viding any information about the consumer to any
consumer reporting agency.
‘‘(2) CONTENTS
OF
NOTICE.—Written notice
provided to a consumer by a person pursuant to
paragraph (1) shall contain the following informa-
tion:
‘‘(A) A brief description of the type of in-
formation which may be furnished regularly to
any consumer reporting agency.
‘‘(B) A brief description of the frequency
with which or the circumstances under which
information is furnished to any consumer re-
porting agency.
‘‘(3) NOTICE BY CERTAIN PERSONS.—A person
who furnishes information about consumers who
have written checks with insufficient funds may give
notice for purposes of paragraph (1) by posting the
notice in a conspicuous manner at each location
where checks are accepted by the person.
‘‘(c) DUTIES
OF FURNISHERS
OF INFORMATION
UPON NOTICE OF DISPUTE.—Upon 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 agency, the person
shall—
‘‘(1) complete an investigation with respect to
the disputed information and report to the consumer
reporting agency the results of that investigation be-
fore the end of the 30-business day period beginning
on the date the agency receives notices of a dispute
from the consumer in accordance with section
611(a)(1); and
‘‘(2) review relevant information submitted to
the consumer reporting agency by the consumer in
accordance with section 611(a)(4).
‘‘(d) LIMITATIONS.—
‘‘(1) CIVIL LIABILITY.—Sections 616 and 617
shall not apply to any failure to comply with sub-
section (a).
‘‘(2) ENFORCEMENT.—Subsection (a) shall be
enforced exclusively under section 621 by the Fed-
eral agencies identified in that section.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of the Fair Credit Reporting Act (15
U.S.C. 1681a et seq.) is amended by striking the item re-
lating to section 622 and inserting after the item relating
to section 621 the following:
‘‘622. Responsibilities of furnishers of information to consumer reporting agen-
cies.
‘‘623. Relation to State laws.’’.
SEC. 113. 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. 114. ADMINISTRATIVE ENFORCEMENT.
The 2d sentence of section 621(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681s(a)) is amended—
(1) by striking ‘‘Act and shall be subject to en-
forcement by the Federal Trade Commission under
section 5(b) thereof with respect to any consumer re-
porting agency or person subject to enforcement by
the Federal Trade Commission pursuant to this sub-
section, irrespective’’ and inserting ‘‘Act. All func-
tions and powers of the Federal Trade Commission
under the Federal Trade Commission Act shall be
available to the Commission to enforce compliance
with this title by any person subject to enforcement
by the Federal Trade Commission pursuant to this
subsection and not subject to enforcement pursuant
to section 8 of the Federal Deposit Insurance Act,
irrespective’’; and
(2) by inserting ‘‘, including the power to en-
force the provisions of this title in the same manner
as if the violation had been a violation of any Fed-
eral Trade Commission trade regulation rule’’ before
the period.
SEC. 115. STATE ENFORCEMENT OF FAIR CREDIT REPORT-
ING ACT.
Section 621 of the Fair Credit Reporting Act (15
U.S.C. 1681s) is amended by redesignating subsection (c)
as subsection (d) and inserting after subsection (b) the
following new subsection:
‘‘(c) STATE ACTION TO ENFORCE FAIR CREDIT RE-
PORTING.—
‘‘(1) AUTHORITY
OF
STATES.—Whenever the
chief law enforcement officer of the State, or an offi-
cial or agency designated by a State, has reason to
believe that any person has violated this title the
State may bring a civil action on behalf of its resi-
dents to enjoin such violation, an action to recover
for actual monetary loss, or both.
‘‘(2) EXCLUSIVE
JURISDICTION
OF
FEDERAL
COURTS.—The district courts of the United States,
the United States courts of any territory, and the
District Court of the United States for the District
of Columbia shall have exclusive jurisdiction over all
civil actions brought under this subsection.
‘‘(3) RIGHTS OF COMMISSION.—The State shall
serve prior written notice of any such civil action
upon the Federal Trade Commission or the appro-
priate Federal regulator determined under sub-
section (b) and provide the Commission or appro-
priate Federal regulator with a copy of its com-
plaint, except in any case where such prior notice is
not feasible, in which case the State shall serve such
notice immediately upon instituting such action. The
Commission or appropriate Federal regulator shall
have the right (A) to intervene in the action, (B)
upon so intervening, to be heard on all matters aris-
ing therein, and (C) to file petitions for appeal.
‘‘(4) VENUE; SERVICE OF PROCESS.—Any civil
action brought under this subsection in a district
court of the United States may be brought in the
district wherein the defendant is found or is an in-
habitant or transacts business or wherein the viola-
tion occurred or is occurring, and process in such
cases may be served in any district in which the de-
fendant is an inhabitant or where the defendant may
be found.
‘‘(5) INVESTIGATORY
POWERS.—For purposes
of bringing any civil action under this subsection,
nothing in this subsection shall prevent the chief law
enforcement officer, or an official or agency des-
ignated by a State, from exercising the powers con-
ferred on the chief law enforcement officer or such
official by the laws of such State to conduct inves-
tigations or to administer oaths or affirmations or to
compel the attendance of witnesses or the production
of documentary and other evidence.
‘‘(6) EFFECT
ON
STATE
COURT
PROCEED-
INGS.—Nothing contained in this subsection shall be
construed to prohibit an authorized State official
from proceeding in State court on the basis of an al-
leged violation of any civil or criminal statute of
such State.
‘‘(7) 
LIMITATION.—Whenever 
the 
Federal
Trade Commission or the appropriate Federal regu-
lator has instituted a civil action for violation of this
title, no State may, during the pendency of such ac-
tion instituted by the Commission or the appropriate
Federal regulator, subsequently institute a civil ac-
tion against any defendant named in the complaint
of the Commission or the appropriate Federal regu-
lator for any violation as alleged in the complaint.’’.
SEC. 116. FEDERAL RESERVE BOARD AUTHORITY.
Section 621 of the Fair Credit Reporting Act (15
U.S.C. 1681s), is further amended by adding after sub-
section (d) (as redesignated by section 115) the following
new subsection:
‘‘(e) INTERPRETIVE AUTHORITY.—The Federal Re-
serve Board may issue interpretations of any provision of
this title as it may apply to any persons identified under
subsection (b) (1), (2), and (3), or to the holding compa-
nies and affiliates of such persons, in consultation with
Federal agencies identified in subsection (b) (1), (2), and
(3).’’.
SEC. 117. ESTABLISHMENT OF TOLL-FREE TELEPHONE
NUMBER.
Each consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis shall
establish (and thereafter maintain) a toll-free telephone
number pursuant to section 609(c)(1)(B) of the Fair
Credit Reporting Act, as amended by section 107(d) of
this Act, before the end of the 455-day period beginning
on the date of the enactment of this Act.
SEC. 118. RELATION TO STATE LAWS.
Section 623 of the Fair Credit Reporting Act, as re-
designated by section 112(a), is amended to read as fol-
lows:
‘‘§ 623. Relation to State laws
‘‘(a) STATE LAW PREEMPTED.—The provisions of
this title shall supersede any provision of the law of any
State relating to the subject matter of this title, including
but not limited to any provision of State law relating to
the furnishing, collection, distribution, or use of any infor-
mation on consumers or any fees imposed upon or any
disclosure to consumers associated with the furnishing,
collection, distribution, or use of any information on con-
sumers, except that any State may employ or establish
State laws for the purpose of enforcing the requirements
of this title.
‘‘(b) LIMITATION.—Nothing in this section restricts
the ability of any State to employ or establish laws to ad-
dress unfair or deceptive acts or practices, or laws protect-
ing aspects of consumer privacy which do not relate to
the subject matter of this title. Nothing in this section
restricts the ability of any State to employ or establish
its own penalties to enforce violations of this title.’’.
SEC. 119. ACTION BY FTC.
The Federal 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 270-day period beginning on the date
of the enactment of this Act.
SEC. 120. MISCELLANEOUS CLERICAL AMENDMENTS.
The Fair Credit Reporting Act is further amended—
(1) 
in 
section 
605(a)(1) 
(15 
U.S.C.
1681c(a)(1)) by striking ‘‘cases’’ and inserting
‘‘Cases’’;
(2) in section 606(b) (15 U.S.C. 1681d(b)) by
striking ‘‘shall’’ the second place it appears;
(3) in section 617(1) (15 U.S.C. 1681o(1)) by
adding ‘‘and’’ after the semicolon at the end; and
(4) 
in 
section 
621(b)(1)(C) 
(15 
U.S.C.
1681s(b)(1)(C)) by striking the period at the end
and inserting a semicolon.
SEC. 121. EFFECTIVE DATES OF AMENDMENTS.
(a) IN GENERAL.—Except as provided in subsection
(b), the amendments made by this title shall be effective
after the 455-day period beginning on the date of the en-
actment of this Act.
(b) EXCEPTIONS.—
(1) NOTIFICATION SYSTEM.—Section 604(d)(3)
of the Fair Credit Reporting Act, as amended by
section 104(a), shall be effective after the 365-day
period beginning on the date of the enactment of
this Act.
(2) FTC AUTHORITY.—Subsection (a) shall not
affect the authority of the Federal Trade Commis-
sion to prescribe matters under the amendments
made by this title.
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 by credit repair organizations.
‘‘405. Disclosures.
‘‘406. Credit repair organizations contracts.
‘‘407. Right to cancel contract.
‘‘408. Noncompliance with this title.
‘‘409. Civil liability.
‘‘410. Administrative enforcement.
‘‘411. Relation to State law.
‘‘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;
‘‘(ii) removing adverse credit informa-
tion that is accurate and not obsolete from
the consumer’s record, history, or rating;
‘‘(iii) altering the consumer’s identi-
fication to prevent the disclosure of the
consumer’s credit record, history, or rating
for the purpose of concealing adverse cred-
it information that is accurate and not ob-
solete;
‘‘(iv) providing advice or assistance to
any consumer with regard to any activity
or service described in clause (i), (ii), or
(iii); 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; or
‘‘(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.
‘‘(4) CREDIT.—The term ‘credit’ has the mean-
ing given to such term in section 103(e) of this Act.
‘‘SEC. 404. PROHIBITED PRACTICES BY CREDIT REPAIR OR-
GANIZATIONS.
‘‘No credit repair organization, and no officer, em-
ployee, agent, or other person participating in the conduct
of the affairs of any credit repair organization, may—
‘‘(1) 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;
‘‘(2) 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;
‘‘(3) 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;
‘‘(4) make or use any untrue or misleading rep-
resentation of the services of the credit repair orga-
nization; or
‘‘(5) 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.
‘‘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
someone to help you interpret the information in your
credit file.
‘‘ ‘You have a right to sue a credit repair company
that violates the Credit Repair Organization Act. This law
prohibits deceptive practices by credit repair companies.
‘‘ ‘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 creditors report information ac-
curately. 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 information. The credit
bureau may not charge any fee for this service. Any perti-
nent information and copies of all documents you have
concerning an error should be given to the credit bureau.
‘‘ ‘If reinvestigation does not resolve 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 in-
clude a summary of your statement about disputed infor-
mation 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.
‘‘(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 provided to 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-