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

103d CONGRESS
  1st Session
                                 S. 783

    To amend the Fair Credit Reporting Act, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                April 7 (legislative day, March 3), 1993

   Mr. Bryan (for himself, Mr. Bond, and Mr. Riegle) introduced the 
 following bill; which was read twice and referred to the Committee on 
                   Banking, Housing and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
    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 1993''.
    (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. Effective dates.
                 TITLE II--CREDIT REPAIR ORGANIZATIONS

Sec. 201. Regulation of credit repair organizations.

          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:
    ``(j) The term `adverse action', when used in connection with any 
action based in whole or in part on any information contained in a 
consumer report, means any action which is adverse or less favorable to 
the interest of the consumer who is the report subject. Without 
limiting the general applicability of the foregoing, the following 
constitute adverse actions:
            ``(1) Credit.--Any denial or revocation of credit, any 
        increase in the charge for credit, any change in the terms of 
        an existing credit arrangement, or any refusal to grant credit 
        in substantially the amount or on substantially the terms 
        requested. Attempts to collect debts owed or allegedly owed 
        shall not be considered `adverse actions'.
            ``(2) Employment.--Any denial of employment or other 
        adverse or less favorable decision relating to employment 
        purposes.
            ``(3) Insurance.--Any denial or cancellation of, any 
        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.--Any denial or cancellation of, 
        or any increase in any charge for, or any other adverse or 
        unfavorable change in the terms of, any license or benefit 
        described in section 604(3)(D).
            ``(5) Consumer initiated business transaction.--Any denial 
        or cancellation of, or any other adverse or unfavorable change 
        in the terms of, any business transaction which 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) by inserting before the semicolon at the end of clause 
        (A) ``, or any communication of that information or information 
        (i) from a credit application by a consumer, provided that it 
        is clearly and conspicuously disclosed with the application 
        that the information may be provided to such entities and the 
        consumer consents to such disclosure, or (ii) among the person 
        making the report, an entity related by common ownership to 
        that person, and an entity affiliated by corporate control with 
        that person'';
            (2) in clause (B), by striking ``or'' after the semicolon 
        at the end; and
            (3) by inserting before the period the following: ``; (D) 
        any communication of information about a consumer between 
        persons who are affiliated by common ownership or common 
        corporate control and in connection with a credit or insurance 
        transaction which is not initiated by the consumer, if either 
        of those persons has complied with section 615(d)(2)(B) with 
        respect to a consumer report from which the information is 
        taken and the consumer has consented to use of the report for 
        the transaction in accordance with section 615(d)(2)(C); or (E) 
        any report furnished for use in connection with a transaction 
        which consists of an extension of credit to be used for a 
        commercial purpose''.
    (c) Firm Offer of Credit.--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 `firm offer of credit' means any offer of credit to 
a consumer that will be honored if, based on information in a consumer 
report on the consumer and other information bearing on the 
creditworthiness of the consumer, the consumer is determined to meet 
the criteria used to select the consumer for the offer.''.
    (d) Credit or Insurance Transaction Which Is Not Initiated by the 
Consumer.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 
1681a) is amended by adding at the end the following new subsection:
    ``(l) The term `credit or insurance transaction which is not 
initiated by the consumer' does not include the use of a consumer 
report by a person with which the consumer has an account, for purposes 
of--
            ``(1) reviewing the account; or
            ``(2) collecting the account.''.

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 ``(a) In General.--A consumer reporting agency 
        may furnish'';
            (2) in subsection (a)(3) (as designated by paragraph (1)), 
        by amending subparagraph (E) to read as follows:
                    ``(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
            (3) 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) or (3), as the case may be, with 
                        respect to such consumer report has been made; 
                        and
                            ``(ii) information from the consumer report 
                        will not be used in violation of any applicable 
                        Federal or State equal employment opportunity 
                        law or regulation; and
                    ``(B) if the consumer reporting agency provides 
                with the report a summary of the consumer's rights 
                under this title, as prescribed by the Federal Trade 
                Commission under section 609(c)(3).
            ``(2) 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 any 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 such persons shall constitute a written 
                disclosure for purposes of subparagraph (A).
            ``(3) Conditions on use for adverse actions.--Before taking 
        any 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 by the Federal Trade 
                Commission under section 609(c)(3); and
                    ``(C) a reasonable opportunity to respond to any 
                information in the report that is disputed by the 
                consumer, 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) is further 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, based in whole or in part on the 
report.''.

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 further amended--
            (1) in subsection (a), by striking ``A consumer reporting 
        agency'' and inserting ``Subject to subsection (d), any 
        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 any consumer pursuant to 
        subsection (a)(3)(A) to any person referred to in such 
        subsection in connection with any solicitation for credit or 
        insurance 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 
                pursuant to paragraph (1)(B).
            ``(2) Limits on information received under paragraph 
        (1)(b).--A person may receive pursuant to paragraph (1)(B) 
        only--
                    ``(A) the name and address of a consumer; and
                    ``(B) information pertaining to a consumer that is 
                not identified or identifiable with the consumer.
            ``(3) Information regarding inquiries.--Except as provided 
        in section 609(a)(4), a consumer reporting agency shall not 
        furnish to any person a record of inquiries resulting from 
        credit or insurance transactions which 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) is further 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.--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 which 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 his or her 
        name and address excluded from any list provided by a consumer 
        reporting agency pursuant to subsection (e)(2), by--
                    ``(A) notifying the agency, through the 
                notification system maintained by the agency under 
                paragraph (3), that the consumer does not consent to 
                any use of consumer reports relating to the consumer in 
                connection with any credit or insurance transaction 
                which is not initiated by the consumer; or
                    ``(B) returning to the agency a signed written 
                notice of the election, if provided by the agency in 
                accordance with paragraph (2).
            ``(2) Provision of written notice to consumer.--A consumer 
        reporting agency shall 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 
        which furnishes a consumer report pursuant to subsection 
        (a)(3)(A) in connection with any credit or insurance 
        transaction which is not initiated by a consumer shall 
        establish and maintain a notification system, including a toll-
        free telephone number, which permits any consumer whose 
        consumer report is maintained by the agency to notify the 
        agency, with appropriate identification, of the consumer's 
        election to have the consumer's name and address excluded from 
        any list of names and addresses provided by the agency pursuant 
        to subsection (d)(1)(B). 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 be in compliance with this 
        paragraph by each affiliate of the agency.
            ``(4) Agencies which operate nationwide.--Each consumer 
        reporting agency which compiles and maintains files on 
        consumers on a nationwide basis shall establish and maintain a 
        notification system 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); and
                    ``(C) shall be effective with respect to each 
                affiliate of the agency.''.
    (c) First Notifications by Consumers.--A consumer may notify a 
consumer reporting agency through a notification system established and 
maintained by the agency under section 604(f) of the Fair Credit 
Reporting Act on or after the date which is 1 year after the date of 
enactment of this Act.

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.--Any 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 
title 11, United States Code, 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 further amended by adding at 
the end the following new subsection:
    ``(c) Running of Reporting Period.--The 7-year period referred to 
in paragraphs (4) and (6) of subsection (a) shall begin, with respect 
to any delinquent account which is placed for collection (internally or 
by referral to a 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 which immediately preceded the collection activity, charge 
to profit and loss, or similar action.''.
    (d) Disclosure of Personal Information.--Section 605 of the Fair 
Credit Reporting Act (15 U.S.C. 1681c) is further amended by adding at 
the end the following new subsection:
    ``(d) Disclosure of Personal Information.--A person who prepares 
any credit report which includes personal credit information on any 
consumer shall not include in the report any adverse item of 
information on the consumer with respect to transactions 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) is further 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 
credit account of a consumer was voluntarily closed by the consumer, 
the agency shall indicate that fact in any consumer report that 
includes information related to the account.''.
    (f) Positive Information.--Section 605 of the Fair Credit Reporting 
Act (15 U.S.C. 1681c) is further amended by adding at the end the 
following new subsection:
    ``(f) Acceptance of Certain Information.--A consumer reporting 
agency shall accept from a consumer and include in the consumer's file 
relevant and timely information that is not in computerized form if the 
information--
            ``(1) would have a positive impact on a determination of 
        creditworthiness of the consumer; and
            ``(2) is submitted in a form and manner that complies with 
        regulations of the Federal Trade Commission.''.
    (g) Clerical Amendments.--
            (1) Section heading.--The heading for section 605 of the 
        Fair Credit Reporting Act (15 U.S.C. 1681c) is amended by 
        striking ``obsolete information'' and inserting ``requirements 
        relating to information contained in consumer reports''.
            (2) 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, 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 a notice to any person--
            ``(1) who regularly and in the ordinary course of business 
        furnishes information to the agency with respect to any 
        consumer; or
            ``(2) to whom a consumer report is provided by the agency;
of such person's responsibilities under this title.''.
            (2) Content of notice.--The Federal Trade Commission shall 
        prescribe the content of notices under section 607(d) of the 
        Fair Credit Reporting Act by not later than 1 year after the 
        date of enactment of this Act.
    (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) is further 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 which originally furnished the 
        report--
                    ``(A) the identity of the ultimate end-user of the 
                report (or the information), and
                    ``(B) each permissible purpose under section 604 
                for which the report is furnished to the ultimate end-
                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 designed to ensure that the report (or the 
                information) is resold by the person only for a purpose 
                for which the report may be furnished under section 
                604, including by ensuring that the person--
                            ``(i) identifies each prospective user of 
                        the resold report (or the information);
                            ``(ii) certifies each purpose for which the 
                        report (or the information) will be used; and
                            ``(iii) certifies 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 within the 2-year 
                period preceding the request; and
                    ``(ii) for any other purpose within 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 further amended by adding 
at the end the following new paragraph:
            ``(4) A record of all inquiries received by the agency in 
        the 1-year period preceding the request that identified the 
        consumer in connection with a credit or insurance transaction 
        which is 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 the consumer 
                has under this title; and
                    ``(B) in the case of a consumer reporting agency 
                which compiles and maintains consumer reports on a 
                nationwide basis, a toll-free telephone number which 
                the consumer can use to communicate with the agency.
            ``(2) Specific items required to be included.--The summary 
        of rights required under paragraph (1) shall include--
                    ``(A) a brief description of this title and all 
                rights of consumers under this title;
                    ``(B) an explanation of how the consumer may 
                exercise the rights of the consumer under this title;
                    ``(C) a list of all Federal agencies responsible 
                for enforcing any provision of this title and the 
                address and any appropriate 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 under section 605 or cannot be 
                verified.
            ``(3) Form of summary of rights.--For purposes of this 
        subsection and any disclosure by a consumer reporting agency 
        required under this title with respect to consumers' rights, 
        the Federal Trade Commission (after consultation with each 
        Federal agency referred to in section 621(b)) shall prescribe 
        the form and content of any disclosure of the rights of 
        consumers required under this title.''.
            (2) Technical amendment.--Section 606(a)(1)(B) of the Fair 
        Credit Reporting Act (15 U.S.C. 1681d(a)(1)(B)) is amended by 
        inserting ``and the written summary of the rights of the 
        consumer prepared pursuant to section 609(c)'' before the 
        semicolon.
    (e) Form of Disclosures.--
            (1) In general.--Subsections (a) and (b) of section 610 of 
        the Fair Credit Reporting Act (15 U.S.C. 1681h) are amended to 
        read as follows:
    ``(a) 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 shall 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 that is 
                available from the agency.''.
            (2) Simplified disclosure.--Not later than 90 days after 
        the effective date 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. The 
        Federal Trade Commission shall take appropriate action to 
        assure that the goals of comprehensibility and standardization 
        are achieved.
            (3) Conforming amendments.--
                    (A) Section heading.--Section 610 of the Fair 
                Credit Reporting Act (15 U.S.C. 1681h) is amended in 
                the heading for the section by inserting ``and form'' 
                after ``conditions''.
                    (B) 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 in the item relating 
                to section 610 by inserting ``and form'' after 
                ``Conditions''.

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 any 
        item of information contained in any consumer's file at any 
        consumer reporting agency is disputed by the consumer and the 
        consumer notifies the agency directly of such dispute, the 
        agency shall reinvestigate free of charge and record the 
        current status of the disputed information before the end of 
        the 30-day period beginning on the date the agency receives the 
        notice of the dispute from the consumer.
            ``(2) Prompt notice of dispute to furnisher of 
        information.--Not later than 5 business days after the date on 
        which a consumer reporting agency receives notice of a dispute 
        from any 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 dispute by the consumer is frivolous or 
                irrelevant, including by reason of a failure by a 
                consumer to provide sufficient information to 
                investigate the dispute.
                    ``(B) Notice of determination.--Not later than 5 
                business days after making any 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, by any other means available to the 
                agency.
            ``(4) Consideration of consumer information.--In conducting 
        any reinvestigation under paragraph (1) with respect to 
        disputed information in the file of any consumer, the consumer 
        reporting agency shall review and consider all relevant 
        information submitted by the consumer in the period described 
        in paragraph (1) with respect to such disputed information.
            ``(5) Deletion of inaccurate or unverifiable information.--
                    ``(A) In general.--If, in the course of any 
                reinvestigation under paragraph (1) of any information 
                disputed by a consumer, an item of the information is 
                found to be inaccurate or cannot be verified, the 
                consumer reporting agency shall promptly delete that 
                item of information from the consumer's file.
                    ``(B) Requirements relating to reinsertion of 
                previously deleted material.--
                            ``(i) Certification of accuracy of 
                        information.--If any information is deleted 
                        from a consumer's file pursuant to subparagraph 
                        (A), the information may not be reinserted in 
                        the file after the deletion unless the person 
                        who furnishes the information certifies that 
                        the information is complete and accurate.
                            ``(ii) Notice to consumer.--If any 
                        information which has been deleted from a 
                        consumer's file pursuant to subparagraph (A) is 
                        reinserted in the file in accordance with 
                        clause (i), the consumer reporting agency 
                        shall, not later than 5 business days after 
                        such deletion, mail to the consumer written 
                        notification of the reinsertion, and, if 
                        authorized by the consumer for that purpose, by 
                        any other means available to the agency.
                    ``(C) Procedures to prevent reappearance.--A 
                consumer reporting agency shall maintain reasonable 
                procedures designed to prevent the reappearance in a 
                consumer's file, and in consumer reports on the 
                consumer, of information that is deleted pursuant to 
                this paragraph (other than information that is 
                reinserted in accordance with subparagraph (B)(i)).
            ``(6) Notice of results of reinvestigation.--
                    ``(A) In general.--A consumer reporting agency 
                shall 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, by other means available to the agency.
                    ``(B) Contents.--As part of or in addition to the 
                notice under subparagraph (A), a consumer reporting 
                agency shall provide to a consumer in writing within 
                the 5-business-day period referred to in subparagraph 
                (A)--
                            ``(i) a statement that the reinvestigation 
                        is completed;
                            ``(ii) a consumer report that is based upon 
                        the consumer's file as that file is revised as 
                        a result of the reinvestigation;
                            ``(iii) a description or indication of any 
                        changes made in the consumer report as a result 
                        of those revisions to the consumer's file;
                            ``(iv) a notice to the consumer that, if 
                        requested by the consumer, a description of the 
                        procedure used to determine the accuracy and 
                        completeness of the information shall be 
                        provided to the consumer by the agency, 
                        including the name, business address, and 
                        telephone number of any furnisher of 
                        information contacted in connection with such 
                        information;
                            ``(v) a notification that the consumer has 
                        the right to add a statement to the consumer's 
                        file disputing the accuracy or completeness of 
                        the information; and
                            ``(vi) a 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.--A 
                consumer reporting agency shall provide to a consumer a 
                description referred to in paragraph (6)(B)(iv) by not 
                later than 15 days after receiving a request from the 
                consumer for that description.''.
    (b) Conforming Amendment.--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.

    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; and
            ``(2) upon written request by the consumer not later than 1 
        year after the consumer receives a notification under 
        subsection (b)(2).
    ``(b) Charge for Certain Notices Prohibited.--A consumer reporting 
agency shall not impose any charge for--
            ``(1) providing a notice required under section 611(a)(6); 
        or
            ``(2) notifying a person pursuant to section 611(d) of the 
        deletion of information which is found to be inaccurate or 
        which can no longer be verified, if the consumer designates 
        that person to the agency before the end of the 30-day period 
        beginning on the date of the notification of the consumer under 
        section 611(a)(6).''.

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 any person takes any 
adverse action with respect to any consumer in connection with credit, 
employment purposes, insurance underwriting, any license or benefit 
described in section 604(3)(D), or any business transaction involving 
the consumer which is based, in whole or in part, on any information 
contained in a consumer report, the person shall--
            ``(1) provide written notice of the adverse action to the 
        consumer;
            ``(2) provide the consumer--
                    ``(A) the name, address, and telephone number of 
                the consumer reporting agency which furnished the 
                report to the person; and
                    ``(B) a statement that the consumer reporting 
                agency did not make the decision to take the adverse 
                action;
            ``(3) provide to the consumer a written notice of the 
        consumer's right--
                    ``(A) to obtain, under section 612, a free copy of 
                a consumer report on the consumer, from the consumer 
                reporting agency referred to in paragraph (2) and from 
                any other consumer reporting agency which compiles and 
                maintains files on consumers on a nationwide basis; and
                    ``(B) to dispute, under section 611, with a 
                consumer reporting agency the accuracy or completeness 
                of any information in a consumer report furnished by 
                the agency; and
            ``(4) in the case of an adverse action based in whole or in 
        part on a credit score or other credit rating system, provide 
        to the consumer--
                    ``(A) notice that the credit scoring system was 
                used; and
                    ``(B) the principal reasons for that credit score, 
                if those reasons are required to be disclosed by the 
                person for purposes of compliance with section 
                701(d)(3) of the Equal Credit Opportunity Act.''.
    (b) Duties of Users Who Make Certain Solicitations.--Section 615 of 
the Fair Credit Reporting Act (15 U.S.C. 1681m) is further 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.--Any person who uses a consumer report of 
        any consumer in connection with any credit or insurance 
        transaction which is not initiated by the consumer and which 
        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, the consumer does not meet the original criteria 
                used to select the consumer for the offer;
                    ``(D) no new criteria for creditworthiness will be 
                imposed on the consumer other than the original 
                criteria used to select the consumer for the offer;
                    ``(E) the consumer has a right to prohibit 
                information contained in the consumer's file with any 
                consumer reporting agency to be used in connection with 
                any credit 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(e)(4).
            ``(2) Limitation on application.--Paragraph (1) does not 
        apply to the use of a consumer report by a person if--
                    ``(A) the person is affiliated by common ownership 
                or by common corporate control with the person who 
                procured the report;
                    ``(B) the person who procured the report clearly 
                and conspicuously disclosed to the consumer to whom the 
                report relates, before the report is provided to the 
                person who will use the report, that the report might 
                be provided to and used by other persons who are 
                affiliated in the manner described in subparagraph (A) 
                to the person who procured the report; and
                    ``(C) that provision and use of the report is 
                consented to by the consumer in writing.
            ``(3) 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 of credit (or offer therefore) 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 used to select the consumer to receive the 
        offer, until the end of the 3-year period beginning on the date 
        on which the offer is made to the consumer.''.
    (c) Duties of Users for Direct Marketing Transactions Not Initiated 
by Consumers.--Section 615 of the Fair Credit Reporting Act (15 U.S.C. 
1681m) is further amended by adding at the end the following new 
subsection:
    ``(e) Duties of Users for Direct Marketing Transactions Not 
Initiated by Consumers.--Any person who, in connection with a direct 
marketing transaction that is not initiated by a consumer, uses 
information concerning the consumer that is provided by a consumer 
reporting agency shall provide to the consumer with each 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(d)(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(d)(4), the toll-free 
        telephone number at which the agency may be notified.''.

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.--Any person who willfully fails to comply with 
any requirement imposed under this title with respect to any consumer 
is liable to that consumer in an amount prescribed under subsection 
(c).
    ``(b) Exception.--A person has no liability to a consumer under 
this section for a violation of section 622(a)(1).
    ``(c) 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 any 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.''.
    (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.--Any 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 (c).
    ``(b) Exception.--A person has no liability to a consumer under 
this section for a violation of section 622(a)(1).
    ``(c) 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.''.

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 any consumer reporting agency if the person 
        knows or should know the information is incomplete or 
        inaccurate.
            ``(2) Duty to correct and update information.--A person 
        who--
                    ``(A) in the ordinary course of business, regularly 
                and on a routine basis furnishes information to one or 
                more consumer reporting agencies about their own 
                transactions or experiences with a consumer; and
                    ``(B) furnishes information to a consumer reporting 
                agency, that the person determines is not complete or 
                accurate;
        shall promptly notify the consumer reporting agency of that 
        determination and provide to the agency any corrections to that 
        information, or any additional information, that is necessary 
        to make the information provided by the person to the agency 
        complete and accurate.
            ``(3) Duty to provide notice of continuing dispute.--If the 
        completeness or accuracy of any information furnished by any 
        person to any consumer reporting agency continues to be 
        disputed to such person, the person may not furnish the 
        information to any consumer reporting agency without notice 
        that such information is disputed by the consumer.
            ``(4) Duty to provide notice of closed accounts.--A person 
        who regularly furnishes information to a consumer reporting 
        agency regarding a consumer who has a credit account with that 
        person shall notify the agency of the closure of that account 
        by the consumer in information regularly furnished for the 
        period in which the account is closed.
            ``(5) Duty to provide notice of delinquency of accounts.--A 
        person who furnishes information to a consumer reporting agency 
        regarding a delinquent account being placed for collection, 
        charged to profit or loss, or subjected to any similar action 
        shall notify the agency of the commencement of the delinquency 
        immediately preceding that action, by not later than 90 days 
        after the date of that commencement.
    ``(b) Notice to Consumers of Information Furnished to Consumer 
Reporting Agencies.--
            ``(1) Notice required.--A person who in the ordinary course 
        of business regularly and on a routine basis furnishes 
        information about that person's transactions or experiences 
        with any consumer to any consumer reporting agency, shall give 
        notice of that fact in writing to the consumer before first 
        providing any information about the consumer to any consumer 
        reporting agency.
            ``(2) Contents of notice.--Written notice provided to a 
        consumer by a person pursuant to paragraph (1) shall contain--
                    ``(A) a brief description of the type of 
                information that may be furnished regularly to any 
                consumer reporting agency; and
                    ``(B) a brief description of the frequency with 
                which or the circumstances under which information is 
                furnished to any consumer reporting agency.
            ``(3) Notice by certain persons.--A person who furnishes 
        information about consumers who have written checks with 
        insufficient funds may give notice for purposes of paragraph 
        (1) by posting the notice in a conspicuous manner at each 
        location where checks are accepted by the person.
    ``(c) Duties of Furnishers of Information Upon Notice of Dispute.--
Upon receiving notice pursuant to section 611(a)(2) of a dispute with 
regard to the completeness or accuracy of any information provided by a 
person to a consumer reporting agency, the person shall--
            ``(1) complete an investigation with respect to the 
        disputed information and report to the consumer reporting 
        agency the results of that investigation before the end of the 
        20-day period beginning on the date the agency receives notices 
        of a dispute from the consumer in accordance with section 
        611(a)(1); and
            ``(2) review relevant information submitted to the consumer 
        reporting agency by the consumer in accordance with section 
        611(a)(4).
    ``(d) Limitations.--
            ``(1) Civil liability.--Sections 616 and 617 shall not 
        apply to any failure to comply with subsection (a).
            ``(2) Enforcement.--Subsection (a) shall be enforced 
        exclusively under section 621 by the 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 by redesignating the item 
relating to sections 622 and 623 as sections 623 and 624, and 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 Act.--If any 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--
            ``(1) to restrain such violation;
            ``(2) to recover amounts for which such person is liable 
        under this title to each person on whose behalf the action is 
        brought;
            ``(3) to seek such remedies as are allowed under the law of 
        such State; or
            ``(4) to collect a civil penalty of not more than $1,000 
        for each such violation.''.

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 any consumer reporting agency or person subject to 
        enforcement by the Federal Trade Commission pursuant to this 
        subsection, irrespective'' and inserting ``Act. All functions 
        and powers of the Federal Trade Commission under the Federal 
        Trade Commission Act shall be available to the Federal Trade 
        Commission to enforce compliance with this title by any person 
        subject to enforcement by the Federal Trade Commission pursuant 
        to this subsection, 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''.
    (b) Federal Reserve Board Interpretive Authority.--Section 621 of 
the Fair Credit Reporting Act (15 U.S.C. 1681s) 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.

    Each consumer reporting agency which compiles and maintains 
consumer reports on a nationwide basis shall establish (and thereafter 
maintain) a toll-free telephone number pursuant to section 609(c)(1)(B) 
of the Fair Credit Reporting Act, as amended by section 106(d), not 
later than 1 year after the date of enactment of this Act.

SEC. 115. ACTION BY FTC.

    The Federal Trade Commission shall prescribe all matters required 
by this title (including the amendments made by this title) to be 
prescribed by the Federal Trade Commission not later than 270 days 
after the date of enactment of this Act.

SEC. 116. 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--
            ``(1) consumers have a vital interest in establishing and 
        maintaining their creditworthiness and credit standing in order 
        to obtain and use credit. As a result, consumers who have 
        experienced credit problems may seek assistance from credit 
        repair organizations which offer to improve the credit standing 
        of such consumers; 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 
        those of 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:
            ``(1) Consumer.--The term `consumer' means an individual.
            ``(2) Consumer credit transaction.--The term `consumer 
        credit transaction' means any transaction in which credit is 
        offered or extended to an individual for personal, family, or 
        household purposes.
            ``(3) Credit repair organization.--The term `credit repair 
        organization'--
                    ``(A) means any person who uses any instrumentality 
                of interstate commerce or the mails to sell, provide, 
                or perform (or represent that such person can or will 
                sell, provide, or perform) any service, in return for 
                the payment of money or other valuable consideration, 
                for the express or implied purpose of--
                            ``(i) improving any consumer's credit 
                        record, credit history, or credit rating;
                            ``(ii) removing adverse credit information 
                        that is accurate and not obsolete from the 
                        consumer's record, history, or rating;
                            ``(iii) altering the consumer's 
                        identification to prevent the 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 
                        any consumer with regard to any activity or 
                        service described in clause (i), (ii), or 
                        (iii); and
                    ``(B) does not include--
                            ``(i) any nonprofit organization which is 
                        exempt from taxation under section 501(c)(3) of 
                        the Internal Revenue Code of 1986; or
                            ``(ii) any attorney at law who is a member 
                        of the bar of the highest court of any State or 
                        otherwise licensed under the laws of any State, 
                        with respect to services rendered 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(e).

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

    ``No credit repair organization, and no officer, employee, agent, 
or other person participating in the conduct of the affairs of any 
credit repair organization, may--
            ``(1) charge or receive any money or other valuable 
        consideration for the performance of any service that the 
        credit repair organization has agreed to perform for any 
        consumer before such service is fully performed;
            ``(2) make any statement, or counsel or advise any consumer 
        to make any statement, which is untrue or misleading (or which, 
        upon the exercise of reasonable care, should be known by the 
        credit repair organization, officer, employee, agent, or other 
        person to be untrue or misleading) with respect to any 
        consumer's creditworthiness, credit standing, or credit 
        capacity to--
                    ``(A) any consumer reporting agency (as defined in 
                section 603(f)); or
                    ``(B) any person--
                            ``(i) who has extended credit to the 
                        consumer; or
                            ``(ii) to whom the consumer has applied or 
                        is applying for an extension of credit;
            ``(3) make any statement, or counsel or advise any consumer 
        to make any statement, the intended effect of which is to alter 
        the consumer's identification to prevent the display of the 
        consumer's credit record, history, or rating for the purpose of 
        concealing adverse 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 
        any 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 
credit report by contacting the credit bureau directly. However, 
neither you nor any ``credit repair'' company or credit repair 
organization has the right to have accurate, current, and verifiable 
information removed from your credit report. The credit bureau must 
remove accurate, negative information from your report only if it is 
over 7 years old. Bankruptcy information can be reported for 10 years.
    ```You have a right to obtain a copy of your credit report from a 
credit bureau. You may be charged a reasonable fee. There is no fee, 
however, if you have been turned down for credit, employment, 
insurance, or a rental dwelling because of information in your credit 
report within the preceding 60 days. The credit bureau must provide 
someone to help you interpret the information in your credit file. A 
credit report is available annually at no charge.
    ```You have a right to sue a credit repair company that violates 
the Credit Repair Organization Act. This law prohibits deceptive 
practices by credit repair companies.
    ```You have the right to cancel your contract with any credit 
repair organization for any reason within 3 business days from the date 
you signed it.
    ```Credit bureaus are required to follow reasonable procedures to 
ensure that creditors report information accurately. However, mistakes 
may occur.
    ```You may, on your own, notify a credit bureau in writing that you 
dispute the accuracy of information in your credit file. The credit 
bureau must then reinvestigate and modify or remove inaccurate 
information. The credit bureau may not charge any fee for this service. 
Any pertinent information and copies of all documents you have 
concerning an error should be given to the credit bureau.
    ```If reinvestigation does not resolve the dispute to your 
satisfaction, you may send a brief statement to the credit bureau, to 
be kept in your file, explaining why you think the record is 
inaccurate. The credit bureau must include 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 which is 
separate from any written contract or other agreement between the 
credit repair organization and the consumer or any other written 
material provided to the consumer.
    ``(c) Retention of Compliance Records.--
            ``(1) In general.--The credit repair organization shall 
        maintain a copy of the statement signed by the consumer 
        acknowledging receipt of the statement.
            ``(2) Maintenance for 2 years.--The copy of any consumer's 
        statement shall be maintained in the organization's files for 2 
        years after the date on which the statement is provided to the 
        consumer.

``SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

    ``(a) Written Contracts Required.--A credit repair organization may 
not provide services for any consumer unless a written and dated 
contract (for the purchase of such services) which meets the 
requirements of subsection (b) has been signed by the consumer.
    ``(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.--Any consumer may cancel any contract with any 
credit repair organization without penalty or obligation by notifying 
the credit repair organization of the consumer's intention to do so at 
any time before midnight of the 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.--Any consumer who enters 
into any contract with any credit repair organization shall be given, 
by the organization--
            ``(1) a copy of the completed contract and the disclosure 
        statement required under section 405; and
            ``(2) a copy of any other document the credit repair 
        organization requires the consumer to sign,
at the time the contract or the other document is signed.

``SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

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

``SEC. 409. CIVIL LIABILITY.

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

``SEC. 410. ADMINISTRATIVE ENFORCEMENT.

    ``(a) In General.--Compliance with the requirements imposed under 
this title with respect to credit repair organizations shall be 
enforced under the Federal Trade Commission Act by the Federal Trade 
Commission.
    ``(b) Violations of This Title Treated as Violations of Federal 
Trade Commission Act.--
            ``(1) In general.--For the purpose of the exercise by the 
        Federal Trade Commission of the 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 the provisions of this title in Federal or State court.
            ``(2) Civil enforcement actions.--Any State may bring a 
        civil action in any Federal or State court to enjoin any 
        violation of this title and to recover damages under this title 
        for consumers who reside in such State.''.

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