I
103D CONGRESS
2D SESSION
H. R. 5178
To amend the Fair Credit Reporting Act, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 5, 1994
Mr. GONZALEZ (for himself, Mr. LEACH, Mr. KENNEDY, Mr. MCCANDLESS,
Mr. LAROCCO, and Mr. LINDER) introduced the following bill; which was
referred to the Committee on Banking, Finance and Urban Affairs
OCTOBER 5, 1994
Committee discharged; considered and passed
A BILL
To amend the Fair Credit Reporting Act, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of contents.
TITLE I—AMENDMENTS TO FAIR CREDIT REPORTING ACT
Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Furnishing consumer reports; use for employment purposes.
Sec. 104. Amendments relating to use of consumer reports for prescreening;
prohibition on unauthorized or uncertified use of information.
Sec. 105. Consumer consent required to furnish consumer report containing
medical information.
Sec. 106. Amendments relating to obsolete information and information con-
tained in consumer reports.
Sec. 107. Amendments relating to compliance procedures.
Sec. 108. Amendments relating to consumer disclosures.
Sec. 109. Amendments relating to procedures in case of the disputed accuracy
of any information in a consumer’s file.
Sec. 110. Amendment relating to charges for disclosure.
Sec. 111. Amendments relating to duties of users of consumer reports and du-
ties of affiliates sharing certain information.
Sec. 112. Amendments relating to civil liability.
Sec. 113. Amendments relating to responsibilities of persons who furnish infor-
mation to consumer reporting agencies.
Sec. 114. Investigative consumer reports.
Sec. 115. Increased criminal penalties for obtaining information under false
pretenses.
Sec. 116. Administrative enforcement.
Sec. 117. State enforcement of Fair Credit Reporting Act.
Sec. 118. Federal Reserve Board authority.
Sec. 119. Preemption of State law.
Sec. 120. Action by FTC and Federal Reserve Board.
Sec. 121. Amendment to Fair Debt Collection Practices Act.
Sec. 122. Furnishing consumer reports for purposes relating to child support.
Sec. 123. Disclosure of information and consumer reports to FBI for counter-
intelligence purposes.
Sec. 124. Effective dates.
Sec. 125. Relationship to other law.
Sec. 126. Sense of Senate.
Sec. 127. Technical correction to Depository Institutions Management Inter-
locks Act.
TITLE II—CREDIT REPAIR ORGANIZATIONS
Sec. 201. Regulation of credit repair organizations.
TITLE III—TRUTH IN LENDING ACT
Sec. 301. Treatment of delivery fees and intangibles taxes.
Sec. 302. Limitations on liability.
TITLE IV—DISASTER RELIEF
Sec. 401. Depository institutions disaster relief.
TITLE I—AMENDMENTS TO FAIR
CREDIT REPORTING ACT
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Consumer Reporting
Reform Act of 1994’’.
SEC. 102. DEFINITIONS.
(a) ADVERSE ACTION.—Section 603 of the Fair
Credit Reporting Act (15 U.S.C. 1681a) is amended by
adding at the end the following new subsection:
‘‘(k)(1) The term ‘adverse action’ means the follow-
ing:
‘‘(A) A denial or revocation of credit, a denial
of an application for an increase of an existing credit
limit, an unfavorable change in the terms of an ex-
isting credit arrangement, or a refusal to grant cred-
it in substantially the amount or on substantially the
terms requested; except that the term ‘adverse ac-
tion’ does not include—
‘‘(i) a refusal to extend additional credit
under an existing credit arrangement if the ap-
plicant is delinquent or otherwise in default as
to that account, or
‘‘(ii) a refusal or failure to authorize an ac-
count transaction at a point of sale which would
exceed a previously established credit limit.
‘‘(B) A denial or cancellation of, an increase in
any charge for, or a reduction or other adverse or
unfavorable change in the terms of coverage or
amount of, any insurance, existing or applied for, in
connection with the underwriting of insurance.
‘‘(C) A denial of employment or any other deci-
sion for employment purposes which adversely af-
fects any current or prospective employee.
‘‘(D) A denial or cancellation of, an increase in
any charge for, or any other adverse or unfavorable
change in the terms of, any license or benefit de-
scribed in section 604(a)(3)(D).
‘‘(E) An action taken or determination made—
‘‘(i) in connection with an application
which was made by, or a transaction which was
initiated by, any consumer, or in connection
with a review of account information under sec-
tion 604(a)(3)(E)(ii); and
‘‘(ii) which is adverse to the interest of the
consumer.
‘‘(2) For purposes of any determination of whether
an action is an adverse action under paragraph (1)(A),
all appropriate final findings, decisions, commentary, and
orders issued under section 701(d)(6) of the Equal Credit
Opportunity Act by the Board of Governors of the Federal
Reserve System or any court shall apply.’’.
(b) FIRM OFFER OF CREDIT.—Section 603 of the
Fair Credit Reporting Act (15 U.S.C. 1681a) is further
amended by adding after subsection (k) (as added by sub-
section (a) of this section) the following:
‘‘(l) The term ‘firm offer of credit’ means any offer
of credit to a consumer that will be honored if the
consumer is determined, based on information in a
consumer report on the consumer, to meet the specific cri-
teria used to select the consumer for the offer, except that
the offer may be further conditioned solely on any com-
bination of the following:
‘‘(1) The consumer being determined, based on
information in the consumer’s application for the
credit, to meet specific criteria bearing on credit-
worthiness that are established—
‘‘(A) before selection of the consumer for
the offer; and
‘‘(B) for the purpose of determining
whether to extend credit pursuant to the offer.
‘‘(2) Verification—
‘‘(A) that the consumer continues to meet
the specific criteria used to select the consumer
for the offer, by using information in a
consumer report on the consumer, information
in the consumer’s application for the credit, or
other information bearing on the creditworthi-
ness of the consumer; or
‘‘(B) of the information in the consumer’s
application for the credit, to determine that the
consumer meets the specific criteria bearing on
creditworthiness.
‘‘(3) The consumer furnishing any collateral
that is a requirement for the extension of the credit
that was—
‘‘(A) established before selection of the
consumer for the offer of credit; and
‘‘(B) described to the consumer in the
offer of credit.’’.
(c) CREDIT TRANSACTION WHICH IS NOT INITIATED
BY THE CONSUMER.—Section 603 of the Fair Credit Re-
porting Act (15 U.S.C. 1681a) is further amended by add-
ing after subsection (l) (as added by subsection (b) of this
section) the following:
‘‘(m) The term ‘credit transaction which is not initi-
ated by the consumer’ does not include the use of a
consumer report by a person with which the consumer has
an account, for purposes of—
‘‘(1) reviewing the account; or
‘‘(2) collecting the account.’’.
(d) STATE.—Section 603 of the Fair Credit Report-
ing Act (15 U.S.C. 1681a) is further amended by adding
after subsection (m) (as added by subsection (c) of this
section) the following:
‘‘(n) The term ‘State’ means any State, the Common-
wealth of Puerto Rico, the District of Columbia, and any
territory or possession of the United States.’’.
(e) EXCLUSIONS FROM DEFINITION OF CONSUMER
REPORT.—Section 603(d) of the Fair Credit Reporting
Act (15 U.S.C. 1681a(d)) is amended in the second sen-
tence in clause (A)—
(1) by inserting ‘‘(i)’’ after ‘‘(A)’’;
(2) by inserting before the semicolon at the end
the following: ‘‘, (ii) any communication of that in-
formation among persons related by common owner-
ship or affiliated by corporate control, or (iii) any
communication of information from a credit applica-
tion by a consumer among persons related by com-
mon ownership or affiliated by corporate control if
it is clearly and conspicuously disclosed that the in-
formation may be communicated among such per-
sons and the consumer is given the opportunity,
prior to the time that the information is initially
communicated, to direct that such information not
be communicated among such persons’’;
(3) in clause (B) by striking ‘‘or’’ after the
semicolon at the end;
(4) in clause (C) by striking the period and in-
serting a semicolon; and
(5) by adding at the end the following: ‘‘or (D)
any communication of information about a consumer
between persons who are affiliated by common own-
ership or common corporate control and in connec-
tion with a credit transaction which is not initiated
by the consumer, or an insurance transaction which
is not initiated by the consumer, if either of those
persons has complied with section 615(d)(4)(B) with
respect to a consumer report from which the infor-
mation is taken and the consumer has consented to
use of the report for the transaction, or with respect
to existing customers, the consumer has not directed
in writing that the report may not be used for the
transaction, 
in 
accordance 
with 
section
615(d)(4)(C).’’.
(f) EXCLUSION OF CERTAIN COMMUNICATIONS BY
EMPLOYMENT
AGENCIES
FROM
DEFINITION
OF
CONSUMER REPORT.—Section 603 of the Fair Credit Re-
porting Act (15 U.S.C. 1681(a)) is further amended—
(1) in subsection (d), as amended by subsection
(e) of this section, by adding at the end the follow-
ing: ‘‘The term also does not include a communica-
tion described in subsection (o).’’; and
(2) by adding at the end the following:
‘‘(o) A communication is described in this subsection
if it is a communication—
‘‘(1) that, but for the 3rd sentence of sub-
section (d), would be an investigative consumer re-
port;
‘‘(2) that is made to a prospective employer for
the purpose of—
‘‘(A) procuring an employee for the em-
ployer, or
‘‘(B) procuring an opportunity for a natu-
ral person to work for the employer;
‘‘(3) that is made by a person that regularly
performs such procurement;
‘‘(4) that is not used by any person for any
purpose other than a purpose described in para-
graph (2) (A) or (B);
‘‘(5) with respect to which—
‘‘(A) the consumer who is the subject of
the communication—
‘‘(i) consents orally or in writing to
the nature and scope of the communica-
tion, before the collection of any informa-
tion for the purpose of making the commu-
nication;