PRE-
TENSES.—Section 619 of the Fair Credit Reporting Act
(15 U.S.C. 1681q) is amended by striking ‘‘fined not more
than $5,000 or imprisoned not more than one year, or
both’’ and inserting ‘‘fined under title 18, United States
Code, imprisoned for not more than 2 years, or both’’.
(b) UNAUTHORIZED DISCLOSURES BY OFFICERS OR
EMPLOYEES.—Section 620 of the Fair Credit Reporting
Act (15 U.S.C. 1681r) is amended by striking ‘‘fined not
more than $5,000 or imprisoned not more than one year,
or both’’ and inserting ‘‘fined under title 18, United States
Code, imprisoned for not more than 2 years, or both’’.
SEC. 2416. ADMINISTRATIVE ENFORCEMENT.
(a) AVAILABLE ENFORCEMENT POWERS.—Section
621(a) of the Fair Credit Reporting Act (15 U.S.C.
1681s(a)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’;
(2) by adding at the end the following new
paragraph:
‘‘(2)(A) In the event of a knowing violation, which
constitutes a pattern or practice of violations of this title,
the Commission may commence a civil action to recover
a civil penalty in a district court of the United States
1124
against any person that violates this title. In such action,
such person shall be liable for a civil penalty of not more
than $2,500 per violation.
‘‘(B) In determining the amount of a civil penalty
under subparagraph (A), the court shall take into account
the degree of culpability, any history of prior such con-
duct, ability to pay, effect on ability to continue to do busi-
ness, and such other matters as justice may require.
‘‘(3) Notwithstanding paragraph (2), a court may not
impose any civil penalty on a person for a violation of sec-
tion 623(a)(1) unless the person has been enjoined from
committing the violation, or ordered not to commit the vio-
lation, in an action or proceeding brought by or on behalf
of the Federal Trade Commission, and has violated the
injunction or order, and the court may not impose any
civil penalty for any violation occurring before the date
of the violation of the injunction or order.
‘‘(4) Neither the Commission nor any other agency
referred to in subsection (b) may prescribe trade regula-
tion rules or other regulations with respect to this title.’’.
(b) AGENCIES RESPONSIBLE FOR ENFORCEMENT.—
Section 621 of the Fair Credit Reporting Act (15 U.S.C.
1681s) is amended—
1125
(1) in subsection (a), by inserting ‘‘ENFORCE-
MENT BY FEDERAL TRADE COMMISSION.—’’ before
‘‘Compliance with the requirements’’;
(2) in subsection (b), by striking the matter
preceding paragraph (1) and inserting the following:
‘‘(b) ENFORCEMENT BY OTHER AGENCIES.—Compli-
ance with the requirements imposed under this title with
respect to consumer reporting agencies, persons who use
consumer reports from such agencies, persons who furnish
information to such agencies, and users of information
that are subject to subsection (d) or (e) of section 615
shall be enforced under—’’; and
(3) in subsection (c), by adding at the end the
following: ‘‘Notwithstanding the preceding, no agen-
cy referred to in subsection (b) may conduct an ex-
amination of a bank, savings association, or credit
union regarding compliance with the provisions of
this title, except in response to a complaint (or if the
agency otherwise has knowledge) that the bank, sav-
ings association, or credit union has violated a provi-
sion of this title, in which case, the agency may con-
duct an examination as necessary to investigate the
complaint. If an agency determines during an inves-
tigation in response to a complaint that a violation
of this title has occurred, the agency may, during its
1126
next 2 regularly scheduled examinations of the bank,
savings association, or credit union, examine for
compliance with this title.’’.
SEC. 2417. STATE ENFORCEMENT OF FAIR CREDIT REPORT-
ING ACT.
Section 621 of the Fair Credit Reporting Act (15
U.S.C. 1681s) is amended—
(1) by redesignating subsection (c) as sub-
section (d); and
(2) by inserting after subsection (b) the follow-
ing new subsection:
‘‘(c) STATE ACTION FOR VIOLATIONS.—
‘‘(1) AUTHORITY OF STATES.—In addition to
such other remedies as are provided under State
law, if 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—
‘‘(A) may bring an action to enjoin such
violation in any appropriate United States dis-
trict court or in any other court of competent
jurisdiction;
‘‘(B) subject to paragraph (5), may bring
an action on behalf of the residents of the State
to recover—
1127
‘‘(i) damages for which the person is
liable to such residents under sections 616
and 617 as a result of the violation;
‘‘(ii) in the case of a violation of sec-
tion 623(a), damages for which the person
would, but for section 623(c), be liable to
such residents as a result of the violation;
or
‘‘(iii) damages of not more than
$1,000 for each willful or negligent viola-
tion; 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 FEDERAL REGULATORS.—The
State shall serve prior written notice of any action
under paragraph (1) upon the Federal Trade Com-
mission or the appropriate Federal regulator deter-
mined under subsection (b) and provide the Commis-
sion or appropriate Federal regulator with a copy of
its complaint, except in any case in which such prior
notice is not feasible, in which case the State shall
serve such notice immediately upon instituting such
1128
action. The Federal Trade Commission or appro-
priate Federal regulator shall have the right—
‘‘(A) to intervene in the action;
‘‘(B) upon so intervening, to be heard on
all matters arising therein;
‘‘(C) to remove the action to the appro-
priate United States district court; and
‘‘(D) 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
ON
STATE
ACTION
WHILE
FEDERAL ACTION PENDING.—If the Federal Trade
Commission or the appropriate Federal regulator
has instituted a civil action or an administrative ac-
tion under section 8 of the Federal Deposit Insur-
ance Act for a violation of this title, no State may,
during the pendency of such action, bring an action
1129
under this section against any defendant named in
the complaint of the Commission or the appropriate
Federal regulator for any violation of this title that
is alleged in that complaint.
‘‘(5) LIMITATIONS ON STATE ACTIONS FOR VIO-
LATION OF SECTION 623(a)(1).—
‘‘(A) VIOLATION
OF
INJUNCTION
RE-
QUIRED.—A State may not bring an action
against a person under paragraph (1)(B) for a
violation of section 623(a)(1), unless—
‘‘(i) the person has been enjoined
from committing the violation, in an action
brought by the State under paragraph
(1)(A); and
‘‘(ii) the person has violated the in-
junction.
‘‘(B) LIMITATION ON DAMAGES RECOVER-
ABLE.—In an action against a person under
paragraph (1)(B) for a violation of section
623(a)(1), a State may not recover any dam-
ages incurred before the date of the violation of
an injunction on which the action is based.’’.
1130
SEC. 2418. FEDERAL RESERVE BOARD AUTHORITY.
Section 621 of the Fair Credit Reporting Act (15
U.S.C. 1681s) is amended by adding at the end the follow-
ing new subsection:
‘‘(e) INTERPRETIVE AUTHORITY.—The Board of
Governors of the Federal Reserve System may issue inter-
pretations of any provision of this title as such provision
may apply to any persons identified under paragraph (1),
(2), and (3) of subsection (b), or to the holding companies
and affiliates of such persons, in consultation with Federal
agencies identified in paragraphs (1), (2), and (3) of sub-
section (b).’’.
SEC. 2419. PREEMPTION OF STATE LAW.
Section 624 of the Fair Credit Reporting Act (as re-
designated by section 2413(a) of this chapter) is amend-
ed—
(1) by striking ‘‘This title’’ and inserting ‘‘(a)
IN GENERAL.—Except as provided in subsections
(b) and (c), this title’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) GENERAL EXCEPTIONS.—No requirement or
prohibition may be imposed under the laws of any State—
‘‘(1) with respect to any subject matter regu-
lated under—
1131
‘‘(A) subsection (c) or (e) 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 shall not apply to any State law
in effect on the date of enactment of the
Consumer Credit Reporting Reform Act of
1996;
‘‘(C) subsections (a) and (b) of section
615, relating to the duties of a person who
takes any adverse action with respect to a
consumer;
‘‘(D) section 615(d), relating to the duties
of persons who use a consumer report of a
consumer in connection with any credit or in-
surance transaction that is not initiated by the
consumer and that consists of a firm offer of
credit or insurance;
‘‘(E) section 605, relating to information
contained in consumer reports, except that this
1132
subparagraph shall not apply to any State law
in effect on the date of enactment of the
Consumer Credit Reporting Reform Act of
1996; or
‘‘(F) section 623, relating to the respon-
sibilities of persons who furnish information to
consumer reporting agencies, except that this
paragraph shall not apply—
‘‘(i) with respect to section 54A(a) of
chapter 93 of the Massachusetts Anno-
tated Laws (as in effect on the date of en-
actment of the Consumer Credit Reporting
Reform Act of 1996); or
‘‘(ii) 
with 
respect 
to 
section
1785.25(a) of the California Civil Code (as
in effect on the date of enactment of the
Consumer Credit Reporting Reform Act of
1996);
‘‘(2) with respect to the exchange of informa-
tion among persons affiliated by common ownership
or common corporate control, except that this para-
graph shall not apply with respect to subsection (a)
or (c)(1) of section 2480e of title 9, Vermont Stat-
utes Annotated (as in effect on the date of enact-
1133
ment of the Consumer Credit Reporting Reform Act
of 1996); 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 OR IN-
SURANCE.—Notwithstanding any definition of the term
‘firm offer of credit or insurance’ (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 interpretation 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 enactment of the Consumer Credit Re-
porting Reform Act of 1996; 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, 2004;
‘‘(B) states explicitly that the provision is
intended to supplement this title; and
1134
‘‘(C) gives greater protection to consumers
than is provided under this title.’’.
SEC. 2420. EFFECTIVE DATE.
(a) IN GENERAL.—Except as otherwise specifically
provided in this chapter, the amendments made by this
chapter shall become effective 365 days after the date of
enactment of this Act.
(b) EARLY COMPLIANCE.—Any person or other entity
that is subject to the requirements of this chapter may,
at its option, comply with any provision of this chapter
before the date on which that provision becomes effective
under this chapter, in which case, each of the correspond-
ing provisions of this chapter shall be fully applicable to
such person or entity.
SEC. 2421. RELATIONSHIP TO OTHER LAW.
Nothing in this chapter or the amendments made by
this chapter 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 solicitations.
SEC. 2422. FEDERAL RESERVE BOARD STUDY.
(a) STUDY REQUIRED.—The Board of Governors of
the Federal Reserve System, in consultation with the other
Federal banking agencies (as defined in section 3 of the
Federal Deposit Insurance Act) and the Federal Trade
1135
Commission, shall conduct a study of whether organiza-
tions which, as of the date of the enactment of this Act,
are not subject to the Fair Credit Reporting Act as
consumer reporting agencies (as defined in section 603 of
such Act) are engaged in the business of making sensitive
consumer identification information, including social secu-
rity numbers, mothers’ maiden names, prior addresses,
and dates of birth, available to the general public.
(b) DETERMINATION OF POTENTIAL FOR FRAUD.—
If the Board of Governors of the Federal Reserve System
determines that organizations referred to in subsection (a)
are engaged in the business of making sensitive consumer
identification information available to the general public,
the Board shall determine—
(1) whether such activities create undue poten-
tial for fraud and risk of loss to insured depository
institutions (as defined in section 3 of the Federal
Deposit Insurance Act); and
(2) if so, whether changes in Federal law are
necessary to address such risks of fraud and loss.
(c) REPORT TO CONGRESS.—Before the end of the
6-month period beginning on the date of the enactment
of this Act, the Board of Governors of the Federal Reserve
System shall submit a report to the Congress containing—
1136
(1) the findings and conclusion of the Board in
connection with the study required under subsections
(a) and (b); and
(2) recommendations for such legislative or ad-
ministrative action as the Board determines to be
appropriate.
CHAPTER 2—CREDIT REPAIR
ORGANIZATIONS
SEC. 2451. REGULATION OF CREDIT REPAIR ORGANIZA-
TIONS.
Title IV of the Consumer Credit Protection Act (Pub-
lic Law 90–321, 82 Stat. 164) is amended to read as fol-
lows:
‘‘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’.
1137
‘‘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 credit worthiness 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—
‘‘(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; and
‘‘(2) to protect the public from unfair or decep-
tive advertising and business practices by credit re-
pair organizations.
1138
‘‘SEC. 403. DEFINITIONS.
‘‘For purposes of this title, the following definitions
apply:
‘‘(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—
1139
‘‘(i) any nonprofit organization which
is exempt from taxation under section
501(c)(3) of the Internal Revenue Code of
1986;
‘‘(ii) 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; or
‘‘(iii) any depository institution (as
that term is defined in section 3 of the
Federal Deposit Insurance Act) or any
Federal or State credit union (as those
terms are defined in section 101 of the
Federal Credit Union Act), or any affiliate
or subsidiary of such a depository institu-
tion or credit union.
‘‘(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
1140
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 credit worthiness, 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
1141
‘‘(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:
1142
‘‘ ‘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
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.
1143
‘‘ ‘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.
‘‘ ‘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.
1144
‘‘ ‘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.
‘‘(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—
1145
‘‘(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 (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—
‘‘(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;
1146
‘‘(3) the credit repair organization’s name and
principal business address; and
‘‘(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
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:
1147
‘‘ ‘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
‘‘(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
1148
‘‘(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
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.—
1149
‘‘(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.
‘‘(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;
1150
‘‘(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
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-
1151
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—
‘‘(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-
1152
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
‘‘(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
1153
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 5-year period beginning on
the date of the occurrence of the violation involved;
or
‘‘(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,
1154
the end of the 5-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.’’.
SEC. 2452. CREDIT WORTHINESS.
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-
cy, should report to the Committee on Banking,
Housing, and Urban Affairs of the Senate as to
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whether and how the location of the residence of an
applicant for unsecured credit is considered by many
companies and financial institutions in deciding
whether an applicant should be granted credit.
Subtitle 
E—Asset 
Conservation,
Lender Liability, and Deposit
Insurance Protection
SEC. 2501. SHORT TITLE.
This subtitle may be cited as the ‘‘Asset Conserva-
tion, Lender Liability, and Deposit Insurance Protection
Act of 1996’’.
SEC. 2502. CERCLA LENDER AND FIDUCIARY LIABILITY
LIMITATIONS AMENDMENTS.
(a) IN GENERAL.—Section 107 of the Comprehensive
Environmental Response, Compensation, and Liability Act
of 1980 (42 U.S.C. 9607) is amended by adding at the
end the following:
‘‘(n) LIABILITY OF FIDUCIARIES.—
‘‘(1) IN GENERAL.—The liability of a fiduciary
under any provision of this Act for the release or
threatened release of a hazardous substance at,
from, or in connection with a vessel or facility held
in a fiduciary capacity shall not exceed the assets
held in the fiduciary capacity.
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‘‘(2) EXCLUSION.—Paragraph (1) does not
apply to the extent that a person is liable under this
Act independently of the person’s ownership of a
vessel or facility as a fiduciary or actions taken in
a fiduciary capacity.
‘‘(3) LIMITATION.—Paragraphs (1) and (4) do
not limit the liability pertaining to a release or
threatened release of a hazardous substance if neg-
ligence of a fiduciary causes or contributes to the re-
lease or threatened release.
‘‘(4) SAFE HARBOR.—A fiduciary shall not be
liable in its personal capacity under this Act for—
‘‘(A) undertaking or directing another per-
son to undertake a response action under sub-
section (d)(1) or under the direction of an on
scene coordinator designated under the Na-
tional Contingency Plan;
‘‘(B) undertaking or directing another per-
son to undertake any other lawful means of ad-
dressing a hazardous substance in connection
with the vessel or facility;
‘‘(C) terminating the fiduciary relationship;
‘‘(D) including in the terms of the fidu-
ciary agreement a covenant, warranty, or other
term or condition that relates to compliance