Title: Credit Services Protection Act of 2018
Policy area: Finance and Financial Sector

Summary:
Credit Services Protection Act of 2018
This bill modifies requirements for consumer credit services, including to exempt certain credit and identity protection services from compliance with the Credit Repair Organizations Act.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6192 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 6192

    To amend the Credit Repair Organizations Act to facilitate the 
    development of consumer credit services, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 22, 2018

   Mr. Royce of California introduced the following bill; which was 
referred to the Committee on Financial Services, and in addition to the 
   Committee on Energy and Commerce, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
    To amend the Credit Repair Organizations Act to facilitate the 
    development of consumer credit services, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Services Protection Act of 
2018''.

SEC. 2. PROTECTION OF CONSUMER CREDIT SERVICES.

    (a) In General.--The Credit Repair Organizations Act (15 U.S.C. 
1679 et seq.) is amended--
            (1) by striking ``title'' each place such term appears and 
        inserting ``chapter'';
            (2) by striking ``TITLE IV--CREDIT REPAIR ORGANIZATIONS'' 
        and inserting ``TITLE IV--CONSUMER CREDIT SERVICES'';
            (3) by inserting before the table of contents for such Act 
        the following:

                     ``CHAPTER 1--CREDIT REPAIR'';

            (4) in section 403(3)(B)--
                    (A) in clause (ii), by striking ``or'' at the end;
                    (B) in clause (iii), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
                            ``(iv) any authorized credit services 
                        provider to the extent such provider offers, 
                        sells, provides, or performs credit and 
                        identity protection services or credit 
                        education services (as such terms are defined, 
                        respectively, under section 423).''; and
            (5) by inserting after section 413 the following:

    ``CHAPTER 2--CREDIT AND IDENTITY PROTECTION AND CREDIT EDUCATION

``Sec. 421. Short title.
``Sec. 422. Findings.
``Sec. 423. Definitions.
``Sec. 424. Promotion of credit and identity protection services and 
                            credit education services.
``Sec. 425. Applicability of Credit Repair Organizations Act to 
                            activities of authorized credit services 
                            providers other than credit and identity 
                            protection services or credit education 
                            services.
``Sec. 426. Relation to State law.
``Sec. 427. Process for registering as authorized credit services 
                            provider.

``SEC. 421. SHORT TITLE.

    ``This chapter may be cited as the `Credit Services Protection 
Act'.

``SEC. 422. FINDINGS.

    ``The Congress makes the following findings:
            ``(1) Consumer reports and credit scores have become widely 
        available to consumers. In order to fully benefit from such 
        access, however, consumers also need the tools to understand 
        and improve their credit standing. By doing so consumers can 
        gain greater access to credit and on better terms, which can 
        help alleviate poverty, sustain the middle class, and grow the 
        economy.
            ``(2) As cyber-attacks and data breaches have proliferated, 
        consumers' credit standing has also become increasingly 
        threatened by identity theft, fraud, and other forms of 
        unauthorized access. To help protect against these threats, 
        consumers turn to credit monitoring and other credit and 
        identity protection tools and services.
            ``(3) Enacted in 1996, the Credit Repair Organizations Act 
        (15 U.S.C. 1679 et seq.) remains an important law to protect 
        consumers from exploitation, but in recent years the law also 
        has worked to prevent credit education and credit and identity 
        theft protection services from reaching consumers.
            ``(4) The provision of credit and identity protection 
        services and credit education services should be accompanied by 
        reasonable and appropriate consumer protections.
            ``(5) Persons who choose to register as an authorized 
        credit services provider pursuant to section 427 and who offer, 
        sell, provide, or perform credit and identity protection 
        services and credit education services should have the 
        certainty of a safe harbor from the Credit Repair Organizations 
        Act that this chapter providers.

``SEC. 423. DEFINITIONS.

    ``For the purposes of this chapter, the following definitions 
apply:
            ``(1) Authorized credit services provider.--The term 
        `authorized credit services provider' means a person that has 
        registered as an authorized credit services provider under 
        section 427.
            ``(2) Credit.--The term `credit' has the meaning given that 
        term under section 403 of the Credit Repair Organizations Act.
            ``(3) Credit and identity protection service.--The term 
        `credit and identity protection service'--
                    ``(A) means any service offered, sold, provided, or 
                performed to or for consumers for the express or 
                implied purpose of protecting a consumer's credit 
                standing or to detect or prevent the commission or 
                remediate the consequences of identity theft, fraud, 
                data breach, or other unauthorized financial or credit-
                related activity; and
                    ``(B) does not include--
                            ``(i) advising or assisting in any activity 
                        described in subparagraphs (A) through (C) of 
                        section 427(b)(2);
                            ``(ii) any services marketed to a consumer 
                        during a call or session with a consumer 
                        reporting agency (as defined under section 
                        603(f) of the Fair Credit Reporting Act) 
                        regarding the exercise of any consumer right 
                        under the Fair Credit Reporting Act or 
                        applicable State laws prior to the consumer 
                        reporting agency meeting its obligations under 
                        the Fair Credit Reporting Act or applicable 
                        State law required for such call or session; or
                            ``(iii) any services provided without 
                        compliance with sections 424(c) and 424(d).
            ``(4) Credit education service.--The term `credit education 
        service'--
                    ``(A) means any service offered, sold, provided, or 
                performed to or for consumers for the express or 
                implied purpose of counseling, educating, or assisting 
                consumers in understanding, managing, or prospectively 
                improving their credit standing, consumer report, 
                credit scores, or access to credit; and
                    ``(B) does not include--
                            ``(i) advising or assisting in any activity 
                        described in subparagraphs (A) through (C) of 
                        section 427(b)(2);
                            ``(ii) any services marketed to a consumer 
                        during a call or session with a consumer 
                        reporting agency (as defined under section 
                        603(f) of the Fair Credit Reporting Act) 
                        regarding the exercise of any consumer right 
                        under the Fair Credit Reporting Act or 
                        applicable State laws prior to the consumer 
                        reporting agency meeting its obligations under 
                        the Fair Credit Reporting Act or applicable 
                        State law required for such call or session; or
                            ``(iii) any services provided without 
                        compliance with sections 424(c) and 424(d).
            ``(5) Consumer.--The term `consumer' has the meaning given 
        that term under section 403 of the Credit Repair Organizations 
        Act.
            ``(6) Consumer report.--The term `consumer report' has the 
        meaning given that term under section 603 of the Fair Credit 
        Reporting Act.

``SEC. 424. PROMOTION OF CREDIT AND IDENTITY PROTECTION SERVICES AND 
              CREDIT EDUCATION SERVICES.

    ``(a) Inapplicability of the Credit Repair Organizations Act to 
Credit and Identity Protection Services and Credit Education 
Services.--The Credit Repair Organizations Act (15 U.S.C. 1679 et seq.) 
shall not apply to any authorized credit services provider to the 
extent such provider offers, sells, provides, or performs credit and 
identity protection services or credit education services.
    ``(b) Prohibited Practices.--No authorized credit services provider 
may--
            ``(1) make any statement, or counsel or advise any consumer 
        to make any statement, which is untrue or misleading (or which, 
        upon the exercise of reasonable care, should be known by the 
        authorized credit services provider 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 
                under section 603(f) of the Fair Credit Reporting Act); 
                or
                    ``(B) any person--
                            ``(i) who has extended credit to the 
                        consumer; or
                            ``(ii) to whom the consumer has applied 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 identification to prevent the display of the 
        consumer's credit record, history, or rating for the purpose of 
        concealing adverse information that is accurate and not 
        obsolete to--
                    ``(A) any consumer reporting agency (as defined 
                under section 603(f) of the Fair Credit Reporting Act); 
                or
                    ``(B) any person--
                            ``(i) who has extended credit to the 
                        consumer;
                            ``(ii) to whom the consumer has applied or 
                        is applying for an extension of credit; or
                            ``(iii) who has a permissible purpose to 
                        obtain a consumer report under section 604 of 
                        the Fair Credit Reporting Act (15 U.S.C. 1681b) 
                        and is making an eligibility determination in a 
                        transaction initiated by the consumer;
            ``(3) make or use any untrue or misleading statement of the 
        services offered by the authorized credit services provider; or
            ``(4) engage, directly or indirectly, in any act, practice, 
        or course of business that constitutes or results directly in 
        the commission of, or attempt to commit, a fraud or deception 
        on any person in connection with the offer or sale of the 
        services of the authorized credit services provider.
    ``(c) Mandatory Disclosure.--Except as otherwise provided by law, 
an authorized credit services provider shall disclose, in writing or 
electronically, the following disclosure, or a substantially similar 
disclosure, to the consumer prior to the authorized credit services 
provider commencing credit and identity protection services or credit 
education services to the consumer:
    ``Consumer Credit File Rights
    ``You have a right to dispute inaccurate information in your credit 
report free of charge by contacting the credit bureau directly. 
However, neither you nor any other company or organization has the 
right to have accurate, current, and verifiable information removed 
from your credit report. Under Federal law, the credit bureau must 
remove accurate, negative information from your report only if it is 
over 7 years old. Bankruptcy information can be reported for 10 years. 
It is unlawful to conceal, distort, or otherwise provide misleading 
information to a credit bureau.
    ``You have a right to obtain a free copy of your credit report 
annually from each of the three nationwide credit bureaus at 
www.annualcreditreport.com.
    ``You have a right to obtain a copy of your credit report from a 
credit bureau at any other time for a reasonable 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 within the preceding 60 days. The credit bureau must provide at 
no cost to you someone to explain to you any information in the credit 
file disclosure you receive from the credit reporting agency. 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 believe that there is inaccurate information in your credit report 
due to fraud.
    ``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, through 
a toll-free telephone number established by the credit bureau or 
through a function of the credit bureau's website, if available, that 
you dispute the accuracy of information in your credit file. The credit 
bureau must then investigate your dispute and modify or remove 
inaccurate or incomplete information. The credit bureau may not charge 
any fee for this service. Any pertinent information and copies of all 
documents you have concerning an error should be given to the credit 
bureau.
    ``If the credit bureau's investigation 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 include a summary of your statement 
about disputed information with any report it issues about you.
    ``There are many different credit score models that can give an 
assessment of your relative risk of default for the same credit report. 
This risk of default is typically expressed in a three-digit number 
known as a credit score.
    ``There are various types of credit scores, and lenders use a 
variety of different types of credit scores to make lending decisions.
    ``The Federal Trade Commission is one of the agencies that 
regulates credit bureaus. For more information visit 
www.consumer.ftc.gov. You may also contact the Bureau of Consumer 
Financial Protection at www.consumerfinance.gov.
    ``(d) Right to Termination of Contract.--
            ``(1) In general.--A consumer shall have the right to 
        terminate a contract for credit and identity theft protection 
        services and credit education services within three business 
        days beginning on the date that the consumer enters into such 
        contract with the authorized credit services provider.
            ``(2) Reasonable value provided.--If a consumer terminates 
        a contract pursuant to paragraph (1), the authorized credit 
        services provider shall be entitled to the reasonable value for 
        services actually rendered prior to termination, not to exceed 
        the total amount paid by the consumer, but an authorized credit 
        services provider is not entitled to retain any fees if no 
        services were rendered.
    ``(e) Enforcement by Federal Trade Commission.--A violation of this 
section shall be treated as a violation of a rule issued under section 
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
57a(a)(1)(B)) regarding unfair or deceptive acts or practices. The 
Federal Trade Commission shall enforce this section in the same manner, 
by the same means, and with the same jurisdiction, powers, and duties 
as though all applicable terms and provisions of the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a 
part of this section.

``SEC. 425. APPLICABILITY OF CREDIT REPAIR ORGANIZATIONS ACT TO 
              ACTIVITIES OF AUTHORIZED CREDIT SERVICES PROVIDERS OTHER 
              THAN CREDIT AND IDENTITY PROTECTION SERVICES OR CREDIT 
              EDUCATION SERVICES.

    ``(a) Enforcement by Federal Trade Commission.--The Credit Repair 
Organizations Act (15 U.S.C. 1679 et seq.) shall be enforced solely by 
the Federal Trade Commission in accordance with subsections (a) and (b) 
of section 410 of that Act with respect to any authorized credit 
services provider.
    ``(b) Civil Liability and Administrative Enforcement.--Sections 409 
and 410(c) of the Credit Repair Organizations Act (15 U.S.C. 1679 et 
seq.) shall not apply to any authorized credit services provider.

``SEC. 426. RELATION TO STATE LAW.

    ``(a) Exemption for Authorized Credit Services Providers.--The 
provisions of this chapter supersede any law or regulation of any State 
with respect to the subject matter of this chapter or the Credit Repair 
Organizations Act (15 U.S.C. 1679 et seq.) to the extent that the State 
law would apply to any authorized credit services provider.
    ``(b) State Laws Regarding Unfair or Deceptive Acts or Practices 
Not Affected.--Except for any provision contained in any State law 
superseded under subsection (a), this section is not intended to 
preempt any law of any State that prohibits unfair or deceptive acts or 
practices, including the making of false or misleading statements in 
the marketing of products or services.

``SEC. 427. PROCESS FOR REGISTERING AS AUTHORIZED CREDIT SERVICES 
              PROVIDER.

    ``(a) Application for Registration.--A person that seeks to be 
registered as an authorized credit services provider under the 
provisions of this chapter shall submit to the Federal Trade Commission 
an application for registration that contains the information described 
in subsection (b).
    ``(b) Required Information.--An application for registration under 
this section shall contain the following:
            ``(1) A statement setting forth the person's full corporate 
        organization, all affiliates of the person, and all officers, 
        directors, and any other individuals with substantial 
        management oversight over the person.
            ``(2) A statement that the person has elected to adhere to, 
        and duly represents and warrants annually and publicly, the 
        following standards:
                    ``(A) The person, or any of its affiliates, does 
                not advise or assist consumers in modifying or 
                removing, or attempting to modify or remove, adverse 
                information that is accurate and not obsolete from a 
                consumer's consumer report.
                    ``(B) The person, or any of its affiliates, does 
                not assist consumers in altering a consumer's existing 
                credit record, credit history, or credit score by 
                concealing or distorting, or attempting to conceal or 
                distort, adverse information that is accurate and not 
                obsolete.
                    ``(C) The person, or any of its affiliates, does 
                not assist consumers in interacting with consumer 
                reporting agencies described in section 603(f) of the 
                Fair Credit Reporting Act in any manner which 
                interferes with the lawful operation of such consumer 
                reporting agencies.
                    ``(D) The person, or any of its affiliates, does 
                not use the term `credit repair' in its marketing of 
                credit and identity protection services and credit 
                education services.
                    ``(E) The person provides consumers with the 
                mandatory disclosure described in section 424(c) prior 
                to entering into a contract or agreement for services, 
                and a right to cancellation, in accordance with the 
                provisions of this chapter.
            ``(3) A copy of the policies and procedures adopted and 
        implemented by the person to ensure and document compliance 
        with the provisions of this Act, including, policies and 
        procedures for--
                    ``(A) executing a contract with the consumer to 
                commence the authorized services;
                    ``(B) providing the mandatory disclosure set forth 
                in subsection 424(c);
                    ``(C) providing consumers with the right to 
                terminate a contract for services in accordance with 
                subsection 424(d); and
                    ``(D) upon termination, determining the reasonable 
                value of services actually rendered, in accordance with 
                the provisions of 424(d)(2).
            ``(4) A general description of the credit and identity 
        protection services and credit education services that the 
        person plans to offer, sell, provide, or perform to or for 
        consumers under the provisions of this Act.
            ``(5) A statement that the person will--
                    ``(A) on a biennial basis, provide to the Federal 
                Trade Commission an update, if needed, to the person's 
                corporate organization, policies and procedures, and 
                general description of services provided pursuant to 
                this subsection;
                    ``(B) on a biennial basis, obtain an assessment 
                from a qualified, objective, independent, third-party 
                professional of the person's actual compliance record 
                with the representations and warranties in paragraph 
                (2); and
                    ``(C) retain such assessment and provide it to the 
                Federal Trade Commission as soon as reasonably 
                practicable, but in no event more than 30 business 
                days, after the Federal Trade Commission requests the 
                assessment.
    ``(c) Consideration of Applications and Expedited Response.--
            ``(1) Timing.--The Federal Trade Commission shall act by 
        approving or denying applications submitted pursuant to this 
        section within 60 days of the submission, and shall set forth 
        in writing its conclusions with regard to such requests.
            ``(2) Additional information.--The Federal Trade Commission 
        may request that an applicant provide additional information 
        that is reasonably related to one or more of the application 
        elements enumerated in subsection (b), including by requesting 
        that the applicant submit supplemental materials, answer 
        questions in writing, or appear in person before the 
        Commissioners or their designee.
            ``(3) Deemed registration.--An application that has not 
        been acted upon by the Federal Trade Commission within 60 days 
        of submission shall be deemed as approved and the person shall 
        be registered as an authorized credit services provider.
            ``(4) Extension of time for additional information.--If the 
        Federal Trade Commission requests additional information 
        pursuant to paragraph (2), the applicant shall have up to 30 
        days to respond in writing or appear before the Commission as 
        requested. The Commission shall then have an additional 30 days 
        to act upon such response, and if not acted upon within 30 
        days, the application shall be deemed as approved and the 
        person shall be registered as an authorized credit services 
        provider. In no event shall the status of an application remain 
        unresolved beyond 120 days from the date of its original 
        submission.
    ``(d) Revocation.--
            ``(1) In general.--The Federal Trade Commission shall have 
        the authority to rescind a person's registration that was 
        issued under this section if the Commission determines that the 
        person has failed to comply with the obligations and standards 
        set forth in this Act.
            ``(2) Opportunity to cure defects.--The Federal Trade 
        Commission shall provide an authorized credit services provider 
        a reasonable opportunity to cure any defects before moving to 
        revoke a person's registration as an authorized credit services 
        provider.
            ``(3) Retroactive revocation.--If the Federal Trade 
        Commission determines that a person who has registered as an 
        authorized credit services provider, or any of the person's 
        affiliates, has--
                    ``(A) engaged in any activity described under 
                subparagraphs (A) through (C) of subsection (b)(2);
                    ``(B) knowingly made false statements in any 
                written statement required under this chapter; or
                    ``(C) willfully or repeatedly violated, or 
                willfully or repeatedly failed to observe, any 
                provision of this Act,
        the Federal Trade Commission shall have the authority to deem a 
        revocation effective at the time immediately prior to when the 
        activity occurred.
    ``(e) Judicial Review of Revocation.--
            ``(1) In general.--Any person for whom a registration under 
        this section has been revoked may obtain review of such 
        revocation in a court of appeals of the United States in 
        accordance with the procedures set forth in section 5(c) of the 
        Federal Trade Commission Act, except that--
                    ``(A) the court of appeals shall hold unlawful and 
                set aside a revocation if the court finds that the 
                Federal Trade Commission's action is not supported by 
                substantial evidence in the adjudicatory record; and
                    ``(B) the filing of a petition for review shall 
                operate as a stay of the revocation until the date on 
                which the determination of the court is final 
                (including any appeal of the determination), but in the 
                event the court's final determination upholds 
                revocation, the effective date of the revocation shall 
                be the date as determined by the Federal Trade 
                Commission.
            ``(2) Adjudicatory record defined.--For purposes of this 
        subsection, the term `adjudicatory record' means the Federal 
        Trade Commission's statement of basis and purpose for 
        revocation, the person's registration application materials, 
        any written submissions by the person or transcripts of oral 
        testimony, and any other evidence that the Commission considers 
        relevant to the revocation.
            ``(3) Additional submissions and presentations.--If the 
        person or the Federal Trade Commission applies to the court for 
        leave to make additional oral submissions or written 
        presentations and shows to the satisfaction of the court that 
        such submissions and presentations would be material and that 
        there were reasonable grounds for the submissions and failure 
        to make such submissions and presentations in the proceeding 
        before the Commission, the court may order the Commission to 
        provide additional opportunity to make such submissions and 
        presentations.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect after the 60-day period beginning on the date of the enactment 
of this Act.
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