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Text of the To amend the Fair Credit Reporting Act to assure the completeness and accuracy of consumer information maintained by credit reporting ...

...by credit reporting agencies, to better inform consumers of their rights under the Act, and to improve enforcement, and for

This bill was introduced on January 26, 1993, in a previous session of Congress, but was not enacted. The text of the bill below is as of Jan 26, 1993 (Introduced).

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HR 619 IH

103d CONGRESS

1st Session

H. R. 619

To amend the Fair Credit Reporting Act to assure the completeness and accuracy of consumer information maintained by credit reporting agencies, to better inform consumers of their rights under the Act, and to improve enforcement, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

January 26, 1993

Mr. MCCANDLESS introduced the following bill; which was referred to the Committee on Banking, Finance and Urban Affairs


A BILL

To amend the Fair Credit Reporting Act to assure the completeness and accuracy of consumer information maintained by credit reporting agencies, to better inform consumers of their rights under the Act, and to improve enforcement, and for other purposes.

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

TITLE I--AMENDMENTS TO FAIR CREDIT REPORTING ACT

SEC. 101. SHORT TITLE.

    This title may be cited as the ‘Consumer Reporting Reform Act of 1993’.

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:

    ‘(j) The term ‘adverse action’--

      ‘(1) has the meaning given to such term in section 701(d)(6) of the Equal Credit Opportunity Act; and

      ‘(2) includes--

        ‘(A) any denial of, increase in any charge for, or reduction in the amount of, insurance for personal, family, or household purposes made in connection with the underwriting of insurance;

        ‘(B) any denial of employment or any other decision for employment purposes which adversely affects any current or prospective employee; and

        ‘(C) any action taken, or determination made--

          ‘(i) with respect to a consumer for--

            ‘(I) an application for an extension of credit;

            ‘(II) a report for the cashing of a check drawn by the consumer;

            ‘(III) an application for a transaction account (as that term is defined in section 19(b)(1) of the Federal Reserve Act) at a depository institution (as that term is defined in section 3(c) of the Federal Deposit Insurance Act);

            ‘(IV) an application for the leasing of real estate; and

          ‘(ii) which is adverse to the interest of the consumer.’.

    (b) 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 sentence--

      (1) by inserting before the semicolon at the end of clause (A) the following: ‘, or (i) any communication of that information among persons related by common ownership or affiliated by corporate control; or (ii) any communication of information from a credit application by a consumer among persons related by common ownership or affiliated by corporate control, provided that it is clearly and conspicuously disclosed with the application that the information may be communicated among such persons and the consumer consents’;

      (2) in clause (B) by striking ‘or’ after the semicolon at the end;

      (3) in clause (C) by striking the period and inserting a semicolon; and

      (4) by adding at the end the following: ‘(D) any communication of information about a consumer between persons who are affiliated by common ownership or common corporate control and in connection with a credit transaction which is not initiated by the consumer, if either of those persons has complied with section 615(d)(2)(B) with respect to a consumer report from which the information is taken and the consumer has consented to use of the report for the transaction in accordance with section 615(d)(2)(C); (E) any report furnished for use in connection with a transaction which consists of an extension of credit to be used for a commercial purpose, or (F) any report or information furnished to a government agency pursuant to section 608 for law enforcement purposes.’.

    (c) CONSUMER REPORTING AGENCY- Section 603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)) is amended by striking ‘practice’ and inserting ‘business’.

    (d) FIRM OFFER OF CREDIT- Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is further amended by adding after subsection (j) (as added by subsection (a) of this section) the following:

    ‘(k) The term ‘firm offer of credit’ means any offer of credit to a consumer that will be honored if, based on information in a consumer report on the consumer and other information bearing on the creditworthiness of the consumer, the consumer is determined to meet the criteria used to select the consumer for the offer.’.

    (e) CREDIT TRANSACTION WHICH IS NOT INITIATED BY THE CONSUMER- Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is further amended by adding after subsection (k) (as added by subsection (d) of this section) the following:

    ‘(l) The term ‘credit transaction which is not initiated 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.’.

    (f) STATE OR LOCAL CHILD SUPPORT ENFORCEMENT AGENCY DEFINED- Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is further amended by adding after subsection (l) (as added by subsection (e) of this section) the following:

    ‘(m) The term ‘State or local child support enforcement agency’ means a State or local agency which administers a State or local program for establishing and enforcing child support obligations.’.

    (g) STATE- Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is further amended by adding after subsection (m) (as added by subsection (f) of this section) the following:

    ‘(n) The term ‘State’ means any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States.’.

    (h) CLERICAL AMENDMENT- Section 603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)) is amended in the first sentence--

      (1) by inserting ‘(1)’ after ‘in whole or in part for’; and

      (2) by striking ‘(1)’ before ‘credit or insurance’.

SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EMPLOYMENT PURPOSES.

    (a) FURNISHING CONSUMER REPORTS FOR BUSINESS TRANSACTIONS- Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is amended--

      (1) by inserting ‘(a) IN GENERAL- ’ before ‘A consumer reporting agency’;

      (2) in subsection (a) (as designated by paragraph (1)) by moving the left hand margins of paragraphs (1) through (3) (including such margins of subparagraphs (A) through (E) of paragraph (3)) 2 ems to the right; and

      (3) in subsection (a)(3) (as designated by paragraph (1) of this subsection) by amending subparagraph (E) to read as follows:

        ‘(E) otherwise has a legitimate business need for the information in connection with--

          ‘(i) a review of an existing account of the consumer; or

          ‘(ii) a business transaction that--

            ‘(I) is initiated by the consumer; or

            ‘(II) is a direct marketing transaction for which the furnishing of a consumer report by the agency is not prohibited under subsection (e).’.

    (b) FURNISHING AND USING CONSUMER REPORTS FOR EMPLOYMENT PURPOSES- Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is further amended by adding at the end the following new subsection:

    ‘(b) Conditions for Furnishing and Using Consumer Reports for Employment Purposes-

      ‘(1) CERTIFICATION FROM USER- A consumer reporting agency may furnish a consumer report for employment purposes only if--

        ‘(A) the person who obtains such report from the agency certifies to the agency that--

          ‘(i) the disclosure required under paragraph (2) or (3), as the case may be, with respect to such consumer report has been made; and

          ‘(ii) information from the consumer report will not be used in violation of any applicable Federal or State equal employment opportunity law or regulation; and

        ‘(B) the consumer reporting agency provides with the report a summary of the consumer’s rights under this title, as prescribed by the Federal Trade Commission under section 609(c)(3).

      ‘(2) DISCLOSURE TO PROSPECTIVE EMPLOYEES- A person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer who is not an employee at the time such report is procured or caused to be procured unless--

        ‘(A) a clear and conspicuous disclosure has been made in writing to the consumer before the report is procured or caused to be procured that a consumer report may be obtained for purposes of considering the consumer for employment; and

        ‘(B) the consumer authorizes in writing the procurement of the report.

      ‘(3) DISCLOSURES TO EXISTING EMPLOYEES-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any employee unless the employee has received, at any time after becoming an employee and before the report is procured, a written disclosure that consumer reports may be used for employment purposes.

        ‘(B) WRITTEN MATERIAL CONSTITUTING DISCLOSURE- A written statement that consumer reports may be used for employment purposes which is contained in employee guidelines or manuals available to employees or included in written materials provided to employees shall constitute a written disclosure for purposes of subparagraph (A).

      ‘(4) CONDITIONS ON USE FOR ADVERSE ACTIONS- In using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report a person shall provide to the consumer to whom the report relates--

        ‘(A) a copy of the report;

        ‘(B) a description of the consumer’s rights under this title, as prescribed by the Federal Trade Commission under section 609(c)(3); and

        ‘(C) a reasonable opportunity to respond to any information in the report that is disputed by the consumer.’.

SEC. 104. AMENDMENTS RELATING TO PRESCREENING OF CONSUMER REPORTS; PROHIBITION ON UNAUTHORIZED OR UNCERTIFIED USE OF INFORMATION.

    (a) IN GENERAL- Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b), as amended by section 103, is further amended--

      (1) in subsection (a) by striking ‘A consumer reporting agency’ and inserting ‘Subject to subsection (c), any consumer reporting agency’; and

      (2) by adding after subsection (b) (as added by section 103(b)) the following new subsections:

    ‘(c) Furnishing Reports in Connection with Credit Transactions not Initiated by the Consumer-

      ‘(1) IN GENERAL- A consumer reporting agency may furnish a consumer report relating to any consumer pursuant to subsection (a)(3)(A) in connection with any credit transaction which is not initiated by the consumer only if--

        ‘(A) the consumer authorizes the agency to provide such report to such person; or

        ‘(B)(i) the transaction consists of a firm offer of credit;

        ‘(ii) the consumer reporting agency has complied with subsection (d); and

        ‘(iii) the consumer has not elected in accordance with subsection (d)(1) to have the consumer’s name and address excluded from lists of names provided by the agency pursuant to this paragraph.

      ‘(2) LIMITS ON INFORMATION RECEIVED UNDER PARAGRAPH (1)(B)- A person may receive pursuant to paragraph (1)(B) only--

        ‘(A) the name and address of a consumer; and

        ‘(B) information pertaining to a consumer that is not identified or identifiable with the consumer.

      ‘(3) INFORMATION REGARDING INQUIRIES- Except as provided in section 609(a)(4), a consumer reporting agency shall not furnish to any person a record of inquiries solely resulting from credit transactions which are not initiated by a consumer.

    ‘(d) ELECTION OF CONSUMER TO BE EXCLUDED FROM LISTS-

      ‘(1) IN GENERAL- A consumer may elect to have his or her name and address excluded from any list provided by a consumer reporting agency in connection with a transaction which is not initiated by the consumer and which is a credit or direct marketing transaction, by--

        ‘(A) notifying the agency, through the notification system maintained by the agency under paragraph (3), that the consumer does not consent to any use of consumer reports relating to the consumer in connection with any transaction which is not initiated by the consumer; and

        ‘(B) returning to the agency a signed written notice of the election, if provided by the agency in accordance with paragraph (2).

      ‘(2) PROVISION OF WRITTEN NOTICE TO CONSUMER- A consumer reporting agency shall provide to a consumer a written notice for purposes of paragraph (1)(B), by not later than 5 business days after being notified of the election of the consumer in accordance with paragraph (1)(A).

      ‘(3) NOTIFICATION SYSTEM- Each consumer reporting agency which furnishes a consumer report in connection with any transaction which is not initiated by a consumer and which is a credit or direct marketing transaction, shall--

        ‘(A) establish and maintain a notification system, including a toll-free telephone number, which permits any consumer whose consumer report is maintained by the agency to notify the agency, with appropriate identification, of the consumer’s election to have the consumer’s name and address excluded from any list of names and addresses provided by the agency for such a transaction; and

        ‘(B) publish by not later than 12 months after the date of the enactment of the Consumer Reporting Reform Act of 1992, and at least annually thereafter, in a publication of general circulation in the area served by the agency--

          ‘(i) a notification that information 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 consumer’s election under subparagraph (A).

      Establishment and maintenance of a notification system and publication by a consumer reporting agency in accordance with this paragraph is deemed to be compliance with this paragraph by each affiliate of the agency.

      ‘(4) AGENCIES WHICH OPERATE NATIONWIDE- Each consumer reporting agency which compiles and maintains files on consumers on a nationwide basis shall establish and maintain a notification system for purposes of paragraph (3) jointly with other such consumer reporting agencies.

      ‘(5) EFFECTIVENESS OF ELECTION- An election of a consumer under paragraph (1)--

        ‘(A) shall be effective with respect to a consumer reporting agency beginning on the later of--

          ‘(i) the date on which the consumer notifies the agency in accordance with paragraph (1)(A); or

          ‘(ii) the date on which the consumer returns to the agency a signed written notification of the election in accordance with paragraph (1)(B), if provided by the agency; and

        ‘(B) shall not be effective after the earlier of--

          ‘(i) the date which is 2 years after that effective date; or

          ‘(ii) the date on which the consumer notifies the agency (through the system established by the agency under paragraph (3)) that the election is no longer effective; and

        ‘(C) shall be effective with respect to each affiliate of the agency.’.

    (b) FURNISHING CONSUMER REPORTS FOR DIRECT MARKETING TRANSACTIONS- Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is further amended by adding after subsection (d) (as added by subsection (a) of this section) the following new subsection:

    ‘(e) FURNISHING CONSUMER REPORTS FOR DIRECT MARKETING TRANSACTIONS NOT INITIATED BY CONSUMER-

      ‘(1) FURNISHING REPORTS PROHIBITED- A consumer reporting agency may not furnish a consumer report for use for a direct marketing transaction that is not initiated by the consumer to whom the report relates, if--

        ‘(A) the consumer notifies the agency that the consumer does not consent to that use;

        ‘(B) the report includes any information other than the name and address of the consumer; or

        ‘(C) the furnishing of the consumer report bears on the status of any account of the consumer, because of the criteria used to decide to furnish the report.

      ‘(2) NOTIFICATION- A consumer may notify a consumer reporting agency for purposes of paragraph (1)(A) by notifying the joint notification system established under subsection (d)(4).’.

    (c) USE OF INFORMATION OBTAINED FROM REPORTS- Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is further amended by adding after subsection (e) (as added by subsection (b) of this section) the following new subsection:

    ‘(f) CERTAIN USE OR OBTAINING OF INFORMATION PROHIBITED- A person shall not use or obtain information from a consumer report for any purpose unless--

      ‘(1) it is obtained for a purpose for which the consumer report is authorized to be furnished under subsection (a); and

      ‘(2) the purpose is certified in accordance with section 607 by a prospective user of the report.’.

    (d) FIRST NOTIFICATIONS BY CONSUMERS- A consumer may notify a consumer reporting agency through a notification system established and maintained by the agency under section 604(d) of the Fair Credit Reporting Act, as amended by subsection (a), on or after the date which is 455 days after the date of the enactment of this Act.

SEC. 105. AMENDMENTS RELATING TO OBSOLETE INFORMATION AND INFORMATION CONTAINED IN CONSUMER REPORTS.

    (a) OBSOLETE INFORMATION- Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended--

      (1) by striking ‘(a) Except as authorized’ and inserting ‘(a) OBSOLETE INFORMATION- Except as authorized’;

      (2) by adding at the end the following:

      ‘(7) OTHER ACCOUNTS INFORMATION- Information regarding an account of a consumer with a person, whether obtained from the person or any other source (including public record information), that relates to a payment which--

        ‘(A) was not more than 30 days overdue on the date of payment and was made more than 3 years before the date of the making of the report;

        ‘(B) was more than 30 days, and not more than 60 days, overdue on the date of payment and was made more than 4 years before the date of the making of the report; or

        ‘(C) was more than 60 days, and not more than 90 days, overdue on the date of payment and was made more than 5 years before the date of the making of the report.’; and

      (3) by moving the left margin of paragraphs (1) through (6) 2 ems to the right so as to align with paragraph (7) (as added by paragraph (2) of this subsection).

    (b) INCREASE IN EXEMPTED AMOUNTS- Section 605(b) of the Fair Credit Reporting Act (15 U.S.C. 1681c(b)) is amended--

      (1) by striking ‘(b) The provisions’ and inserting ‘(b) EXEMPTED TRANSACTIONS- The provisions’;

      (2) in paragraph (1) by striking ‘$50,000’ and inserting ‘$200,000’;

      (3) in paragraph (2) by striking ‘$50,000’ and inserting ‘$200,000’; and

      (4) in paragraph (3) by striking ‘$20,000’ and inserting ‘$100,000’.

    (c) CLARIFICATION OF REPORTING PERIOD- Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding at the end the following new subsection:

    ‘(c) RUNNING OF REPORTING PERIOD- The 7-year period referred to in paragraphs (4) and (6) of subsection (a) shall begin, with respect to any delinquent account which is placed for collection (internally or by referral to a 3d 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.’.

    (d) ADDITIONAL INFORMATION ON BANKRUPTCY FILINGS REQUIRED- Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding after subsection (c) (as added by subsection (c) of this section) the following new subsection:

    ‘(d) INFORMATION REQUIRED TO BE DISCLOSED- Any consumer reporting agency which furnishes a consumer report which contains information regarding any case involving the consumer which 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.’.

    (e) DISCLOSURE OF PERSONAL INFORMATION- Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding after subsection (d) (as added by subsection (d) of this section) the following new subsection:

    ‘(e) DISCLOSURE OF PERSONAL INFORMATION- A person who prepares any credit report which includes personal credit information on any consumer shall not include in the report any adverse item of information on the consumer with respect to matters which antedate the report by more than 10 years or which could not be included in any consumer report on the consumer in accordance with this section.’.

    (f) INDICATION OF CLOSURE OF ACCOUNT- Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding after subsection (e) (as added by subsection (e) of this section) the following new subsection:

    ‘(f) INDICATION OF CLOSURE OF ACCOUNT BY CONSUMER- If a consumer reporting agency is notified pursuant to section 622(a)(4) that a credit account of a consumer was closed by the consumer, the agency shall indicate that fact in any consumer report that includes information related to the account.’.

    (g) PROHIBITION ON MAINTAINING OR FURNISHING MEDICAL INFORMATION- Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding after subsection (f) (as added by subsection (f) of this section) the following new subsection:

    ‘(g) MEDICAL INFORMATION- A consumer reporting agency shall not maintain in the file of a consumer, or furnish for credit or employment purposes a consumer report on a consumer which contains, any medical information about the consumer without the consent of the consumer.’.

    (h) INCLUSION OF INFORMATION REGARDING OVERDUE CHILD SUPPORT OBLIGATIONS- Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding after subsection (g) (as added by subsection (g) of this section) the following new subsection:

    ‘(h) OVERDUE CHILD SUPPORT OBLIGATIONS- A consumer reporting agency shall include in any consumer report furnished by the agency pursuant to section 604(a) information (if any) on the failure of the consumer to pay overdue support (as that term is defined in section 466(e) of the Social Security Act), which is--

      ‘(1) provided to the agency by a State or local child support enforcement agency; or

      ‘(2) provided to the agency and verified by any local, State, or Federal Government agency.’.

    (i) PROHIBITION ON MAINTAINING OR FURNISHING CERTAIN ACCOUNT INFORMATION- Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding after subsection (h) (as added by subsection (h) of this section) the following new subsection:

    ‘(i) CERTAIN ACCOUNT INFORMATION-

      ‘(1) EXCLUSION FROM CONSUMER REPORTS- A consumer reporting agency shall not maintain in the file of a consumer, or furnish a consumer report on a consumer which contains, any information regarding a failure of the consumer to make any payment on an account of the consumer that became due in a period during which the consumer was receiving unemployment compensation under the laws of any State (or but for the exhaustion of benefits would be entitled to receive such compensation), if--

        ‘(A) the consumer requests in writing that the consumer reporting agency exclude the information from either the file or such reports;

        ‘(B) the consumer provides to the agency appropriate documentation which demonstrates that the consumer was receiving (or would so be entitled to receive) such compensation during that period; and

        ‘(C) the account is maintained in a current status during the one-year period ending on the date of the submittal of the request.’.

      ‘(2) APPROPRIATE DOCUMENTATION- The Federal Trade Commission shall prescribe what constitutes appropriate documentation for purposes of paragraph (1).’.

    (j) CLERICAL AMENDMENTS-

      (1) The heading for section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended by striking ‘Obsolete information’ and inserting ‘Requirements relating to information contained in consumer reports’.

      (2) 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 relating to section 605 and inserting the following:

      ‘605. Requirements relating to information contained in consumer reports.’.

SEC. 106. AMENDMENTS RELATING TO 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, or is contemplated, by the user based in whole or in part on the report.’.

    (b) NOTICE TO USERS AND PROVIDERS OF INFORMATION TO ENSURE COMPLIANCE- Section 607 of the Fair Credit Reporting Act (15 U.S.C. 1681e) is further 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 INFORMATION-

      ‘(1) NOTICE REQUIREMENT- A consumer reporting 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 provided 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 notices under paragraph (1).’.

    (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 further amended by adding after subsection (d) (as added by subsection (b) of this section) the following new subsection:

    ‘(e) PROCUREMENT OF CONSUMER REPORT FOR RESALE-

      ‘(1) DISCLOSURE- A person may not procure a consumer report for purposes of reselling the report (or any information in the report) unless the person discloses to the consumer reporting agency which originally furnishes the report--

        ‘(A) the identity of the ultimate end-user of the report (or information), and

        ‘(B) each permissible purpose under section 604 for which the report is furnished to the ultimate end-user of the report (or information).

      ‘(2) RESPONSIBILITIES OF PROCURERS FOR RESALE- A person which procures a consumer report for purposes of reselling the report (or any information 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 furnished under section 604, including by ensuring that the person--

          ‘(i) identifies each prospective user of the resold report (or information);

          ‘(ii) certifies each purpose for which the report (or information) will be used; and

          ‘(iii) certifies that the report (or information) will be used for no other purpose; and

        ‘(B) before reselling the report, makes reasonable efforts to verify the identifications and certifications made under subparagraph (A).’.

SEC. 107. AMENDMENTS RELATING TO CONSUMER DISCLOSURES.

    (a) ALL INFORMATION IN CONSUMER’S FILE REQUIRED 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.’.

    (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:

      ‘(3)(A) Identification of--

        ‘(i) each person who for employment purposes within the 2-year period preceding the request; and

        ‘(ii) each person who for any other purpose within the 6-month period preceding the request;

      procured a consumer report.

      ‘(B) An identification of a person under subparagraph (A) shall include--

        ‘(i) the name of the person or, if applicable, the trade name (written in full) under which such person conducts business; and

        ‘(ii) upon request of the consumer, the address of the person.’.

    (c) INFORMATION REGARDING INQUIRIES- Section 609(a) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is amended--

      (1) by adding at the end the following:

      ‘(4) A record of all inquiries received by the agency in the 6-month period preceding the request that identified the consumer in connection with a credit transaction which is not initiated by the consumer.’; and

      (2) by moving the left margin of paragraph (2) 2 ems to the right so as to align with paragraph (4) (as added by paragraph (1) of this subsection).

    (d) SUMMARY OF RIGHTS REQUIRED TO BE INCLUDED 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 INCLUDED WITH DISCLOSURE-

      ‘(1) SUMMARY OF RIGHTS- A consumer reporting 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 rights 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 which the consumer can use to communicate with the agency.

      ‘(2) SPECIFIC ITEMS REQUIRED TO BE INCLUDED- 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;

        ‘(B) an explanation of how the consumer may exercise the rights of the consumer under this title;

        ‘(C) a list of all Federal agencies responsible 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; and

        ‘(D) a statement that a consumer reporting agency is not required to remove accurate derogatory information from a consumer’s file, unless the information is outdated under section 605 or cannot be verified.

      ‘(3) FORM OF SUMMARY OF RIGHTS- For purposes 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 the form and content of any disclosure of the rights of consumers required under this title.’.

      (2) TECHNICAL AMENDMENT- Section 606(a)(1)(B) of the Fair Credit Reporting Act (15 U.S.C. 1681d(a)(1)(B)) is amended by inserting ‘and the written summary of the rights of the consumer prepared pursuant to section 609(c)’ before the semicolon.

    (e) FORM OF DISCLOSURES-

      (1) IN GENERAL- Subsections (a) and (b) of section 610 of the Fair Credit Reporting Act (15 U.S.C. 1681h) are amended to read as follows:

    ‘(a) FORM OF DISCLOSURE, GENERALLY- Except as provided in subsection (b), the disclosures required to be made under section 609 shall be provided to a consumer in writing.

    ‘(b) OTHER FORMS OF DISCLOSURE-

      ‘(1) IN GENERAL- A consumer reporting agency may make the disclosures required under section 609 other than in writing if authorized by the consumer, and in such form as may be specified by the consumer and 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--

          ‘(i) 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; and

          ‘(ii) the furnishing of proper identification by the consumer;

        ‘(B) by telephone, if the consumer has made a written request for disclosure by telephone that includes proper identification of the consumer;

        ‘(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- Section 610 of the Fair Credit Reporting Act (15 U.S.C. 1681h) is amended by adding at the end the following:

    ‘(f) SIMPLIFIED DISCLOSURE- The Federal Trade Commission shall prescribe the form in which a consumer reporting agency shall make the disclosures required under section 609(a), for the purpose of maximizing the comprehensibility and standardization of such disclosures.’.

      (3) CONFORMING AMENDMENTS-

        (A) Section 610 of the Fair Credit Reporting Act (15 U.S.C. 1681h) is amended in the heading for the section by inserting ‘and form’ after ‘Conditions’.

        (B) The table of sections at the beginning of the Fair Credit Reporting Act (15 U.S.C. 1681a et seq.) is amended in the item relating to section 610 by inserting ‘and form’ after ‘Conditions’.

SEC. 108. AMENDMENTS RELATING TO PROCEDURES IN CASE OF THE DISPUTED ACCURACY OF ANY INFORMATION IN A CONSUMER’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 INFORMATION-

      ‘(1) IN GENERAL- If the completeness or accuracy of any item of information contained in any consumer’s file at any 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 disputed information before the end of the 30-business-day period beginning on the date the agency receives the notice of the dispute from the consumer.

      ‘(2) PROMPT NOTICE OF DISPUTE TO FURNISHER OF INFORMATION- Before the end of the 5-business-day period beginning on the date a consumer reporting agency receives 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 dispute, at the address and in the manner established with the person.

      ‘(3) DETERMINATION THAT DISPUTE IS FRIVOLOUS OR IRRELEVANT-

        ‘(A) IN GENERAL- Notwithstanding paragraph (1), a consumer reporting agency may terminate a reinvestigation of information disputed by a consumer under that paragraph if the agency determines that the dispute by the consumer is frivolous or irrelevant, including by reason of a failure by a consumer to provide sufficient information to resolve the dispute.

        ‘(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 within 5 business days of such determination (including the reasons for the determination), by mail or, if authorized by the consumer for that purpose, by any other means available to the agency.

      ‘(4) CONSIDERATION OF CONSUMER INFORMATION- 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 information submitted by the consumer in the period described in paragraph (1) with respect to such disputed information.

      ‘(5) TREATMENT OF INACCURATE OR UNVERIFIABLE INFORMATION-

        ‘(A) IN GENERAL- If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or cannot be verified, the consumer reporting agency shall promptly delete that item of information from the consumer’s file.

        ‘(B) REQUIREMENTS RELATING TO REINSERTION OF PREVIOUSLY DELETED MATERIAL-

          ‘(i) CERTIFICATION OF ACCURACY OF INFORMATION- If any information is deleted from a consumer’s file pursuant to subparagraph (A), the information may not be reinserted in the file after the deletion unless the person who furnishes the information certifies that the information is complete and accurate.

          ‘(ii) NOTICE TO CONSUMER- If any information which has been deleted from a consumer’s file pursuant to subparagraph (A) is reinserted in the file, the consumer reporting agency shall promptly notify the consumer of the reinsertion in writing or, if authorized by the consumer for that purpose, by any other means available to the agency.

          ‘(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 within the 5-business-day period beginning on the date of the reinsertion--

            ‘(I) a statement that the disputed information has been reinserted;

            ‘(II) a notice to the consumer that if requested by the consumer the agency shall provide to the consumer, within 15 days after the date of the request, the name, business address, and telephone number of any furnisher of information contacted, or of any furnisher of information which contacted the consumer reporting agency, in connection with the reinsertion of such information; and

            ‘(III) the toll-free telephone number of the consumer reporting agency that the consumer can use to contact the agency with respect to obtaining the information described in subclause (II).

        ‘(C) PROCEDURES TO PREVENT REAPPEARANCE- A consumer reporting agency shall maintain reasonable procedures designed 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 reinserted in accordance with subparagraph (B)(i)).

      ‘(6) NOTICE OF RESULTS OF REINVESTIGATION-

        ‘(A) IN GENERAL- A consumer reporting agency shall provide written notice to a consumer of the results of a reinvestigation under this subsection within 5 business days after the completion of the reinvestigation, by mail or, if authorized by the consumer for that purpose, by other means available to the agency.

        ‘(B) CONTENTS- As part of or in addition to the notice under subparagraph (A), a consumer reporting agency shall provide to a consumer in writing within the 5-business-day period referred to in subparagraph (A)--

          ‘(i) a statement that the reinvestigation is completed;

          ‘(ii) a consumer report that is based upon the consumer’s file as that file is revised as a result of the reinvestigation;

          ‘(iii) a description or indication of any changes made in the consumer report as a result of those revisions to the consumer’s file;

          ‘(iv) a notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the agency, including the name, business address, and telephone number of any furnisher of information contacted in connection with such information;

          ‘(v) a notice that the consumer has the right to add a statement to the consumer’s file disputing the accuracy or completeness of the information; and

          ‘(vi) a notice that the consumer has the right to request under subsection (d) that the consumer reporting agency furnish notifications under that subsection.

        ‘(7) DESCRIPTION OF REINVESTIGATION PROCEDURE- A consumer reporting agency shall provide to a consumer a description referred to in paragraph (6)(B)(iv) by not later than 15 days after receiving a request from the consumer for that description.’.

    (b) CONFORMING AMENDMENT- Subsection (d) of section 611 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. 109. AMENDMENT RELATING TO CHARGES FOR DISCLOSURE.

    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 CERTAIN DISCLOSURES- Except as provided in subsections (b) and (c), a consumer reporting agency may impose a reasonable charge on a consumer--

      ‘(1) for making a disclosure to the consumer pursuant to section 609, which--

        ‘(A) shall not exceed $8, or such other amount as is prescribed by the Federal Trade Commission under subsection (d); and

        ‘(B) shall be indicated to the consumer prior to making disclosure; and

      ‘(2) for furnishing a notification, statement, summary, or codification to any person designated by the consumer pursuant to section 611(d), which--

        ‘(A) shall not exceed the charge that the agency would impose on each designated recipient for a consumer report; and

        ‘(B) shall be indicated to the consumer prior to furnishing such information.

    ‘(b) FREE CONSUMER REPORT 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, within 60 days after receipt by such consumer of a notification pursuant to section 615 or of a notification 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) CHARGE FOR CERTAIN NOTICES PROHIBITED- A consumer reporting agency shall not impose any charge for--

      ‘(1) providing any notice to a consumer required under section 611; or

      ‘(2) notifying a person pursuant to section 611(d) of the deletion of information which is found to be inaccurate or which can no longer be verified, if the consumer designates that person to the agency before the end of the 30-day period beginning on the date of the notification of the consumer under section 611(a)(6).

    ‘(d) ADJUSTMENT OF FEE- The Federal Trade Commission shall annually adjust the maximum amount of the fee authorized under subsection (a)(1)(A), to reflect changes in the consumer price index.’.

SEC. 110. AMENDMENTS RELATING TO 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 in connection with any transaction initiated by the consumer or any employment determination, which is based in whole or in part on any information contained in a consumer report, the person shall--

      ‘(1) provide written notice of the adverse action to the consumer;

      ‘(2) provide to the consumer--

        ‘(A) the name, address, and telephone number of the consumer reporting agency which furnished the report to the person; and

        ‘(B) a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken;

      ‘(3) provide to the consumer a written 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) and from any other consumer reporting agency which compiles and maintains files on consumers on a nationwide basis, which notice shall include an indication of the 60-day period under that section 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; and

      ‘(4) in the case of an adverse action based in whole or in part on a credit score or other predictor of credit worthiness, provide to the consumer--

        ‘(A) notice that the predictor was used; and

        ‘(B) the principal factors used to determine that predictor, if those factors are required to be disclosed by the person for purposes of compliance with section 701(d)(3) of the Equal Credit Opportunity Act.’.

    (b) DUTIES OF USERS WHO MAKE CERTAIN CREDIT SOLICITATIONS- Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended by adding at the end the following new subsection:

    ‘(d) DUTIES OF USERS WHO MAKE WRITTEN CREDIT SOLICITATIONS ON THE BASIS OF INFORMATION CONTAINED IN CONSUMER FILES-

      ‘(1) IN GENERAL- Any person who uses a consumer report of any consumer in connection with any credit transaction which is not initiated by the consumer and which consists of a firm offer of credit shall provide with any written solicitation made to the consumer regarding the transaction a clear and conspicuous statement that--

        ‘(A) information contained in the consumer’s consumer report was used in connection with the transaction;

        ‘(B) the consumer received the offer of credit because the consumer satisfied the criteria for creditworthiness under which the consumer was selected for the offer;

        ‘(C) if applicable, the credit may not be extended if, after the consumer responds to the offer, the consumer does not meet the criteria used to select the consumer for the offer;

        ‘(D) the consumer has a right to prohibit information contained in the consumer’s file with any consumer reporting agency to be used in connection with any credit transaction that is not initiated by the consumer; and

        ‘(E) the consumer may exercise the right referred to in subparagraph (D) by notifying the joint notification system established under section 604(d).

      ‘(2) LIMITATION ON APPLICATION- Paragraph (1) does not apply to the use of a consumer report by a person if--

        ‘(A) the person is affiliated by common ownership or by common corporate control with the person who procured the report;

        ‘(B) the person who procured the report clearly and conspicuously disclosed to the consumer to whom the report relates, before the report is provided to the person who will use the report, that the report might be provided to and used by other persons who are affiliated in the manner described in subparagraph (A) to the person who procured the report; and

        ‘(C) that provision and use of the report is consented to by the consumer in writing.

      ‘(3) MAINTAINING CRITERIA ON FILE- A person who makes an offer of credit to a consumer under a credit transaction described in paragraph (1) shall maintain on file the criteria used to select the consumer to receive the offer, until the end of the 3-year period beginning on the date on which the offer is made to the consumer.’.

    (c) DUTIES OF USERS FOR DIRECT MARKETING TRANSACTIONS NOT INITIATED BY CONSUMERS- Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is further amended by adding after subsection (d) (as added by subsection (b) of this section) the following new subsection:

    ‘(e) DUTIES OF USERS FOR DIRECT MARKETING TRANSACTIONS NOT INITIATED BY CONSUMERS- Any person who, in connection with a direct marketing transaction that is not initiated by a consumer, uses information concerning the consumer that is provided by a consumer reporting agency shall provide to the consumer with each solicitation made to the consumer regarding the transaction a clear and conspicuous written statement--

      ‘(1) that information concerning the consumer that was provided by a consumer reporting agency was used in connection with the transaction;

      ‘(2) that the consumer has the right under section 604(e) to prohibit any information concerning the consumer from being provided by the consumer reporting agency for use in connection with any direct marketing transaction that is not initiated by the consumer;

      ‘(3) that the consumer may exercise the right referred to in paragraph (2) by notifying the joint notification system established under section 604(d)(4).’.

SEC. 111. AMENDMENTS RELATING TO CIVIL LIABILITY.

    (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLIANCE, GENERALLY- Section 616 of the Fair Credit Reporting Act (15 U.S.C. 1681n) is amended by striking ‘Any consumer reporting agency or user of information which’ and inserting ‘Any person who’.

    (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NONCOMPLIANCE- Section 616(1) of the Fair Credit Reporting Act (15 U.S.C. 1681n(1)) is amended to read as follows:

      ‘(1)(A) any actual damages sustained by the consumer as a result of the failure; or

      ‘(B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, such damages or $1,000, whichever is greater;’.

    (c) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLIANCE- Section 617 of the Fair Credit Reporting Act (15 U.S.C. 1681o) is amended by striking ‘Any consumer reporting agency or user of information which’ and inserting ‘Any person who’.

SEC. 112. AMENDMENTS RELATING TO 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 by redesignating section 622 as section 623 and inserting after section 621 the following new section:

‘Sec. 622. Responsibilities of furnishers of information to consumer reporting agencies

    ‘(a) Duty of Furnishers of Information to Provide Complete and Accurate Information-

      ‘(1) IN GENERAL- A person shall not furnish any information to any consumer reporting agency if the person knows or should know the information is incomplete or inaccurate.

      ‘(2) DUTY TO CORRECT AND UPDATE INFORMATION- A person who--

        ‘(A) in the ordinary course of business, regularly and on a routine basis furnishes information to one or more consumer reporting agencies about their own transactions or experiences with a consumer; and

        ‘(B) furnishes information to a consumer reporting agency, that the person determines 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 information, that is necessary to make the information provided by the person to the agency complete and accurate.

      ‘(3) DUTY TO PROVIDE NOTICE OF CONTINUING DISPUTE- If the completeness or accuracy of any information furnished by any person to any consumer reporting agency continues to be disputed to such person, 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 ACCOUNTS- A person who regularly furnishes information to a consumer reporting agency regarding a consumer who has a credit account with that person shall notify the agency of the closure of that account by the consumer in information regularly furnished for the period in which the account is closed.

      ‘(5) DUTY TO PROVIDE NOTICE OF DELINQUENCY OF ACCOUNTS- A person who furnishes information 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 notify the agency of the commencement of the delinquency immediately preceding that action, by not later than 90 days after the date of that commencement.

    ‘(b) Notice to Consumers of Information Furnished to Consumer Reporting Agencies-

      ‘(1) NOTICE REQUIRED- A person who in the ordinary course of business regularly and on a routine basis furnishes information about that person’s transactions or experiences with any consumer to any consumer reporting agency, shall give notice of that fact in writing to the consumer before first providing 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 information:

        ‘(A) A brief description of the type of information 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 reporting 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 pursuant 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 before 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 subsection (a).

      ‘(2) ENFORCEMENT- Subsection (a) shall be enforced exclusively under section 621 by the Federal 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 relating to section 622 and inserting after the item relating to section 621 the following:

      ‘622. Responsibilities of furnishers of information to consumer reporting agencies.

      ‘623. Relation to State laws.’.

SEC. 113. INCREASED CRIMINAL PENALTIES FOR OBTAINING INFORMATION UNDER FALSE PRETENSES.

    (a) OBTAINING INFORMATION UNDER FALSE PRETENSES- 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 enforcement by the Federal Trade Commission under section 5(b) thereof with respect to any consumer reporting agency or person subject to enforcement by the Federal Trade Commission pursuant to this subsection, irrespective’ and inserting ‘Act. All functions 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 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’ before the period.

SEC. 115. STATE ENFORCEMENT OF FAIR CREDIT REPORTING 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 REPORTING-

      ‘(1) AUTHORITY OF STATES- Whenever the chief law enforcement officer of the State, or an official 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 residents 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 appropriate Federal regulator determined under subsection (b) and provide the Commission or appropriate Federal regulator 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 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 arising 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 inhabitant or transacts business or wherein the violation occurred or is occurring, and process in such cases may be served in any district in which the defendant 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 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 attendance of witnesses or the production of documentary and other evidence.

      ‘(6) EFFECT ON STATE COURT PROCEEDINGS- Nothing contained in this subsection shall be construed to prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any civil or criminal statute of such State.

      ‘(7) LIMITATION- Whenever the Federal Trade Commission or the appropriate Federal regulator has instituted a civil action for violation of this title, no State may, during the pendency of such action instituted by the Commission or the appropriate Federal regulator, subsequently institute a civil action against any defendant named in the complaint of the Commission or the appropriate Federal regulator 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 subsection (d) (as redesignated by section 115) the following new subsection:

    ‘(e) INTERPRETIVE AUTHORITY- The Federal Reserve 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 companies 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 redesignated by section 112(a), is amended to read as follows:

‘Sec. 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 information on consumers or any fees imposed upon or any disclosure to consumers associated with the furnishing, collection, distribution, or use of any information on consumers, 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 address unfair or deceptive acts or practices, or laws protecting 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 enactment 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 Commission to prescribe matters under the amendments made by this title.

TITLE II--CREDIT REPAIR ORGANIZATIONS

SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZATIONS.

    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 Organizations Act’.

‘SEC. 402. FINDINGS AND PURPOSES.

    ‘(a) FINDINGS- The Congress makes the following findings:

      ‘(1) Consumers have a vital interest in establishing 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 organizations which offer to improve the credit standing 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 economic 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 deceptive advertising and business practices by credit repair 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 transaction in which credit is offered or extended to an individual for personal, family, or household purposes.

      ‘(3) CREDIT REPAIR ORGANIZATION- The term ‘credit repair organization’--

        ‘(A) means any person who uses any instrumentality 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 information that is accurate and not obsolete from the consumer’s record, history, or rating;

          ‘(iii) altering the consumer’s identification to prevent the disclosure of the consumer’s credit record, history, or rating for the purpose of concealing adverse credit information that is accurate and not obsolete;

          ‘(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 regulations applicable to members of such bar or such licensees.

      ‘(4) CREDIT- The term ‘credit’ has the meaning given to such term in section 103(e) of this Act.

‘SEC. 404. PROHIBITED PRACTICES BY CREDIT REPAIR ORGANIZATIONS.

    ‘No credit repair organization, and no officer, employee, 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 valuable 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 untrue or misleading (or which, upon the exercise of reasonable care, should be known by the credit repair 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 applied 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 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;

        ‘(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;

      ‘(4) make or use any untrue or misleading representation of the services of the credit repair organization; or

      ‘(5) engage, directly or indirectly, in any act, practice, or course of business that constitutes or results 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 repair organization.

‘SEC. 405. DISCLOSURES.

    ‘(a) DISCLOSURE REQUIRED- Any credit repair organization shall provide any consumer with the following written statement before any contract or agreement between 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 directly. However, neither you nor any ‘credit repair’ company 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 reported for 10 years.

    ‘You have a right to obtain a copy of your credit report from a credit bureau. You may be charged 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 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 accurately. 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 pertinent 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 include a summary of your statement about disputed information with any report it issues about you.

    ‘The Federal Trade Commission regulates credit bureaus and credit repair organizations. For more information 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 provided as a document which is separate from any written contract or other agreement between the credit repair organization and the consumer or any other written material provided to the consumer.

    ‘(c) RETENTION OF COMPLIANCE RECORDS-

      ‘(1) IN GENERAL- The credit repair organization shall maintain a copy of the statement signed by the consumer acknowledging receipt of the statement.

      ‘(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 requirements 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 requirements of this subsection unless such contract includes the following information (in writing):

      ‘(1) The terms and conditions of payment, including 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 services to be performed by the credit repair organization for the consumer, including--

        ‘(A) all guarantees and all promises of full or partial refunds; and

        ‘(B) an estimate of--

          ‘(i) the date by which the performance 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 necessary to perform such services.

      ‘(3) The credit repair organization’s name and principal business address.

      ‘(4) A conspicuous statement in bold face type, in immediate proximity to the space reserved for the consumer’s signature on the contract, which reads as follows: ‘You may cancel this contract without penalty 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 penalty or obligation by notifying the credit repair organization of the consumer’s intention to do so at any time before 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 INFORMATION- Each contract shall be accompanied by a form, in duplicate, which has the heading ‘Notice of Cancellation’ and contains in bold face type the following statement:

      ‘You may cancel this contract, without any penalty or obligation, at any time before midnight of the 3rd day which begins after the date the contract is signed by you.

      ‘If you cancel, any payment you made under this contract will be returned before the end of the 10-day period beginning on the date the seller receives your cancellation notice.

      ‘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 credit 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

      ‘(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 contract for services which does not comply with the applicable 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 credit repair organization, and any officer, employee, agent, or other person participating in the conduct of the affairs of any credit repair organization, which fails to comply with any provision of this title with respect to any 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-

        ‘(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 minimum individual recovery.

      ‘(3) ATTORNEYS’ FEES- In the case of any successful action to enforce any liability under paragraph (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 factors--

      ‘(1) the frequency and persistence of noncompliance by the credit repair organization;

      ‘(2) the nature of the noncompliance;

      ‘(3) the extent to which such noncompliance was intentional; and

      ‘(4) in the case of any class action, the number of consumers adversely affected.

    ‘(c) JURISDICTION- Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, before the later of--

      ‘(1) the end of the 2-year period beginning on the date of the occurrence of the violation involved; or

      ‘(2) in any case in which any credit repair organization has materially and willfully misrepresented any information which--

        ‘(A) the credit repair organization is required, 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 section,

      the end of the 2-year period beginning on the date of the discovery by the consumer of the misrepresentation.

‘SEC. 410. ADMINISTRATIVE ENFORCEMENT.

    ‘(a) IN GENERAL- Compliance with the requirements 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 VIOLATIONS OF FEDERAL TRADE COMMISSION ACT-

      ‘(1) IN GENERAL- For the purpose of the exercise by the Federal Trade Commission of the Commission’s functions and powers under the Federal Trade Commission Act, any violation of any requirement or prohibition imposed under this title with respect 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 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, 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 organization--

        ‘(A) is engaged in commerce; or

        ‘(B) meets any other jurisdictional tests in the Federal Trade Commission Act.

    ‘(c) STATE ENFORCEMENT OF TITLE-

      ‘(1) IN GENERAL- The attorney general of any State, or an official or agency designated under the law of any State, may enforce the provisions of this title in Federal or State court.

      ‘(2) CIVIL ENFORCEMENT ACTIONS- Any State may bring a civil action in any Federal or State court to enjoin any violation of this title and recover damages under this title for consumers who reside in such State.

‘SEC. 411. RELATION TO STATE LAW.

    ‘This title shall not annul, alter, affect, or exempt any person subject to the provisions of this title from complying 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.’.