[Congressional Record Volume 140, Number 52 (Wednesday, May 4, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 4, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                 CONSUMER REPORTING REFORM ACT OF 1994

  The Senate continued with the consideration of the bill.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall it pass?
  On this question, the yeas and nays have been ordered, and the clerk 
will call the roll.
  The legislation clerk called the roll.
  Mr. FORD. I announce that the Senator from Connecticut [Mr. Dodd] and 
the Senator from Pennsylvania [Mr. Wofford] are necessarily absent.
  I also announce that the Senator from Alabama [Mr. Shelby] is absent 
because of illness.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The result was announced--yeas 87, nays 10, as follows:

                      [Rollcall Vote No. 100 Leg.]

                                YEAS--87

     Akaka
     Baucus
     Biden
     Bingaman
     Bond
     Boren
     Boxer
     Bradley
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cohen
     Conrad
     Craig
     D'Amato
     Danforth
     Daschle
     DeConcini
     Dole
     Domenici
     Dorgan
     Durenberger
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Gorton
     Graham
     Grassley
     Gregg
     Harkin
     Hatfield
     Heflin
     Helms
     Hollings
     Inouye
     Jeffords
     Johnston
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mathews
     McConnell
     Metzenbaum
     Mikulski
     Mitchell
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Packwood
     Pell
     Pressler
     Pryor
     Reid
     Riegle
     Robb
     Rockefeller
     Roth
     Sarbanes
     Sasser
     Simon
     Simpson
     Smith
     Specter
     Stevens
     Thurmond
     Wallop
     Warner
     Wellstone

                                NAYS--10

     Bennett
     Cochran
     Coverdell
     Faircloth
     Gramm
     Hatch
     Hutchison
     Kassebaum
     Mack
     McCain

                             NOT VOTING--3

     Dodd
     Shelby
     Wofford
  So, the bill (S. 783), as amended, was passed, as follows:

                                 S. 783

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Consumer 
     Reporting Reform Act of 1994''.
       (b) Table of Contents.--The following is a table of 
     contents for this Act:

Sec. 1. Short title; table of contents.

          TITLE I--AMENDMENTS TO THE FAIR CREDIT REPORTING ACT

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

                 TITLE II--CREDIT REPAIR ORGANIZATIONS

Sec. 201. Regulation of credit repair organizations.
Sec. 202. Credit worthiness.

            TITLE III--FINANCIAL ACCOUNTING STANDARDS BOARD

Sec. 301. Findings.
Sec. 302. New accounting treatment of employee stock options and 
              purchase plans.
Sec. 303. Status.

                   TITLE IV--MISCELLANEOUS PROVISION

Sec. 401. Securities and Exchange Commission, Seattle district office.
          TITLE I--AMENDMENTS TO THE FAIR CREDIT REPORTING ACT

     SEC. 101. DEFINITIONS.

       (a) Adverse Action.--Section 603 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681a) is amended by adding at the 
     end the following new subsection:
       ``(k) The term `adverse action', when used in connection 
     with an action based in whole or in part on information 
     contained in a consumer report, means an action that is 
     adverse or less favorable to the interest of the consumer who 
     is the subject of the report. Without limiting the general 
     applicability of the foregoing, the following constitute 
     adverse actions:
       ``(1) Credit.--
       ``(A) Actions included.--A denial or revocation of credit, 
     an increase in the charge for credit, an adverse change in 
     the terms of an existing credit arrangement, or a refusal to 
     grant credit in substantially the amount or on substantially 
     the terms requested.
       ``(B) Actions not included.--For the purposes of this 
     paragraph, the term `adverse action' does not include--
       ``(i) an attempt to collect a debt owed or allegedly owed;
       ``(ii) an action taken with respect to a credit or 
     insurance transaction that is not initiated by the consumer 
     if--

       ``(I) no change is made with respect to the interests of 
     the consumer; or
       ``(II) a change is made that is not unfavorable to the 
     interests of the consumer; and

       ``(iii) an action taken with respect to the review of an 
     account under section 604(a)(3)(A), if--

       ``(I) no change is made with respect to the interests of 
     the consumer; or
       ``(II) a change is made that is not unfavorable to the 
     interests of the consumer.

       ``(2) Employment.--A denial of employment or other adverse 
     or less favorable decision relating to employment.
       ``(3) Insurance.--A denial or cancellation of, an increase 
     in any charge for, or reduction or other adverse or 
     unfavorable change in the terms of coverage or amount of, any 
     insurance, existing or applied for, in connection with the 
     underwriting of insurance.
       ``(4) License or benefit.--A denial or cancellation of, or 
     an increase in any charge for, or any other adverse or 
     unfavorable change in the terms of, any license or benefit 
     described in section 604(a)(3)(D).
       ``(5) Consumer initiated business transaction.--A denial or 
     cancellation of, or any other adverse or unfavorable change 
     in the terms of, any business transaction that the consumer 
     has initiated or sought to initiate.''.
       (b) Definition of Consumer Report.--Section 603(d) of the 
     Fair Credit Reporting Act (15 U.S.C. 1681a(d)) is amended in 
     the second sentence--
       (1) in subparagraph (A)--
       (A) by inserting ``(i)'' after ``(A)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``; (ii) any communication of that information 
     among persons related by common ownership or affiliated by 
     corporate control; or (iii) any communication of information 
     from a credit application by a consumer among persons related 
     by common ownership or affiliated by common corporate 
     control, if (I) it is clearly and conspicuously disclosed to 
     the consumer with the credit application that the information 
     may be communicated among such persons; and (II) the consumer 
     is provided with the option to prohibit such communication 
     (in writing, using a signature line that is separate and 
     distinct from that used for the consumer's consent to the 
     extension of credit) and does not exercise such option'';
       (2) in subparagraph (B), by striking ``or'' after the 
     semicolon at the end; and
       (3) in subparagraph (C), by striking the period at the end 
     and inserting the following: ``; or (D) any communication of 
     information about a consumer between persons who are 
     affiliated by common ownership or common corporate control 
     and in connection with a credit or insurance transaction that 
     is not initiated by the consumer, if either person has 
     complied with section 615(d)(2)(B) with respect to a consumer 
     report from which the information is taken and the consumer 
     has consented to use of the report for the transaction in 
     accordance with section 615(d)(2)(C).''.
       (c) Firm Offer.--Section 603 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681a), as amended by subsection (a), is 
     amended by adding at the end the following new subsection:
       ``(l) The term `firm offer' means an offer of credit or 
     insurance to a consumer that will be honored by the offeror 
     if--
       ``(1) based on information in the consumer report on the 
     consumer or other information bearing on the creditworthiness 
     of the consumer, the consumer is determined to meet the 
     criteria used to select consumers for the offer; and
       ``(2) the information provided by the consumer in the 
     application in response to the offer--
       ``(A) is not determined to be incorrect or inadequate; and
       ``(B) meets the criteria established by the offeror in 
     advance of the offer for such extension of credit or 
     insurance.''.
       (d) Credit or Insurance Transaction That Is Not Initiated 
     by the Consumer.--Section 603 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681a), as amended by subsection (c), is 
     amended by adding at the end the following new subsection:
       ``(m) The term `credit or insurance transaction that is not 
     initiated by the consumer' does not include the use of a 
     consumer report by a person with whom the consumer has an 
     account, for purposes of--
       ``(1) reviewing the account; or
       ``(2) collecting the account.''.
       (e) Exclusion of Certain Communications By Employment 
     Agencies From Definition of Consumer Report.--Section 603 of 
     the Fair Credit Reporting Act (15 U.S.C. 1681(a)), as amended 
     by subsections (a) through (d), is amended--
       (1) in subsection (d), by adding at the end the following 
     new sentence: ``The term also does not include a 
     communication described in subsection (n).''; and
       (2) by adding at the end the following:
       ``(n) Communications By Employment Agencies Excluded From 
     Definition of Consumer Report.--For purposes of subsection 
     (d), a communication is described in this subsection if it is 
     a communication--
       ``(1) that, but for the third sentence of subsection (d), 
     would be an investigative consumer report;
       ``(2) that is made to a prospective employer for the 
     purpose of--
       ``(A) procuring an employee for the employer; or
       ``(B) procuring an opportunity for a natural person to work 
     for the employer;
       ``(3) that is made by a person that regularly performs such 
     procurement;
       ``(4) that is not used by any person for any purpose other 
     than a purpose described in subparagraph (A) or (B) of 
     paragraph (2);
       ``(5) with respect to which--
       ``(A) the consumer who is the subject of the 
     communication--
       ``(i) consents orally or in writing to the nature and scope 
     of the communication, before the collection of any 
     information for the purpose of making the communication;
       ``(ii) consents orally or in writing to the making of the 
     communication to a prospective employer, before the making of 
     the communication; and
       ``(iii) in the case of consent under clause (i) or (ii) 
     given orally, is provided written confirmation of that 
     consent by the person making the communication, not later 
     than 3 business days after the receipt of the consent by that 
     person;
       ``(B) the person making the communication does not, for the 
     purpose of making the communication, make any inquiry that if 
     made by a prospective employer of the consumer who is the 
     subject of the communication would violate any applicable 
     Federal or State equal employment opportunity law or 
     regulation; and
       ``(C) the person making the communication--
       ``(i) discloses in writing to the consumer who is the 
     subject of the communication, not later than 5 business days 
     after receiving any request from the consumer for such 
     disclosure, the nature and substance of all information in 
     the consumer's file at the time of the request, except that 
     the sources of information that is acquired solely for use in 
     making the communication and actually used for no other 
     purpose need not be disclosed other than under appropriate 
     discovery procedures in the court in which an action is 
     brought; and
       ``(ii) notifies the consumer who is the subject of the 
     communication, in writing, of the consumer's right to request 
     the information described in clause (i).''.

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

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

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

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

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

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

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

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

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

     SEC. 105. AMENDMENTS RELATING TO COMPLIANCE PROCEDURES.

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

     SEC. 106. AMENDMENTS RELATING TO CONSUMER DISCLOSURES.

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

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

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

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

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

       (a) In General.--Section 611(a) of the Fair Credit 
     Reporting Act (15 U.S.C. 1681i(a)) is amended to read as 
     follows:
       ``(a) Reinvestigation of Disputed Information.--
       ``(1) In general.--If the completeness or accuracy of an 
     item of information contained in a consumer's file at a 
     consumer reporting agency is disputed by the consumer and the 
     consumer notifies the agency directly of such dispute, the 
     agency shall reinvestigate free of charge and record the 
     current status of the disputed information before the later 
     of--
       ``(A) the expiration of the 30-day period beginning on the 
     date the agency receives the notice of the dispute from the 
     consumer; or
       ``(B) the expiration of the 15-day period beginning on the 
     last date on which the agency receives relevant information 
     submitted by the consumer in accordance with paragraph (4).
       ``(2) Prompt notice of dispute to furnisher of 
     information.--Not later than 5 business days after the date 
     on which a consumer reporting agency receives notice of a 
     dispute from a consumer in accordance with paragraph (1), the 
     agency shall notify any person who provided any item of 
     information in dispute at the address and in the manner 
     established with the person.
       ``(3) Determination that dispute is frivolous or 
     irrelevant.--
       ``(A) In general.--Notwithstanding paragraph (1), a 
     consumer reporting agency may terminate a reinvestigation of 
     information disputed by a consumer under that paragraph if 
     the agency reasonably determines that the dispute raised by 
     the consumer is frivolous or irrelevant, including by reason 
     of a failure to provide sufficient information to investigate 
     the dispute.
       ``(B) Notice of determination.--Not later than 5 business 
     days after making a determination in accordance with 
     subparagraph (A) that a dispute is frivolous or irrelevant, a 
     consumer reporting agency shall mail to the consumer a 
     written notification of such determination (including the 
     reasons for the determination), and, if authorized by the 
     consumer for that purpose, notification by any other means 
     available to the agency.
       ``(4) Consideration of consumer information.--In conducting 
     any reinvestigation under paragraph (1) with respect to 
     disputed information in the file of a consumer, the consumer 
     reporting agency shall review and consider all relevant 
     information submitted by the consumer during the 30-day 
     period beginning on the date the agency receives the notice 
     of the dispute from the consumer.
       ``(5) Deletion of inaccurate or unverifiable information.--
       ``(A) In general.--If, in the course of a reinvestigation 
     under paragraph (1) of any information disputed by a 
     consumer, an item of the information is found to be 
     inaccurate or cannot be verified, the consumer reporting 
     agency shall delete that item of information from the 
     consumer's file.
       ``(B) Requirements relating to reinsertion of previously 
     deleted material.--
       ``(i) Certification of accuracy of information.--If any 
     information is deleted from a consumer's file pursuant to 
     subparagraph (A), the information may not be reinserted in 
     the file after the deletion unless the person who furnishes 
     the information certifies that the information is complete 
     and accurate.
       ``(ii) Notice to consumer.--If any information that has 
     been deleted from a consumer's file pursuant to subparagraph 
     (A) is reinserted in the file in accordance with clause (i), 
     the consumer reporting agency shall, not later than 5 
     business days after such reinsertion, mail to the consumer 
     written notification of the reinsertion, and, if authorized 
     by the consumer for that purpose, shall provide such notice 
     by any other means available to the agency.
       ``(iii) Contents.--The notice of reinsertion required under 
     clause (ii) shall include--

       ``(I) all information prescribed in clauses (iii) and (v) 
     of paragraph (6)(B);
       ``(II) a description of the procedure used to make the 
     finding that the information should be reinserted; and
       ``(III) the name, business address, and telephone number of 
     any furnisher of information contacted in connection with 
     such information.

       ``(C) Procedures to prevent reappearance.--A consumer 
     reporting agency shall maintain reasonable procedures 
     designed to prevent the reappearance in a consumer's file, 
     and in consumer reports on the consumer, of information that 
     is required to be deleted pursuant to this paragraph (other 
     than information that is reinserted in accordance with 
     subparagraph (B)(i)).
       ``(6) Notice of results of reinvestigation.--
       ``(A) In general.--A consumer reporting agency shall mail 
     to the consumer written notification of the results of a 
     reinvestigation under this subsection not later than 5 
     business days after the completion of the reinvestigation, 
     and, if authorized by the consumer for that purpose, shall 
     provide notification by other means available to the agency.
       ``(B) Contents.--As part of or in addition to the notice 
     under subparagraph (A), a consumer reporting agency shall 
     provide to a consumer in writing during the 5-business-day 
     period referred to in subparagraph (A)--
       ``(i) a statement that the reinvestigation is completed;
       ``(ii) a consumer report that is based upon the consumer's 
     file as that file is revised as a result of the 
     reinvestigation;
       ``(iii) a description or indication of any changes made in 
     the consumer report as a result of those revisions to the 
     consumer's file;
       ``(iv) in any case in which disputed information is found 
     to be accurate and complete (and in any other case upon 
     request by the consumer), a description of the procedure used 
     to make the finding and the name, business address, and 
     telephone number of any furnisher of information contacted in 
     connection with such information;
       ``(v) a notification that the consumer has the right to 
     insert a statement in such consumer's file disputing the 
     accuracy or completeness of the information in the file; and
       ``(vi) a clear and conspicuous notification of the right of 
     the consumer to request under subsection (d) that the 
     consumer reporting agency furnish notifications under that 
     subsection.
       ``(7) Description of reinvestigation procedure.--Not later 
     than 15 days after receiving a request from the consumer for 
     a description referred to in paragraph (6)(B)(iv), the 
     consumer reporting agency shall provide such description to 
     the consumer.
       ``(8) Exception.--If the dispute is resolved by the 
     deletion of the disputed information not later than 3 
     business days after the date on which the consumer reporting 
     agency receives notice of the dispute in accordance with 
     paragraph (1), the consumer reporting agency shall be exempt 
     from the requirements of paragraphs (2) and (6) if the 
     consumer reporting agency--
       ``(A) provides prompt notification of the deletion to the 
     consumer by telephone;
       ``(B) provides written confirmation of the deletion, upon 
     request by the consumer; and
       ``(C) maintains reasonable procedures designed to prevent 
     the reappearance in the consumer's file, and in reports on 
     the consumer, of information deleted pursuant to paragraph 
     (5).
       ``(9) Consideration of consumer documentation.--
       ``(A) In general.--Reinvestigation under this section shall 
     include an acceptance of the consumer's version of the 
     disputed information and correction or deletion of the 
     disputed information, if the consumer submits to the consumer 
     reporting agency documentation obtained from the source of 
     the information in dispute confirming that the disputed 
     information in the consumer report is inaccurate or 
     incomplete.
       ``(B) Exception.--Notwithstanding subparagraph (A), the 
     consumer reporting agency need not accept the consumer's 
     version of the disputed information if the consumer reporting 
     agency, acting in good faith--
       ``(i) has reason to doubt the authenticity of the 
     documentation submitted by the consumer;
       ``(ii) reinvestigates the dispute by contacting the source 
     of the disputed item; and
       ``(iii) verifies that the documentation is not authentic.
       ``(10) Information from consumer.--Nothing in paragraph 
     (1)(B) or paragraph (4) shall be construed to require a 
     consumer to provide information in connection with a 
     reinvestigation under this section.''.
       (b) Conforming Amendment.--Section 611(d) of the Fair 
     Credit Reporting Act (15 U.S.C. 1681i(d)) is amended by 
     striking ``The consumer reporting agency shall clearly'' and 
     all that follows through the end of the subsection.

     SEC. 108. AMENDMENT RELATING TO CHARGES FOR DISCLOSURE.

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

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

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

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

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

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

     SEC. 110. AMENDMENTS RELATING TO CIVIL LIABILITY.

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

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

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

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

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

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

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

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

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

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

     SEC. 112. STATE ACTION TO ENFORCE ACT.

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

     SEC. 113. ADMINISTRATIVE ENFORCEMENT.

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

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

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

     SEC. 115. ACTION BY FTC.

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

     SEC. 116. RELATION TO STATE LAWS.

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

     SEC. 117. FAIR DEBT COLLECTION PRACTICES.

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

     SEC. 118. EFFECTIVE DATES.

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

     SEC. 201. REGULATION OF CREDIT REPAIR ORGANIZATIONS.

       Title IV of the Consumer Credit Protection Act is amended 
     to read as follows:
                ``TITLE IV--CREDIT REPAIR ORGANIZATIONS
``Sec.
``401. Short title.
``402. Findings and purposes.
``403. Definitions.
``404. Prohibited practices by credit repair organizations.
``405. Disclosures.
``406. Credit repair organizations contracts.
``407. Right to cancel contract.
``408. Noncompliance with this title.
``409. Civil liability.
``410. Administrative enforcement.

     ``SEC. 401. SHORT TITLE.

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

     ``SEC. 402. FINDINGS AND PURPOSES.

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

     ``SEC. 403. DEFINITIONS.

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

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

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

     ``SEC. 405. DISCLOSURES.

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

                       ```Public Reference Branch

                        Federal Trade Commission

                       Washington, D.C. 20580.'.

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

     ``SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

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

     ``SEC. 407. RIGHT TO CANCEL CONTRACT.

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

     at the time the contract or the other document is signed.

     ``SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

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

     ``SEC. 409. CIVIL LIABILITY.

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

     the end of the 2-year period beginning on the date of the 
     discovery by the consumer of the misrepresentation.

     ``SEC. 410. ADMINISTRATIVE ENFORCEMENT.

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

     SEC. 202. CREDIT WORTHINESS.

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

     SEC. 301. FINDINGS.

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

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

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

     SEC. 303. STATUS.

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

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

       It is the sense of the Senate that the Securities and 
     Exchange Commission district office located in Seattle, 
     Washington shall not be closed, nor its services, operations, 
     or staff be reduced from the levels in effect on January 1, 
     1994. None of the operations of the Seattle office shall be 
     transferred to another office of the Securities and Exchange 
     Commission.
  Mr. BRYAN. Mr. President, I move to reconsider the vote by which the 
bill was passed.
  Mr. BOND. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                             position on vote

  Mr. WOFFORD. Mr. President, I was necessarily absent for the vote on 
finalP passage of the Fair Credit Reporting Act, S. 783. Had I been 
present I would have voted ``aye.''
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I want to extend my warm appreciation and 
thanks to my colleagues for the vote in favor of S. 783.
  I particularly want to commend the lead manager, Senator Bryan, who 
has put in a tremendous amount of time with his staff on this bill. 
This is, I think, a very significant measure which will serve the 
consumers of this country and which will help facilitate the provision 
of credit.
  Without the strong leadership of Senator Bryan, we would not have 
accomplished what we have today. We were able to reach a bipartisan 
agreement on a bill that was anything but bipartisan, and was extremely 
contentious from the beginning. It was a major effort and I am very, 
very grateful for his leadership.
  I want to extend my thanks also to the chairman and the ranking 
member of our committee, Senator Riegle and Senator D'Amato, for their 
support. Without them, it could not have been a bipartisan effort.
  We have already mentioned some of the staff who have worked on this. 
Andy Vermilye, with Senator Bryan; Howard Menell and Doug Nappi, with 
Senator D'Amato; and Steve Harris and Mark Kaufman, with Senator 
Riegle. And from my staff, Maggie Fisher and Jon Kamarck. They all 
deserve our sincere thanks.
  I think S. 783 is a well balanced bill. Everybody will benefit from 
it. The free flow of accurate information will help all sides by 
promoting good economic decisions in our free market society. Consumers 
get increased disclosure and a 30-day reinvestigation time period and 
the credit industry gets a limited Federal preemption, the ability to 
share information among affiliates, and broader prescreening and direct 
marketing abilities.
  I think this is a good measure. Consumers need this legislation. I 
thank my colleagues for their support of this much needed reform in the 
credit reporting system. I hope the House will accept our effort.
  I yield the floor
  Mr. BRYAN. Mr. President, I am pleased to respond.
  As I said several times today and earlier in the week, Senator Bond's 
leadership on this piece of legislation made it all possible, and I 
acknowledge that. His able staff was a delight to work with. They, 
together with my staff and the staff of Chairman Riegle and the ranking 
member, Senator D'Amato, all worked very carefully to make sure that 
this piece of legislation is balanced, it represents a significant 
achievement in terms of consumer protection, and may very well be the 
most significant consumer bill enacted in this session of the Congress.
  It also recognizes the business community, in terms of being able to 
have access to credit information. That is important for the business 
community, as well as for consumers.
  I want to acknowledge again the appreciation that I have for my 
colleagues on both sides of the aisle for their support of this piece 
of legislation. As Senator Bond has said, hopefully, we will be able to 
move this through the other body and be able to participate in a 
signing in the not too distant future.
  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. MITCHELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Dorgan). Without objection, it is so 
ordered.

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