[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1370 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1370

  To amend the Fair Credit Reporting Act to provide for disclosure of 
    credit-scoring information by creditors and consumer reporting 
                               agencies.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              July 8, 2003

Mr. Schumer (for himself and Mr. Allard) 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 to provide for disclosure of 
    credit-scoring information by creditors and consumer reporting 
                               agencies.

    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 Credit Score Disclosure Act 
of 2003''.

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:
    ``(q) Definitions Relating to Credit Scores.--In this title--
            ``(1) when used in connection with an application for an 
        extension of credit for a consumer purpose that is to be 
        secured by a dwelling--
                    ``(A) the term `credit score'--
                            ``(i) means a numerical value or 
                        categorization derived from a statistical tool 
                        or modeling system used to predict the 
                        likelihood of certain credit behaviors, 
                        including default; and
                            ``(ii) does not include--
                                    ``(I) any mortgage score or rating 
                                of an automated underwriting system 
                                that considers 1 or more factors in 
                                addition to credit information, 
                                including the loan-to-value ratio, the 
                                amount of down payment, or the 
                                financial assets of a consumer; or
                                    ``(II) other elements of the 
                                underwriting process or underwriting 
                                decision; and
                    ``(B) the term `key factors' means all relevant 
                elements or reasons affecting the credit score for a 
                consumer, listed in the order of their importance, 
                based on their respective effects on the credit score; 
                and
            ``(2) the terms `creditor' and `dwelling' have the same 
        meanings as in section 103 of the Truth in Lending Act.''.

SEC. 3. DUTIES OF CONSUMER REPORTING AGENCIES TO DISCLOSE CREDIT 
              SCORES.

    (a) In General.--Section 609(a) of the Fair Credit Reporting Act 
(15 U.S.C. 1681g(a)) is amended by adding at the end the following:
            ``(6) In connection with an application for an extension of 
        credit for a consumer purpose that is to be secured by a 
        dwelling--
                    ``(A) the current, or most recent, credit score of 
                the consumer that was previously calculated by the 
                agency;
                    ``(B) the range of possible credit scores under the 
                model used;
                    ``(C) the key factors, if any, not to exceed 4, 
                that adversely affected the credit score of the 
                consumer in the model used;
                    ``(D) the date on which the credit score was 
                created; and
                    ``(E) the name of the person or entity that 
                provided the credit score or the credit file on the 
                basis of which the credit score was created.''.
    (b) Limitations on Required Provision of Credit Score.--Section 609 
of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended by adding 
at the end the following:
    ``(d) Limitations on Required Provision of Credit Score.--
            ``(1) In general.--Subsection (a)(6) may not be construed--
                    ``(A) to compel a consumer reporting agency to 
                develop or disclose a credit score if the agency does 
                not, in the ordinary course of its business--
                            ``(i) distribute scores that are used in 
                        connection with extensions of credit secured by 
                        residential real property; or
                            ``(ii) develop credit scores that assist 
                        creditors in understanding the general credit 
                        behavior of the consumer and predicting future 
                        credit behavior;
                    ``(B) to require a consumer reporting agency that 
                distributes credit scores developed by another person 
                or entity to provide a further explanation of those 
                scores, or to process a dispute arising pursuant to 
                section 611(a), except that the consumer reporting 
                agency shall be required to provide to the consumer the 
                name and information for contacting the person or 
                entity that developed the score;
                    ``(C) to require a consumer reporting agency to 
                maintain credit scores in its files; or
                    ``(D) to compel disclosure of a credit score, 
                except upon specific request of the consumer, except 
                that if a consumer requests the credit file and not the 
                credit score, then the consumer shall be provided with 
                the credit file and a statement that the consumer may 
                request and obtain a credit score.
            ``(2) Provision of scoring model.--In complying with 
        subsection (a)(6) and this subsection, a consumer reporting 
        agency shall supply to the consumer--
                    ``(A) a credit score that is derived from a credit 
                scoring model that is widely distributed to users of 
                credit scores by that consumer reporting agency in 
                connection with any extension of credit secured by a 
                dwelling; or
                    ``(B) a credit score that assists the consumer in 
                understanding the credit scoring assessment of the 
                credit behavior of the consumer and predictions about 
                future credit behavior.''.
    (c) Conforming Amendment.--Section 609(a)(1) of the Fair Credit 
Reporting Act (15 U.S.C. 1681g(a)(1)) is amended by inserting before 
the period ``, other than as provided in paragraph (6)''.

SEC. 4. DUTIES OF USERS OF CREDIT SCORES.

    (a) In General.--Section 615 of the Fair Credit Reporting Act (15 
U.S.C. 1681m) is amended--
            (1) by striking ``(e)'' at the end; and
            (2) by adding at the end the following:
    ``(e) Duties of Users of Credit Scores.--
            ``(1) Disclosures.--Any person that makes or arranges 
        extensions of credit for consumer purposes that are to be 
        secured by a dwelling and that uses credit scores for that 
        purpose, shall be required to provide to the consumer to whom 
        the credit score relates, as soon as is reasonably practicable 
        after such use--
                    ``(A) a copy of the information described in 
                section 609(a)(6) that was obtained from a consumer 
                reporting agency or that was developed and used by that 
                user of the credit score information; or
                    ``(B) if the user of the credit score information 
                obtained such information from a third party that 
                developed such information, (other than a consumer 
                reporting agency or the user itself) only--
                            ``(i) a copy of the information described 
                        in section 609(a)(6) provided to the user by 
                        the person or entity that developed the credit 
                        score; and
                            ``(ii) a notice that generally describes 
                        credit scores, their use, and the sources and 
                        kinds of data used to generate credit scores.
            ``(2) Rule of construction.--This subsection may not be 
        construed to require the user of a credit score described in 
        paragraph (1)--
                    ``(A) to explain to the consumer the information 
                provided pursuant to section 609(a)(6), unless that 
                information was developed by the user;
                    ``(B) to disclose any information other than a 
                credit score or the key factors required to be 
                disclosed under section 609(a)(6)(C);
                    ``(C) to disclose any credit score or related 
                information obtained by the user after a transaction 
                occurs; or
                    ``(D) to provide more than 1 disclosure under this 
                subsection to any 1 consumer per credit transaction.
            ``(3) Limitation.--Except as otherwise provided in this 
        subsection, the obligation of a user of a credit score under 
        this subsection shall be limited solely to providing a copy of 
        the information that was received from the consumer reporting 
        agency or other person. A user of a credit score has no 
        liability under this subsection for the content of credit score 
        information received from a consumer reporting agency or for 
        the omission of any information within the report provided by 
        the consumer reporting agency.''.
    (b) Conforming Amendment.--Section 615 of the Fair Credit Reporting 
Act (15 U.S.C. 1681m) is amended in the section heading, by adding at 
the end ``and credit scores''.

SEC. 5. CONTRACTUAL LIABILITY.

    Section 616 of the Fair Credit Reporting Act (15 U.S.C. 1681n) is 
amended by adding at the end the following:
    ``(d) Use of Credit Scores.--Any provision of any contract that 
prohibits the disclosure of a credit score by a consumer reporting 
agency or a person who makes or arranges extensions of credit to the 
consumer to whom the credit score relates is void. A user of a credit 
score shall not have liability under any such contractual provision for 
disclosure of a credit score.''.

SEC. 6. RELATION TO STATE LAWS.

    Section 624(b)(1) of the Fair Credit Reporting Act (15 U.S.C. 
1681t(b)(1)) is amended--
            (1) in subparagraph (E), by striking ``or'' at the end; and
            (2) by adding at the end the following new subparagraphs:
                    ``(G) section 609(a)(6), relating to the disclosure 
                of credit scores by consumer reporting agencies; or
                    ``(H) section 615(e), relating to the duties of 
                users of credit scores to disclose credit score 
                information to consumers;''.

SEC. 7. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall become effective 
180 days after the date of enactment of this Act.
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