[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2622 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 2622
To amend the Fair Credit Reporting Act, to prevent identity theft,
improve resolution of consumer disputes, improve the accuracy of
consumer records, make improvements in the use of, and consumer access
to, credit information, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 26, 2003
Mr. Bachus (for himself, Ms. Hooley of Oregon, Mrs. Biggert, Mr. Moore,
Mr. LaTourette, Mr. Kanjorski, Mr. Castle, Mrs. Maloney, Mr. Shadegg,
Mr. Ford, Mr. Tiberi, Mr. Hinojosa, Mr. Hensarling, Mr. Crowley, Mr.
Sessions, Mr. Ross, Mr. Matheson, Mr. Davis of Alabama, Mr. Baker, Mr.
King of New York, Mr. Lucas of Oklahoma, Mr. Lucas of Kentucky, Mr.
Ney, Mrs. Kelly, Mr. Jones of North Carolina, Mr. Israel, Ms. Hart, Mr.
Miller of North Carolina, Mrs. Capito, Mrs. McCarthy of New York, Mr.
Barrett of South Carolina, Mr. Feeney, and Ms. Harris) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To amend the Fair Credit Reporting Act, to prevent identity theft,
improve resolution of consumer disputes, improve the accuracy of
consumer records, make improvements in the use of, and consumer access
to, credit information, 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 ``Fair and Accurate
Credit Transactions Act of 2003''.
(b) Table of Contents.--The table of contents for this Act are as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS
Sec. 101. Uniform national consumer protections standards made
permanent.
TITLE II--IDENTITY THEFT PREVENTION
Sec. 201. Investigating changes of address.
Sec. 202. Fraud alerts.
Sec. 203. Truncation of credit card and debit card account numbers.
Sec. 204. Summary of rights of identity theft victims.
Sec. 205. Blocking of information resulting from identity theft.
Sec. 206. Establishment of procedures for depository institutions to
identify possible instances of identity
theft.
TITLE III--IMPROVING RESOLUTION OF CONSUMER DISPUTES
Sec. 301. Coordination of consumer complaint investigations.
Sec. 302. Notice of dispute through reseller.
Sec. 303. Prompt investigation of disputed consumer information.
TITLE IV--IMPROVING ACCURACY OF CONSUMER RECORDS
Sec. 401. Reconciling addresses.
Sec. 402. Prevention of repollution of consumer reports.
Sec. 403. Notice by users with respect to fraudulent information.
TITLE V--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
Sec. 501. Free reports annually.
Sec. 502. Summary of credit scores.
Sec. 503. Simpler and easier method for consumers to use notification
system.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
Sec. 601. Certain employee investigation communications excluded from
definition of consumer report.
SEC. 2. DEFINITIONS.
Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is
amended by adding at the end the following new subsections:
``(r) Reseller.--The term `reseller' means a consumer reporting
agency that--
``(1) acts as a reseller of information by assembling and
merging information contained in the database of another
consumer reporting agency or multiple consumer reporting
agencies; and
``(2) does not maintain a permanent database of the
assembled or merged information from which new consumer reports
are produced.
``(s) Other Definitions.--
``(1) Board; credit; creditor.--The terms `Board', `credit'
and `creditor' have the same meanings as in section 103 of the
Truth in Lending Act.
``(2) Electronic fund transfer.--The term `electronic fund
transfer' has the same meaning as in section 903 of the
Electronic Fund Transfer Act.
``(3) Federal banking agency.--The term `Federal banking
agency' has the same meaning as in section 3 of the Federal
Deposit Insurance Act.
``(4) Identity theft.--The term `identity theft' includes a
violation of section 1028, 1029, or 1030 of title 18, United
States Code.''.
TITLE I--UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS
SEC. 101. UNIFORM NATIONAL CONSUMER PROTECTIONS STANDARDS MADE
PERMANENT.
Section 624(d) of the Fair Credit Reporting Act (15 U.S.C.
1681t(d)) is amended--
(1) by striking ``Subsections (b) and (c)'' and all that
follows through ``do not affect any settlement,'' and inserting
``Subsections (b) and (c) do not affect any settlement,''; and
(2) by striking ``Consumer Credit Reporting Reform Act of
1996'' and all that follows through the period at the end of
paragraph (2) and inserting ``Consumer Credit Reporting Reform
Act of 1996.''.
TITLE II--IDENTITY THEFT PREVENTION
SEC. 201. INVESTIGATING CHANGES OF ADDRESS.
(a) In General.--Section 605 of the Fair Credit Reporting Act (15
U.S.C. 1681c) is amended by inserting after subsection (f), the
following new subsection:
``(g) Investigation of Changes of Address.--If a credit card issuer
receives a request for an additional credit card with respect to an
existing credit card account within 30 days after receiving
notification of a change of address for that account, the card issuer
shall--
``(1) notify the cardholder of the request--
``(A) at both the new address and the former
address of the cardholder; or
``(B) by such other means of communication as the
cardholder and the credit card issuer previously agreed
to,
in accordance with reasonable policies and procedures
established by the card issuer pursuant to regulations which
the Board shall prescribe; and
``(2) provide to the cardholder a means of promptly
reporting incorrect changes.''.
(b) Clerical Amendments.--
(1) The heading for section 605 of the Fair Credit
Reporting Act is amended to read as follows:
``Sec. 605. Requirements relating to information contained in consumer
reports and to identity theft.''.
(2) The table of sections for title VI of the Consumer
Credit Protection Act is amended by striking the item relating
to section 605 and inserting the following new item:
``605. Requirements relating to information contained in consumer
reports and to identity theft.''.
SEC. 202. FRAUD ALERTS.
Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is
amended by adding at the end the following new subsection:
``(i) Fraud Alerts.--
``(1) In general.--Upon the request of a consumer who
asserts in good faith a suspicion that the consumer has been or
is about to become a victim of fraud or related crime, and upon
receiving proper identification, a consumer reporting agency
shall include a fraud alert in the file of that consumer.
``(2) Notice to users.--A consumer reporting agency shall
notify each person procuring a consumer report with respect to
a consumer of the existence of a fraud alert in effect for such
consumer, regardless of whether a full credit report, credit
score, or summary report is requested.
``(3) Prohibition.--No user of a consumer report with a
fraud alert may issue or extend credit in the name of the
consumer to a person other than the consumer without attempting
to obtain the authorization or preauthorization of the consumer
in the manner contained in the fraud alert in effect for such
consumer.
``(4) Definition.--In this subsection, the term `fraud
alert' means a clear and conspicuous statement in the file of a
consumer that notifies all prospective users of a consumer
report made with respect to that consumer that the consumer
does not authorize the issuance or extension of credit in the
name of the consumer unless--
``(A) the issuer or extender of such credit first
obtains verbal authorization from the consumer at a
telephone number designated by the consumer; or
``(B) the issuer of such credit utilizes another
reasonable means of communication to obtain the express
authorization or preauthorization of the consumer.
``(5) Exceptions.--
``(A) Resellers.--
``(i) In general.--The provisions of this
subsection shall not apply to a reseller.
``(ii) Limitation.--A reseller shall
preserve any fraud alert placed on a consumer
report by another consumer reporting agency.
``(B) Exempt institutions.--The requirement under
this subsection to place a fraud alert in a consumer
file shall not apply to--
``(i) a check services company, which
issues authorizations for the purpose of
approving or processing negotiable instruments,
electronic funds transfers, or similar methods
of payments; or
``(ii) a deposit account information
service company, which issues reports regarding
account closures due to fraud, substantial
overdrafts, automated teller machine abuse, or
similar negative information regarding a
consumer, to inquiring banks or other financial
institutions for use only in reviewing a
consumer request for a demand deposit account
at the inquiring bank or financial
institution.''.
SEC. 203. TRUNCATION OF CREDIT CARD AND DEBIT CARD ACCOUNT NUMBERS.
(a) In General.--Except as provided in this section, no person,
firm, partnership, association, corporation, or limited liability
company that accepts credit cards or debit cards for the transaction of
business shall print more than the last 4 digits of the card account
number or the expiration date upon any receipt provided to the
cardholder at the point of the sale or transaction.
(b) Limitation.--This section applies only to receipts that are
electronically printed, and does not apply to transactions in which the
sole means of recording the person's credit card or debit card account
number is by handwriting or by an imprint or copy of the card.
(c) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Credit card.--The term ``credit card'' has the same
meaning as in section 103(k) of the Truth in Lending Act.
(2) Debit card.--The term ``debit card'' means any card
issued by a financial institution to a consumer for use in
initiating electronic fund transfers (as defined in section
903(6) of the Electronic Fund Transfer Act) from the account
(as defined in such Act) of the consumer at such financial
institution for the purpose of transferring money between
accounts or obtaining money, property, labor, or services.
(d) Effective Date.--This section shall become effective on--
(1) January 1, 2007, with respect to any cash register or
other machine or device that electronically prints receipts for
credit card or debit card transactions that is in use before
January 1, 2005; and
(2) January 1, 2005, with respect to any cash register or
other machine or device that electronically prints receipts for
credit card or debit card transactions that is first put into
use on or after such date.
SEC. 204. SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS.
(a) In General.--Section 609 of the Fair Credit Reporting Act (15
U.S.C. 1681g) is amended by adding at the end the following new
subsection:
``(d) Summary of Rights of Identity Theft Victims.--A consumer
reporting agency shall establish reasonable policies and procedures for
providing consumers who have reason to believe they are the victims of
fraud or identity theft involving credit, electronic fund transfers, or
accounts or transactions at or with a financial institution with a
summary of the rights of consumers under the Consumer Credit Protection
Act and other provisions of Federal law and procedures for remedying
the effects of any such alleged offense.''.
(b) Best Practices.--The Federal Trade Commission shall develop
guidelines for model policies and model procedures with regard to the
summary of rights required under the amendment made by subsection (a).
SEC. 205. BLOCKING OF INFORMATION RESULTING FROM IDENTITY THEFT.
Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is
amended by inserting after subsection (i) (as added by section 202 of
this title) the following new subsection:
``(j) Block of Information Resulting From Identity Theft.--
``(1) Block.--Except as provided in paragraph (3) and not
later than 30 days after the date of receipt of proof of the
identity of a consumer and an official copy of a police report
evidencing the claim of the consumer of identity theft, a
consumer reporting agency shall block the reporting of any
information identified by the consumer in the file of the
consumer resulting from the alleged identity theft, so that the
information cannot be reported.
``(2) Notification.--A consumer reporting agency shall
promptly notify the furnisher of information identified by the
consumer under paragraph (1)--
``(A) that the information may be a result of
identity theft;
``(B) that a police report has been filed;
``(C) that a block has been requested under this
subsection; and
``(D) of the effective date of the block.
``(3) Authority to decline or rescind.--
``(A) In general.--A consumer reporting agency may
decline to block, or may rescind any block, of consumer
information under this subsection if--
``(i) the consumer reporting agency
reasonably determined that--
``(I) the information was blocked
due to a misrepresentation of fact by
the consumer relevant to the request to
block; or
``(II) the consumer knowingly
obtained possession of goods, services,
or moneys as a result of the blocked
transaction or transactions, or the
consumer should have known that the
consumer obtained possession of goods,
services, or moneys as a result of the
blocked transaction or transactions; or
``(ii) the consumer agrees that the blocked
information or portions of the blocked
information were blocked in error.
``(B) Notification to consumer.--If the block of
information is declined or rescinded under this
paragraph, the affected consumer shall be notified
promptly, in the same manner as consumers are notified
of the reinsertion of information under section
611(a)(5)(B).
``(C) Significance of block.--For purposes of this
paragraph, if a consumer reporting agency rescinds a
block, the presence of information in the file of a
consumer prior to the blocking of such information is
not evidence of whether the consumer knew or should
have known that the consumer obtained possession of any
goods, services, or monies as a result of the block.
``(4) Exceptions.--
``(A) Negative information data.--A consumer
reporting agency shall not be required to comply with
this subsection when such agency is issuing information
for authorizations, for the purpose of approving or
processing negotiable instruments, electronic funds
transfers, or similar methods of payment, based solely
on negative information, including--
``(i) dishonored checks;
``(ii) accounts closed for cause;
``(iii) substantial overdrafts;
``(iv) abuse of automated teller machines;
or
``(v) other information which indicates a
risk of fraud occurring.
``(B) Resellers.--
``(i) No reseller file.--The provisions of
this subsection do not apply to a consumer
reporting agency if the consumer reporting
agency--
``(I) is a reseller;
``(II) is not, at the time of the
request of the consumer under paragraph
(1), otherwise furnishing or reselling
a consumer report concerning the
information identified by the consumer;
and
``(III) informs the consumer, by
any means, that the consumer may report
the identity theft to the Federal Trade
Commission to obtain consumer
information regarding identity theft.
``(ii) Reseller with file.--The sole
obligation of the consumer reporting agency
under this subsection, with regard to any
request of a consumer under this subsection,
shall be to block the consumer report
maintained by the consumer reporting agency
from any subsequent use if--
``(I) the consumer, in accordance
with the provisions of paragraph (1),
identifies, to a consumer reporting
agency, information in the file of the
consumer that resulted from identity
theft; and
``(II) the consumer reporting
agency is a reseller of the identified
information.
``(iii) Notice.--In carrying out its
obligation under clause (ii), the reseller
shall promptly provide a notice to the consumer
of the decision to block the file. Such notice
shall contain the name, address, and telephone
number of each consumer reporting agency from
which the consumer information was obtained for
resale.''.
SEC. 206. ESTABLISHMENT OF PROCEDURES FOR DEPOSITORY INSTITUTIONS TO
IDENTIFY POSSIBLE INSTANCES OF IDENTITY THEFT.
(a) In General.--Section 605 of the Fair Credit Reporting Act (15
U.S.C. 1681c) is amended by inserting after subsection (j) (as added by
section 205 of this title) the following new subsection:
``(k) `Red Flag' Guidelines Required.--The Federal banking agencies
shall jointly establish and maintain guidelines for use by insured
depository institutions in identifying patterns, practices, and
specific forms of activity that indicate the possible existence of
identity theft, and update such guidelines as often as necessary.''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect at the end-of the 1-year period beginning the date of the
enactment of this Act.
TITLE III--IMPROVING RESOLUTION OF CONSUMER DISPUTES
SEC. 301. COORDINATION OF CONSUMER COMPLAINT INVESTIGATIONS.
Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is
amended by adding at the end the following new subsections:
``(f) Coordination of Consumer Complaint Investigations.-- Not
later than 365 days after the date of enactment of the Fair and
Accurate Credit Transactions Act of 2003, the Federal Trade Commission
shall prescribe rules in accordance with section 553 of title 5, United
States Code--
``(1) to develop procedures for referral of consumer
complaints under this title about identity theft and fraud
alerts between and among the consumer reporting agencies and
the Commission; and
``(2) to develop a model form and model procedures to be
used by consumers who are victims of identity fraud for
contacting and informing creditors and consumer reporting
agencies of the fraud.''.
SEC. 302. NOTICE OF DISPUTE THROUGH RESELLER.
Section 611(a)(1)(A) of the Fair Credit Reporting Act (15 U.S.C.
1681i(a)(1)(A)) is amended by inserting ``, or indirectly through a
reseller,'' after ``notifies the agency directly''.
SEC. 303. PROMPT INVESTIGATION OF DISPUTED CONSUMER INFORMATION.
(A) Study Required.--The Board of Governors of the Federal Reserve
System and the Federal Trade Commission shall each study the extent to
which, and the manner in which, consumer reporting agencies and
furnishers of consumer information to consumer reporting agencies are
complying with the procedures, time lines, and requirements under the
Fair Credit Reporting Act for the prompt investigation of the disputed
accuracy of any consumer information and the prompt correction or
deletion, in accordance with such Act, of any inaccurate or incomplete
information or information that cannot be verified.
(b) Report Required.--Before the end of the 6-month period
beginning on the date of the enactment of this Act, the Board of
Governors of the Federal Reserve System and the Federal Trade
Commission shall each submit a progress report to the Congress on the
results of the study required under subsection (a).
(c) Recommendations.--The report under subsection (b) shall include
such recommendations as the Board and the Commission determine to be
appropriate for legislative or administrative action to ensure that--
(1) consumer disputes with consumer reporting agencies over
the accuracy or completeness of information in a consumer's
file are promptly and fully investigated and any incorrect,
incomplete, or unverifiable information is immediately
corrected or deleted;
(2) furnishers of information to consumer reporting
agencies maintain full and prompt compliance with the duties
and responsibilities established under section 623 of the Fair
Credit Reporting Act; and
(3) consumer reporting agencies establish and maintain
appropriate internal controls and management review procedures
for maintaining full and continuous compliance with the
procedures, time lines, and requirements under the Fair Credit
Reporting Act for the prompt investigation of the disputed
accuracy of any consumer information and the prompt correction
or deletion, in accordance with such Act, of any inaccurate or
incomplete information or information that cannot be verified.
(d) Definitions.--For purposes of this section, the terms
``consumer'', ``consumer report'', and ``consumer reporting agency''
have the same meaning as in the Fair Credit Reporting Act.
TITLE IV--IMPROVING ACCURACY OF CONSUMER RECORDS
SEC. 401. RECONCILING ADDRESSES.
Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is
amended by inserting after subsection (g) (as added by section 201 of
this Act) the following new subsection.
``(h) Notice of Discrepancy.--In any case in which a person has
requested a consumer report relating to a consumer, and the request
includes an address for the consumer that substantially differs from
the most recent address in the file of the consumer, the consumer
reporting agency shall--
``(1) notify the requester of the discrepancy; and
``(2) reconcile or resolve, within 30 days, any substantial
variation between the most recent address in the file of the
consumer at the agency and the address contained in the
request, in accordance with reasonable policies and procedures
established by the consumer reporting agency.''.
SEC. 402. PREVENTION OF REPOLLUTION OF CONSUMER REPORTS.
Section 623(a)(1) of the Fair Credit Reporting Act (15 U.S.C.
1681s-2(a)(1)) is amended by adding at the end the following new
subparagraph:
``(D) Information known to include identity theft
activity.--A person may not furnish information to any
consumer reporting agency that the person knows or has
reason to believe has resulted from fraudulent
activity, including identity theft.''.
SEC. 403. NOTICE BY USERS WITH RESPECT TO FRAUDULENT INFORMATION.
Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is
amended by adding at the end the following new subsection:
``(e) Notice of Fraudulent Information Relating to Identity
Theft.--Any assignee or agent, including a debt collector (as defined
in title VIII), of a person who uses a consumer report on any consumer,
who learns that any information in such consumer report is fraudulent
and may be the result of identity theft shall notify the person of such
fraudulent information.''.
TITLE V--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
SEC. 501. FREE REPORTS ANNUALLY.
Section 612(c) of the Fair Credit Reporting Act (15 U.S.C.
1681j(c)) is amended to read as follows:
``(c) Free Annual Disclosure.--Upon the request of the consumer, a
consumer reporting agency shall make all disclosures pursuant to
section 609 once during any 12-month period without charge to the
consumer.''.
SEC. 502. SUMMARY OF CREDIT SCORES.
Section 609(a)(1) of the Fair Credit Reporting Act (15 U.S.C.
1681g(a)(1)) is amended by striking ``except that nothing'' and all
that follows through the period at the end and inserting ``including a
summary of how any individual credit score of the consumer was derived
and how such score might be improved.''.
SEC. 503. SIMPLER AND EASIER METHOD FOR CONSUMERS TO USE NOTIFICATION
SYSTEM.
(a) In General.--Section 604(e)(5)(A)(i) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(e)(5)(A)(i)) is amended by inserting
``in a simple and easy manner and'' after ``notify the agency,''.
(b) Technical and Conforming Amendment.--Section 615(d) of the Fair
Credit Reporting Act (15 U.S.C. 1681m(d)) is amended--
(1) by redesignating paragraphs (2), (3), and (4), as
paragraphs (3), (4) and (5); and
(2) by inserting after paragraph (1) the following new
paragraph:
``(2) Simple and easy notification.--Any statement given
the consumer under paragraph (1)(E) shall be in a simple and
easy to understand format and shall afford a simple and easy
method for the consumer to respond.''.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
SEC. 601. CERTAIN EMPLOYEE INVESTIGATION COMMUNICATIONS EXCLUDED FROM
DEFINITION OF CONSUMER REPORT.
(a) In General.--Section 603 of the Fair Credit Reporting Act (15
U.S.C. 1681a) is amended--
(1) by redesignating subsection (p) as subsection (q); and
(2) by inserting after subsection (o) the following new
subsection:
``(p) Exclusion of Certain Communications for Employee
Investigations.--
``(1) Communications described in this subsection.--A
communication is described in this subsection if--
``(A) but for subsection (d)(2)(D), the
communication would be a consumer report;
``(B) the communication is made to an employer in
connection with an investigation of--
``(i) suspected misconduct relating to
employment; or
``(ii) compliance with Federal, State, or
local laws and regulations, the rules of a
self-regulatory organization, or any
preexisting written policies of the employer;
``(C) the communication is not made for the purpose
of investigating a consumer's credit worthiness, credit
standing, or credit capacity; and
``(D) the communication is not provided to any
person except--
``(i) to the employer or an agent of the
employer;
``(ii) to any Federal or State officer,
agency, or department, or any officer, agency,
or department of a unit of general local
government;
``(iii) to any self-regulatory organization
with regulatory authority over the activities
of the employer or employee;
``(iv) as otherwise required by law; or
``(v) pursuant to section 608.
``(2) Subsequent disclosure.--After taking any adverse
action based in whole or in part on a communication described
in paragraph (1), the employer shall disclose to the consumer a
summary containing the nature and substance of the
communication upon which the adverse action is based, except
that the sources of information acquired solely for use in
preparing what would be but for subsection (d)(2)(D) an
investigative consumer report need not be disclosed.
``(3) Self-regulatory organization defined.--For purposes
of this subsection, the term `self-regulatory organization'
includes any self-regulatory organization (as defined in
section 3(a)(26) of the Securities Exchange Act of 1934), any
entity established under Title I of the Sarbanes-Oxley Act of
2002, any board of trade designated by the Commodity Futures
Trading Commission, and any futures association registered with
such Commission.''.
(b) Technical and Conforming Amendment.--Section 603(d)(2)(D) of
the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(D)) is amended by
inserting ``or (p)'' after ``subsection (o)''.
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