[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 783 Engrossed in Senate (ES)]

103d CONGRESS

  2d Session

                                 S. 783

_______________________________________________________________________

                                 AN ACT

    To amend the Fair Credit Reporting Act, and for other purposes.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
103d CONGRESS
  2d Session
                                 S. 783

_______________________________________________________________________

                                 AN ACT


 
    To amend the Fair Credit Reporting Act, 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 ``Consumer Reporting 
Reform Act of 1994''.
    (b) Table of Contents.--The following is a table of contents for 
this Act:

Sec. 1. Short title; table of contents.
          TITLE I--AMENDMENTS TO THE FAIR CREDIT REPORTING ACT

Sec. 101. Definitions.
Sec. 102. Furnishing and using reports; use of information obtained 
                            from reports.
Sec. 103. Amendments relating to prescreening of consumer reports.
Sec. 104. Amendments relating to obsolete information and information 
                            contained in consumer reports.
Sec. 105. Amendments relating to compliance procedures.
Sec. 106. Amendments relating to consumer disclosures.
Sec. 107. Amendments relating to procedures in case of the disputed 
                            accuracy of any information in a consumer's 
                            file. 
Sec. 108. Amendment relating to charges for disclosure.
Sec. 109. Amendments relating to duties of users of consumer reports.
Sec. 110. Amendments relating to civil liability.
Sec. 111. Amendments relating to responsibilities of persons who 
                            furnish information to consumer reporting 
                            agencies.
Sec. 112. State action to enforce Act.
Sec. 113. Administrative enforcement.
Sec. 114. Establishment of toll-free telephone number.
Sec. 115. Action by FTC.
Sec. 116. Relation to State laws.
Sec. 117. Fair debt collection practices.
Sec. 118. Effective dates.
                 TITLE II--CREDIT REPAIR ORGANIZATIONS

Sec. 201. Regulation of credit repair organizations.
Sec. 202. Credit worthiness.
            TITLE III--FINANCIAL ACCOUNTING STANDARDS BOARD

Sec. 301. Findings.
Sec. 302. New accounting treatment of employee stock options and 
                            purchase plans.
Sec. 303. Status.
                   TITLE IV--MISCELLANEOUS PROVISION

Sec. 401. Securities and Exchange Commission, Seattle district office.

          TITLE I--AMENDMENTS TO THE FAIR CREDIT REPORTING ACT

SEC. 101. DEFINITIONS.

    (a) Adverse Action.--Section 603 of the Fair Credit Reporting Act 
(15 U.S.C. 1681a) is amended by adding at the end the following new 
subsection:
    ``(k) The term `adverse action', when used in connection with an 
action based in whole or in part on information contained in a consumer 
report, means an action that is adverse or less favorable to the 
interest of the consumer who is the subject of the report. Without 
limiting the general applicability of the foregoing, the following 
constitute adverse actions:
            ``(1) Credit.--
                    ``(A) Actions included.--A denial or revocation of 
                credit, an increase in the charge for credit, an 
                adverse change in the terms of an existing credit 
                arrangement, or a refusal to grant credit in 
                substantially the amount or on substantially the terms 
                requested.
                    ``(B) Actions not included.--For the purposes of 
                this paragraph, the term `adverse action' does not 
                include--
                            ``(i) an attempt to collect a debt owed or 
                        allegedly owed;
                            ``(ii) an action taken with respect to a 
                        credit or insurance transaction that is not 
                        initiated by the consumer if--
                                    ``(I) no change is made with 
                                respect to the interests of the 
                                consumer; or
                                    ``(II) a change is made that is not 
                                unfavorable to the interests of the 
                                consumer; and
                            ``(iii) an action taken with respect to the 
                        review of an account under section 
                        604(a)(3)(A), if--
                                    ``(I) no change is made with 
                                respect to the interests of the 
                                consumer; or
                                    ``(II) a change is made that is not 
                                unfavorable to the interests of the 
                                consumer.
            ``(2) Employment.--A denial of employment or other adverse 
        or less favorable decision relating to employment.
            ``(3) Insurance.--A denial or cancellation of, an increase 
        in any charge for, or reduction or other adverse or unfavorable 
        change in the terms of coverage or amount of, any insurance, 
        existing or applied for, in connection with the underwriting of 
        insurance.
            ``(4) License or benefit.--A denial or cancellation of, or 
        an increase in any charge for, or any other adverse or 
        unfavorable change in the terms of, any license or benefit 
        described in section 604(a)(3)(D).
            ``(5) Consumer initiated business transaction.--A denial or 
        cancellation of, or any other adverse or unfavorable change in 
        the terms of, any business transaction that the consumer has 
        initiated or sought to initiate.''.
    (b) Definition of Consumer Report.--Section 603(d) of the Fair 
Credit Reporting Act (15 U.S.C. 1681a(d)) is amended in the second 
sentence--
            (1) in subparagraph (A)--
                    (A) by inserting ``(i)'' after ``(A)''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``; (ii) any communication of that 
                information among persons related by common ownership 
                or affiliated by corporate control; or (iii) any 
                communication of information from a credit application 
                by a consumer among persons related by common ownership 
                or affiliated by common corporate control, if (I) it is 
                clearly and conspicuously disclosed to the consumer 
                with the credit application that the information may be 
                communicated among such persons; and (II) the consumer 
                is provided with the option to prohibit such 
                communication (in writing, using a signature line that 
                is separate and distinct from that used for the 
                consumer's consent to the extension of credit) and does 
                not exercise such option'';
            (2) in subparagraph (B), by striking ``or'' after the 
        semicolon at the end; and
            (3) in subparagraph (C), by striking the period at the end 
        and inserting the following: ``; or (D) any communication of 
        information about a consumer between persons who are affiliated 
        by common ownership or common corporate control and in 
        connection with a credit or insurance transaction that is not 
        initiated by the consumer, if either person has complied with 
        section 615(d)(2)(B) with respect to a consumer report from 
        which the information is taken and the consumer has consented 
        to use of the report for the transaction in accordance with 
        section 615(d)(2)(C).''.
    (c) Firm Offer.--Section 603 of the Fair Credit Reporting Act (15 
U.S.C. 1681a), as amended by subsection (a), is amended by adding at 
the end the following new subsection:
    ``(l) The term `firm offer' means an offer of credit or insurance 
to a consumer that will be honored by the offeror if--
            ``(1) based on information in the consumer report on the 
        consumer or other information bearing on the creditworthiness 
        of the consumer, the consumer is determined to meet the 
        criteria used to select consumers for the offer; and
            ``(2) the information provided by the consumer in the 
        application in response to the offer--
                    ``(A) is not determined to be incorrect or 
                inadequate; and
                    ``(B) meets the criteria established by the offeror 
                in advance of the offer for such extension of credit or 
                insurance.''.
    (d) Credit or Insurance Transaction That Is Not Initiated by the 
Consumer.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 
1681a), as amended by subsection (c), is amended by adding at the end 
the following new subsection:
    ``(m) The term `credit or insurance transaction that is not 
initiated by the consumer' does not include the use of a consumer 
report by a person with whom the consumer has an account, for purposes 
of--
            ``(1) reviewing the account; or
            ``(2) collecting the account.''.
    (e) Exclusion of Certain Communications By Employment Agencies From 
Definition of Consumer Report.--Section 603 of the Fair Credit 
Reporting Act (15 U.S.C. 1681(a)), as amended by subsections (a) 
through (d), is amended--
            (1) in subsection (d), by adding at the end the following 
        new sentence: ``The term also does not include a communication 
        described in subsection (n).''; and
            (2) by adding at the end the following:
    ``(n) Communications By Employment Agencies Excluded From 
Definition of Consumer Report.--For purposes of subsection (d), a 
communication is described in this subsection if it is a 
communication--
            ``(1) that, but for the third sentence of subsection (d), 
        would be an investigative consumer report;
            ``(2) that is made to a prospective employer for the 
        purpose of--
                    ``(A) procuring an employee for the employer; or
                    ``(B) procuring an opportunity for a natural person 
                to work for the employer;
            ``(3) that is made by a person that regularly performs such 
        procurement;
            ``(4) that is not used by any person for any purpose other 
        than a purpose described in subparagraph (A) or (B) of 
        paragraph (2);
            ``(5) with respect to which--
                    ``(A) the consumer who is the subject of the 
                communication--
                            ``(i) consents orally or in writing to the 
                        nature and scope of the communication, before 
                        the collection of any information for the 
                        purpose of making the communication;
                            ``(ii) consents orally or in writing to the 
                        making of the communication to a prospective 
                        employer, before the making of the 
                        communication; and
                            ``(iii) in the case of consent under clause 
                        (i) or (ii) given orally, is provided written 
                        confirmation of that consent by the person 
                        making the communication, not later than 3 
                        business days after the receipt of the consent 
                        by that person;
                    ``(B) the person making the communication does not, 
                for the purpose of making the communication, make any 
                inquiry that if made by a prospective employer of the 
                consumer who is the subject of the communication would 
                violate any applicable Federal or State equal 
                employment opportunity law or regulation; and
                    ``(C) the person making the communication--
                            ``(i) discloses in writing to the consumer 
                        who is the subject of the communication, not 
                        later than 5 business days after receiving any 
                        request from the consumer for such disclosure, 
                        the nature and substance of all information in 
                        the consumer's file at the time of the request, 
                        except that the sources of information that is 
                        acquired solely for use in making the 
                        communication and actually used for no other 
                        purpose need not be disclosed other than under 
                        appropriate discovery procedures in the court 
                        in which an action is brought; and
                            ``(ii) notifies the consumer who is the 
                        subject of the communication, in writing, of 
                        the consumer's right to request the information 
                        described in clause (i).''.

SEC. 102. FURNISHING AND USING REPORTS; USE OF INFORMATION OBTAINED 
              FROM REPORTS.

    (a) Use of Reports for Employment and Business Purposes.--Section 
604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is amended--
            (1) by striking ``A consumer reporting agency may furnish'' 
        and inserting the following:
    ``(a) In General.--A consumer reporting agency may furnish'';
            (2) in subsection (a)(3)(A) (as designated by paragraph 
        (1)), by striking ``and involving the'' and all that follows 
        through the semicolon and inserting ``or involving the 
        extension of credit to, or review or collection of a credit or 
        other account of, the consumer;'';
            (3) in subsection (a)(3) (as designated by paragraph (1)), 
        by striking subparagraph (E) and inserting the following:
                    ``(E) otherwise has a legitimate business need for 
                the information in connection with a business 
                transaction that--
                            ``(i) is initiated by the consumer; or
                            ``(ii) is a direct marketing transaction 
                        for which the furnishing of a consumer report 
                        by the agency is not prohibited under 
                        subsection (e).''; and
            (4) by adding at the end the following new subsection:
    ``(b) Conditions for Furnishing and Using Consumer Reports for 
Employment Purposes.--
            ``(1) Certification from user.--A consumer reporting agency 
        may furnish a consumer report for employment purposes only--
                    ``(A) if the person who obtains such report from 
                the agency certifies to the agency that--
                            ``(i) the disclosure required under 
                        paragraph (2) has been made and, if necessary, 
                        the disclosure required under paragraph (3), 
                        shall be made; and
                            ``(ii) information from the consumer report 
                        will not be used in violation of any applicable 
                        Federal or State equal employment opportunity 
                        law or regulation; and
                    ``(B) if the consumer reporting agency provides 
                with the report a summary of the consumer's rights 
                under this title, as prescribed in accordance with 
                section 609(c)(3).
            ``(2) Disclosures to prospective and current employees.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a person may not procure a consumer 
                report, or cause a consumer report to be procured, for 
                employment purposes with respect to a prospective or 
                current employee unless--
                            ``(i) the prospective or current employee 
                        has received, before the report is procured, a 
                        clear and conspicuous disclosure made in 
                        writing that consumer reports may be used for 
                        employment purposes; and
                            ``(ii) the prospective or current employee 
                        has provided a general or specific written 
                        authorization for the procurement of the report 
                        prior to such procurement.
                    ``(B) Written material constituting notice.--A 
                written statement that consumer reports may be used for 
                employment purposes which is contained in employee 
                guidelines or manuals available to employees and 
                prospective employees or included in written materials 
                provided to employees or prospective employees shall 
                constitute a written disclosure for purposes of 
                subparagraph (A).
            ``(3) Conditions on use for adverse actions.--Before taking 
        an adverse action based on a consumer report used for 
        employment purposes, a person shall provide to the consumer to 
        whom the report relates--
                    ``(A) a copy of the report;
                    ``(B) a description of the consumer's rights under 
                this title, as prescribed in accordance with section 
                609(c)(3); and
                    ``(C) a reasonable opportunity (not more than 5 
                business days following the receipt of the report by 
                the consumer) to respond to any information in the 
                report that is disputed by the consumer, except that if 
                the person has a reasonable belief that the consumer 
                has engaged in fraudulent or criminal activity, no such 
                opportunity to respond shall be required.''.
    (b) Use of Information Obtained From Reports.--Section 604 of the 
Fair Credit Reporting Act (15 U.S.C. 1681b), as amended by subsection 
(a), is amended by adding at the end the following new subsection:
    ``(c) Certain Use or Obtaining of Information Prohibited.--A person 
shall not use or obtain information from a consumer report for any 
purpose unless--
            ``(1) it is obtained for a purpose for which the consumer 
        report is authorized to be furnished under subsection (a); and
            ``(2) the purpose is certified in accordance with section 
        607 by a prospective user of the report.''.
    (c) Disclosure of Consumer Reports by Users.--Section 607 of the 
Fair Credit Reporting Act (15 U.S.C. 1681e) is amended by adding at the 
end the following new subsection:
    ``(c) Disclosure of Consumer Reports by Users Allowed.--A consumer 
reporting agency may not prohibit a user of a consumer report furnished 
by the agency on a consumer from disclosing the contents of the report 
to the consumer if adverse action against the consumer has been taken 
or is contemplated by the user of the consumer report, based in whole 
or in part on the report.''.
    (d) Use of Reports To Establish and Enforce Child Support Orders.--
Section 604(a) of the Fair Credit Reporting Act (15 U.S.C. 1681b), as 
amended by subsections (a) and (b), is amended by adding at the end the 
following new paragraph:
    ``(4) In response to a request from the head of the agency, 
department, or office (or an official authorized by the head of that 
agency, department, or office) that is responsible under law for 
obtaining child support orders, in order to establish an individual's 
obligation to make child support payments or to determine the 
appropriate level of such payments. Any consumer report obtained 
pursuant to this paragraph shall be kept confidential (other than for 
its use in connection with a public hearing related to child support) 
and shall not be used in connection with any other civil, 
administrative, or criminal proceeding.''.

SEC. 103. AMENDMENTS RELATING TO PRESCREENING OF CONSUMER REPORTS.

    (a) In General.--Section 604 of the Fair Credit Reporting Act (15 
U.S.C. 1681b), as amended by section 102, is amended--
            (1) in subsection (a), by striking ``A consumer reporting 
        agency'' and inserting ``Subject to subsection (d), a consumer 
        reporting agency''; and
            (2) by adding at the end the following new subsection:
    ``(d) Limitations on Reports Relating to Credit or Insurance 
Transactions Not Initiated by the Consumer.--
            ``(1) In general.--A consumer reporting agency may furnish 
        a consumer report relating to a consumer pursuant to subsection 
        (a)(3)(A) to any person referred to in such subsection in 
        connection with any credit or insurance transaction that is not 
        initiated by the consumer only if--
                    ``(A) the consumer authorizes the agency to provide 
                such report to such person; or
                    ``(B)(i) the transaction consists of a firm offer 
                of credit or insurance;
                    ``(ii) the consumer reporting agency has complied 
                with subsection (f); and
                    ``(iii) the consumer has not elected in accordance 
                with subsection (f)(1) to have the consumer's name and 
                address excluded from lists provided by the agency.
            ``(2) Limits on information received under paragraph 
        (1)(b).--A person may receive pursuant to paragraph (1)(B) 
        only--
                    ``(A) the name and address of a consumer;
                    ``(B) an identifier that is not unique to the 
                consumer and that is used by the person solely for the 
                purpose of verifying the identity of the consumer; and
                    ``(C) information pertaining to a consumer that is 
                not identified or identifiable with the consumer.
            ``(3) Information regarding inquiries.--Except as provided 
        in section 609(a)(4), a consumer reporting agency shall not 
        furnish to any person a record of inquiries resulting from 
        credit or insurance transactions that are not initiated by a 
        consumer.''.
    (b) Furnishing Consumer Reports for Direct Marketing 
Transactions.--Section 604 of the Fair Credit Reporting Act (15 U.S.C. 
1681b), as amended by subsection (a), is amended by adding at the end 
the following new subsections:
    ``(e) Furnishing Consumer Reports for Direct Marketing Transactions 
Not Initiated by Consumer.--
            ``(1) Furnishing reports prohibited.--Except as provided in 
        subsections (a)(2) and (d), a consumer reporting agency may not 
        furnish a consumer report for use for a direct marketing 
        transaction that is not initiated by the consumer to whom the 
        report relates, if--
                    ``(A) the consumer notifies the agency that the 
                consumer does not consent to that use;
                    ``(B) the report includes any information other 
                than the name and address of the consumer; or
                    ``(C) furnishing the information would disclose the 
                credit payment history, credit limit, credit balance, 
                or any negative information pertaining to the consumer.
            ``(2) Notification.--A consumer may notify a consumer 
        reporting agency for purposes of paragraph (1)(A) either--
                    ``(A) in writing; or
                    ``(B) in the case of an agency that compiles and 
                maintains files on consumers on a nationwide basis, by 
                calling the toll-free telephone number established 
                pursuant to subsection (f)(3).
    ``(f) Election of Consumer To Be Excluded From Lists.--
            ``(1) In general.--A consumer may elect to have such 
        consumer's name and address excluded from any list provided by 
        a consumer reporting agency pursuant to subsection (d)(1)(B) or 
        (e)(2), by--
                    ``(A) notifying the agency, in writing or through 
                the notification system maintained by the agency under 
                paragraph (3), that the consumer does not consent to 
                any use of consumer reports relating to the consumer in 
                connection with any credit or insurance transaction 
                that is not initiated by the consumer or in connection 
                with a direct marketing transaction that is not 
                initiated by the consumer; or
                    ``(B) returning to the agency a signed written 
                notice of the election, as provided by the agency in 
                accordance with paragraph (2).
            ``(2) Provision of written notice to consumer.--A consumer 
        reporting agency shall mail to a consumer a written notice for 
        purposes of paragraph (1)(B), not later than 5 business days 
        after being notified of the election of the consumer in 
        accordance with paragraph (1)(A).
            ``(3) Notification system.--Each consumer reporting agency 
        that furnishes a consumer report pursuant to subsection 
        (d)(1)(B) in connection with any credit or insurance 
        transaction that is not initiated by a consumer or pursuant to 
        subsection (e) in connection with any direct marketing 
        transaction that is not initiated by the consumer, shall 
        establish and maintain a notification system, including a toll-
        free telephone number, which permits a consumer whose consumer 
        report is maintained by the agency to notify the agency, with 
        appropriate identification, of the consumer's election to have 
        the consumer's name and address excluded from any list of names 
        and addresses provided by the agency or its affiliates pursuant 
        to subsection (d)(1)(B) or (e)(2). Establishment and 
        maintenance of a nationwide notification system and publication 
        by a consumer reporting agency on a nationwide basis in 
        accordance with this paragraph shall be considered to fulfill 
        the requirements of this paragraph with respect to each 
        affiliate of the agency.
            ``(4) Agencies operating nationwide.--Each consumer 
        reporting agency that compiles and maintains files on consumers 
        on a nationwide basis shall establish and maintain a 
        notification system under paragraph (3) jointly with other such 
        consumer reporting agencies.
            ``(5) Effectiveness of election.--An election of a consumer 
        under paragraph (1)--
                    ``(A) shall be effective with respect to a consumer 
                reporting agency beginning on the date on which the 
                consumer notifies the agency in accordance with 
                paragraph (1)(A);
                    ``(B) shall be effective--
                            ``(i) for a period of 2 years after that 
                        effective date; or
                            ``(ii) permanently, as may be specified by 
                        the consumer in his or her notification of 
                        election under paragraph (1)(B), except that 
                        the consumer may notify the agency at any time 
                        of a change of election in accordance with 
                        paragraph (1);
                    ``(C) shall be effective with respect to each 
                affiliate of the consumer reporting agency; and
                    ``(D) shall be effective with respect to any list 
                provided by a consumer reporting agency pursuant to 
                subsection (d)(1)(B) or (e)(2), unless otherwise 
                specified by the consumer.''.
    (c) First Notifications by Consumers.--Not later than 1 year after 
the date of enactment of this Act, each consumer reporting agency that 
furnishes a consumer report pursuant to subsection (d) or (e) of 
section 604 shall establish and thereafter maintain a notification 
system in accordance with section 604(f).

SEC. 104. AMENDMENTS RELATING TO OBSOLETE INFORMATION AND INFORMATION 
              CONTAINED IN CONSUMER REPORTS.

    (a) Repeal of Exemption Provisions.--Section 605(a) of the Fair 
Credit Reporting Act (15 U.S.C. 1681c(a)) is amended in subsection (a), 
by striking ``(a) Except as authorized under subsection (b) of this 
section, no'' and inserting ``(a) Obsolete Information.--Except as 
otherwise specifically authorized, no''.
    (b) Additional Information on Bankruptcy Filings Required.--Section 
605(b) of the Fair Credit Reporting Act (15 U.S.C. 1681c(b)) is amended 
to read as follows:
    ``(b) Information Required To Be Disclosed.--A consumer reporting 
agency that furnishes a consumer report that contains information 
regarding any case involving the consumer which arises under title 11, 
United States Code, shall include in the report an identification of 
the chapter of such title 11 under which such case arises if provided 
by the source of the information. If any case arising or filed under 
such title 11 is withdrawn by the consumer prior to a final judgment, 
the consumer reporting agency shall include in the report that such 
case or filing was withdrawn upon receipt of documentation certifying 
such withdrawal.''.
    (c) Clarification of Reporting Period.--Section 605 of the Fair 
Credit Reporting Act (15 U.S.C. 1681c) is amended by adding at the end 
the following new subsection:
    ``(c) Running of Reporting Period.--The 7-year period referred to 
in paragraphs (4) and (6) of subsection (a) shall begin, with respect 
to a delinquent account that is placed for collection (internally or by 
referral to a third party, whichever is earlier), charged to profit and 
loss, or subjected to any similar action, upon the expiration of the 
180-day period beginning on the date of the commencement of the 
delinquency that immediately preceded the collection activity, charge 
to profit and loss, or similar action. The requirements of this 
subsection shall apply only to information added to a consumer report 
beginning 1 year after the date of enactment of the Consumer Reporting 
Reform Act of 1994.''.
    (d) Disclosure of Personal Information.--Section 605 of the Fair 
Credit Reporting Act (15 U.S.C. 1681c), as amended by subsection (c), 
is amended by adding at the end the following new subsection:
    ``(d) Disclosure of Personal Information.--A person who prepares a 
consumer report that includes personal credit information on a consumer 
shall not include in the report any adverse item of information on the 
consumer with respect to matters which antedate the report by more than 
10 years or which could not be included in any consumer report on the 
consumer in accordance with this section.''.
    (e) Indication of Closure of Account.--Section 605 of the Fair 
Credit Reporting Act (15 U.S.C. 1681c), as amended by subsection (d), 
is amended by adding at the end the following new subsection:
    ``(e) Indication of Closure of Account by Consumer.--If a consumer 
reporting agency is notified pursuant to section 622(a)(4) that a 
consumer's credit account was voluntarily closed by the consumer, the 
agency shall indicate that fact in any consumer report that includes 
information related to that account.''.
    (f) Clerical Amendments.--
            (1) Section heading.--The heading for section 605 of the 
        Fair Credit Reporting Act (15 U.S.C. 1681c) is amended to read 
        as follows:

``SEC. 605. REQUIREMENTS RELATING TO INFORMATION CONTAINED IN CONSUMER 
              REPORTS.''.

            (2) Table of sections.--The table of sections at the 
        beginning of the Fair Credit Reporting Act (15 U.S.C. 1681a et 
        seq.) is amended by striking the item relating to section 605 
        and inserting the following:

    ``605. Requirements relating to information contained in consumer 
                            reports.''.

SEC. 105. AMENDMENTS RELATING TO COMPLIANCE PROCEDURES.

    (a) Notice to Users and Providers of Information To Ensure 
Compliance.--
            (1) In general.--Section 607 of the Fair Credit Reporting 
        Act (15 U.S.C. 1681e), as amended by section 102(c), is amended 
        by adding at the end the following new subsection:
    ``(d) Notice to Users and Furnishers of Information.--A consumer 
reporting agency shall provide notice to a person of such person's 
responsibilities under this title if such person--
            ``(1) regularly and in the ordinary course of business 
        furnishes information to the agency with respect to a consumer; 
        or
            ``(2) is provided by the agency with a consumer report.''.
            (2) Content of notice.--Not later than 1 year after the 
        date of enactment of this Act, the Federal Trade Commission 
        shall prescribe the content of notices required under section 
        607(d) of the Fair Credit Reporting Act, as added by this 
        subsection.
    (b) Record of Identity of Users and Purposes Certified by Users of 
Reports.--Section 607 of the Fair Credit Reporting Act (15 U.S.C. 
1681e), as amended by subsection (a), is amended by adding at the end 
the following new subsection:
    ``(e) Procurement of Consumer Report for Resale.--
            ``(1) Disclosure.--A person may not procure a consumer 
        report for purposes of reselling the report (or the information 
        contained in the report) unless the person discloses to the 
        consumer reporting agency that originally furnished the 
        report--
                    ``(A) the identity of the ultimate user of the 
                report (or the information), and
                    ``(B) each permissible purpose under section 604 
                for which the report will be furnished to the ultimate 
                user of the report (or the information).
            ``(2) Responsibilities of procurers for resale.--A person 
        who procures a consumer report for purposes of reselling the 
        report (or the information contained in the report) shall--
                    ``(A) establish and comply with reasonable 
                procedures, which shall be designed to ensure that the 
                report (or the information) is resold by such person 
                only for a purpose for which the report may be 
                furnished under section 604, including--
                            ``(i) identifying each prospective user of 
                        the resold report (or the information);
                            ``(ii) certifying each purpose for which 
                        the report (or the information) will be used; 
                        and
                            ``(iii) certifying that the report (or the 
                        information) will be used for no other purpose; 
                        and
                    ``(B) before reselling the report, make reasonable 
                efforts to verify the identifications and 
                certifications made under subparagraph (A).''.

SEC. 106. AMENDMENTS RELATING TO CONSUMER DISCLOSURES.

    (a) All Information in Consumer's File Required To Be Disclosed.--
Section 609(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 
1681g(a)(1)) is amended to read as follows:
            ``(1) All information in the consumer's file at the time of 
        the request.''.
    (b) More Information Concerning Recipients of Reports Required.--
Section 609(a)(3) of the Fair Credit Reporting Act (15 U.S.C. 
1681g(a)(3)) is amended to read as follows:
            ``(3)(A) Identification of each person who procured a 
        consumer report--
                    ``(i) for employment purposes during the 2-year 
                period preceding the request; and
                    ``(ii) for any other purpose during the 1-year 
                period preceding the request.
            ``(B) An identification of a person under subparagraph (A) 
        shall include--
                    ``(i) the name of the person or, if applicable, the 
                trade name (written in full) under which such person 
                conducts business; and
                    ``(ii) upon request of the consumer, the address 
                and telephone number of the person.''.
    (c) Information Regarding Inquiries.--Section 609(a) of the Fair 
Credit Reporting Act (15 U.S.C. 1681g(a)) is amended by adding at the 
end the following new paragraph:
            ``(4) A record of all inquiries received by the agency 
        during the 1-year period preceding the request that identified 
        the consumer in connection with a credit or insurance 
        transaction that was not initiated by the consumer.''.
    (d) Summary of Rights Required To Be Included With Disclosure.--
            (1) In general.--Section 609 of the Fair Credit Reporting 
        Act (15 U.S.C. 1681g) is amended by adding at the end the 
        following new subsection:
    ``(c) Summary of Rights Required To Be Included With Disclosure.--
            ``(1) Summary of rights.--A consumer reporting agency shall 
        provide to a consumer, on or with each written disclosure by 
        the agency to the consumer under this section--
                    ``(A) a written summary of all rights afforded to 
                the consumer under this title; and
                    ``(B) in the case of a consumer reporting agency 
                that compiles and maintains consumer reports on a 
                nationwide basis, a toll-free telephone number that the 
                consumer can use to communicate with the agency.
            ``(2) Specific items required to be included.--The summary 
        of rights required under paragraph (1) shall include--
                    ``(A) a brief description of this title and all 
                rights of consumers under this title;
                    ``(B) an explanation of how the consumer may 
                exercise the rights of the consumer under this title;
                    ``(C) a list of all Federal agencies responsible 
                for enforcing any provision of this title and the 
                address and any appropriate telephone number of each 
                such agency, in a form that will assist the consumer in 
                selecting the appropriate agency; and
                    ``(D) a statement that a consumer reporting agency 
                is not required to remove accurate derogatory 
                information from a consumer's file unless the 
                information is outdated, as determined in accordance 
                with section 605, or unless the information cannot be 
                verified.
            ``(3) Form of summary of rights.--The Federal Trade 
        Commission (after consultation with each Federal agency 
        referred to in section 621(b)) shall prescribe the form and 
        content of any disclosure with respect to consumers' rights 
        required to be made by a consumer reporting agency under this 
        title.
            ``(4) State disclosures.--Notwithstanding paragraphs (1) 
        through (3), a State shall retain the authority to require 
        additional disclosures pertaining to State law in connection 
        with a consumer report. Nothing in this subsection shall be 
        construed to limit the authority of a State to mandate the time 
        by which a disclosure shall be made to a consumer.''.
            (2) Technical amendment.--Section 606(a)(1)(B) of the Fair 
        Credit Reporting Act (15 U.S.C. 1681d(a)(1)(B)) is amended by 
        inserting before the semicolon the following: ``and the written 
        summary of the rights of the consumer prepared pursuant to 
        section 609(c)''.
    (e) Form of Disclosures.--
            (1) In general.--Subsections (a) and (b) of section 610 of 
        the Fair Credit Reporting Act (15 U.S.C. 1681h) are amended to 
        read as follows:
    ``(a) Written Disclosure.--The disclosures required to be made 
under section 609 shall be provided to a consumer in writing.
    ``(b) Other Forms of Disclosure.--
            ``(1) In general.--In addition to the written disclosures 
        required by subsection (a), a consumer reporting agency may 
        make the disclosures required under section 609 other than in 
        written form if--
                    ``(A) the consumer authorizes the disclosure;
                    ``(B) the consumer furnishes proper identification 
                to the consumer reporting agency;
                    ``(C) the consumer specifies the form of 
                disclosure; and
                    ``(D) such form of disclosure is available from the 
                agency.
            ``(2) Form.--A consumer may specify, pursuant to paragraph 
        (1), that disclosures under section 609 be made--
                    ``(A) in person, upon the appearance of the 
                consumer at the place of business of the consumer 
                reporting agency where disclosures are regularly 
                provided, during normal business hours, and on 
                reasonable notice;
                    ``(B) by telephone, if the consumer has made a 
                written request for disclosure by telephone that 
                includes the proper identification of the consumer, as 
                required by paragraph (1)(B);
                    ``(C) by electronic means, if available from the 
                agency; or
                    ``(D) by any other reasonable means available from 
                the agency.''.
            (2) Simplified disclosure.--Not later than 90 days after 
        the date of enactment of this Act, each consumer reporting 
        agency shall develop a form on which such consumer reporting 
        agency shall make the disclosures required under section 609(a) 
        of the Fair Credit Reporting Act, for the purpose of maximizing 
        the comprehensibility and standardization of such disclosures.
            (3) Goals.--The Federal Trade Commission shall take 
        appropriate action to assure that the goals of 
        comprehensibility and standardization are achieved in 
        accordance with paragraph (2).
            (4) Conforming amendments.--
                    (A) Section heading.--The section heading for 
                section 610 of the Fair Credit Reporting Act (15 U.S.C. 
                1681h) is amended to read as follows:

``SEC. 610. CONDITIONS AND FORM OF DISCLOSURE TO CONSUMERS.''.

                    (B) Table of sections.--The table of sections at 
                the beginning of the Fair Credit Reporting Act (15 
                U.S.C. 1681a et seq.) is amended by striking the item 
                relating to section 610 by inserting the following:

    ``610. Conditions and form of disclosure to consumers.''.

SEC. 107. AMENDMENTS RELATING TO PROCEDURES IN CASE OF THE DISPUTED 
              ACCURACY OF ANY INFORMATION IN A CONSUMER'S FILE.

    (a) In General.--Section 611(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681i(a)) is amended to read as follows:
    ``(a) Reinvestigation of Disputed Information.--
            ``(1) In general.--If the completeness or accuracy of an 
        item of information contained in a consumer's file at a 
        consumer reporting agency is disputed by the consumer and the 
        consumer notifies the agency directly of such dispute, the 
        agency shall reinvestigate free of charge and record the 
        current status of the disputed information before the later 
        of--
                    ``(A) the expiration of the 30-day period beginning 
                on the date the agency receives the notice of the 
                dispute from the consumer; or
                    ``(B) the expiration of the 15-day period beginning 
                on the last date on which the agency receives relevant 
                information submitted by the consumer in accordance 
                with paragraph (4).
            ``(2) Prompt notice of dispute to furnisher of 
        information.--Not later than 5 business days after the date on 
        which a consumer reporting agency receives notice of a dispute 
        from a consumer in accordance with paragraph (1), the agency 
        shall notify any person who provided any item of information in 
        dispute at the address and in the manner established with the 
        person.
            ``(3) Determination that dispute is frivolous or 
        irrelevant.--
                    ``(A) In general.--Notwithstanding paragraph (1), a 
                consumer reporting agency may terminate a 
                reinvestigation of information disputed by a consumer 
                under that paragraph if the agency reasonably 
                determines that the dispute raised by the consumer is 
                frivolous or irrelevant, including by reason of a 
                failure to provide sufficient information to 
                investigate the dispute.
                    ``(B) Notice of determination.--Not later than 5 
                business days after making a determination in 
                accordance with subparagraph (A) that a dispute is 
                frivolous or irrelevant, a consumer reporting agency 
                shall mail to the consumer a written notification of 
                such determination (including the reasons for the 
                determination), and, if authorized by the consumer for 
                that purpose, notification by any other means available 
                to the agency.
            ``(4) Consideration of consumer information.--In conducting 
        any reinvestigation under paragraph (1) with respect to 
        disputed information in the file of a consumer, the consumer 
        reporting agency shall review and consider all relevant 
        information submitted by the consumer during the 30-day period 
        beginning on the date the agency receives the notice of the 
        dispute from the consumer.
            ``(5) Deletion of inaccurate or unverifiable information.--
                    ``(A) In general.--If, in the course of a 
                reinvestigation under paragraph (1) of any information 
                disputed by a consumer, an item of the information is 
                found to be inaccurate or cannot be verified, the 
                consumer reporting agency shall delete that item of 
                information from the consumer's file.
                    ``(B) Requirements relating to reinsertion of 
                previously deleted material.--
                            ``(i) Certification of accuracy of 
                        information.--If any information is deleted 
                        from a consumer's file pursuant to subparagraph 
                        (A), the information may not be reinserted in 
                        the file after the deletion unless the person 
                        who furnishes the information certifies that 
                        the information is complete and accurate.
                            ``(ii) Notice to consumer.--If any 
                        information that has been deleted from a 
                        consumer's file pursuant to subparagraph (A) is 
                        reinserted in the file in accordance with 
                        clause (i), the consumer reporting agency 
                        shall, not later than 5 business days after 
                        such reinsertion, mail to the consumer written 
                        notification of the reinsertion, and, if 
                        authorized by the consumer for that purpose, 
                        shall provide such notice by any other means 
                        available to the agency.
                            ``(iii) Contents.--The notice of 
                        reinsertion required under clause (ii) shall 
                        include--
                                    ``(I) all information prescribed in 
                                clauses (iii) and (v) of paragraph 
                                (6)(B);
                                    ``(II) a description of the 
                                procedure used to make the finding that 
                                the information should be reinserted; 
                                and
                                    ``(III) the name, business address, 
                                and telephone number of any furnisher 
                                of information contacted in connection 
                                with such information.
                    ``(C) Procedures to prevent reappearance.--A 
                consumer reporting agency shall maintain reasonable 
                procedures designed to prevent the reappearance in a 
                consumer's file, and in consumer reports on the 
                consumer, of information that is required to be deleted 
                pursuant to this paragraph (other than information that 
                is reinserted in accordance with subparagraph (B)(i)).
            ``(6) Notice of results of reinvestigation.--
                    ``(A) In general.--A consumer reporting agency 
                shall mail to the consumer written notification of the 
                results of a reinvestigation under this subsection not 
                later than 5 business days after the completion of the 
                reinvestigation, and, if authorized by the consumer for 
                that purpose, shall provide notification by other means 
                available to the agency.
                    ``(B) Contents.--As part of or in addition to the 
                notice under subparagraph (A), a consumer reporting 
                agency shall provide to a consumer in writing during 
                the 5-business-day period referred to in subparagraph 
                (A)--
                            ``(i) a statement that the reinvestigation 
                        is completed;
                            ``(ii) a consumer report that is based upon 
                        the consumer's file as that file is revised as 
                        a result of the reinvestigation;
                            ``(iii) a description or indication of any 
                        changes made in the consumer report as a result 
                        of those revisions to the consumer's file;
                            ``(iv) in any case in which disputed 
                        information is found to be accurate and 
                        complete (and in any other case upon request by 
                        the consumer), a description of the procedure 
                        used to make the finding and the name, business 
                        address, and telephone number of any furnisher 
                        of information contacted in connection with 
                        such information;
                            ``(v) a notification that the consumer has 
                        the right to insert a statement in such 
                        consumer's file disputing the accuracy or 
                        completeness of the information in the file; 
                        and
                            ``(vi) a clear and conspicuous notification 
                        of the right of the consumer to request under 
                        subsection (d) that the consumer reporting 
                        agency furnish notifications under that 
                        subsection.
            ``(7) Description of reinvestigation procedure.--Not later 
        than 15 days after receiving a request from the consumer for a 
        description referred to in paragraph (6)(B)(iv), the consumer 
        reporting agency shall provide such description to the 
        consumer.
            ``(8) Exception.--If the dispute is resolved by the 
        deletion of the disputed information not later than 3 business 
        days after the date on which the consumer reporting agency 
        receives notice of the dispute in accordance with paragraph 
        (1), the consumer reporting agency shall be exempt from the 
        requirements of paragraphs (2) and (6) if the consumer 
        reporting agency--
                    ``(A) provides prompt notification of the deletion 
                to the consumer by telephone;
                    ``(B) provides written confirmation of the 
                deletion, upon request by the consumer; and
                    ``(C) maintains reasonable procedures designed to 
                prevent the reappearance in the consumer's file, and in 
                reports on the consumer, of information deleted 
                pursuant to paragraph (5).
            ``(9) Consideration of consumer documentation.--
                    ``(A) In general.--Reinvestigation under this 
                section shall include an acceptance of the consumer's 
                version of the disputed information and correction or 
                deletion of the disputed information, if the consumer 
                submits to the consumer reporting agency documentation 
                obtained from the source of the information in dispute 
                confirming that the disputed information in the 
                consumer report is inaccurate or incomplete.
                    ``(B) Exception.--Notwithstanding subparagraph (A), 
                the consumer reporting agency need not accept the 
                consumer's version of the disputed information if the 
                consumer reporting agency, acting in good faith--
                            ``(i) has reason to doubt the authenticity 
                        of the documentation submitted by the consumer;
                            ``(ii) reinvestigates the dispute by 
                        contacting the source of the disputed item; and
                            ``(iii) verifies that the documentation is 
                        not authentic.
            ``(10) Information from consumer.--Nothing in paragraph 
        (1)(B) or paragraph (4) shall be construed to require a 
        consumer to provide information in connection with a 
        reinvestigation under this section.''.
    (b) Conforming Amendment.--Section 611(d) of the Fair Credit 
Reporting Act (15 U.S.C. 1681i(d)) is amended by striking ``The 
consumer reporting agency shall clearly'' and all that follows through 
the end of the subsection.

SEC. 108. AMENDMENT RELATING TO CHARGES FOR DISCLOSURE.

    (a) In General.--Section 612 of the Fair Credit Reporting Act (15 
U.S.C. 1681j) is amended to read as follows:

``SEC. 612. CHARGES FOR DISCLOSURES AND CERTAIN NOTICES PROHIBITED.

    ``(a) Free Consumer Reports.--Each consumer reporting agency that 
maintains a file on a consumer shall make all disclosures pursuant to 
section 609 without charge to the consumer--
            ``(1) if the consumer makes a request under section 609 not 
        later than 60 days after receipt by such consumer of a 
        notification pursuant to section 615 or of a notification from 
        a debt collection agency affiliated with that consumer 
        reporting agency stating that the consumer's credit rating may 
        be or has been adversely affected;
            ``(2) upon written request by the consumer not later than 1 
        year after the consumer receives a notification under 
        subsection (b)(2); and
            ``(3) if the consumer certifies in writing that the 
        consumer--
                    ``(A) is unemployed and intends to apply for 
                employment during the 60-day period beginning on the 
                date on which such certification is made;
                    ``(B) is a recipient of public welfare assistance; 
                or
                    ``(C) has been the victim of fraud.
    ``(b) Charge for Certain Notices Prohibited.--A consumer reporting 
agency shall not impose any charge on the consumer for--
            ``(1) providing a notice required under section 604(f)(2), 
        607(d), or 611(a); or
            ``(2) notifying a person pursuant to section 611(d) of the 
        deletion of information that is found to be inaccurate or that 
        can no longer be verified, if the consumer designates that 
        person to the agency before the end of the 30-day period 
        beginning on the date of the notification of the consumer under 
        section 611(a)(6).
    ``(c) Consumer Reports at Specified Charge.--
            ``(1) In general.--Upon the written request of a consumer, 
        a consumer reporting agency that maintains a file on the 
        consumer shall make all disclosures pursuant to section 609 
        once during any 12-month period at the applicable charge 
        described in paragraph (2).
            ``(2) Applicable charge.--For purposes of paragraph (1), 
        the applicable charge shall not exceed the lesser of--
                    ``(A) the total costs incurred by the consumer 
                reporting agency in making the disclosures; and
                    ``(B) $3.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
the Fair Credit Reporting Act (15 U.S.C. 1681a et seq.) is amended by 
striking the item relating to section 612 and inserting the following:

    ``612. Charges for disclosures and certain notices prohibited.''.

SEC. 109. AMENDMENTS RELATING TO DUTIES OF USERS OF CONSUMER REPORTS.

    (a) Duties of Users Taking Adverse Actions.--Section 615(a) of the 
Fair Credit Reporting Act (15 U.S.C. 1681m(a)) is amended to read as 
follows:
    ``(a) Duties of Users Taking Adverse Actions on the Basis of 
Information Contained in Consumer Reports.--If a person takes any 
adverse action with respect to a consumer in connection with credit, 
employment purposes, insurance underwriting, any license or benefit 
described in section 604(a)(3)(D), or any business transaction 
involving the consumer that is based, in whole or in part, on any 
information contained in a consumer report, the person shall--
            ``(1) provide written notice of the adverse action to the 
        consumer;
            ``(2) provide to the consumer--
                    ``(A) the name, address, and telephone number 
                (including any available toll-free telephone number) of 
                the consumer reporting agency that furnished the report 
                to the person; and
                    ``(B) a statement that the consumer reporting 
                agency did not make the decision to take the adverse 
                action; and
            ``(3) provide to the consumer a written notice of the 
        consumer's right--
                    ``(A) to obtain, under section 612, a free copy of 
                a consumer report on the consumer, from the consumer 
                reporting agency referred to in paragraph (2); and
                    ``(B) to dispute, under section 611, with a 
                consumer reporting agency the accuracy or completeness 
                of any information in a consumer report furnished by 
                the agency.''.
    (b) Duties of Users Who Make Certain Solicitations.--Section 615 of 
the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended by adding at 
the end the following new subsection:
    ``(d) Duties of Users Who Make Written Credit or Insurance 
Solicitations on the Basis of Information Contained in Consumer 
Files.--
            ``(1) In general.--A person who uses a consumer report of a 
        consumer in connection with any credit or insurance transaction 
        that is not initiated by the consumer and that consists of a 
        firm offer of credit or insurance shall provide on or with any 
        written solicitation made to the consumer regarding the 
        transaction a clear and conspicuous statement that--
                    ``(A) information contained in the consumer's 
                consumer report was used in connection with the 
                transaction;
                    ``(B) the consumer received the offer of credit or 
                insurance because the consumer satisfied the criteria 
                for creditworthiness under which the consumer was 
                selected for the offer;
                    ``(C) if applicable, the credit or insurance may 
                not be extended if, after the consumer responds to the 
                offer by submitting an application, the consumer--
                            ``(i) fails to provide correct and adequate 
                        information in such application; or
                            ``(ii) does not meet the criteria 
                        established in advance of the offer for such 
                        extension of credit or insurance;
                    ``(D) no criteria for creditworthiness will be 
                imposed on the consumer other than the criteria 
                established in advance of the offer for such extension 
                of credit or insurance;
                    ``(E) the consumer has a right to prohibit 
                information contained in the consumer's file with a 
                consumer reporting agency to be used in connection with 
                any credit or insurance transaction that is not 
                initiated by the consumer; and
                    ``(F) the consumer may exercise the right referred 
                to in subparagraph (E) by using the joint notification 
                system established under section 604(f)(4) or the toll-
                free telephone number established pursuant to section 
                604(f)(3).
            ``(2) Limitation on application.--Paragraph (1) does not 
        apply to the use of a consumer report by a person if--
                    ``(A) the person is affiliated by common ownership 
                or by common corporate control with the person who 
                procured the report;
                    ``(B) the person who procured the report clearly 
                and conspicuously disclosed to the consumer to whom the 
                report relates, before the report is provided to the 
                person who will use the report, that the report might 
                be provided to and used by other persons who are 
                affiliated in the manner described in subparagraph (A) 
                to the person who procured the report; and
                    ``(C) the provision and use of the report is 
                consented to by the consumer in writing.
            ``(3) False and misleading statements.--No statement 
        accompanying a credit or insurance transaction that is not 
        initiated by the consumer shall contain any false or misleading 
        information concerning any condition or criteria for the 
        extension or offer of credit or insurance to the consumer.
            ``(4) Maintaining criteria on file.--A person who makes an 
        offer of credit or insurance to a consumer under a credit or 
        insurance transaction described in paragraph (1) shall maintain 
        on file the criteria established in advance of the offer for 
        such extension of credit or insurance until the expiration of 
        the 3-year period beginning on the date on which the offer is 
        made to the consumer.''.
    (c) Duties of Users for Direct Marketing Transactions Not Initiated 
by Consumers.--Section 615 of the Fair Credit Reporting Act (15 U.S.C. 
1681m), as amended by subsection (b), is amended by adding at the end 
the following new subsection:
    ``(e) Duties of Users for Direct Marketing Transactions Not 
Initiated by Consumers.--A person who, in connection with a direct 
marketing transaction that is not initiated by a consumer, uses 
information concerning the consumer that is provided by a consumer 
reporting agency to that person under section 604(e) shall provide to 
the consumer with each communication regarding the transaction made to 
the consumer a clear and conspicuous written statement--
            ``(1) that information concerning the consumer that was 
        provided by a consumer reporting agency was used in connection 
        with the transaction;
            ``(2) that the consumer has the right under section 604(e) 
        to prohibit any information concerning the consumer from being 
        provided by the consumer reporting agency for use in connection 
        with any direct marketing transaction that is not initiated by 
        the consumer;
            ``(3) that the consumer may exercise the right referred to 
        in paragraph (2) by notifying the consumer reporting agency in 
        writing or, in the case of a consumer reporting agency required 
        to establish a toll-free telephone number pursuant to section 
        604(f)(4), by calling that number; and
            ``(4) disclosing the name, address, and, in the case of a 
        consumer reporting agency required to establish a toll-free 
        telephone number pursuant to section 604(f)(4), the toll-free 
        telephone number at which the agency may be notified.''.
    (d) Affiliate Sharing Notice Requirement.--Section 615 of the Fair 
Credit Reporting Act (15 U.S.C. 1681m), as amended by subsections (b) 
and (c), is amended by adding at the end the following new subsection:
    ``(f) Affiliate Sharing Notice Requirement.--Whenever credit or 
insurance for personal, family, or household purposes involving a 
consumer is denied or the charge for such credit is increased, either 
wholly or partly because of information that is furnished to the user 
of the information by a person related to the user by common ownership 
or affiliated by corporate control, and that bears upon the consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living, the user of 
such information shall--
            ``(1) notify the consumer of the action, and upon a written 
        request from the consumer for the reasons for such action that 
        is received by the user not later than 60 days after 
        transmitting such notice, not later than 30 days after 
        receiving such request, disclose the nature of the information 
        to the consumer; and
            ``(2) provide to the consumer a toll-free telephone number 
        that is established and maintained by the user and that enables 
        the consumer to contact the user regarding the action.''.

SEC. 110. AMENDMENTS RELATING TO CIVIL LIABILITY.

    (a) Willful Failure To Comply.--Section 616 of the Fair Credit 
Reporting Act (15 U.S.C. 1681n) is amended to read as follows:

``SEC. 616. CIVIL LIABILITY FOR WILLFUL NONCOMPLIANCE.

    ``(a) In General.--Except as provided in section 622(c), a person 
who willfully fails to comply with any requirement imposed under this 
title with respect to a consumer is liable to that consumer in an 
amount prescribed under subsection (b).
    ``(b) Damages.--Liability for a willful failure to comply described 
in subsection (a) shall be in an amount equal to the sum of--
            ``(1) any actual damages sustained by the consumer as a 
        result of the failure;
            ``(2) an amount not less than $300 nor greater than $1,000;
            ``(3) such punitive damages as the court may allow; and
            ``(4) in the case of a successful action to enforce any 
        liability under this section--
                    ``(A) the costs of the action; and
                    ``(B) reasonable attorney's fees, as determined by 
                the court.
    ``(c) Attorney's Fees.--On a finding by the court that an 
unsuccessful pleading, motion, or other paper filed in connection with 
an action under this section was filed in bad faith or for purposes of 
harassment, the court shall award to the prevailing party attorney's 
fees reasonable in relation to the work expended in responding to such 
pleading, motion, or other paper.''.
    (b) Negligent Failure To Comply.--Section 617 of the Fair Credit 
Reporting Act (15 U.S.C. 1681o) is amended to read as follows:

``SEC. 617. CIVIL LIABILITY FOR NEGLIGENT NONCOMPLIANCE.

    ``(a) In General.--Except as provided in section 622(c), a person 
who is negligent in failing to comply with any requirement of this 
title with respect to a consumer shall be liable to that consumer in an 
amount prescribed in subsection (b).
    ``(b) Damages.--Liability for a negligent failure to comply 
described in subsection (a) shall be in an amount equal to the sum of--
            ``(1) any actual damage sustained by a consumer as a result 
        of the failure; and
            ``(2) in the case of any successful action to enforce 
        liability under this section--
                    ``(A) the costs of the action; and
                    ``(B) reasonable attorney's fees, as determined by 
                the court.
    ``(c) Attorney's Fees.--On a finding by the court that an 
unsuccessful pleading, motion, or other paper filed in connection with 
an action under this section was filed in bad faith or for purposes of 
harassment, the court shall award to the prevailing party attorney's 
fees reasonable in relation to the work expended in responding to such 
pleading, motion, or other paper.''.

SEC. 111. AMENDMENTS RELATING TO RESPONSIBILITIES OF PERSONS WHO 
              FURNISH INFORMATION TO CONSUMER REPORTING AGENCIES.

    (a) In General.--The Fair Credit Reporting Act (15 U.S.C. 1681 et 
seq.) is amended--
            (1) by redesignating sections 622 and 623 as sections 623 
        and 624; and
            (2) by inserting after section 621 the following new 
        section:

``SEC. 622. RESPONSIBILITIES OF FURNISHERS OF INFORMATION TO CONSUMER 
              REPORTING AGENCIES.

    ``(a) Duty of Furnishers of Information To Provide Complete and 
Accurate Information.--
            ``(1) In general.--A person shall not furnish any 
        information to a consumer reporting agency if the person knows 
        or should know the information is incomplete or inaccurate.
            ``(2) Duty to correct and update information after 
        reinvestigation.--A person who furnishes to a consumer 
        reporting agency information that is disputed by a consumer in 
        accordance with section 611 and that, as a result of an 
        investigation conducted in accordance with subsection (b), is 
        determined by the person to be inaccurate or incomplete shall--
                    ``(A) promptly notify the consumer reporting agency 
                of that determination; and
                    ``(B) provide to the agency any corrections to that 
                information, or any additional information, that is 
                necessary to make the information provided by the 
                person to the agency complete and accurate.
            ``(3) Duty to correct information otherwise determined to 
        be inaccurate or incomplete.--A person who regularly and in the 
        ordinary course of business furnishes to a consumer reporting 
        agency information that, other than as a result of an 
        investigation conducted in accordance with subsection (b), is 
        determined by the person to be inaccurate or incomplete shall--
                    ``(A) promptly notify the consumer reporting agency 
                of that determination; and
                    ``(B) provide to the agency any corrections to that 
                information, or any additional information, necessary 
                to make the information provided by the person to the 
                agency complete and accurate.
            ``(4) Duty to provide notice of continuing dispute.--If the 
        completeness or accuracy of any information furnished by any 
        person to a consumer reporting agency continues to be disputed 
        by the consumer to such person, that person shall not furnish 
        the information to a consumer reporting agency without notice 
        that such information is disputed by the consumer.
            ``(5) Duty to provide notice of closed accounts.--A person 
        who regularly furnishes information to a consumer reporting 
        agency regarding a consumer who has a credit account with that 
        person shall notify the agency of the closure of that account 
        by the consumer in information regularly furnished for the 
        period in which the account is closed.
            ``(6) Duty to provide notice of delinquency of accounts.--A 
        person who furnishes information to a consumer reporting agency 
        regarding a delinquent account being placed for collection, 
        charged to profit or loss, or subjected to any similar action 
        shall, by not later than 90 days after furnishing the 
        information, notify the agency of the month and year of the 
        commencement of the delinquency which immediately preceded the 
        action.
    ``(b) Duties of Furnishers of Information Upon Notice of Dispute.--
Upon receiving notice pursuant to section 611(a)(2) of a dispute with 
regard to the completeness or accuracy of any information provided by a 
person to a consumer reporting agency, the person shall--
            ``(1) complete an investigation with respect to the 
        disputed information and report to the consumer reporting 
        agency the results of that investigation before the end of the 
        applicable period under section 611(a), during which the 
        consumer reporting agency is required to complete actions 
        required by that section regarding that information; and
            ``(2) review relevant information submitted to the consumer 
        reporting agency by the consumer in accordance with section 
        611(a)(4).
    ``(c) Limitations.--
            ``(1) Limitation on liability.--Sections 616 and 617 do not 
        apply to any failure to comply with paragraph (1), (3), (4), 
        (5), or (6) of subsection (a).
            ``(2) Enforcement.--Paragraphs (1), (3), (4), (5), and (6) 
        of subsection (a) shall be enforced exclusively under section 
        621 by the agencies identified in that section.
            ``(3) Injunctive relief.--In an action alleging a violation 
        of subsection (a)(1), the court shall have jurisdiction to 
        enjoin the violation only where the action is brought by the 
        Federal Trade Commission or the attorney general of a State.''.
    (b) Clerical Amendment.--The table of sections for title VI of the 
Consumer Credit Protection Act is amended--
            (1) by redesignating the items relating to sections 622 and 
        623 as sections 623 and 624, respectively; and
            (2) inserting after the item relating to section 621 the 
        following new item:

``622. Responsibilities of furnishers of information to consumer 
                            reporting agencies.''.

SEC. 112. STATE ACTION TO ENFORCE ACT.

    Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is 
amended by adding at the end the following new subsection:
    ``(d) State Action To Enforce Title.--
            ``(1) In general.--If a person violates any requirement 
        imposed under this title, the chief law enforcement officer of 
        the State in which such violation occurred (or an official or 
        agency designated by that State) may bring an action--
                    ``(A) to restrain such violation;
                    ``(B) to recover amounts for which such person is 
                liable under this title to each consumer on whose 
                behalf the action is brought;
                    ``(C) to seek such remedies as are allowed under 
                the laws of such State; or
                    ``(D) except in the case of a violation of section 
                622(a)(1), to collect a civil penalty of not more than 
                $1,000 for each such violation.
            ``(2) Notice.--The State shall serve prior written notice 
        of any civil action under this subsection upon the Commission 
        and provide the Commission with a copy of the complaint. If 
        prior notice is not feasible, the State attorney general shall 
        provide notice immediately upon initiating the action. Upon 
        receiving notice of a civil action under this section, the 
        Commission shall have the right--
                    ``(A) to intervene in the action;
                    ``(B) upon so intervening, to be heard on all 
                matters arising therein; and
                    ``(C) to file petitions for appeal.''.

SEC. 113. ADMINISTRATIVE ENFORCEMENT.

    (a) In General.--Section 621(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681s(a)) is amended in the second sentence--
            (1) by striking ``Act and shall be subject to enforcement 
        by the Federal Trade Commission under section 5(b) thereof with 
        respect to a consumer reporting agency or person subject to 
        enforcement by the Federal Trade Commission pursuant to this 
        subsection, irrespective'' and inserting ``Act. All functions 
        and powers of the Federal Trade Commission under the Federal 
        Trade Commission Act shall be available to the Federal Trade 
        Commission to enforce compliance with this title by any person 
        subject to enforcement by the Federal Trade Commission pursuant 
        to this subsection and not subject to enforcement pursuant to 
        section 8 of the Federal Deposit Insurance Act, irrespective''; 
        and
            (2) by inserting before the period ``, including the power 
        to enforce the provisions of this title in the same manner as 
        if the violation had been a violation of any Federal Trade 
        Commission trade regulation rule, except that no civil penalty 
        may be imposed for a violation of section 622(a)(1)''.
    (b) Federal Reserve Board Interpretive Authority.--Section 621 of 
the Fair Credit Reporting Act (15 U.S.C. 1681s), as amended by section 
112, is amended by adding at the end the following new subsection:
    ``(e) Interpretive Authority.--The Board of Governors of the 
Federal Reserve System may issue an interpretation of any provision of 
this title as it may apply to any person identified in paragraph (1), 
(2), or (3) of subsection (b), and the holding companies and affiliates 
of such person, in consultation with the Federal agencies identified in 
paragraph (1), (2), or (3) of subsection (b).''.

SEC. 114. ESTABLISHMENT OF TOLL-FREE TELEPHONE NUMBER.

    Not later than 1 year after the date of enactment of this Act, each 
consumer reporting agency that compiles and maintains consumer reports 
on a nationwide basis shall establish, and thereafter maintain, a toll-
free telephone number for the purpose of making agency personnel 
accessible to consumers pursuant to section 609(c)(1)(B) of the Fair 
Credit Reporting Act.

SEC. 115. ACTION BY FTC.

    Not later than 270 days after the date of enactment of this Act, 
the Federal Trade Commission shall prescribe all matters required to be 
prescribed by the Federal Trade Commission under this title and the 
amendments made by this title.

SEC. 116. RELATION TO STATE LAWS.

    Section 624 of the Fair Credit Reporting Act (15 U.S.C. 1681t) (as 
redesignated by section 111 of this Act) is amended--
            (1) by striking ``This title'' and inserting the following:
    ``(a) In General.--This title'';
            (2) by inserting ``, and except as provided in subsection 
        (b)'' before the period at the end; and
            (3) by adding at the end the following new subsection:
    ``(b) Exceptions.--
            ``(1) State law.--No requirement or prohibition may be 
        imposed under the laws of any State--
                    ``(A) with respect to any subject matter regulated 
                under--
                            ``(i) section 604(d), relating to the 
                        prescreening of consumer reports;
                            ``(ii) section 605, relating to obsolete 
                        information, except that this clause does not 
                        affect the applicability of any State law in 
                        effect on the date of enactment of the Consumer 
                        Reporting Reform Act of 1994;
                            ``(iii) section 611, relating to the time 
                        by which a consumer reporting agency must take 
                        any action, including the provision of 
                        notification to a consumer or other person, in 
                        any procedure related to the disputed accuracy 
                        of information in a consumer's file, except 
                        that this clause does not affect the 
                        applicability of any State law in effect on the 
                        date of enactment of the Consumer Reporting 
                        Reform Act of 1994;
                            ``(iv) section 615(a), relating to the 
                        duties of a person who takes any adverse action 
                        with respect to a consumer on the basis of 
                        information contained in a consumer report; or
                            ``(v) section 615(d), relating to the 
                        duties of persons who use a consumer report of 
                        a consumer in connection with any credit or 
                        insurance transaction that is not initiated by 
                        the consumer and that consists of a firm offer 
                        of credit or insurance;
                    ``(B) with respect to the exchange of information 
                among persons affiliated by common ownership or common 
                corporate control; or
                    ``(C) with respect to the form and content of any 
                disclosure required to be made under section 609(c).
            ``(2) Definition of `firm offer of credit'.--
        Notwithstanding the definition of the term `firm offer of 
        credit' (or any equivalent term) under the laws of any State, 
        the definition of that term contained in section 603(l) shall 
        be construed to apply in the enforcement and interpretation of 
        the laws of any State governing consumer reports.
            ``(3) FTC modification permitted.--If it considers such 
        action necessary for the protection of consumers, the Federal 
        Trade Commission may, after consultation with each Federal 
        agency referred to in section 621(b) and with appropriate State 
        regulatory and law enforcement agencies, promulgate regulations 
        in accordance with section 553 of title 5, United States Code, 
        to impose requirements--
                    ``(A) that are more stringent than those imposed 
                under--
                            ``(i) section 611, relating to the time by 
                        which a consumer reporting agency must take any 
                        action, including the provision of notification 
                        to a consumer or other person, in any procedure 
                        related to the disputed accuracy of information 
                        in a consumer's file;
                            ``(ii) section 615(a), relating to the 
                        duties of a person who takes any adverse action 
                        with respect to a consumer on the basis of 
                        information contained in a consumer report; or
                            ``(iii) section 615(d), relating to the 
                        duties of persons who use a consumer report of 
                        a consumer in connection with any credit or 
                        insurance transaction that is not initiated by 
                        the consumer and that consists of a firm offer 
                        of credit or insurance; and
                    ``(B) with respect to the form and content of any 
                disclosure required to be made under section 609(c).
            ``(4) Applicability.--Notwithstanding any other provision 
        of this subsection, beginning 6 years after the date of 
        enactment of the Consumer Reporting Reform Act of 1994, a State 
        may adopt a law, or certify that the voters of the State have 
        voted in favor of a constitutional or other provision, which 
        states explicitly and by its terms that the law or provision is 
        intended to supplement this Act, if the law or provision gives 
        greater protection to the consumer than is provided under this 
        Act.''.

SEC. 117. FAIR DEBT COLLECTION PRACTICES.

    Section 807(11) of the Fair Debt Collection Practices Act (15 
U.S.C. 1692e(11)) is amended to read as follows:
            ``(11) Except as otherwise provided for communications to 
        acquire location information under section 804, the failure to 
        disclose clearly in the initial written communication with a 
        consumer in connection with the collection of a debt or to 
        obtain information about a consumer, that the debt collector is 
        attempting to collect a debt and that any information obtained 
        will be used for that purpose.''.

SEC. 118. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this title shall become effective 1 year after the 
date of enactment of this Act.
    (b) Exceptions.--Notwithstanding the provisions of subsection (a), 
the Federal Trade Commission may prescribe regulations, as required by 
this title and the amendments made by this title.

                 TITLE II--CREDIT REPAIR ORGANIZATIONS

SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZATIONS.

    Title IV of the Consumer Credit Protection Act is amended to read 
as follows:

                ``TITLE IV--CREDIT REPAIR ORGANIZATIONS

``Sec.
``401. Short title.
``402. Findings and purposes.
``403. Definitions.
``404. Prohibited practices by credit repair organizations.
``405. Disclosures.
``406. Credit repair organizations contracts.
``407. Right to cancel contract.
``408. Noncompliance with this title.
``409. Civil liability.
``410. Administrative enforcement.

``SEC. 401. SHORT TITLE.

    ``This title may be cited as the `Credit Repair Organizations Act'.

``SEC. 402. FINDINGS AND PURPOSES.

    ``(a) Findings.--The Congress finds that--
            ``(1) consumers have a vital interest in establishing and 
        maintaining their creditworthiness and credit standing in order 
        to obtain and use credit. As a result, consumers who have 
        experienced credit problems may seek assistance from credit 
        repair organizations that offer to improve the credit standing 
        of such consumers; and
            ``(2) certain advertising and business practices of some 
        companies engaged in the business of credit repair services 
        have worked a financial hardship upon consumers, particularly 
        consumers who have limited economic means and who are 
        inexperienced in credit matters.
    ``(b) Purposes.--The purposes of this title are--
            ``(1) to ensure that prospective buyers of the services of 
        credit repair organizations are provided with the information 
        necessary to make an informed decision regarding the purchase 
        of such services; and
            ``(2) to protect the public from unfair or deceptive 
        advertising and business practices by credit repair 
        organizations.

``SEC. 403. DEFINITIONS.

    ``For purposes of this title, the following definitions shall 
apply:
            ``(1) Consumer.--The term `consumer' means an individual.
            ``(2) Consumer credit transaction.--The term `consumer 
        credit transaction' means any transaction in which credit is 
        offered or extended to an individual for personal, family, or 
        household purposes.
            ``(3) Credit repair organization.--The term `credit repair 
        organization'--
                    ``(A) means a person who uses any instrumentality 
                of interstate commerce or the mails to sell, provide, 
                or perform (or represent that such person can or will 
                sell, provide, or perform) any service, in return for 
                the payment of money or other valuable consideration, 
                for the express or implied purpose of--
                            ``(i) improving a consumer's credit record, 
                        credit history, or credit rating;
                            ``(ii) removing adverse credit information 
                        that is accurate and not obsolete from the 
                        consumer's record, history, or rating;
                            ``(iii) altering the consumer's 
                        identification to prevent the display of the 
                        consumer's credit record, history, or rating 
                        for the purpose of concealing adverse credit 
                        information that is accurate and not obsolete; 
                        or
                            ``(iv) providing advice or assistance to a 
                        consumer with regard to any activity or service 
                        described in clause (i), (ii), or (iii); and
                    ``(B) does not include--
                            ``(i) a nonprofit organization that is 
                        exempt from taxation under section 501(c)(3) of 
                        the Internal Revenue Code of 1986; or
                            ``(ii) an attorney at law who is a member 
                        of the bar of the highest court of any State or 
                        otherwise licensed under the laws of any State, 
                        with respect to services rendered that are 
                        within the scope of regulations applicable to 
                        members of such bar or such licensees.
            ``(4) Credit.--The term `credit' has the same meaning as in 
        section 103 of the Truth in Lending Act.

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

    ``No credit repair organization, and no officer, employee, agent, 
or other person participating in the conduct of the affairs of a credit 
repair organization, may--
            ``(1) receive any money or other valuable consideration for 
        the performance of any service that the credit repair 
        organization has agreed to perform for a consumer before such 
        service is fully performed;
            ``(2) make any statement, or counsel or advise a consumer 
        to make any statement, that is untrue or misleading (or that, 
        upon the exercise of reasonable care, should be known by the 
        credit repair organization, officer, employee, agent, or other 
        person to be untrue or misleading) with respect to the 
        consumer's credit history, credit rating, or credit standing 
        to--
                    ``(A) any consumer reporting agency (as defined in 
                section 603(f)); or
                    ``(B) any person--
                            ``(i) who has extended credit to the 
                        consumer; or
                            ``(ii) to whom the consumer has applied or 
                        is applying for an extension of credit;
            ``(3) make any statement, or counsel or advise a consumer 
        to make any statement, the intended effect of which is to alter 
        the consumer's identification to prevent the display of the 
        consumer's credit record, history, or rating for the purpose of 
        concealing adverse credit information that is accurate and not 
        obsolete to--
                    ``(A) any consumer reporting agency; or
                    ``(B) any person--
                            ``(i) who has extended credit to the 
                        consumer; or
                            ``(ii) to whom the consumer has applied or 
                        is applying for an extension of credit;
            ``(4) make or use any untrue or misleading representation 
        of the services of the credit repair organization; or
            ``(5) engage, directly or indirectly, in any act, practice, 
        or course of business that constitutes or results in the 
        commission of, or an attempt to commit, a fraud or deception on 
        a person in connection with the offer or sale of the services 
        of the credit repair organization.

``SEC. 405. DISCLOSURES.

    ``(a) Disclosure Required.--Before any contract or agreement 
between a consumer and a credit repair organization is executed, the 
credit repair organization shall provide the consumer with the 
following written statement:

       ```Consumer Credit File Rights Under State and Federal Law

    ```You have a right to dispute inaccurate information in your 
consumer report by contacting the credit bureau directly. However, 
neither you nor any ``credit repair'' company or credit repair 
organization has the right to have accurate, current, and verifiable 
information removed from your consumer report. The credit bureau must 
remove accurate, negative information from your report only if it is 
over 7 years old. Bankruptcy information can be reported for 10 years.
    ```You have a right to obtain a copy of your consumer report from a 
credit bureau. You are entitled to receive a free copy of your credit 
report if you have been turned down for credit, employment, insurance, 
or a rental dwelling because of information in your consumer report 
during the preceding 60 days. You are also entitled to receive a free 
copy of your credit report if you are unemployed and intend to apply 
for employment during the next 60 days, if you are a recipient of 
public welfare assistance, or if you have been the victim of fraud. 
Otherwise, you may be charged a reasonable fee. The credit bureau must 
provide someone to help you interpret the information in your credit 
file.
    ```You have a right to sue a credit repair company that violates 
the Credit Repair Organization Act. This law prohibits deceptive 
practices by credit repair companies.
    ```You have the right to cancel your contract with any credit 
repair organization for any reason not later than 3 business days from 
the date you signed it.
    ```Credit bureaus are required to follow reasonable procedures to 
ensure that creditors report information accurately. However, mistakes 
may occur.
    ```You may, on your own, notify a credit bureau in writing that you 
dispute the accuracy of information in your credit file. The credit 
bureau must then reinvestigate and modify or remove inaccurate 
information. The credit bureau may not charge any fee for this service. 
Any pertinent information and copies of all documents you have 
concerning an error should be given to the credit bureau.
    ```If reinvestigation does not resolve the dispute to your 
satisfaction, you may send a brief statement to the credit bureau, to 
be kept in your file, explaining why you think the record is 
inaccurate. The credit bureau must include your statement about 
disputed information with any report it issues about you.
    ```The Federal Trade Commission regulates credit bureaus and credit 
repair organizations. For more information contact:

                       ```Public Reference Branch

                        Federal Trade Commission

                       Washington, D.C. 20580.'.

    ``(b) Separate Statement Requirement.--The written statement 
required under this section shall be provided as a document that is 
separate from any written contract or other agreement between the 
credit repair organization and the consumer or any other written 
material provided to the consumer.
    ``(c) Retention of Compliance Records.--
            ``(1) In general.--The credit repair organization shall 
        maintain a copy of the statement signed by the consumer 
        acknowledging receipt of the statement.
            ``(2) Maintenance for 2 years.--The copy of the consumer's 
        statement shall be maintained in the organization's files for 2 
        years after the date on which the statement is provided to the 
        consumer.

``SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

    ``(a) Written Contracts Required.--A credit repair organization may 
not provide services for a consumer unless a written and dated contract 
for the purchase of such services that meets the requirements of 
subsection (b) has been signed by the consumer.
    ``(b) Terms and Conditions of Contract.--No contract referred to in 
subsection (a) meets the requirements of this subsection unless such 
contract includes the following information (in writing):
            ``(1) The terms and conditions of payment, including the 
        total amount of all payments to be made by the consumer to the 
        credit repair organization or to any other person.
            ``(2) A full and detailed description of the services to be 
        performed by the credit repair organization for the consumer, 
        including--
                    ``(A) all guarantees and all promises of full or 
                partial refunds; and
                    ``(B) an estimate of--
                            ``(i) the date by which the performance of 
                        the services (to be performed by the credit 
                        repair organization or any other person) will 
                        be complete; or
                            ``(ii) the length of the period necessary 
                        to perform such services.
            ``(3) The credit repair organization's name and principal 
        business address.
            ``(4) A conspicuous statement in boldface type, in 
        immediate proximity to the space reserved for the consumer's 
        signature on the contract, which reads as follows: `You may 
        cancel this contract without penalty or obligation at any time 
        before midnight of the third business day after the date on 
        which you signed the contract. See the attached notice of 
        cancellation form for an explanation of this right.'.

``SEC. 407. RIGHT TO CANCEL CONTRACT.

    ``(a) In General.--A consumer may cancel any contract with a credit 
repair organization without penalty or obligation by notifying the 
credit repair organization of the consumer's intention to do so at any 
time before midnight of the third business day which begins on the date 
on which the contract or agreement between the consumer and the credit 
repair organization is executed or would, but for this subsection, 
become enforceable against the parties.
    ``(b) Cancellation Form and Other Information.--Each contract shall 
be accompanied by a form, in duplicate, which has the heading `Notice 
of Cancellation' and contains in boldface type the following statement:
            ```You may cancel this contract, without any penalty or 
        obligation, at any time before midnight of the third business 
        day which begins after the date the contract is signed by you.
            ```If you cancel, any payment you made under this contract 
        will be returned before the end of the 10-day period beginning 
        on the date the seller receives your cancellation notice.
            ```To cancel this contract, mail or deliver a signed, dated 
        copy of this cancellation notice, or any other written notice 
        to [insert name of credit repair organization] at [insert 
        address of credit repair organization] before midnight on 
        [insert date].
            ```I hereby cancel this transaction.
            ```__________________(purchaser's signature)
            ```______________(date)'.
    ``(c) Consumer Copy of Contract Required.--A consumer who enters 
into any contract with a credit repair organization shall be given, by 
the organization--
            ``(1) a copy of the completed contract and the disclosure 
        statement required under section 405; and
            ``(2) a copy of any other document the credit repair 
        organization requires the consumer to sign,
at the time the contract or the other document is signed.

``SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

    ``(a) Consumer Waivers Invalid.--Any waiver by a consumer of any 
protection provided by or any right of the consumer under this title--
            ``(1) shall be treated as void; and
            ``(2) may not be enforced by a Federal or State court or 
        any other person.
    ``(b) Attempt To Obtain Waiver.--An attempt by any credit repair 
organization to obtain a waiver from a consumer of any protection 
provided by or any right of the consumer under this title shall be 
treated as a violation of this title.
    ``(c) Contracts Not in Compliance.--A contract for services that 
does not comply with the applicable provisions of this title--
            ``(1) shall be treated as void; and
            ``(2) may not be enforced by a Federal or State court or by 
        any other person.

``SEC. 409. CIVIL LIABILITY.

    ``(a) Liability Established.--A credit repair organization that 
fails to comply with any provision of this title with respect to any 
person shall be liable to such person in an amount equal to the sum of 
the amounts determined under each of the following paragraphs:
            ``(1) Actual damages.--The greater of--
                    ``(A) the amount of any actual damage sustained by 
                such person as a result of such failure; or
                    ``(B) any amount paid by the person to the credit 
                repair organization.
            ``(2) Punitive damages.--
                    ``(A) Individual actions.--In the case of an action 
                by an individual, such additional amounts as the court 
                may allow.
                    ``(B) Class actions.--In the case of a class 
                action, the sum of--
                            ``(i) the aggregate of the amount that the 
                        court may allow for each named plaintiff; and
                            ``(ii) the aggregate of the amount that the 
                        court may allow for each other class member, 
                        without regard to any minimum individual 
                        recovery.
            ``(3) Attorneys' fees.--In the case of a successful action 
        to enforce any liability under paragraph (1) or (2), the costs 
        of the action, together with reasonable attorneys' fees.
    ``(b) Factors To Be Considered in Awarding Punitive Damages.--In 
determining the amount of any liability of any credit repair 
organization under subsection (a)(2), the court shall consider, among 
other relevant factors--
            ``(1) the frequency and persistence of noncompliance by the 
        credit repair organization;
            ``(2) the nature of the noncompliance;
            ``(3) the extent to which such noncompliance was 
        intentional; and
            ``(4) in the case of any class action, the number of 
        consumers adversely affected.
    ``(c) Jurisdiction.--An action under this section may be brought in 
any United States district court, or in any other court of competent 
jurisdiction, before the later of--
            ``(1) the end of the 2-year period beginning on the date of 
        the occurrence of the violation involved; or
            ``(2) in any case in which a credit repair organization has 
        materially and willfully misrepresented any information that--
                    ``(A) the credit repair organization is required, 
                by any provision of this title, to disclose to a 
                consumer; and
                    ``(B) is material to the establishment of the 
                credit repair organization's liability to the consumer 
                under this section,
        the end of the 2-year period beginning on the date of the 
        discovery by the consumer of the misrepresentation.

``SEC. 410. ADMINISTRATIVE ENFORCEMENT.

    ``(a) In General.--Compliance with the requirements imposed under 
this title with respect to credit repair organizations shall be 
enforced under the Federal Trade Commission Act by the Federal Trade 
Commission.
    ``(b) Violations of This Title Treated as Violations of Federal 
Trade Commission Act.--
            ``(1) In general.--For the purpose of the exercise by the 
        Federal Trade Commission of the Federal Trade Commission's 
        functions and powers under the Federal Trade Commission Act, 
        any violation of any requirement or prohibition imposed under 
        this title with respect to credit repair organizations shall 
        constitute an unfair or deceptive act or practice in commerce 
        in violation of section 5(a) of the Federal Trade Commission 
        Act.
            ``(2) Enforcement authority under other law.--All functions 
        and powers of the Federal Trade Commission under the Federal 
        Trade Commission Act shall be available to the Federal Trade 
        Commission to enforce compliance with this title by any person 
        subject to enforcement by the Federal Trade Commission pursuant 
        to this subsection, including the power to enforce the 
        provisions of this title in the same manner as if the violation 
        had been a violation of any Federal Trade Commission trade 
        regulation rule, without regard to whether the credit repair 
        organization--
                    ``(A) is engaged in commerce; or
                    ``(B) meets any other jurisdictional tests in the 
                Federal Trade Commission Act.
    ``(c) State Enforcement of Title.--
            ``(1) In general.--The attorney general of any State, or an 
        official or agency designated under the law of any State, may 
        enforce compliance with this title in Federal or State court.
            ``(2) Civil enforcement actions.--A State may bring a civil 
        action in any Federal or State court to enjoin any violation of 
        this title and to recover damages under this title for 
        consumers who reside in such State.''.

SEC. 202. CREDIT WORTHINESS.

    It is the sense of the Senate that--
            (a) individuals should generally be judged for credit 
        worthiness based on their own credit worthiness and not on the 
        zip code or neighborhood in which they live; and
            (b) the Federal Trade Commission after consultation with 
        the appropriate Federal banking agency, shall report to the 
        Banking Committee within 6 months as to whether and how the 
        location of the residence of an applicant for unsecured credit 
        is considered by many companies and financial institutions in 
        deciding whether an applicant should be granted credit.

            TITLE III--FINANCIAL ACCOUNTING STANDARDS BOARD

SEC. 301. FINDINGS.

    (a) The Financial Accounting Standards Board (FASB) is currently 
considering changing the Generally Accepted Accounting Principle 
relating to employee stock option plans and stock purchase plans;
    (b) FASB's proposal that would require the use of complex 
mathematical formulas to estimate a value for employee stock options at 
the date of grant and requires those estimated values be deducted from 
earnings on companies' income statements;
    (c) FASB has just completed an extended review of its proposal 
which included a public comment period, numerous field hearings and a 
field test;
    (d) FASB's proposal has generated opposition which is unprecedented 
in both its intensity and universality;
    (e) The accounting profession, as represented by the American 
Institute of Certified Public Accountants and each of the 6 largest 
national accounting firms, oppose FASB's proposal;
    (f) Individual investors, as represented by the United Shareholders 
Association, oppose FASB's proposal;
    (g) Institutional investors and pension funds, as represented by 
the Council of Institutional Investors, oppose FASB's proposal;
    (h) Both the Secretary of the Treasury and the Secretary of 
Commerce have raised serious concerns about FASB's proposal: ``Most 
troubling is the possibility that implementation of the proposal might 
result in more volatile and less accurate and consistent financial 
statements because of the extreme difficulty of valuing long-term, non-
marketable, forfeitable stock options'';
    (i) There is a broad consensus among those who have studied the 
FASB proposal it will diminish and not improve either the integrity or 
comparability of information available to investors;
    (j) The National economic policy implications of FASB's proposal 
are substantial because small, growth-oriented companies often lack 
capital and therefore regularly rely on broad-based employee stock 
options to attract employees and large business provide employee stock 
options and broad-based employee stock purchase plans to help motivate 
their employees and improve productivity; and
    (k) the FASB proposal will diminish the ability of small companies 
to raise capital and attract employees and it will curtail, not enhance 
broad-based employee ownership.

SEC. 302. NEW ACCOUNTING TREATMENT OF EMPLOYEE STOCK OPTIONS AND 
              PURCHASE PLANS.

    It is the sense of the Senate that--
            (1) the new accounting treatment of employee stock options 
        and employee stock purchase plans, proposed by the Financial 
        Accounting Standards Board, will have grave economic 
        consequences particularly for businesses in new-growth sectors 
        which rely heavily on employee entrepreneurship;
            (2) the new accounting treatment of employee stock options 
        and employee stock purchase plans, proposed by the Financial 
        Accounting Standards Board, will diminish rather than expand 
        broad-based employee stock option plans; and
            (3) the Financial Accounting Standards Board should not at 
        this time change the current generally accepted accounting 
        treatment of stock options and stock purchase plans contained 
        in Accounting Principles Board Decision 25.

SEC. 303. STATUS.

    It is the sense of the Senate that--
            (1) the status of the Financial Accounting Standards Board 
        as a private body of independent accounting experts should be 
        respected and safeguarded; and
            (2) the Congress should not impair the objectivity or 
        integrity of the Financial Accounting Standards Board's 
        decisionmaking process by legislating accounting rules.

                   TITLE IV--MISCELLANEOUS PROVISION

SEC. 401. SECURITIES AND EXCHANGE COMMISSION, SEATTLE DISTRICT OFFICE.

    It is the sense of the Senate that the Securities and Exchange 
Commission district office located in Seattle, Washington shall not be 
closed, nor its services, operations, or staff be reduced from the 
levels in effect on January 1, 1994. None of the operations of the 
Seattle office shall be transferred to another office of the Securities 
and Exchange Commission.

            Passed the Senate May 4 (legislative day, May 2), 1994.

            Attest:






                                                             Secretary.

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