[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2561 Considered and Passed Senate (CPS)]







105th CONGRESS
  2d Session
                                S. 2561

 To amend the Fair Credit Reporting Act with respect to furnishing and 
            using consumer reports for employment purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

              October 6 (legislative day, October 2), 1998

Mr. Nickles (for himself and Mr. Bryan) introduced the following bill; 
   which was read twice, considered, read the third time, and passed

_______________________________________________________________________

                                 A BILL


 
 To amend the Fair Credit Reporting Act with respect to furnishing and 
            using consumer reports for employment purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Reporting Employment 
Clarification Act of 1998''.

SEC. 2. USE OF CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.

    (a) Disclosure to Consumer.--Section 604(b)(2) of the Fair Credit 
Reporting Act (15 U.S.C. 1681b(b)(2)) is amended to read as follows:
            ``(2) Disclosure to consumer.--
                    ``(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 consumer, 
                unless--
                            ``(i) a clear and conspicuous disclosure 
                        has been made in writing to the consumer at any 
                        time before the report is procured or caused to 
                        be procured, in a document that consists solely 
                        of the disclosure, that a consumer report may 
                        be obtained for employment purposes; and
                            ``(ii) the consumer has authorized in 
                        writing (which authorization may be made on the 
                        document referred to in clause (i)) the 
                        procurement of the report by that person.
                    ``(B) Application by mail, telephone, computer, or 
                other similar means.--If a consumer described in 
                subparagraph (C) applies for employment by mail, 
                telephone, computer, or other similar means, at any 
                time before a consumer report is procured or caused to 
                be procured in connection with that application--
                            ``(i) the person who procures the consumer 
                        report on the consumer for employment purposes 
                        shall provide to the consumer, by oral, 
                        written, or electronic means, notice that a 
                        consumer report may be obtained for employment 
                        purposes, and a summary of the consumer's 
                        rights under section 615(a)(3); and
                            ``(ii) the consumer shall have consented, 
                        orally, in writing, or electronically to the 
                        procurement of the report by that person.
                    ``(C) Scope.--Subparagraph (B) shall apply to a 
                person procuring a consumer report on a consumer in 
                connection with the consumer's application for 
                employment only if--
                            ``(i) the consumer is applying for a 
                        position over which the Secretary of 
                        Transportation has the power to establish 
                        qualifications and maximum hours of service 
                        pursuant to the provisions of Section 31502 of 
                        Title 49, or a position subject to safety 
                        regulation by a state transportation agency; 
                        and
                            ``(ii) as of the time at which the person 
                        procures the report or causes the report to be 
                        procured the only interaction between the 
                        consumer and the person in connection with that 
                        employment application has been by mail, 
                        telephone, computer, or other similar means.''
    (b) Conditions on Use for Adverse Actions.--Section 604(b)(3) of 
the Fair Credit Reporting Act (15 U.S.C. 1681b(b)(3)) is amended to 
read as follows:
            ``(3) Conditions on use for adverse actions.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in using a consumer report for 
                employment purposes, before taking any adverse action 
                based in whole or in part on the report, the person 
                intending to take such adverse action shall provide to 
                the consumer to whom the report relates--
                            ``(i) a copy of the report; and
                            ``(ii) a description in writing of the 
                        rights of the consumer under this title, as 
                        prescribed by the Federal Trade Commission 
                        under section 609(c)(3).
                    ``(B) Application by mail, telephone, computer, or 
                other similar means.--
                            ``(i) If a consumer described in 
                        subparagraph (C) applies for employment by 
                        mail, telephone, computer or other similar 
                        means, and if a person who has procured a 
                        consumer report on the consumer for employment 
                        purposes takes adverse action on the employment 
                        application based in whole or in part on the 
                        report, then the person must provide to the 
                        consumer to whom the report relates, in lieu of 
                        the notices required under subparagraph (A) of 
                        this section and under section 615(a), within 3 
                        business days of taking such action, an oral, 
                        written or electronic notification--
                                    ``(I) that adverse action has been 
                                taken based in whole or in part on a 
                                consumer report received from a 
                                consumer reporting agency;
                                    ``(II) of the name, address and 
                                telephone number of the consumer report 
                                agency that furnished the consumer 
                                report (including a toll-free telephone 
                                number established by the agency if the 
                                agency compiles and maintains files on 
                                consumers on a nationwide basis);
                                    ``(III) that the consumer reporting 
                                agency did not make the decision to 
                                take the adverse action and is unable 
                                to provide to the consumer the specific 
                                reasons why the adverse action was 
                                taken; and
                                    ``(IV) that the consumer may, upon 
                                providing proper identification, 
                                request a free copy of a report and may 
                                dispute with the consumer reporting 
                                agency the accuracy or completeness of 
                                any information in a report.
                            ``(ii) If, under clause (B)(i)(IV), the 
                        consumer requests a copy of a consumer report 
                        from the person who procured the report, then, 
                        within 3 business days of receiving the 
                        consumer's request, together with proper 
                        identification, the person must send or provide 
                        to the consumer a copy of a report and a copy 
                        of the consumer's rights as prescribed by the 
                        Federal Trade Commission under section 
                        609(c)(3).''.
                    ``(C) Scope.--Subparagraph (B) shall apply to a 
                person procuring a consumer report on a consumer in 
                connection with the consumer's application for 
                employment only if--
                            (i) the consumer is applying for a position 
                        over which the Secretary of Transportation has 
                        the power to establish qualifications and 
                        maximum hours of service pursuant to the 
                        provisions of section 31502 of title 49, or a 
                        position subject to safety regulation by a 
                        state transportation agency; and
                            (ii) as of the time at which the person 
                        procures the report or causes the report to be 
                        procured the only interaction between the 
                        consumer and the person in connection with that 
                        employment application has been by mail, 
                        telephone, computer, or other similar means.''

SEC. 3. PROVISION OF SUMMARY OF RIGHTS.

    Section 604(b)(1)(B) of the Fair Credit Reporting Act (15 U.S.C. 
1681b(b)(1)(B)) is amended by inserting ``, or has previously 
provided,'' before ``a summary''.

SEC. 4. NATIONAL SECURITY INVESTIGATION CONFORMING AMENDMENTS.

    (a) Government as End User.--Section 609(a)(3) of the Fair 
Credit Reporting Act (15 U.S.C. 1681g(a)(3)) is amended by adding at 
the end the following:
                    ``(C) Subparagraph (A) does not apply if--
                            ``(i) the end user is an agency or 
                        department of the United States Government that 
                        procures the report from the person for 
                        purposes of determining the eligibility of the 
                        consumer to whom the report relates to receive 
                        access or continued access to classified 
                        information (as defined in section 
                        604(b)(4)(E)(i)); and
                            ``(ii) the head of the agency or department 
                        makes a written finding as prescribed under 
                        section 604(b)(4)(A).''.
    (b) National Security Investigations.--Section 613 of the Fair 
Credit Reporting Act (15 U.S.C. 1681k) is amended--
            (1) by inserting ``(a) In General.--'' before ``A 
        consumer''; and
            (2) by adding at the end the following:
    ``(b) Exemption for National Security Investigations.--Subsection 
(a) does not apply in the case of an agency or department of the United 
States Government that seeks to obtain and use a consumer report for 
employment purposes, if the head of the agency or department makes a 
written finding as prescribed under section 604(b)(4)(A).''.

SEC. 5. CIVIL SUITS AND JUDGMENTS.

    Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 
1681c(a)) is amended--
            (1) in paragraph (2), by striking ``Suits and Judgments 
        which'' and inserting ``Civil suits, civil judgments, and 
        records of arrest that'';
            (2) by striking paragraph (5);
            (3) in paragraph (6), by inserting ``, other than records 
        of convictions of crimes'' after ``of information''; and
            (4) by redesignating paragraph (6) as paragraph (5).

SEC. 6. TECHNICAL AMENDMENTS.

    The Fair Credit Reporting Act (15 U.S.C. 1601 et seq.) is amended--
            (1) in section 603(d)(2)(A)(iii), by striking ``any 
        communication'' and inserting ``communication'';
            (2) in section 603(o)(1), by striking ``(d)(2)(E)'' and 
        inserting ``(d)(2)(D)'';
            (3) in section 603(o)(4), by striking ``or'' at the end and 
        inserting ``and'';
            (4) in section 604(g), by striking ``or a direct marketing 
        transaction'';
            (5) in section 611(a)(7), by striking ``(6)(B)(iv)'' and 
        inserting ``(6)(B)(iii)''; and
            (6) in section 621(b), by striking ``or (e)''.

SEC. 7. EFFECTIVE DATE.

    The amendments made by this title shall be deemed to have the same 
effective date as the amendments made by section 2403 of the Consumer 
Credit Reporting Reform Act of 1996 (Public Law 104-208; 110 Stat. 
3009-1257).
                                 <all>