[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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