S. 1753 (108th): National Consumer Credit Reporting System Improvement Act of 2003

108th Congress, 2003–2004. Text as of Oct 17, 2003 (Placed on Calendar in the Senate).

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S 1753 PCS

Calendar No. 312

108th CONGRESS

1st Session

S. 1753

[Report No. 108-166]

To amend the Fair Credit Reporting Act in order to prevent identity theft, to improve the use of and consumer access to consumer reports, to enhance the accuracy of consumer reports, to limit the sharing of certain consumer information, to improve financial education and literacy, and for other purposes.

IN THE SENATE OF THE UNITED STATES

October 17, 2003

Mr. SHELBY, from the Committee on Banking, Housing, and Urban Affairs, reported the following original bill; which was read twice and placed on the calendar


A BILL

To amend the Fair Credit Reporting Act in order to prevent identity theft, to improve the use of and consumer access to consumer reports, to enhance the accuracy of consumer reports, to limit the sharing of certain consumer information, to improve financial education and literacy, 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; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘National Consumer Credit Reporting System Improvement Act of 2003’.

    (b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

      Sec. 1. Short title; table of contents.

TITLE I--IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION

Subtitle A--Identity Theft Prevention

      Sec. 111. Definitions.

      Sec. 112. Fraud alerts and active duty alerts.

      Sec. 113. Truncation of credit card and debit card account numbers.

      Sec. 114. Establishment of procedures for the identification of possible instances of identity theft.

      Sec. 115. Amendments to existing identity theft prohibition.

Subtitle B--Protection and Restoration of Identity Theft Victim Credit History

      Sec. 151. Summary of rights of identity theft victims.

      Sec. 152. Blocking of information resulting from identity theft.

      Sec. 153. Coordination of identity theft complaint investigations.

      Sec. 154. Prevention of repollution of consumer reports.

      Sec. 155. Notice by debt collectors with respect to fraudulent information.

      Sec. 156. Statute of limitations.

TITLE II--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT INFORMATION

      Sec. 211. Free credit reports.

      Sec. 212. Credit scores.

      Sec. 213. Enhanced disclosure of the means available to opt out of prescreened lists.

      Sec. 214. Affiliate sharing.

      Sec. 215. Study of effects of credit scores and credit-based insurance scores on availability and affordability of financial products.

TITLE III--ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION

      Sec. 311. Notice with respect to counter offers.

      Sec. 312. Procedures to enhance the accuracy and completeness of information furnished to consumer reporting agencies.

      Sec. 313. Federal Trade Commission and consumer reporting agency action concerning complaints.

      Sec. 314. Ongoing audits of the accuracy of consumer reports.

      Sec. 315. Improved disclosure of the results of reinvestigation.

      Sec. 316. Reconciling addresses.

      Sec. 317. FTC study of issues relating to the Fair Credit Reporting Act.

TITLE IV--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE FINANCIAL SYSTEM

      Sec. 411. Protection of medical information in the financial system.

      Sec. 412. Confidentiality of medical contact information in consumer reports.

TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT

      Sec. 511. Short title.

      Sec. 512. Definitions.

      Sec. 513. Establishment of Financial Literacy and Education Commission.

      Sec. 514. Duties of the Commission.

      Sec. 515. Powers of the Commission.

      Sec. 516. Commission personnel matters.

      Sec. 517. Study by the Comptroller General.

      Sec. 518. Authorization of appropriations.

TITLE VI--RELATION TO STATE LAW

      Sec. 611. Relation to State law.

TITLE VII--MISCELLANEOUS

      Sec. 711. Clerical amendments.

TITLE I--IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION

Subtitle A--Identity Theft Prevention

SEC. 111. DEFINITIONS.

    Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following:

    ‘(q) DEFINITIONS RELATING TO FRAUD ALERTS-

      ‘(1) ACTIVE DUTY MILITARY CONSUMER- The term ‘active duty military consumer’ means a consumer in military service who--

        ‘(A) is on active duty (as defined in section 101(d)(1) of title 10, United States Code) or is a reservist performing duty under a call or order to active duty under a provision of law referred to in section 101(a)(13) of title 10, United States Code; and

        ‘(B) is assigned to service away from the usual duty station of the consumer.

      ‘(2) FRAUD ALERT; ACTIVE DUTY ALERT- The terms ‘fraud alert’ and ‘active duty alert’ mean a statement in the file of a consumer that--

        ‘(A) notifies all prospective users of a consumer report relating to the consumer that the consumer may be a victim of fraud, including identity theft, or is an active duty military consumer, as applicable;

        ‘(B) provides to all prospective users of a consumer report relating to the consumer, a telephone number or other reasonable contact method designated by the consumer for the user to obtain authorization from the consumer before establishing new credit (including providing any increase in a credit limit with respect to an existing credit account) in the name of the consumer; and

        ‘(C) is presented in a manner that facilitates a clear and conspicuous view of the statement by any person requesting such file, or any portion thereof.

    ‘(r) CREDIT CARD- The term ‘credit card’ has the same meaning as in section 103 of the Truth in Lending Act.

    ‘(s) DEBIT CARD- The term ‘debit card’ means any card issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account of the consumer at such financial institution, for the purpose of transferring money between accounts or obtaining money, property, labor, or services.

    ‘(t) ACCOUNT AND ELECTRONIC FUND TRANSFER- The terms ‘account’ and ‘electronic fund transfer’ have the same meanings as in section 903 of the Electronic Fund Transfer Act.

    ‘(u) CREDITOR--The terms ‘credit’ and ‘creditor’ have the same meanings as in section 103 of the Truth in Lending Act.

    ‘(v) FEDERAL BANKING AGENCIES- The term ‘Federal banking agencies’ has the same meaning as in section 3 of the Federal Deposit Insurance Act.

    ‘(w) FINANCIAL INSTITUTION- The term ‘financial institution’ means a State or National bank, a State or

Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person that, directly or indirectly, holds an account belonging to a consumer.

    ‘(x) RESELLER- The term ‘reseller’ means a consumer reporting agency that--

      ‘(1) assembles and merges information contained in the database of another consumer reporting agency or multiple consumer reporting agencies concerning any consumer for purposes of furnishing such information to any third party, to the extent of such activities; and

      ‘(2) does not maintain a database of the assembled or merged information from which new consumer reports are produced.

    ‘(y) DEFINITIONS RELATING TO CREDIT SCORES-

      ‘(1) CREDIT SCORE AND KEY FACTORS- When used in connection with an application for an extension of credit for a consumer purpose that is to be secured by a dwelling--

        ‘(A) the term ‘credit score’--

          ‘(i) means a numerical value or categorization derived from a statistical tool or modeling system used to predict the likelihood of certain credit behaviors, including default; and

          ‘(ii) does not include--

            ‘(I) any mortgage score or rating of an automated underwriting system that considers 1 or more factors in addition to credit information, including the loan-to-value ratio, the amount of down payment, or the financial assets of a consumer; or

            ‘(II) other elements of the underwriting process or underwriting decision; and

        ‘(B) the term ‘key factors’ means all relevant elements or reasons affecting the credit score for a consumer, listed in the order of their importance, based on their respective effects on the credit score.

      ‘(2) DWELLING- The term ‘dwelling’ has the same meaning as in section 103 of the Truth in Lending Act.

    ‘(z) IDENTITY THEFT REPORT- The term ‘identity theft report’ means a report--

      ‘(1) that alleges an identity theft;

      ‘(2) that is filed by a consumer with an appropriate Federal, State, or local government agency, including the United States Postal Inspection Service and any law enforcement agency; and

      ‘(3) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false.’.

SEC. 112. FRAUD ALERTS AND ACTIVE DUTY ALERTS.

    The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after section 605 the following:

‘Sec. 605A. Identity theft prevention; fraud alerts and active duty alerts

    ‘(a) ONE-CALL FRAUD ALERTS-

      ‘(1) INITIAL ALERTS- Upon the request of a consumer who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency described in section 603(p) that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall--

          ‘(A) include a fraud alert in the file of that consumer for a period of not less than 90 days, beginning on the date of such request, unless the consumer requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose; and

          ‘(B) refer the information regarding the fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f).

      ‘(2) ACCESS TO FREE REPORTS- In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall--

        ‘(A) disclose to the consumer that the consumer may request a free copy of the file of the consumer pursuant to section 612(d); and

        ‘(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A).

    ‘(b) EXTENDED ALERTS-

      ‘(1) IN GENERAL- Upon the request of a consumer who submits an identity theft report to a consumer reporting agency described in section 603(p) that maintains a file on the consumer, if the agency has received appropriate proof of the identity of the requester, the agency shall--

        ‘(A) include a fraud alert in the file of that consumer during the 7-year period beginning on the date of such request, unless the consumer requests that such fraud alert be removed before the end of such period and the agency has received appropriate proof of the identity of the requester for such purpose;

        ‘(B) during the 7-year period beginning on the date of such request, exclude the consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer requests that such exclusion be rescinded before the end of such period; and

        ‘(C) refer the information regarding the extended fraud alert under this paragraph to each of the other consumer reporting agencies

described in section 603(p), in accordance with procedures developed under section 621(f).

      ‘(2) VERIFICATION OF IDENTITY THEFT CLAIM- For purposes of paragraph (1), a consumer reporting agency shall accept as proof of a claim of identity theft, in lieu of an identity theft report--

        ‘(A) a properly completed copy of a standardized affidavit of identity theft developed and made available by the Federal Trade Commission; or

        ‘(B) any affidavit of fact that is acceptable to the consumer reporting agency for that purpose.

      ‘(3) ACCESS TO FREE REPORTS- In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall--

        ‘(A) disclose to the consumer that the consumer may request 2 free copies of the file of the consumer pursuant to section 612(d) during the 12-month period beginning on the date on which the fraud alert was included in the file; and

        ‘(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A).

    ‘(c) ACTIVE DUTY ALERTS- Upon the request of an active duty military consumer, a consumer reporting agency described in section 603(p) that maintains a file on the active duty military consumer and has received appropriate proof of the identity of the requester shall--

      ‘(1) include an active duty alert in the file of that active duty military consumer during a period of not less than 12 months, beginning on the date of the request, unless the active duty military consumer requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose;

      ‘(2) during the 12-month period beginning on the date of such request, exclude the active duty military consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer requests that such exclusion be rescinded before the end of such period; and

      ‘(3) refer the information regarding the active duty alert to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f).

    ‘(d) PROCEDURES- Each consumer reporting agency described in section 603(p) shall establish policies and procedures to comply with this section, including procedures that allow consumers and active duty military consumers to request temporary, extended, or active duty alerts (as applicable) in a simple and easy manner, including by telephone.

    ‘(e) REFERRALS OF FRAUD ALERTS- Each consumer reporting agency described in section 603(p) that receives a referral of a fraud alert or active duty alert from another consumer reporting agency pursuant to this section shall, as though the agency received the request from the consumer directly, follow the procedures required under--

      ‘(1) paragraphs (1)(A) and (2) of subsection (a), in the case of a referral under subsection (a)(1)(B);

      ‘(2) paragraphs (1)(A), (1)(B), and (3) of subsection (b), in the case of a referral under subsection (b)(1)(C); and

      ‘(3) paragraphs (1) and (2) of subsection (c), in the case of a referral under subsection (c)(3).

    ‘(f) DUTY OF RESELLER TO RECONVEY ALERT- A reseller shall include in its report any fraud alert or active duty alert placed in the file of a consumer pursuant to this section by another consumer reporting agency.

    ‘(g) DUTY OF OTHER CONSUMER REPORTING AGENCIES TO PROVIDE CONTACT INFORMATION- If a consumer contacts any consumer reporting agency that is not described in section 603(p) to communicate a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, the agency shall provide information to the consumer on how to contact the Commission and the consumer reporting agencies described in section 603(p) to obtain more detailed information and request alerts under this section.’.

SEC. 113. TRUNCATION OF CREDIT CARD AND DEBIT CARD ACCOUNT NUMBERS.

    Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended by adding at the end the following:

    ‘(g) TRUNCATION OF CREDIT CARD AND DEBIT CARD NUMBERS-

      ‘(1) IN GENERAL- Except as otherwise specifically provided in this subsection, no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card account number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction.

      ‘(2) LIMITATION- This subsection applies only to receipts that are electronically printed, and does not apply to transactions in which the sole means of recording a credit card or debit card account number is by handwriting or by an imprint or copy of the card.

      ‘(3) EFFECTIVE DATE- This subsection shall become effective--

        ‘(A) 3 years after the date of enactment of this subsection, with respect to any cash register or other machine or device that electronically prints receipts for credit card or debit card transactions that is in use before January 1, 2005; and

        ‘(B) 1 year after the date of enactment of this subsection, with respect to any cash register or other machine or device that electronically prints receipts for credit card or debit card transactions that is first put into use on or after January 1, 2005.’.

SEC. 114. ESTABLISHMENT OF PROCEDURES FOR THE IDENTIFICATION OF POSSIBLE INSTANCES OF IDENTITY THEFT.

    (a) IN GENERAL- Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended--

      (1) by striking ‘(e)’ at the end; and

      (2) by adding at the end the following:

    ‘(e) RED FLAG GUIDELINES AND REGULATIONS REQUIRED-

      ‘(1) GUIDELINES- The Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission shall, with respect to the entities that are subject to their respective enforcement authority under section 621, and in coordination as described in paragraph (2)--

        ‘(A) establish and maintain guidelines for use by each financial institution and each other person that is a creditor or other user of a consumer report regarding identity theft with respect to account holders at, or customers of, such entities, and update such guidelines as often as necessary; and

        ‘(B) prescribe regulations requiring each financial institution and each other person that is a creditor or other user of a consumer report to establish reasonable policies and procedures for implementing the guidelines established pursuant to paragraph (1), to identify possible risks to account holders or to the safety and soundness of the institution or customers.

      ‘(2) COORDINATION- Each agency required to prescribe regulations under paragraph (1) shall consult and coordinate with each other such agency so that, to the extent possible, the regulations prescribed by each such entity are consistent and comparable with the regulations prescribed by each other such agency.

      ‘(3) CRITERIA- In developing the guidelines required by paragraph (1)(A), the agencies described in paragraph (1) shall identify patterns, practices, and specific forms of activity that indicate the possible existence of identity theft.

      ‘(4) CONSISTENCY WITH VERIFICATION REQUIREMENTS- Policies and procedures established pursuant to paragraph (1) shall not be inconsistent with, or duplicative of, the policies and procedures required under section 5318(l) of title 31, United States Code.

    ‘(f) INVESTIGATION OF CHANGES OF ADDRESS-

      ‘(1) IN GENERAL- The Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission, in carrying out the responsibilities of such agencies under subsection (e) shall, with respect to the entities that are subject to their respective enforcement authority under section 621, and in coordination as described in paragraph (2), prescribe regulations applicable to card issuers to ensure that, if any such card issuer receives a request for an additional or replacement card for an existing account not later than 30 days after the card issuer has received notification of a change of address for the same account, the card issuer will follow reasonable policies and procedures that prohibit, as appropriate, the card issuer from issuing the additional or replacement card, unless the card issuer--

        ‘(A) notifies the cardholder of the request at the former address of the cardholder and provides to the cardholder a means of promptly reporting incorrect address changes;

        ‘(B) notifies the cardholder of the request by such other means of communication as the cardholder and the card issuer previously agreed to; or

        ‘(C) uses other means of assessing the validity of the change of address, in accordance with reasonable policies and procedures established by the card issuer in accordance with the regulations prescribed under subsection (e).

      ‘(2) COORDINATION- Each agency required to prescribe regulations under paragraph (1) shall consult and coordinate with each other such agency so that, to the extent possible, the regulations prescribed by each such entity are consistent and comparable with the regulations prescribed by each other such agency.

      ‘(3) DEFINITION OF CARD ISSUER- For purposes of this subsection, the term ‘card issuer’ means--

        ‘(A) any person who issues a credit card, or the agent of such person with respect to such card; and

        ‘(B) any person who issues a debit card.’.

    (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect 1 year after the date of enactment of this Act.

SEC. 115. AMENDMENTS TO EXISTING IDENTITY THEFT PROHIBITION.

    Section 1028 of title 18, United States Code, is amended--

      (1) in subsection (a)(7)--

        (A) by striking ‘transfers’ and inserting ‘transfers, possesses,’; and

        (B) by striking ‘abet,’ and inserting ‘abet, or in connection with,’;

      (2) in subsection (b)(1)(D), by striking ‘transfer’ and inserting ‘transfer, possession,’; and

      (3) in subsection (b)(2), by striking ‘three years’ and inserting ‘5 years’.

Subtitle B--Protection and Restoration of Identity Theft Victim Credit History

SEC. 151. SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS.

    (a) IN GENERAL- Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended by adding at the end the following:

    ‘(d) SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS-

      ‘(1) IN GENERAL- The Federal Trade Commission, in consultation with the Federal banking agencies and the National Credit Union Administration, shall prepare a model summary of the rights of consumers under this title with respect to the procedures for remedying the effects of fraud or identity theft involving credit, electronic fund transfers, or

accounts or transactions at or with a financial institution.

      ‘(2) SUMMARY OF RIGHTS AND CONTACT INFORMATION- If any consumer contacts a consumer reporting agency and expresses a belief that the consumer is a victim of fraud or identity theft involving credit, an electronic fund transfer, or an account or transaction at or with a financial institution, the consumer reporting agency shall, in addition to any other action that the agency may take, provide the consumer with the model summary of rights prepared by the Commission under paragraph (1) and information on how to contact the Commission to obtain more detailed information.’.

    (b) PUBLIC CAMPAIGN TO PREVENT IDENTITY THEFT- Not later than 2 years after the date of enactment of this Act, the Federal Trade Commission shall establish and implement a media and distribution campaign to teach the public how to prevent identity theft. Such campaign shall include existing Federal Trade Commission education materials, as well as radio, television, and print public service announcements, video cassettes, interactive digital video discs (DVD’s) or compact audio discs (CD’s), and Internet resources.

    (c) CONFORMING AMENDMENT- Section 624(b)(3) of the Fair Credit Reporting Act (15 U.S.C. 1681t(b)(3), regarding relation to State laws) is amended by striking ‘section 609(c)’ and inserting ‘subsection (c) or (d) of section 609’.

SEC. 152. BLOCKING OF INFORMATION RESULTING FROM IDENTITY THEFT.

    (a) IN GENERAL- The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after section 605A, as added by this Act, the following:

‘Sec. 605B. Block of information resulting from identity theft

    ‘(a) BLOCK- Except as otherwise provided in this section, a consumer reporting agency shall block the reporting of any information in the file of a consumer that the consumer identifies as information that resulted from an alleged identity theft, not later than 3 business days after the date of receipt by such agency of--

      ‘(1) appropriate proof of the identity of the consumer;

      ‘(2) a copy of an identity theft report; and

      ‘(3) the identification of such information by the consumer.

    ‘(b) NOTIFICATION- A consumer reporting agency shall promptly notify the furnisher of information identified by the consumer under subsection (a)--

      ‘(1) that the information may be a result of identity theft;

      ‘(2) that an identity theft report has been filed;

      ‘(3) that a block has been requested under this section; and

      ‘(4) of the effective dates of the block.

    ‘(c) AUTHORITY TO DECLINE OR RESCIND-

      ‘(1) IN GENERAL- A consumer reporting agency may decline to block, or may rescind any block, of information relating to a consumer under this section, if the consumer reporting agency reasonably determines that--

        ‘(A) the information was blocked in error or a block was requested by the consumer in error;

        ‘(B) the information was blocked, or a block was requested by the consumer, on the basis of a material misrepresentation of fact relevant to the request to block; or

        ‘(C) the consumer obtained possession of goods, services, or money as a result of the blocked transaction or transactions.

      ‘(2) NOTIFICATION TO CONSUMER- If a block of information is declined or rescinded under this subsection, the affected consumer shall be notified promptly, in the same manner as consumers are notified of the reinsertion of information under section 611(a)(5)(B).

      ‘(3) SIGNIFICANCE OF BLOCK- For purposes of this subsection, if a consumer reporting agency rescinds a block, the presence of information in the file of a consumer prior to the blocking of such information is not evidence of whether the consumer knew or should have known that the consumer obtained possession of any goods, services, or money as a result of the block.

    ‘(d) EXCEPTION FOR RESELLERS-

      ‘(1) NO RESELLER FILE- This section shall not apply to a consumer reporting agency, if the consumer reporting agency--

        ‘(A) is a reseller;

        ‘(B) is not, at the time of the request of the consumer under subsection (a), otherwise furnishing or reselling a consumer report concerning the information identified by the consumer; and

        ‘(C) informs the consumer, by any means, that the consumer may report the identity theft to the Commission to obtain consumer information regarding identity theft.

      ‘(2) RESELLER WITH FILE- The sole obligation of the consumer reporting agency under this section, with regard to any request of a consumer under this section, shall be to block the consumer report maintained by the consumer reporting agency from any subsequent use, if--

        ‘(A) the consumer, in accordance with the provisions of subsection (a), identifies, to a consumer reporting agency, information in the file of the consumer that resulted from identity theft; and

        ‘(B) the consumer reporting agency is a reseller of the identified information.

      ‘(3) NOTICE- In carrying out its obligation under paragraph (2), the reseller shall promptly provide a notice to the consumer of the decision to block the file. Such notice shall contain the name, address, and telephone number of each consumer reporting agency from which the consumer information was obtained for resale.

    ‘(e) EXCEPTION FOR VERIFICATION COMPANIES- The provisions of this section do not apply to a check services company, acting as such, which issues authorizations for the purpose of approving or processing negotiable instruments, electronic fund transfers, or similar methods of payments, except that, beginning 3 business days after receipt of information described in paragraphs (1) through (3) of subsection (a), a check services company shall not report to a national consumer reporting agency described in section 603(p), any information identified in the subject identity theft report as resulting from identity theft.

    ‘(f) ACCESS TO BLOCKED INFORMATION BY LAW ENFORCEMENT AGENCIES- No provision of this section shall be construed as requiring a consumer reporting agency to prevent a Federal, State, or local law enforcement agency from accessing blocked information in a consumer file to which the agency could otherwise obtain access under this title.’.

    (b) CLERICAL AMENDMENT- The table of sections for the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after the item relating to section 605 the following new items:

      ‘605A. Identity theft prevention; fraud alerts and active duty alerts.

      ‘605B. Block of information resulting from identity theft.’.

SEC. 153. COORDINATION OF IDENTITY THEFT COMPLAINT INVESTIGATIONS.

    Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended by adding at the end the following:

    ‘(f) COORDINATION OF CONSUMER COMPLAINT INVESTIGATIONS-

      ‘(1) IN GENERAL- Each consumer reporting agency described in section 603(p) shall develop and maintain procedures for the referral to each other such agency of any consumer complaint received by the agency alleging identity theft, or requesting a fraud alert under section 605A or a block under section 605B.

      ‘(2) MODEL FORM AND PROCEDURE FOR REPORTING IDENTITY THEFT- The Federal Trade Commission, in consultation with the Federal banking agencies and the National Credit Union Administration, shall develop a model form and model procedures to be used by consumers who are victims of identity theft for contacting and informing creditors and consumer reporting agencies of the fraud.

      ‘(3) ANNUAL SUMMARY REPORTS- Each consumer reporting agency described in section 603(p) shall submit an annual summary report to the Commission on consumer complaints received by the agency on identity theft or fraud alerts.’.

SEC. 154. PREVENTION OF REPOLLUTION OF CONSUMER REPORTS.

    (a) PREVENTION OF REINSERTION OF ERRONEOUS INFORMATION-

      (1) DUTIES OF FURNISHERS UPON NOTICE OF IDENTITY THEFT-RELATED DISPUTES- Section 623(b) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(b)) is amended--

        (A) by redesignating paragraph (2) as paragraph (3);

        (B) by inserting after paragraph (1) the following:

      ‘(2) DUTIES OF FURNISHERS UPON NOTICE OF IDENTITY THEFT-RELATED DISPUTES- A person that furnishes information to any consumer reporting agency shall--

        ‘(A) have in place reasonable procedures to respond to any notification from a consumer reporting agency under section 605B relating to information resulting from identity theft, to prevent that person from refurnishing such information; and

        ‘(B) take the actions described in subparagraphs (A) through (D) of paragraph (1), if such person receives directly from a consumer, an identity theft report or a properly completed copy of a standardized affidavit of identity theft developed and made available by the Federal Trade Commission.’; and

        (C) in paragraph (3), as redesignated, by striking ‘paragraph (1)’ and inserting ‘this subsection’.

      (2) CONFORMING AMENDMENTS RELATING TO NOTICE OF IDENTITY THEFT DIRECTLY FROM CONSUMERS- Section 623(b)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(b)(1)) is amended--

        (A) in the matter preceding subparagraph (A), by inserting ‘or as described in paragraph (2)(B),’ after ‘agency,’;

        (B) subparagraph (B), by inserting before the semicolon the following: ‘, and by the consumer, and other documentation reasonably available to the person that is necessary to conduct a reasonable investigation’; and

        (C) in subparagraph (C), by inserting before the semicolon at the end the following: ‘, and to the consumer, if notice of the dispute was received directly from the consumer, as described in paragraph (2)(B)’.

    (b) PROHIBITION ON SALE OR TRANSFER OF DEBT CAUSED BY IDENTITY THEFT- Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m), as amended by this Act, is amended by adding at the end the following:

    ‘(g) PROHIBITION ON SALE OR TRANSFER OF DEBT CAUSED BY IDENTITY THEFT-

      ‘(1) IN GENERAL- No person shall sell, transfer for consideration, or place for collection a debt that such person has been notified under section 605B has resulted from identity theft.

      ‘(2) APPLICABILITY- The prohibitions of this subsection shall apply to all persons collecting a debt described in paragraph (1) after the date of a notification under paragraph (1).

      ‘(3) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed to prohibit--

        ‘(A) the repurchase of a debt in any case in which the assignee of the debt requires such repurchase because the debt has resulted from identity theft;

        ‘(B) the securitization of a debt; or

        ‘(C) the transfer of debt as a result of a merger, acquisition, purchase and assumption transaction, or transfer of substantially all of the assets of an entity.’.

SEC. 155. NOTICE BY DEBT COLLECTORS WITH RESPECT TO FRAUDULENT INFORMATION.

    Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m), as amended by this Act, is amended by adding at the end the following:

    ‘(h) DEBT COLLECTOR COMMUNICATIONS CONCERNING IDENTITY THEFT- If a person acting as a debt collector (as that term is defined in title VIII) on behalf of a third party that is a creditor or other user of a consumer report is notified that any information relating to a debt that the person is attempting to collect may be fraudulent or may be the result of identity theft, that person shall--

      ‘(1) notify the third party that the information may be fraudulent or may be the result of identity theft; and

      ‘(2) upon request of the consumer to whom the debt purportedly relates, provide to the consumer all information to which the consumer would otherwise be entitled if the consumer were not a victim of identity theft, but wished to dispute the debt under provisions of law applicable to that person.’.

SEC. 156. STATUTE OF LIMITATIONS.

    Section 618 of the Fair Credit Reporting Act (15 U.S.C. 1681p) is amended to read as follows:

‘Sec. 618. Jurisdiction of courts; limitation of actions

    ‘An action to enforce any liability created under this title may be brought in any appropriate United States district court, without regard to the amount in controversy, or in any other court of competent jurisdiction, not later than the earlier of--

      ‘(1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or

      ‘(2) 7 years after the date on which the violation that is the basis for such liability occurs.’.

TITLE II--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT INFORMATION

SEC. 211. FREE CREDIT REPORTS.

    (a) IN GENERAL- Section 612 of the Fair Credit Reporting Act (15 U.S.C. 1681j) is amended--

      (1) by redesignating subsection (a) as subsection (f), and transferring it to the end of the section;

      (2) by inserting before subsection (b) the following:

    ‘(a) FREE ANNUAL DISCLOSURE-

      ‘(1) IN GENERAL- A consumer reporting agency described in section 603(p) shall make all disclosures pursuant to section 609 once during any 12-month period upon request of the consumer and without charge to the consumer, only if the request is made by mail or through an Internet website using the centralized system and the standardized form established for such requests in accordance with section 211(c) of the National Consumer Credit Reporting System Improvement Act of 2003.

      ‘(2) TIMING- A consumer reporting agency shall provide a consumer report under paragraph (1) not later than 15 days after the date on which the request is received under paragraph (1).

      ‘(3) REINVESTIGATIONS- Notwithstanding the time periods specified in section 611(a)(1), a reinvestigation under that section by a consumer reporting agency upon a request of a consumer that is made after receiving a consumer report under this subsection shall be completed not later than 45 days after the date on which the request is received.’;

      (3) by redesignating subsection (d) as subsection (e);

      (4) by inserting before subsection (e), as redesignated, the following:

    ‘(d) FREE DISCLOSURES IN CONNECTION WITH FRAUD ALERTS- Upon the request of a consumer, a consumer reporting agency described in section 603(p) shall make all disclosures pursuant to section 609 without charge to the consumer, as provided in subsections (a)(2) and (b)(3) of section 605A, as applicable.’;

      (5) in subsection (e), as redesignated, by striking ‘subsection (a)’ and inserting ‘subsection (f)’; and

      (6) in subsection (f), as redesignated, by striking ‘Except as provided in subsections (b), (c), and (d), a’ and inserting ‘In the case of a request from a consumer other than a request that is covered by any of subsections (a) through (d), a’.

    (b) SUMMARY OF RIGHTS TO OBTAIN AND DISPUTE INFORMATION IN CONSUMER REPORTS AND TO OBTAIN CREDIT SCORES- Section 609(c) of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended to read as follows:

    ‘(c) SUMMARY OF RIGHTS TO OBTAIN AND DISPUTE INFORMATION IN CONSUMER REPORTS AND TO OBTAIN CREDIT SCORES-

      ‘(1) COMMISSION SUMMARY OF RIGHTS REQUIRED-

        ‘(A) IN GENERAL- The Federal Trade Commission shall prepare a model summary of the rights of consumers under this title.

        ‘(B) CONTENT OF SUMMARY- The summary of rights prepared under subparagraph (A) shall include a description of--

          ‘(i) the right of a consumer to obtain a copy of a consumer report under subsection (a) from each consumer reporting agency;

          ‘(ii) the frequency and circumstances under which a consumer is entitled to receive a consumer report without charge under section 612;

          ‘(iii) the right of a consumer to dispute information in the file of the consumer under section 611;

          ‘(iv) the right of a consumer to obtain a credit score from a consumer reporting agency, and a description of how to obtain a credit score; and

          ‘(v) the method by which a consumer can contact, and obtain a consumer report from, a consumer reporting agency without charge, as provided in the regulations of the Commission prescribed under section 211(c) of the National Consumer Credit Reporting System Improvement Act of 2003.

        ‘(C) AVAILABILITY OF SUMMARY OF RIGHTS- The Federal Trade Commission shall--

          ‘(i) actively publicize the availability of the summary of rights prepared under this paragraph;

          ‘(ii) conspicuously post on its Internet website the availability of such summary of rights; and

          ‘(iii) promptly make such summary of rights available to consumers, on request.

      ‘(2) SUMMARY OF RIGHTS REQUIRED TO BE INCLUDED WITH AGENCY DISCLOSURES- A consumer reporting agency shall provide to a consumer, with each written disclosure by the agency to the consumer under this section--

        ‘(A) the summary of rights prepared by the Federal Trade Commission under paragraph (1);

        ‘(B) in the case of a consumer reporting agency described in section 603(p), a toll-free telephone number established by the agency, at which personnel are accessible to consumers during normal business hours;

        ‘(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;

        ‘(D) a statement that the consumer may have additional rights under State law, and that the consumer may wish to contact a State or local consumer protection agency or a State attorney general (or the equivalent thereof) to learn of those rights; and

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

    (c) RULEMAKING REQUIRED-

      (1) IN GENERAL- The Federal Trade Commission shall prescribe regulations applicable to consumer reporting agencies described in section 603(p) of the Fair Credit Reporting Act to require the establishment of--

        (A) a centralized source, through which consumers may obtain a consumer report from each consumer reporting agency described in that section 603(p) using a single request and without charge to the consumer, as provided in section 612(a) of the Fair Credit Reporting Act (as amended by this Act);

        (B) a standardized form for a consumer to make such a request for a consumer report by mail or through an Internet website; and

        (C) streamlined methods by which such a consumer reporting agency shall provide such consumer reports, after consideration of--

          (i) the significant demands that may be placed on consumer reporting agencies in providing such consumer reports;

          (ii) appropriate means to ensure that consumer reporting agencies can satisfactorily meet those demands, including the efficacy of a system of staggering the availability to consumers of such consumer reports using a quarterly method based on the birth month of the consumer; and

          (iii) the ease by which consumers should be able to contact consumer reporting agencies with respect to access to such consumer reports.

      (2) TIMING- Regulations required by this subsection shall--

        (A) be issued in final form not later than 6 months after the date of enactment of this Act; and

        (B) become effective not later than 6 months after the date on which they are issued in final form.

    (d) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall become effective on the effective date of the regulations prescribed by the Commission in accordance with subsection (c).

SEC. 212. CREDIT SCORES.

    (a) DUTIES OF CONSUMER REPORTING AGENCIES TO DISCLOSE CREDIT SCORES-

      (1) IN GENERAL- Section 609(a) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is amended by adding at the end the following:

      ‘(6) In connection with an application for an extension of credit for a consumer purpose that is to be secured by a dwelling--

        ‘(A) the current, or most recent, credit score of the consumer that was previously calculated by the agency;

        ‘(B) the range of possible credit scores under the model used;

        ‘(C) the key factors, if any, not to exceed 4, that adversely affected the credit score of the consumer in the model used;

        ‘(D) the date on which the credit score was created; and

        ‘(E) the name of the person or entity that provided the credit score or the credit file on the basis of which the credit score was created.’.

      (2) LIMITATIONS ON REQUIRED PROVISION OF CREDIT SCORE- Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g), as amended by this Act, is amended by adding at the end the following:

    ‘(e) LIMITATIONS ON REQUIRED PROVISION OF CREDIT SCORE-

      ‘(1) IN GENERAL- Subsection (a)(6) may not be construed--

        ‘(A) to compel a consumer reporting agency to develop or disclose a credit score if the agency does not, in the ordinary course of its business--

          ‘(i) distribute scores that are used in connection with extensions of credit secured by residential real property; or

          ‘(ii) develop credit scores that assist creditors in understanding the general credit behavior of the consumer and predicting future credit behavior;

        ‘(B) to require a consumer reporting agency that distributes credit scores developed by another person or entity to provide a further explanation of those scores, or to process a dispute arising pursuant to section 611(a), except that the consumer reporting agency shall be required to provide to the consumer the name and information for contacting the person or entity that developed the score;

        ‘(C) to require a consumer reporting agency to maintain credit scores in its files; or

        ‘(D) to compel disclosure of a credit score, except upon specific request of the consumer, except that if a consumer requests the credit file and not the credit score, then the consumer shall be provided with the credit file and a statement that the consumer may request and obtain a credit score.

      ‘(2) PROVISION OF SCORING MODEL- In complying with subsection (a)(6) and this subsection, a consumer reporting agency shall supply to the consumer--

        ‘(A) a credit score that is derived from a credit scoring model that is widely distributed to users of credit scores by that consumer reporting agency in connection with any extension of credit secured by a dwelling; or

        ‘(B) a credit score that assists the consumer in understanding the credit scoring assessment of the credit behavior of the consumer and predictions about future credit behavior.’.

      (3) CONFORMING AMENDMENT- Section 609(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is amended by inserting before the period ‘, other than as provided in paragraph (6)’.

    (b) DUTIES OF USERS OF CREDIT SCORES-

      (1) IN GENERAL- Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m), as amended by this Act, is amended by adding at the end the following:

    ‘(i) DUTIES OF USERS OF CREDIT SCORES-

      ‘(1) DISCLOSURES- Any person that makes or arranges extensions of credit for consumer purposes that are to be secured by a dwelling and that uses credit scores for that purpose, shall be required to provide to the consumer to whom the credit score relates, as soon as is reasonably practicable after such use--

        ‘(A) a copy of the information described in section 609(a)(6) that was obtained from a consumer reporting agency or that was developed and used by that user of the credit score information; or

        ‘(B) if the user of the credit score information obtained such information from a third party that developed such information, (other than a consumer reporting agency or the user itself) only--

          ‘(i) a copy of the information described in section 609(a)(6) provided to the user by the person or entity that developed the credit score; and

          ‘(ii) a notice that generally describes credit scores, their use, and the sources and kinds of data used to generate credit scores.

      ‘(2) RULE OF CONSTRUCTION- This subsection may not be construed to require the user of a credit score described in paragraph (1)--

        ‘(A) to explain to the consumer the information provided pursuant to section 609(a)(6), unless that information was developed by the user;

        ‘(B) to disclose any information other than a credit score or the key factors required to be disclosed under section 609(a)(6)(C);

        ‘(C) to disclose any credit score or related information obtained by the user after a transaction occurs; or

        ‘(D) to provide more than 1 disclosure under this subsection to any 1 consumer per credit transaction.

      ‘(3) LIMITATION- Except as otherwise provided in this subsection, the obligation of a user of a credit score under this subsection shall be limited solely to providing a copy of the information that was received from the consumer reporting agency or other person. A user of a credit score has no liability under this subsection for the content of credit score information received from a consumer reporting agency or for the omission of any information within the report provided by the consumer reporting agency.’.

      (2) CONFORMING AMENDMENT- Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended in the section heading, by adding at the end the following: ‘and credit scores’.

    (c) CONTRACTUAL LIABILITY- Section 616 of the Fair Credit Reporting Act (15 U.S.C. 1681n) is amended by adding at the end the following:

    ‘(d) USE OF CREDIT SCORES- Any provision of any contract that prohibits the disclosure of a credit score by a consumer reporting agency or a person who makes or arranges extensions of credit to the consumer to whom the credit score relates is void. A user of a credit score shall not have liability under any such contractual provision for disclosure of a credit score.’.

    (d) RELATION TO STATE LAWS- Section 624(b)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681t(b)(1), regarding relation to State laws) is amended--

      (1) in subparagraph (E), by striking ‘or’ at the end; and

      (2) by adding at the end the following:

        ‘(G) subsections (a)(6) and (e) of section 609, relating to the disclosure of credit scores by consumer reporting agencies in connection with an application for an extension of credit that is to be secured by a dwelling; or

        ‘(H) section 615(i), relating to the duties of users of credit scores to disclose credit score information to consumers in connection with an application for an extension of credit that is to be secured by a dwelling;’.

    (e) EFFECTIVE DATE- The amendments made by this section shall become effective 180 days after the date of enactment of this Act.

SEC. 213. ENHANCED DISCLOSURE OF THE MEANS AVAILABLE TO OPT OUT OF PRESCREENED LISTS.

    (a) NOTICE AND RESPONSE FORMAT FOR USERS OF REPORTS- Section 615(d)(2) of the Fair Credit Reporting Act (15 U.S.C. 1681m(d)(2)) is amended to read as follows:

      ‘(2) DISCLOSURE OF ADDRESS AND TELEPHONE NUMBER; FORMAT- A statement under paragraph (1) shall--

        ‘(A) include the address and toll-free telephone number of the appropriate notification system established under section 604(e); and

        ‘(B) be presented in such format and in such type size and manner as is established by the Federal Trade Commission, by rule, in consultation with the Federal banking agencies and the National Credit Union Administration.’.

    (b) RULEMAKING SCHEDULE- Regulations required by section 615(d)(2) of the Fair Credit Reporting Act, as amended by this section, shall be issued in final form not later than 1 year after the date of enactment of this Act.

    (c) DURATION OF ELECTIONS- Section 604(e) of the Fair Credit Reporting Act (15 U.S.C. 1681b(e)) is amended in each of paragraphs (3)(A) and (4)(B)(i)), by striking ‘2-year period’ each place that term appears and inserting ‘7-year period’.

    (d) PUBLIC AWARENESS CAMPAIGN- The Federal Trade Commission shall actively publicize and conspicuously post on its website any address and the toll-free telephone number established as part of a notification system for opting out of prescreening under section 604(e), and otherwise take measures to increase public awareness regarding the availability of the right to opt out of prescreening.

SEC. 214. AFFILIATE SHARING.

    (a) LIMITATION- The Fair Credit Reporting Act (15 U.S.C. 1601 et seq.) is amended--

      (1) by redesignating section 624 (regarding relation to State laws), as so designated by section 2413(b) of the Consumer Credit Reporting Reform Act of 1996 (110 Stat. 3009-447), as section 625;

      (2) by redesignating section 624 (regarding disclosures to FBI for counterintelligence purposes), as added by section 601(a) of the Intelligence Authorization Act for Fiscal Year 1996 (Public Law 104-93; 109 Stat. 974) (15 U.S.C. 1681u)), as section 626; and

      (3) by inserting after section 623 the following:

‘SEC. 624. AFFILIATE SHARING.

    ‘(a) SPECIAL RULE FOR SOLICITATION FOR PURPOSES OF MARKETING-

      ‘(1) NOTICE- Any person that receives from another person related to it by common ownership or affiliated by corporate control a communication of information that would be a consumer report, except for clauses (i) through (iii) of section 603(d)(2)(A), may not use the information to make a solicitation for marketing purposes to a consumer about its products or services, unless--

        ‘(A) it is clearly and conspicuously disclosed to the consumer that the information may be communicated among such persons for purposes of making solicitations to the consumer; and

        ‘(B) the consumer is provided an opportunity and a simple method to prohibit the making of such solicitations to the consumer by such person.

      ‘(2) CONSUMER CHOICE-

        ‘(A) IN GENERAL- The notice required under paragraph (1) shall allow the consumer the opportunity to prohibit all solicitation for marketing purposes, and may allow the consumer to choose from different options when electing to prohibit the sending of solicitations, including options regarding the types of entities

and information covered, and which methods of delivering solicitations the consumer elects to prohibit.

        ‘(B) FORMAT- Notwithstanding subparagraph (A), the notice required under paragraph (1) must be clear, conspicuous, and concise, and any method provided under paragraph (1)(B) must be simple. The regulations prescribed to implement this section shall provide specific guidance regarding how to comply with such standards.

      ‘(3) DURATION- The election of the consumer pursuant to paragraph (1)(B) to prohibit the sending of solicitations shall be effective for 5 years, beginning on the date on which the person receives the election of the consumer, unless the consumer requests that such election be revoked before the end of such period. At such time as the election of the consumer pursuant to paragraph (1)(B) is no longer effective, a person may not use information it receives as described in paragraph (1) to make a solicitation for marketing purposes to such consumer unless the consumer receives a notice and an opportunity to extend the opt out for another period of 5 years, pursuant to the procedure described in paragraph (1).

      ‘(4) SCOPE- This section shall not apply to a person--

        ‘(A) using information to make a solicitation for marketing purposes to a consumer with whom the person has a pre-existing business relationship;

        ‘(B) using information to perform services on behalf of another person related by common ownership or affiliated by corporate control, except that this subparagraph shall not permit a person to send solicitations on behalf of another person if such other person would not be permitted to send the solicitation on its own behalf as a result of the election of the consumer to prohibit solicitations under paragraph (1)(B);

        ‘(C) using information in direct response to a communication initiated by the consumer in which the consumer has requested information about a product or service; or

        ‘(D) using information to directly respond to solicitations authorized or requested by the consumer.

    ‘(b) NOTICE FOR OTHER PURPOSES PERMISSIBLE- A notice or other disclosure that is equivalent to the notice required by subsection (a), and that is provided by a person described in subsection (a) to a consumer together with disclosures required by any other provision of law shall satisfy the requirements of subsection (a).’.

    (b) RULEMAKING REQUIRED-

      (1) IN GENERAL- The Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission shall, with respect to the entities that are subject to their respective enforcement authority under section 621 of the Fair Credit Reporting Act, and in coordination as described in paragraph (2), prescribe regulations to implement section 624 of the Fair Credit Reporting Act, as added by this section.

      (2) COORDINATION- Each agency required to prescribe regulations under paragraph (1) shall consult and coordinate with each other such agency so that, to the extent possible, the regulations prescribed by each such entity are consistent and comparable with the regulations prescribed by each other such agency.

      (3) CONSIDERATIONS- In promulgating regulations under this subsection, the Commission shall--

        (A) ensure that affiliate sharing notification methods provide a simple means for consumers to make determinations and choices under section 624 of the Fair Credit Reporting Act, as added by this section; and

        (B) consider the affiliate sharing notification practices employed on the date of enactment of this Act by persons that will be subject to that section 624.

      (4) TIMING- Regulations required by this subsection shall--

        (A) be issued in final form not later than 6 months after the date of enactment of this Act; and

        (B) become effective not later than 3 months after the date on which they are issued in final form.

    (c) CONFORMING AMENDMENT- Section 603(d)(2)(A) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(A)) is amended by inserting ‘subject to section 624,’ after ‘(A)’.

    (d) CLERICAL AMENDMENT- The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended in the table of sections, by striking the items following the item relating to section 623 and inserting the following:

      ‘624. Affiliate sharing.

      ‘625. Relation to State laws.

      ‘626. Disclosures to FBI for counterintelligence purposes.’.

    (e) STUDIES OF INFORMATION SHARING PRACTICES-

      (1) IN GENERAL- The Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission shall jointly conduct regular studies of the consumer information sharing practices by financial institutions and other persons that are creditors or users of consumer reports with their affiliates.

      (2) MATTERS FOR STUDY- In conducting the studies required by paragraph (1), the agencies described in paragraph (1) shall--

        (A) identify--

          (i) the purposes for which financial institutions and other creditors and users of consumer reports share consumer information;

          (ii) the types of information shared by such entities with their affiliates;

          (iii) the number of choices provided to consumers with respect to the control of such sharing, and the degree to and manner in which consumers exercise such choices, if at all; and

          (iv) whether such entities share or may share personally identifiable transaction or experience information with affiliates for purposes--

            (I) that are related to employment or hiring, including whether the person that is the subject of such information is given notice of such sharing, and the specific uses of such shared information; or

            (II) of general publication of such information; and

        (B) specifically examine the information sharing practices that financial institutions and other creditors and users of consumer reports and their affiliates employ for the purpose of making underwriting decisions or credit evaluations of consumers.

      (3) REPORTS-

        (A) INITIAL REPORT- Not later than 3 years after the date of enactment of this Act, the Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission shall jointly submit a report to the Congress on the results of the initial study conducted in accordance with this subsection, together with any recommendations for legislative or regulatory action.

        (B) FOLLOWUP REPORTS- The Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission shall, not less frequently than once every 3 years following the date of submission of the initial report under subparagraph (A), jointly submit a report to the Congress that, together with any recommendations for legislative or regulatory action--

          (i) documents any changes in the areas of study referred to in paragraph (2)(A) occurring since the date of submission of the previous report;

          (ii) identifies any changes in the practices of financial institutions and other creditors and users of consumer reports in sharing consumer information with their affiliates for the purpose of making underwriting decisions or credit evaluations of consumers occurring since the date of submission of the previous report; and

          (iii) examines the effects that changes described in clause (ii) have had, if any, on the degree to which such affiliate sharing practices reduce the need for financial institutions, creditors, and other users of consumer reports to rely on credit reports for such decisions.

    (f) DEFINITIONS- As used in this section--

      (1) the terms ‘consumer’, ‘consumer report’, ‘consumer reporting agency’, ‘creditor’, ‘Federal banking agencies’, and ‘financial institution’, have the same meanings as in section 603 of the Fair Credit Reporting Act, as amended by this Act; and

      (2) the term ‘affiliates’ means persons that are related by common ownership or affiliated by corporate control.

SEC. 215. STUDY OF EFFECTS OF CREDIT SCORES AND CREDIT-BASED INSURANCE SCORES ON AVAILABILITY AND AFFORDABILITY OF FINANCIAL PRODUCTS.

    (a) DEFINED TERM- As used in this section, the term ‘credit score’ means a numerical value or a categorization derived from a statistical tool or modeling system used to predict the likelihood of certain credit or insurance behaviors, including default.

    (b) STUDY REQUIRED- The Federal Trade Commission shall conduct a study of--

      (1) the effects of the use of credit scores and credit-based insurance scores on the availability and affordability of financial products and services, including credit cards, mortgages, auto loans, and property and casualty insurance;

      (2) the degree of correlation between the factors considered by credit score systems and the quantifiable risks and actual losses experienced by businesses, including the extent to which each of the factors considered or otherwise taken into account by such systems correlated to risk or loss;

      (3) the extent to which the use of credit scoring models, credit scores and credit-based insurance scores benefit or negatively impact persons based on geography, income, ethnicity, race, color, religion, national origin, age, sex, marital status, or creed; and

      (4) the extent to which credit scoring systems are used by businesses, the factors considered by such systems, and the effects of variables which are not considered by such systems.

    (c) PUBLIC PARTICIPATION- The Commission shall seek public input about the prescribed methodology and research design of the study required by subsection (b).

    (d) REPORT-

      (1) IN GENERAL- Before the end of the 18-month period beginning on the date of enactment of this Act, the Federal Trade Commission shall submit a detailed report on the study conducted under this section to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.

      (2) CONTENTS- The report submitted under paragraph (1) shall include--

        (A) the findings and conclusions of the Commission;

        (B) recommendations to address specific areas of concern that were identified in the study; and

        (C) recommendations for legislative or administrative action that the Commission may determine to be necessary to ensure that credit and credit-based insurances score are used appropriately and fairly.

TITLE III--ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION

SEC. 311. NOTICE WITH RESPECT TO COUNTER OFFERS.

    (a) RULEMAKING- Section 603(k) of the Fair Credit Reporting Act (15 U.S.C. 1681a(k)) is amended--

      (1) in paragraph (1)(B)--

        (A) in clause (iii), by striking ‘and’ at the end;

        (B) in clause (iv), by striking the period at the end and inserting ‘; and’; and

        (C) by adding at the end the following:

          ‘(v) notwithstanding subparagraph (A), and subject to regulations prescribed by the Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission with respect to the entities that are subject to their respective enforcement authority under section 621 and in coordination as described in paragraph (3), an extension or grant of credit based on a counter offer by the creditor on material terms, including interest rate, that are materially less favorable than the terms generally available to consumers from the creditor, based in whole or in part on a consumer report.’; and

      (2) by adding at the end the following:

      ‘(3) COORDINATION OF RULEMAKING- Each agency required to prescribe regulations under paragraph (1)(B)(v) shall consult and coordinate with each other such agency so that, to the extent possible, the regulations prescribed by each such entity are consistent and comparable with the regulations prescribed by each other such agency.’.

    (b) RULEMAKING- Regulations required by section 603(k)(1)(B)(v) of the Fair Credit Reporting Act, as added by this section, shall be issued in final form not later than 1 year after the date of enactment of this Act.

    (c) EFFECTIVE DATE- The amendments made by subsection (a) shall become effective on the effective date of regulations prescribed in accordance with subsection (b).

SEC. 312. PROCEDURES TO ENHANCE THE ACCURACY AND COMPLETENESS OF INFORMATION FURNISHED TO CONSUMER REPORTING AGENCIES.

    (a) ACCURACY GUIDELINES AND REGULATIONS- Section 623 of the Fair Credit Reporting Act (15 U.S.C. 15 U.S.C. 1681s-2) is amended by adding at the end the following:

    ‘(e) ACCURACY GUIDELINES AND REGULATIONS REQUIRED-

      ‘(1) GUIDELINES- The Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission shall, with respect to the entities that are subject to their respective enforcement authority under section 621, and in coordination as described in paragraph (2)--

        ‘(A) establish and maintain guidelines for use by each person that furnishes information to a consumer reporting agency regarding the accuracy and completeness of the information relating to consumers that such entities furnish to consumer reporting agencies, and update such guidelines as often as necessary; and

        ‘(B) prescribe regulations requiring each person that furnishes information to a consumer reporting agency to establish reasonable policies and procedures for implementing the guidelines established pursuant to subparagraph (A).

      ‘(2) COORDINATION- Each agency required to prescribe regulations under paragraph (1) shall consult and coordinate with each other such agency so that, to the extent possible, the regulations prescribed by each such entity are consistent and comparable with the regulations prescribed by each other such agency.

      ‘(3) CRITERIA- In developing the guidelines required by paragraph (1)(A), the agencies described in paragraph (1) shall--

        ‘(A) identify patterns, practices, and specific forms of activity that can compromise the accuracy and completeness of information furnished to consumer reporting agencies;

        ‘(B) review the methods (including technological means) used to furnish information relating to consumers to consumer reporting agencies;

        ‘(C) determine whether persons that furnish information to consumer reporting agencies maintain and enforce policies to provide complete and accurate information to consumer reporting agencies; and

        ‘(D) examine the policies and processes that persons that furnish information to consumer reporting agencies employ to conduct reinvestigations and correct inaccurate information relating to consumers that has been furnished to consumer reporting agencies.’.

    (b) FURNISHER LIABILITY EXCEPTION- Section 623(a)(5) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)(5)) is amended by adding at the end the following: ‘For purposes of this paragraph only, and subject to the requirements of this section, a person that so notifies the agency may rely on the date provided by the entity to whom the account was owed at the time that the delinquency occurred, provided that the consumer does not dispute the information.’.

SEC. 313. FEDERAL TRADE COMMISSION AND CONSUMER REPORTING AGENCY ACTION CONCERNING COMPLAINTS.

    Section 611 of the Fair Credit Reporting Act (15 U.S.C. 1681i) is amended by adding at the end the following:

    ‘(e) TREATMENT OF COMPLAINTS AND REPORT TO CONGRESS-

      ‘(1) IN GENERAL- The Federal Trade Commission shall--

        ‘(A) compile all complaints that it receives that a file of a consumer that is maintained by a consumer reporting agency described in section 603(p) contains incomplete or inaccurate information, with respect to which, the consumer appears to have disputed the completeness or accuracy with the consumer reporting agency or otherwise utilized the procedures provided by subsection (a); and

        ‘(B) transmit each such complaint to each consumer reporting agency involved.

      ‘(2) EXCLUSION- Complaints received or obtained by the Commission pursuant to its investigative authority under the Federal Trade Commission Act shall not be subject to this paragraph (1).

      ‘(3) AGENCY RESPONSIBILITIES- Each consumer reporting agency described in section 603(p) that receives a complaint transmitted by the Commission pursuant to paragraph (1) shall--

        ‘(A) review each such complaint to determine whether all legal obligations imposed on the consumer reporting agency under this title (including any obligation imposed by an applicable court or administrative order) have been met with respect to the subject matter of the complaint;

        ‘(B) provide reports on a regular basis to the Commission regarding the determinations of and actions taken by the consumer reporting agency, if any, in connection with its review of such complaints; and

        ‘(C) maintain, for a reasonable time period, records regarding the disposition of each such complaint that is sufficient to demonstrate compliance with this subsection.

      ‘(4) RULEMAKING AUTHORITY- The Commission may prescribe regulations in accordance with the requirements of section 553 of title 5, United States Code, as appropriate to implement this subsection.

      ‘(5) ANNUAL REPORT TO CONGRESS- The Commission shall submit to Congress an annual report regarding compliance with this subsection.’.

SEC. 314. ONGOING AUDITS OF THE ACCURACY OF CONSUMER REPORTS.

    (a) AUDITS REQUIRED- The Board of Governors of the Federal Reserve System (in this section referred to as ‘the Board’) shall conduct ongoing audits of the accuracy and completeness of information contained in consumer reports prepared or maintained by consumer reporting agencies. The Board shall independently verify the accuracy and completeness of information contained in consumer reports by evaluating information and data provided by consumer reporting agencies (as defined in section 603 of the Fair Credit Reporting Act).

    (b) SUBJECT MATTERS- In conducting audits under this section, the Board shall examine--

      (1) the accuracy and completeness of information contained in consumer reports, including an analysis of the type of inaccurate or incomplete information, if any, that may have the most significant impact on the availability and terms of various credit products offered to borrowers; and

      (2) the impact, if any, of incomplete and inaccurate information on the credit and credit-based insurance scores that are most widely used to determine borrower credit worthiness and to make insurance underwriting and rating decisions, including an analysis of how, if at all, changes to credit scores resulting from inaccurate or incomplete credit reporting information affect the availability and terms of various credit products offered to borrowers.

    (c) BIENNIAL REPORTS REQUIRED-

      (1) IN GENERAL- The Board shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives at the end of the 2-year period beginning on the date of enactment of this Act. Thereafter, the Board shall conduct additional audits and submit additional reports once every 2 years.

      (2) CONTENTS- Each report submitted under this subsection shall contain a detailed summary of the findings and conclusions of the Board with respect to the audits required by this section, and such recommendations for legislative and administrative action as the Board may determine to be appropriate.

    (d) PROVISION OF REPORTS TO THE BOARD FOR PURPOSES OF ANALYSIS- Section 604(d) of the Fair Credit Reporting Act (12 U.S.C. 1681b(d)) is amended to read as follows:

    ‘(d) FURNISHING CONSUMER REPORTS FOR ACCURACY OR COMPLIANCE AUDITS- A consumer reporting agency shall provide consumer reports to the Board of Governors of the Federal Reserve System, upon request, for the purpose of conducting an accuracy or compliance audit in accordance with section 314 of the National Consumer Credit Reporting System Improvement Act of 2003.’.

SEC. 315. IMPROVED DISCLOSURE OF THE RESULTS OF REINVESTIGATION.

    (a) IN GENERAL- Section 611(a)(5)(A) of the Fair Credit Reporting Act (15 U.S.C. 1681i) is amended by striking ‘shall’ and all that follows through the end of the subparagraph, and inserting the following: ‘shall--

          ‘(i) promptly delete that item of information from the file of the consumer, or modify that item of information, as appropriate, based on the results of the reinvestigation; and

          ‘(ii) promptly notify the furnisher of that information that the information has been deleted from the file of the consumer.’.

    (b) FURNISHER REQUIREMENTS RELATING TO INACCURATE, INCOMPLETE, OR UNVERIFIABLE INFORMATION- Section 623(b)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(b)(1)) is amended--

        (A) in subparagraph (C), by striking ‘and’ at the end; and

        (B) in subparagraph (D), by striking the period at the end and inserting the following: ‘; and

        ‘(E) if an item of any information disputed by a consumer is found to be inaccurate or incomplete or cannot be verified after any reinvestigation under paragraph (1), promptly delete that item of information from the furnisher’s records or modify that item of information, as appropriate, based on the results of the reinvestigation.’.

SEC. 316. RECONCILING ADDRESSES.

    Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c), as amended by this Act, is amended by adding at the end the following:

    ‘(h) NOTICE OF DISCREPANCY IN ADDRESS-

      ‘(1) IN GENERAL- If a person has requested a consumer report relating to a consumer from a consumer reporting agency described in section 603(p), the request includes an address for the consumer that substantially differs from the addresses in the file of the consumer, and the agency provides a consumer report in response to the request, the consumer reporting agency shall notify the requester of the existence of the discrepancy.

      ‘(2) REGULATIONS-

        ‘(A) REGULATIONS REQUIRED- The Federal banking agencies, the National Credit Union Administration, and the Federal Trade Commission shall, with respect to the entities that are subject to their respective enforcement authority under section 621, and in coordination as described in subparagraph (B), prescribe regulations providing guidance regarding reasonable policies and procedures that a user of a consumer report should employ when such user has received a notice of discrepancy under paragraph (1).

        ‘(B) COORDINATION- Each agency required to prescribe regulations under subparagraph (A) shall consult and coordinate with each other such agency so that, to the extent possible, the regulations prescribed by each such entity are consistent and comparable with the regulations prescribed by each other such agency.

        ‘(C) POLICIES AND PROCEDURES TO BE INCLUDED- The regulations prescribed under subparagraph (A) shall describe reasonable policies and procedures for use by a user of a consumer report--

          ‘(i) to form a reasonable belief that the user knows the identity of the person to whom the consumer report pertains; and

          ‘(ii) if the user establishes a continuing relationship with the consumer, and the user regularly and in the ordinary course of business furnishes information to the consumer reporting agency from which the notice of discrepancy pertaining to the consumer was obtained, to reconcile the address of the consumer with the consumer reporting agency by furnishing such address to such consumer reporting agency as part of information regularly furnished by the user for the period in which the relationship is established.’.

SEC. 317. FTC STUDY OF ISSUES RELATING TO THE FAIR CREDIT REPORTING ACT.

    (a) STUDY REQUIRED-

      (1) IN GENERAL- The Federal Trade Commission shall conduct a study on ways to improve the operation of the Fair Credit Reporting Act.

      (2) AREAS FOR STUDY- In conducting the study under paragraph (1), the Commission shall review--

        (A) the efficacy of increasing the number of points of identifying information that a credit reporting agency is required to match to ensure that a consumer is the correct individual to whom a consumer report relates before releasing a consumer report to a user, including--

          (i) the extent to which requiring additional points of such identifying information to match would--

            (I) enhance the accuracy of credit reports; and

            (II) combat the provision of incorrect consumer reports to users;

          (ii) the extent to which requiring an exact match of the first and last name, social security number, and address and ZIP Code of the consumer would enhance the likelihood of increasing credit report accuracy; and

          (iii) the effects of allowing consumer reporting agencies to use partial matches of social security numbers and name recognition software on the accuracy of credit reports;

        (B) requiring notification to consumers when negative information has been added to their credit reports, including--

          (i) the potential impact of such notification on the ability of consumers to identify errors on their credit reports; and

          (ii) the potential impact of such notification on the ability of consumers to remove fraudulent information from their credit reports;

        (C) the effects of requiring that a consumer who has experienced an adverse action based on a credit report receives a copy of the same credit report that the creditor relied on in taking the adverse action, including--

          (i) the extent to which providing such reports to consumers would increase the ability of consumers to identify errors in their credit reports; and

          (ii) the extent to which providing such reports to consumers would increase the

ability of consumers to remove fraudulent information from their credit reports;

        (D) any common financial transactions that are not generally reported to the consumer reporting agencies, but would provide useful information in determining the credit worthiness of consumers; and

        (E) any actions that might be taken within a voluntary reporting system to encourage the reporting of the types of transactions described in subparagraph (D).

      (3) COSTS AND BENEFITS- With respect to each area of study described in paragraph (2), the Commission shall consider the extent to which such requirements would benefit consumers, balanced against the cost of implementing such provisions.

    (b) REPORT REQUIRED- Not later than 270 days after the date of enactment of this Act, the chairman of the Federal Trade Commission shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives containing a detailed summary of the findings and conclusions of the study under this section, together with such recommendations for legislative or administrative actions as may be appropriate.

TITLE IV--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE FINANCIAL SYSTEM

SEC. 411. PROTECTION OF MEDICAL INFORMATION IN THE FINANCIAL SYSTEM.

    (a) IN GENERAL- Section 604(g) of the Fair Credit Reporting Act (15 U.S.C. 1681b(g)) is amended to read as follows:

    ‘(g) PROTECTION OF MEDICAL INFORMATION-

      ‘(1) LIMITATION ON CONSUMER REPORTING AGENCIES- A consumer reporting agency shall not furnish for employment purposes, or in connection with a credit or insurance transaction, a consumer report that contains medical information about a consumer, unless--

        ‘(A) if furnished in connection with an insurance transaction, the consumer affirmatively consents to the furnishing of the report;

        ‘(B) if furnished for employment purposes or in connection with a credit transaction--

          ‘(i) the information to be furnished is relevant to process or effect the employment or credit transaction; and

          ‘(ii) the consumer provides specific written consent for the furnishing of the report that describes in clear and conspicuous language the use for which the information will be furnished; or

        ‘(C) such information is restricted or reported using codes that do not identify, or provide information sufficient to infer, the specific provider or the nature of such services, products, or devices to a person other than the consumer, unless the report is being provided to an insurance company for a purpose relating to engaging in the business of insurance, other than property and casualty insurance.

      ‘(2) LIMITATION ON CREDITORS- Except as permitted pursuant to paragraph (3)(C) or regulations prescribed under paragraph (5)(A), a creditor shall not obtain or use medical information pertaining to a consumer in connection with any determination of the consumer’s eligibility, or continued eligibility, for credit.

      ‘(3) ACTIONS AUTHORIZED BY FEDERAL LAW, INSURANCE ACTIVITIES AND REGULATORY DETERMINATIONS- Section 603(d)(3) shall not be construed so as to treat information or any communication of information as a consumer report if the information or communication is disclosed--

        ‘(A) in connection with the business of insurance or annuities, including the activities described in section 18B of the model Privacy of Consumer Financial and Health Information Regulation issued by the National Association of Insurance Commissioners (as in effect on January 1, 2003);

        ‘(B) for any purpose permitted without authorization under the Standards for Individually Identifiable Health Information promulgated by the Department of Health and Human Services pursuant to the Health Insurance Portability and Accountability Act of 1996, or referred to under section 1179 of such Act, or described in section 502(e) of Public Law 106-102; or

        ‘(C) as otherwise determined to be necessary and appropriate, by regulation or order and subject to paragraph (6), by the Commission, any Federal banking agency or the National Credit Union Administration (with respect to any financial institution subject to the jurisdiction of such agency or Administration under paragraph (1), (2), or (3) of section 621(b), or the applicable State insurance authority (with respect to any person engaged in providing insurance or annuities).

      ‘(4) LIMITATION ON REDISCLOSURE OF MEDICAL INFORMATION- Any person that receives medical information pursuant to paragraph (1) or (3) shall not disclose such information to any other person, except as necessary to carry out the purpose for which the information was initially disclosed, or as otherwise permitted by statute, regulation, or order.

      ‘(5) REGULATIONS AND EFFECTIVE DATE FOR PARAGRAPH (2)-

        ‘(A) REGULATIONS REQUIRED- Each Federal banking agency and the National Credit Union Administration shall, subject to paragraph (6) and after notice and opportunity for comment, prescribe regulations that permit transactions under paragraph (2) that are determined to be necessary and appropriate to protect legitimate operational, transactional,

risk, consumer, and other needs, consistent with the intent of paragraph (2) to restrict the use of medical information for inappropriate purposes.

        ‘(B) FINAL REGULATIONS REQUIRED- The Federal banking agencies and the National Credit Union Administration shall issue the regulations required under subparagraph (A) in final form before the end of the 6-month period beginning on the date of enactment of the National Consumer Credit Reporting System Improvement Act of 2003.

      ‘(6) COORDINATION WITH OTHER LAWS- No provision of this subsection shall be construed as altering, affecting, or superseding the applicability of any other provision of Federal law relating to medical confidentiality.’.

    (b) RESTRICTION ON SHARING OF MEDICAL INFORMATION- Section 603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)) is amended--

      (1) in paragraph (2), by striking ‘The term’ and inserting ‘Except as provided in paragraph (3), the term’; and

      (2) by adding at the end the following new paragraph:

      ‘(3) RESTRICTION ON SHARING OF MEDICAL INFORMATION- Except for information or any communication of information disclosed as provided in section 604(g)(3), the exclusions in paragraph (2) shall not apply with respect to information disclosed to any person related by common ownership or affiliated by corporate control, if--

        ‘(A) the information is medical information; or

        ‘(B) the information is an individualized list or description based on a consumer’s payment transactions for medical products or services, or an aggregate list of identified consumers based on payment transactions for medical products or services.’.

    (c) EFFECTIVE DATES- This section shall take effect at the end of the 180-day period beginning on the date of enactment of this Act, except that paragraph (2) of section 604(g) of the Fair Credit Reporting Act (as amended by subsection (a)) shall take effect on the later of--

      (1) the end of the 90-day period beginning on the date on which the regulations required under paragraph (5)(B) of such section 604(g) (as added by subsection (a) of this section) are issued in final form; or

      (2) the date specified in the regulations referred to in paragraph (1).

SEC. 412. CONFIDENTIALITY OF MEDICAL CONTACT INFORMATION IN CONSUMER REPORTS.

    (a) DUTIES OF MEDICAL INFORMATION FURNISHERS- Section 623(a) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)) is amended by adding at the end the following:

      ‘(6) DUTY TO PROVIDE NOTICE OF STATUS AS MEDICAL INFORMATION FURNISHER- A person whose primary business is providing medical services, products, or devices, or the person’s agent or assignee, who furnishes information to a consumer reporting agency on a consumer shall be considered a medical information furnisher for purposes of this title, and shall notify the agency of such status.’.

    (b) RESTRICTION OF DISSEMINATION OF MEDICAL CONTACT INFORMATION- Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding at the end the following:

      ‘(6) The name, address, and telephone number of any medical information furnisher that has notified the agency of its status, unless--

        ‘(A) such name, address, and telephone number are restricted or reported using codes that do not identify, or provide information sufficient to infer, the specific provider or the nature of such services, products, or devices to a person other than the consumer; or

        ‘(B) the report is being provided to an insurance company for a purpose relating to engaging in the business of insurance other than property and casualty insurance.’.

    (c) NO EXCEPTIONS ALLOWED FOR DOLLAR AMOUNTS- Section 605(b) of the Fair Credit Reporting Act (15 U.S.C. 1681c(b)) is amended by striking ‘The provisions of subsection (a)’ and inserting ‘The provisions of paragraphs (1) through (5) of subsection (a)’.

    (d) COORDINATION WITH OTHER LAWS- No provision of any amendment made by this section shall be construed as altering, affecting, or superseding the applicability of any other provision of Federal law relating to medical confidentiality.

    (e) FTC REGULATION OF CODING OF TRADE NAMES- Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s), as amended by this Act, is amended by adding at the end the following:

    ‘(g) FTC REGULATION OF CODING OF TRADE NAMES- If the Commission determines that a person described in paragraph (6) of section 623(a) has not met the requirements of such paragraph, the Commission shall take action to ensure the person’s compliance with such paragraph, which may include issuing model guidance or prescribing reasonable policies and procedures as necessary to ensure that such person complies with such paragraph.’.

    (f) TECHNICAL AND CONFORMING AMENDMENTS- Section 604(g) of the Fair Credit Reporting Act (15 U.S.C. 1681b(g)), as amended by section 411 of this Act, is amended--

      (1) in paragraph (1), by inserting ‘(other than medical contact information treated in the manner required under section 605(a)(6))’ after ‘a consumer report that contains medical information’; and

      (2) in paragraph (2), by inserting ‘(other than medical information treated in the manner required under section 605(a)(6))’ after ‘a creditor shall not obtain or use medical information’.

    (g) EFFECTIVE DATE- The amendments made by this section shall take effect at the end of the 15-month period beginning on the date of enactment of this Act.

TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT

SEC. 511. SHORT TITLE.

    This title may be cited as the ‘Financial Literacy and Education Improvement Act’.

SEC. 512. DEFINITIONS.

    As used in this title--

      (1) the term ‘Chairperson’ means the chairperson of the Financial Literacy and Education Commission; and

      (2) the term ‘Commission’ means the Financial Literacy and Education Commission established under section 513.

SEC. 513. ESTABLISHMENT OF FINANCIAL LITERACY AND EDUCATION COMMISSION.

    (a) IN GENERAL- There is established a commission to be known as the ‘Financial Literacy and Education Commission’.

    (b) PURPOSE- The Commission shall serve to improve the financial literacy and education of persons in the United States.

    (c) MEMBERSHIP-

      (1) COMPOSITION- The Commission shall be composed of--

        (A) the Secretary of the Treasury;

        (B) the respective head of each of the Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act), the National Credit Union Administration, the Securities and Exchange Commission, each of the Departments of Education, Agriculture, Defense, Health and Human Services, Housing and Urban Development, Labor, and Veterans Affairs, the Federal Trade Commission, the General Services Administration, the Small Business Administration, the Social Security Administration, the Commodity Futures Trading Commission, and the Office of Personnel Management; and

        (C) at the discretion of the President, not more than 5 individuals appointed by the President from among the administrative heads of any other Federal agencies, departments, or other Government entities, whom the President determines to be engaged in a serious effort to improve financial literacy and education.

      (2) ALTERNATES- Each member of the Commission may designate an alternate if the member is unable to attend a meeting of the Commission. Such alternate shall be an individual who exercises significant decisionmaking authority.

    (d) CHAIRPERSON- The Secretary of the Treasury shall serve as the Chairperson.

    (e) MEETINGS- The Commission shall hold, at the call of the Chairperson, at least 1 meeting every 4 months. All such meetings shall be open to the public. The Commission may hold, at the call of the Chairperson, such other meetings as the Chairperson sees fit to carry out this title.

    (f) QUORUM- A majority of the members of the Commission shall constitute a quorum, but a lesser number of members may hold hearings.

    (g) INITIAL MEETING- The Commission shall hold its first meeting not later than 60 days after the date of enactment of this Act.

SEC. 514. DUTIES OF THE COMMISSION.

    (a) DUTIES-

      (1) IN GENERAL- The Commission, through the authority of the members referred to in section 513(c), shall take such actions as it deems necessary to streamline, improve, or augment the financial literacy and education programs, grants, and materials of the Federal Government, including curricula for all Americans.

      (2) AREAS OF EMPHASIS- To improve financial literacy and education, the Commission shall emphasize, among other elements, basic personal income and household money management and planning skills, including how to--

        (A) create household budgets, initiate savings plans, and make strategic investment decisions for education, retirement, home ownership, wealth building, or other savings goals;

        (B) manage spending, credit, and debt, including credit card debt, effectively;

        (C) increase awareness of the availability and significance of credit reports and credit scores in obtaining credit, the importance of their accuracy (and how to correct inaccuracies), their effect on credit terms, and the effect common financial decisions may have on credit scores;

        (D) ascertain fair and favorable credit terms;

        (E) avoid abusive, predatory, or deceptive credit offers and financial products;

        (F) understand, evaluate, and compare financial products, services, and opportunities;

        (G) understand resources that ought to be easily accessible and affordable, and that inform and educate investors as to their rights and avenues of recourse when an investor believes his or her rights have been violated by unprofessional conduct of market intermediaries; and

        (H) improve financial literacy and education through all other related skills.

    (b) WEBSITE-

      (1) IN GENERAL- The Commission shall establish and maintain a website, such as the domain name ‘FinancialLiteracy.gov’, or a similar domain name.

      (2) PURPOSES- The website established under paragraph (1) shall--

        (A) serve as a clearinghouse of information about Federal financial literacy and education programs;

        (B) provide a coordinated entry point for accessing information about all Federal publications, grants, and materials promoting enhanced financial literacy and education;

        (C) offer information on all Federal grants to promote financial literacy and education, and

on how to target, apply for, and receive a grant that is most appropriate under the circumstances;

        (D) as the Commission considers appropriate, feature website links to efforts that have no commercial content and that feature information about financial literacy and education programs, materials, or campaigns; and

        (E) offer such other information as the Commission finds appropriate to share with the public in the fulfillment of its purpose.

    (c) TOLL-FREE HOTLINE- The Commission shall establish a toll-free telephone number that shall be made available to members of the public seeking information about issues pertaining to financial literacy and education.

    (d) DEVELOPMENT AND DISSEMINATION OF MATERIALS- The Commission shall--

      (1) develop materials to promote financial literacy and education; and

      (2) disseminate such materials to the general public.

    (e) COORDINATION OF EFFORTS- The Commission shall take such steps as are necessary to coordinate and promote financial literacy and education efforts at the State and local level, including promoting partnerships among Federal, State, and local governments, nonprofit organizations, and private enterprises.

    (f) NATIONAL STRATEGY-

      (1) IN GENERAL- The Commission shall--

        (A) not later than 18 months after the date of enactment of this Act, develop a national strategy to promote basic financial literacy and education among all American consumers; and

        (B) coordinate Federal efforts to implement the strategy developed under subparagraph (A).

      (2) STRATEGY- The strategy to promote basic financial literacy and education required to be developed under paragraph (1) shall provide for--

        (A) participation by State and local governments and private, nonprofit, and public institutions in the creation and implementation of such strategy;

        (B) the development of methods--

          (i) to increase the general financial education level of current and future consumers of financial services and products; and

          (ii) to enhance the general understanding of financial services and products;

        (C) review of Federal activities designed to promote financial literacy and education, and development of a plan to improve coordination of such activities; and

        (D) the identification of areas of overlap and duplication among Federal financial literacy and education activities and proposed means of eliminating any such overlap and duplication.

      (3) NATIONAL STRATEGY REVIEW- The Commission shall, not less than annually, review the national strategy developed under this subsection and make such changes and recommendations as it deems necessary

    (g) CONSULTATION- The Commission shall actively consult with a variety of representatives from private and nonprofit organizations and State and local agencies, as determined appropriate by the Commission.

    (h) REPORTS-

      (1) IN GENERAL- Not later than 18 months after the date of the first meeting of the Commission, and annually thereafter, the Commission shall issue a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the progress of the Commission in carrying out this title.

      (2) CONTENTS- The report required under paragraph (1) shall include--

        (A) information concerning the implementation of the duties of the Commission under subsections (a) through (g);

        (B) an assessment of the success of the Commission in implementing the national strategy developed under subsection (f);

        (C) an assessment of the availability, utilization, and impact of Federal financial literacy and education materials;

        (D) information concerning the content and public use of--

          (i) the website established under subsection (b); and

          (ii) the toll-free telephone number established under subsection (c);

        (E) a brief survey of the financial literacy and education materials developed under subsection (d), and data regarding the dissemination and impact of such materials, as measured by improved financial decision making;

        (F) a brief summary of any hearings conducted by the Commission, including a list of witnesses who testified at such hearings;

        (G) information about the activities of the Commission planned for the next fiscal year;

        (H) a summary of all Federal financial literacy and education activities targeted to communities that have historically lacked access to financial literacy materials and education, and have been underserved by the mainstream financial systems; and

        (I) such other materials relating to the duties of the Commission as the Commission deems appropriate.

      (3) INITIAL REPORT- The initial report under paragraph (1) shall include information regarding all Federal programs, materials, and grants which seek to improve financial literacy, and assess the effectiveness of such programs.

    (i) TESTIMONY- The Commission shall provide, upon request, testimony by the Chairperson to the Committee on Banking, Housing, and Urban Affairs of the

Senate, and the Committee on Financial Services of the House of Representatives.

SEC. 515. POWERS OF THE COMMISSION.

    (a) HEARINGS- The Commission may hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence as the Commission considers advisable to carry out this title.

    (b) INFORMATION FROM FEDERAL AGENCIES- The Commission may secure directly from any Federal department or agency such information as the Commission considers necessary to carry out this title. Upon request of the Chairperson, the head of such department or agency shall furnish such information to the Commission.

    (c) PERIODIC STUDIES- The Commission may conduct periodic studies regarding the state of financial literacy and education in the United States, as the Commission determines appropriate.

SEC. 516. COMMISSION PERSONNEL MATTERS.

    (a) COMPENSATION OF MEMBERS- Each member of the Commission shall serve without compensation in addition to that received for their service as an officer or employee of the United States.

    (b) TRAVEL EXPENSES- The members of the Commission shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Commission.

    (c) ASSISTANCE-

      (1) IN GENERAL- The Director of the Office of Financial Education of the Department of the Treasury shall provide assistance to the Commission, upon request of the Commission, without reimbursement.

      (2) DETAIL OF GOVERNMENT EMPLOYEES- Any Federal Government employee may be detailed to the Commission without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege.

SEC. 517. STUDY BY THE COMPTROLLER GENERAL.

    Not later than 3 years after the date of enactment of this Act, the Comptroller General of the United States shall submit a report to Congress assessing the effectiveness of the Commission in promoting financial literacy and education.

SEC. 518. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Commission such sums as may be necessary to carry out this title, including administrative expenses of the Commission.

TITLE VI--RELATION TO STATE LAW

SEC. 611. RELATION TO STATE LAW.

    Section 625(d) of the Fair Credit Reporting Act (15 U.S.C. 1681t(d), regarding relation to State laws), as so designated by section 214 of this Act, is amended--

      (1) by striking paragraph (2);

      (2) by striking ‘(c)--’ and all that follows through ‘do not affect’ and inserting ‘(c) do not affect’; and

      (3) by striking ‘1996; and’ and inserting ‘1996.’.

TITLE VII--MISCELLANEOUS

SEC. 711. CLERICAL AMENDMENTS.

    (a) SHORT TITLE- Section 601 of the Fair Credit Reporting Act (15 U.S.C. 1601 note) is amended by striking ‘the Fair Credit Reporting Act.’ and inserting ‘the ‘Fair Credit Reporting Act’.’.

    (b) Section 604- Section 604(a) of the Fair Credit Reporting Act (15 U.S.C. 1681b(a)) is amended in paragraphs (1) through (5), other than subparagraphs (E) and (F) of paragraph (3), by moving each margin 2 ems to the right.

    (c) Section 605-

      (1) Section 605(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(1)) is amended by striking ‘(1) cases’ and inserting ‘(1) Cases’.

      (2)(A) Section 5(1) of Public Law 105-347 (112 Stat. 3211) is amended by striking ‘Judgments which’ and inserting ‘judgments which’.

      (B) The amendment made by subparagraph (A) shall be deemed to have the same effective date as section 5(1) of Public Law 105-347 (112 Stat. 3211).

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

      (1) in paragraph (2), by moving the margin 2 ems to the right; and

      (2) in paragraph (3)(C), by moving the margins 2 ems to the left.

    (e) Section 617- Section 617(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681o(a)(1)) is amended by adding ‘and’ at the end.

    (f) Section 621- Section 621(b)(1)(B) of the Fair Credit Reporting Act (15 U.S.C. 1681s(b)(1)(B)) is amended by striking ‘25(a)’ and inserting ‘25A’.

    (g) Title 31- Section 5318 of title 31, United States Code, is amended by redesignating the second item designated as subsection (l) (relating to applicability of rules) as subsection (m).

    (h) CONFORMING AMENDMENT- Section 2411(c) of Public Law 104-208 (110 Stat. 3009-445) is repealed.

Calendar No. 312

108th CONGRESS

1st Session

S. 1753

[Report No. 108-166]

A BILL

To amend the Fair Credit Reporting Act in order to prevent identity theft, to improve the use of and consumer access to consumer reports, to enhance the accuracy of consumer reports, to limit the sharing of certain consumer information, to improve financial education and literacy, and for other purposes.


October 17, 2003

Read twice and placed on the calendar