[Congressional Record Volume 140, Number 73 (Monday, June 13, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 13, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                 CONSUMER REPORTING REFORM ACT OF 1994

  Mr. GONZALEZ. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1015) to amend the Fair Credit Reporting Act to assure the 
completeness and accuracy of consumer information maintained by credit 
reporting agencies, to better inform consumers of their rights under 
the act, and to improve enforcement, and for other purposes, as 
amended.
  The Clerk read as follows:

                               H.R. 1015

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
            TITLE I--AMENDMENTS TO FAIR CREDIT REPORTING ACT

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Consumer Reporting Reform 
     Act of 1994''.

     SEC. 102. 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'--
       ``(1) has the meaning given to such term in section 
     701(d)(6) of the Equal Credit Opportunity Act; and
       ``(2) includes--
       ``(A) any denial of, increase in any charge for, or 
     reduction in the amount of, insurance for personal, family, 
     or household purposes made in connection with the 
     underwriting of insurance;
       ``(B) any denial of employment or any other decision for 
     employment purposes which adversely affects any current or 
     prospective employee; and
       ``(C) any action taken or determination made--
       ``(i) in connection with an application which was made by, 
     or a transaction which was initiated by, any consumer; and
       ``(ii) which is adverse to the interest of the consumer.''.
       (b) Firm Offer of Credit.--Section 603 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681a) is further amended by adding 
     after subsection (k) (as added by subsection (a) of this 
     section) the following:
       ``(l) The term `firm offer of credit'--
       ``(1) means any offer of credit to a consumer that, except 
     as provided in paragraph (2), will be honored if the consumer 
     is determined, based on information in a consumer report on 
     the consumer, to meet the specific criteria used to select 
     the consumer for the offer; and
       ``(2) includes an offer of credit described in paragraph 
     (1) for which extension of credit may be conditioned solely 
     on any combination of the following:
       ``(A) The consumer being determined, based on information 
     in the consumer's application for the credit, to meet 
     specific criteria bearing on creditworthiness that are 
     established--
       ``(i) before selection of the consumer for the offer; and
       ``(ii) for the purpose of determining whether to extend 
     credit pursuant to the offer.
       ``(B) Verification--
       ``(i) that the consumer continues to meet the specific 
     criteria used to select the consumer for the offer, by using 
     information in a consumer report on the consumer, information 
     in the consumer's application for the credit, or other 
     information bearing on the creditworthiness of the consumer; 
     or
       ``(ii) of the information in the consumer's application for 
     the credit, to determine that the consumer meets the specific 
     criteria bearing on creditworthiness.
       ``(C) The consumer furnishing any collateral that is a 
     requirement for the extension of the credit that was--
       ``(i) established before selection of the consumer for the 
     offer of credit; and
       ``(ii) described to the consumer in the offer of credit.''.
       (c) Credit Transaction Which Is Not Initiated by the 
     Consumer.--Section 603 of the Fair Credit Reporting Act (15 
     U.S.C. 1681a) is further amended by adding after subsection 
     (l) (as added by subsection (b) of this section) the 
     following:
       ``(m) The term `credit transaction which is not initiated 
     by the consumer' does not include the use of a consumer 
     report by a person with which the consumer has an account, 
     for purposes of--
       ``(1) reviewing the account; or
       ``(2) collecting the account.''.
       (d) State.--Section 603 of the Fair Credit Reporting Act 
     (15 U.S.C. 1681a) is further amended by adding after 
     subsection (m) (as added by subsection (c) of this section) 
     the following:
       ``(n) The term `State' means any State, the Commonwealth of 
     Puerto Rico, the District of Columbia, and any territory or 
     possession of the United States.''.
       (e) Exclusions From 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 in clause (A)--
       (1) by inserting ``(i)'' after ``(A)'';
       (2) 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 corporate control if it 
     is clearly and conspicuously disclosed (I) with the 
     application that the information may be communicated among 
     such persons and the consumer consents, or (II) with respect 
     to existing customers, at any time prior to the time that the 
     information is initially communicated, that such information 
     may be communicated among such persons and the consumer is 
     given the opportunity, prior to the time that the information 
     is initially communicated, to direct in writing that such 
     information not be communicated among such persons'';
       (3) in clause (B) by striking ``or'' after the semicolon at 
     the end;
       (4) in clause (C) by striking the period and inserting a 
     semicolon; and
       (5) by adding at the end 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 transaction which is 
     not initiated by the consumer, if either of those persons has 
     complied with section 615(d)(4)(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, or 
     with respect to existing customers, the consumer has not 
     directed in writing that the report may not be used for the 
     transaction, in accordance with section 615(d)(4)(C).''.
       (f) 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)) is further 
     amended--
       (1) in subsection (d), as amended by subsection (e) of this 
     section, by adding at the end the following: ``The term also 
     does not include a communication described in subsection 
     (o).''; and
       (2) by adding at the end the following:
       ``(o) Communications by Employment Agencies Excluded From 
     Definition of Consumer Report.--A communication is described 
     in this subsection if it is a communication--
       ``(1) that, but for the 3rd 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 paragraph (2) (A) or (B);
       ``(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, within 3 
     business days after the receipt of the consent by that 
     person;
       ``(B) the person that makes 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 that makes the communication--
       ``(i) discloses in writing to the consumer who is the 
     subject of the communication, within 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 that is the subject of the 
     communication, in writing, of the consumer's right to request 
     the information described in clause (i).''.
       (g) Clerical Amendment.--Section 603(d) of the Fair Credit 
     Reporting Act (15 U.S.C. 1681a(d)) is amended in the first 
     sentence--
       (1) by inserting ``(1)'' after ``in whole or in part for''; 
     and
       (2) by striking ``(1)'' before ``credit or insurance''.

     SEC. 103. FURNISHING CONSUMER REPORTS; USE FOR EMPLOYMENT 
                   PURPOSES.

       (a) Furnishing Consumer Reports for Business 
     Transactions.--Section 604 of the Fair Credit Reporting Act 
     (15 U.S.C. 1681b) is amended--
       (1) by inserting ``(a) In General.--'' before ``A consumer 
     reporting agency''; and
       (2) in subsection (a)(3) (as designated by paragraph (1) of 
     this subsection) by amending subparagraph (E) to read as 
     follows:
       ``(E) otherwise has a legitimate business need for the 
     information in connection with a business transaction that is 
     initiated by the consumer.''.
       (b) Furnishing and Using Consumer Reports for Employment 
     Purposes.--Section 604 of the Fair Credit Reporting Act (15 
     U.S.C. 1681b) is further amended 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 
     if--
       ``(A) the person who obtains such report from the agency 
     certifies to the agency that--
       ``(i) the person has complied with paragraph (2) with 
     respect to the consumer report, and the person will comply 
     with paragraph (3) with respect to the consumer report if 
     paragraph (3) becomes applicable; 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) the consumer reporting agency provides with the 
     report a summary of the consumer's rights under this title, 
     as prescribed by the Federal Trade Commission under section 
     609(c)(3).
       ``(2) Disclosure to consumer.--A person may not procure a 
     consumer report, or cause a consumer report to be procured, 
     for employment purposes with respect to any consumer unless--
       ``(A) a clear and conspicuous disclosure has been made in 
     writing to the consumer at any time before the report is 
     procured or caused to be procured, in a document that 
     consists solely of the disclosure, that a consumer report may 
     be obtained for employment purposes; and
       ``(B) the consumer has authorized in writing the 
     procurement of the report by that person.
       ``(3) Conditions on use for adverse actions.--In using a 
     consumer report for employment purposes, before taking any 
     adverse action based in whole or in part on the report a 
     person shall provide to the consumer to whom the report 
     relates--
       ``(A) a copy of the report;
       ``(B) a description in writing of the consumer's rights 
     under this title, as prescribed by the Federal Trade 
     Commission under section 609(c)(3); and
       ``(C) a reasonable period (not required to exceed 5 
     business days following receipt of the report by the 
     consumer) to respond to any information in the report that is 
     disputed by the consumer, and notice in writing of the 
     opportunity for the consumer to respond in that period.
       ``(4) Limitation on purposes.--Subject to paragraph (1), a 
     consumer reporting agency may furnish a consumer report, and 
     a person may use a consumer report, for employment purposes 
     only under the following circumstances:
       ``(A) The employment requires or is expected to require a 
     security clearance issued by an agency of the United States 
     as a condition for employment.
       ``(B) The employment requires or is expected to require an 
     employee to be covered by a fidelity bond.
       ``(C) The employment requires or is expected to require an 
     employee, on a regular basis and as part of the normal duties 
     of employment--
       ``(i) to handle or otherwise have access to substantial 
     amounts of cash or other things of value of the employer: or
       ``(ii) to engage in any conduct or activity with respect to 
     which the employee has a fiduciary duty.''.

     SEC. 104. AMENDMENTS RELATING TO USE OF CONSUMER REPORTS FOR 
                   PRESCREENING; PROHIBITION ON 
                   UNAUTHORIZED OR UNCERTIFIED USE OF INFORMATION.

       (a) In General.--Section 604 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681b), as amended by section 103, is further 
     amended--
       (1) in subsection (a) by striking ``A consumer reporting 
     agency'' and inserting ``Subject to subsection (c), any 
     consumer reporting agency''; and
       (2) by adding after subsection (b) (as added by section 
     103(b)) the following new subsections:
       ``(c) Furnishing Reports in Connection With Credit 
     Transactions Not Initiated by the Consumer.--
       ``(1) In general.--A consumer reporting agency may furnish 
     a consumer report relating to any consumer pursuant to 
     subsection (a)(3)(A) in connection with any credit 
     transaction which 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;
       ``(ii) the consumer reporting agency has complied with 
     subsection (d); and
       ``(iii) the consumer has not elected in accordance with 
     subsection (d)(1) to have the consumer's name and address 
     excluded from lists of names provided by the agency pursuant 
     to this paragraph.
       ``(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 
     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)(5), a consumer reporting agency shall not 
     furnish to any person a record of inquiries in connection 
     with credit transactions which are not initiated by a 
     consumer.
       ``(d) Election of Consumer To Be Excluded From Lists.--
       ``(1) In general.--A consumer may elect to have his or her 
     name and address excluded from any list provided by a 
     consumer reporting agency in connection with a credit 
     transaction which is not initiated by the consumer, by--
       ``(A) notifying the agency, 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 
     transaction which is not initiated by the consumer; and
       ``(B) returning to the agency a signed written notice of 
     the election, if provided by the agency in accordance with 
     paragraph (2).
       ``(2) Provision of written notice to consumer.--A consumer 
     reporting agency shall provide to a consumer a written notice 
     for purposes of paragraph (1)(B), by 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 
     which furnishes a consumer report in connection with any 
     credit transaction which is not initiated by a consumer, 
     shall--
       ``(A) establish and maintain a notification system, 
     including a toll-free telephone number, which permits any 
     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 for such a transaction; and
       ``(B) publish by not later than 12 months after the date of 
     the enactment of the Consumer Reporting Reform Act of 1994, 
     and at least annually thereafter, in a publication of general 
     circulation in the area served by the agency--
       ``(i) a notification that information in consumer files 
     maintained by the agency may be used in connection with such 
     transactions; and
       ``(ii) the address and toll-free telephone number for 
     consumers to use to notify the agency of the consumer's 
     election under subparagraph (A).

     Establishment and maintenance of a notification system 
     (including a toll-free telephone number) and publication by a 
     consumer reporting agency on its own behalf and on behalf of 
     any of its affiliates in accordance with this paragraph is 
     deemed to be compliance with this paragraph by each of those 
     affiliates.
       ``(4) Agencies which operate nationwide.--Each consumer 
     reporting agency which compiles and maintains files on 
     consumers on a nationwide basis shall establish and maintain 
     a notification system for purposes of 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 later of--
       ``(i) the date on which the consumer notifies the agency in 
     accordance with paragraph (1)(A); or
       ``(ii) the date on which the consumer returns to the agency 
     a signed written notification of the election in accordance 
     with paragraph (1)(B), if provided by the agency;
       ``(B) shall not be effective after the date on which the 
     consumer notifies the agency (through the system established 
     by the agency under paragraph (3)) that the election is no 
     longer effective; and
       ``(C) shall be effective with respect to each affiliate of 
     the agency.''.
       (b) Furnishing Consumer Reports for Certain Direct 
     Marketing Transactions Prohibited.--Section 604 of the Fair 
     Credit Reporting Act (15 U.S.C. 1681b) is further amended by 
     adding after subsection (d) (as added by subsection (a) of 
     this section) the following new subsection:
       ``(e) Furnishing Consumer Reports for Certain Direct 
     Marketing Transactions Prohibited.--Except as provided in 
     subsection (a)(2) and subsection (c), a consumer reporting 
     agency may not furnish a consumer report for use for a direct 
     marketing transaction which is not initiated by the consumer 
     to whom the report relates.''.
       (c) Use of Information Obtained From Reports.--Section 604 
     of the Fair Credit Reporting Act (15 U.S.C. 1681b) is further 
     amended by adding after subsection (e) (as added by 
     subsection (b) of this section) the following new subsection:
       ``(f) 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.''.
       (d) First Notifications by Consumers.--A consumer may 
     notify a consumer reporting agency through a notification 
     system established and maintained by the agency under section 
     604(d) of the Fair Credit Reporting Act, as amended by 
     subsection (a), on or after the date which is 455 days after 
     the date of the enactment of this Act.

     SEC. 105. CONSUMER CONSENT REQUIRED TO FURNISH CONSUMER 
                   REPORT CONTAINING MEDICAL INFORMATION.

       Section 604 of the Fair Credit Reporting Act (15 U.S.C. 
     1681b), as amended by sections 103 and 104, is further 
     amended by adding at the end the following:
       ``(g) Furnishing Reports Containing Medical Information.--A 
     consumer reporting agency shall not furnish for employment 
     purposes, or in connection with a credit transaction, a 
     consumer report which contains medical information about a 
     consumer, unless the consumer consents to the furnishing of 
     the report.''.

     SEC. 106. AMENDMENTS RELATING TO OBSOLETE INFORMATION AND 
                   INFORMATION CONTAINED IN CONSUMER REPORTS.

       (a) Repeal Large-Dollar Exceptions.--Section 605 of the 
     Fair Credit Reporting Act (15 U.S.C. 1681c) is amended--
       (1) in subsection (a) by striking ``(a) Except as 
     authorized under subsection (b), no'' and inserting ``(a) 
     Information Excluded From Consumer Reports.--No''; and
       (2) by striking subsection (b).
       (b) Clarification of Reporting Period.--Section 605 of the 
     Fair Credit Reporting Act (15 U.S.C. 1681c), as amended by 
     subsection (a), is further amended by adding at the end the 
     following new subsection:
       ``(b) Running of Reporting Period.--(1) The 7-year period 
     referred to in paragraphs (4) and (6) of subsection (a) shall 
     begin, with respect to any delinquent account which is placed 
     for collection (internally or by referral to a 3d 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 which immediately preceded the collection 
     activity, charge to profit and loss, or similar action.
       ``(2) Paragraph (1) applies only to items of information 
     added to a consumer report on or after the date that is 455 
     days after the date of the enactment of the Consumer 
     Reporting Reform Act of 1994.''.
       (c) Additional Information on Bankruptcy Filings 
     Required.--Section 605 of the Fair Credit Reporting Act (15 
     U.S.C. 1681c) is further amended by adding after subsection 
     (b) (as added by subsection (b) of this section) the 
     following new subsection:
       ``(c) Information Required To Be Disclosed.--Any consumer 
     reporting agency which furnishes a consumer report which 
     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 title 11, United States Code, 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.''.
       (d) Indication of Closure of Account; Indication of Dispute 
     by Consumer.--Section 605 of the Fair Credit Reporting Act 
     (15 U.S.C. 1681c) is further amended by adding after 
     subsection (c) (as added by subsection (c) of this section) 
     the following new subsections:
       ``(d) Indication of Closure of Account by Consumer.--If a 
     consumer reporting agency is notified pursuant to section 
     623(a)(4) that a credit account of a consumer was voluntarily 
     closed by the consumer, the agency shall indicate that fact 
     in any consumer report that includes information related to 
     the account.
       ``(e) Indication of Dispute by Consumer.--If a consumer 
     reporting agency is notified pursuant to section 623(a)(3) 
     that information regarding a consumer that was furnished to 
     the agency is disputed by the consumer, the agency shall 
     indicate that fact in each consumer report that includes the 
     disputed information.''.
       (e)  Prohibition on Maintaining or Furnishing Certain 
     Account Information.--
       (1) In general.--Section 605 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681c) is further amended by adding at the end 
     the following new subsection:
       ``(f) Certain Account Information.--
       ``(1) Exclusion from consumer report.--A consumer reporting 
     agency shall not maintain in the file of a consumer, or 
     furnish a consumer report on a consumer which contains, any 
     information regarding a failure of the consumer to make any 
     payment on an account of the consumer that became due in a 
     period during which the consumer was receiving assistance 
     pursuant to a declaration of an emergency by the President 
     under The Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act, or unemployment compensation under the laws 
     of any State (or but for the exhaustion of benefits would be 
     entitled to receive such compensation), if--
       ``(A) the consumer requests in writing that the consumer 
     reporting agency exclude the information from either the file 
     or such reports;
       ``(B) the consumer provides to the agency appropriate 
     documentation which demonstrates that the consumer was 
     receiving such assistance or was receiving (or would so be 
     entitled to receive) such compensation during that period; 
     and
       ``(C) the account is maintained in a current status during 
     the 1-year period ending on the date of the submittal of the 
     request.
       ``(2) Appropriate documentation.--The Federal Trade 
     Commission shall prescribe what constitutes appropriate 
     documentation for purposes of paragraph (1).''.
       (g) Clerical Amendments.--
       (1) The heading for section 605 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681c) is amended by striking 
     ``Obsolete information'' and inserting ``Requirements 
     relating to information contained in consumer reports''.
       (2) 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. 107. AMENDMENTS RELATING TO COMPLIANCE PROCEDURES.

       (a) 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 based in whole or in part on the 
     report.''.
       (b) Notice to Users and Providers of Information To Ensure 
     Compliance.--Section 607 of the Fair Credit Reporting Act (15 
     U.S.C. 1681e) is further amended by adding after subsection 
     (c) (as added by subsection (a) of this section) the 
     following new subsection:
       ``(d) Notice to Users and Furnishers of Information.--
       ``(1) Notice requirement.--A consumer reporting agency 
     shall provide to any person--
       ``(A) who regularly and in the ordinary course of business 
     furnishes information to the agency with respect to any 
     consumer; or
       ``(B) to whom a consumer report is provided by the agency;
     a notice of such person's responsibilities under this title.
       ``(2) Content of notice.--The Federal Trade Commission 
     shall prescribe the content of notices under paragraph 
     (1).''.
       (c) 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) is further amended by adding after 
     subsection (d) (as added by subsection (b) of this section) 
     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 any 
     information in the report) unless the person discloses to the 
     consumer reporting agency which originally furnishes the 
     report--
       ``(A) the identity of the ultimate end-user of the report 
     (or information), and
       ``(B) each permissible purpose under section 604 for which 
     the report is furnished to the ultimate end-user of the 
     report (or information).
       ``(2) Responsibilities of procurers for resale.--A person 
     which procures a consumer report for purposes of reselling 
     the report (or any information in the report) shall--
       ``(A) establish and comply with reasonable procedures 
     designed to ensure that the report (or information) is resold 
     by the person only for a purpose for which the report may be 
     furnished under section 604, including by requiring that each 
     person to which the report (or information) is resold--
       ``(i) identifies each prospective user of the resold report 
     (or information);
       ``(ii) certifies each purpose for which the report (or 
     information) will be used; and
       ``(iii) certifies that the report (or 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. 108. 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)) is amended to read as follows:
       ``(3)(A) Identification of each person (including each 
     ultimate end-user identified under section 607(e)(1)) who 
     procured a consumer report--
       ``(i) for employment purposes within the 2-year period 
     preceding the request; or
       ``(ii) for any other purpose within 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) Disclosure of Permissible Purposes.--Section 609(a) of 
     the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is further 
     amended by adding at the end the following:
       ``(4) The permissible purpose for which each person 
     identified under paragraph (3) procured a consumer report.''.
       (d) Information Regarding Inquiries.--Section 609(a) of the 
     Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is amended by 
     adding after paragraph (4) (as added by subsection (c) of 
     this section) the following:
       ``(5) A record of all inquiries received by the agency in 
     the 1-year period preceding the request that identified the 
     consumer in connection with a credit transaction which was 
     not initiated by the consumer.''.
       (e) Disclosing the Facts Regarding Checks Upon Which 
     Adverse Characterization Is Based.--Section 609(a) of the 
     Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is amended by 
     adding after paragraph (5) (as added by subsection (d) of 
     this section) the following:
       ``(6) The dates, original payees, and amounts of any checks 
     upon which is based any adverse characterization of the 
     consumer included in the file at the time of the 
     disclosure.''.
       (f) 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, with each written disclosure by the 
     agency to the consumer under this section--
       ``(A) a written summary of all rights the consumer has 
     under this title; and
       ``(B) in the case of a consumer reporting agency that 
     compiles and maintains files on consumers on a nationwide 
     basis, the toll-free telephone number established by the 
     agency pursuant to section 607(f).
       ``(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 phone 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 under 
     section 605 or cannot be verified.
       ``(3) Form of summary of rights.--For purposes of this 
     subsection and any disclosure by a consumer reporting agency 
     required under this title with respect to consumers' 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 of the rights of 
     consumers required under this title.''.
       (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 ``and the written summary of the rights of the 
     consumer prepared pursuant to section 609(c)'' before the 
     semicolon.
       (g) 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) In General.--
       ``(1) Proper identification.--A consumer reporting agency 
     shall require, as a condition of making the disclosures 
     required under section 609, that the consumer furnish proper 
     identification.
       ``(2) Disclosure in writing.--Except as provided in 
     subsection (b), the disclosures required to be made under 
     section 609 shall be provided under that section in writing.
       ``(b) Other Forms of Disclosure.--
       ``(1) In general.--If authorized by a consumer, a consumer 
     reporting agency may make the disclosures required under 
     609--
       ``(A) other than in writing; and
       ``(B) in such form as may be--
       ``(i) specified by the consumer in accordance with 
     paragraph (2); and
       ``(ii) available from the agency.
       ``(2) Form.--A consumer may specify pursuant to paragraph 
     (1) that disclosures under section 609 shall 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;
       ``(C) by electronic means, if available from the agency; or
       ``(D) by any other reasonable means that is available from 
     the agency.''.
       (2) Simplified disclosure.--Section 610 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681h) is amended by adding at the 
     end the following:
       ``(f) Simplified Disclosure.--The Federal Trade Commission 
     shall prescribe the form in which a consumer reporting agency 
     shall make the disclosures required under section 609(a), for 
     the purpose of maximizing the comprehensibility and 
     standardization of such disclosures.''.
       (3) Conforming amendments.--
       (A) Section 609(a) of the Fair Credit Reporting Act (15 
     U.S.C. 1681h(a)) is amended in the matter preceding paragraph 
     (1) by striking ``and proper identification of any consumer'' 
     and inserting ``and subject to section 610(a)(1)''.
       (B) Section 610 of the Fair Credit Reporting Act (15 U.S.C. 
     1681h) is amended in the heading for the section by inserting 
     ``and form'' after ``Conditions''.
       (C) The table of sections at the beginning of the Fair 
     Credit Reporting Act (15 U.S.C. 1681a et seq.) is amended in 
     the item relating to section 610 by inserting ``and form'' 
     after ``Conditions''.

     SEC. 109. 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) Reinvestigations of Disputed Information.--
       ``(1) Reinvestigation required.--
       ``(A) In general.--If the completeness or accuracy of any 
     item of information contained in any consumer's file at any 
     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, or delete the 
     item from the file in accordance with paragraph (5), before 
     the end of the 30-day period beginning on the date the agency 
     receives the notice of the dispute from the consumer.
       ``(B) Extension of period to reinvestigate.--
     Except as provided in subparagraph (C), the 30-day period 
     described in subparagraph (A) may be extended if--
       ``(i) the consumer reporting agency receives information 
     from the consumer within that 30-day period that is relevant 
     to the reinvestigation; and
       ``(ii) the consumer reporting agency has provided clear and 
     conspicuous notice to the consumer, in a disclosure under 
     section 609(c), of the circumstances that may cause such an 
     extension.

     The period, as extended, shall end not later than 15 days 
     after the last date the agency receives such information.
       ``(C) Limitations on extension of period to 
     reinvestigate.--Subparagraph (B) shall not apply to any 
     reinvestigation in which, in the 30-day period described in 
     subparagraph (A), the information that is the subject of the 
     reinvestigation is found to be inaccurate or incomplete or 
     cannot be verified.
       ``(2) Prompt notice of dispute to furnisher of 
     information.--
       ``(A) In general.--Before the end of the 5-day period 
     beginning on the date a consumer reporting agency receives 
     notice of a dispute from any consumer in accordance with 
     paragraph (1), the agency shall provide notification of the 
     dispute to any person that provided any item of information 
     in dispute, at the address and in the manner established with 
     the person. The notice shall include disclosure of the date 
     on which the consumer reporting agency received notice of the 
     dispute from the consumer and all relevant information 
     regarding the dispute that the agency has received from the 
     consumer.
       ``(B) Provision of other information from consumer.--The 
     consumer reporting agency shall promptly provide to the 
     person that provided the information in dispute all relevant 
     information regarding the dispute that is received by the 
     agency from the consumer after the period referred to in 
     subparagraph (A) and before the end of the period referred to 
     in paragraph (1)(A).
       ``(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 by the 
     consumer is frivolous or irrelevant, including by reason of a 
     failure by a consumer to provide sufficient information to 
     investigate the disputed information.
       ``(B) Notice of determination.--Upon making any 
     determination in accordance with subparagraph (A) that a 
     dispute is frivolous or irrelevant, a consumer reporting 
     agency shall notify the consumer within 5 days of such 
     determination, by mail or, if authorized by the consumer for 
     that purpose, by any other means available to the agency.
       ``(C) Contents of notice.--A notice under subparagraph (B) 
     shall include--
       ``(i) the reasons for the determination under subparagraph 
     (A); and
       ``(ii) identification of any information required to 
     investigate the disputed information.
       ``(4) Consideration of consumer information.--In conducting 
     any reinvestigation under paragraph (1) with respect to 
     disputed information in the file of any consumer, the 
     consumer reporting agency shall review and consider all 
     relevant information submitted by the consumer in the period 
     described in paragraph (1)(A) with respect to such disputed 
     information.
       ``(5) Treatment of inaccurate or unverifiable 
     information.--
       ``(A) In general.--If, after any reinvestigation 
     under paragraph (1) of any information disputed by a 
     consumer, an item of the information is found to be 
     inaccurate or incomplete or cannot be verified, the consumer 
     reporting agency shall promptly delete that item of 
     information from the consumer's file. The information deleted 
     shall consist solely of the information that was disputed by 
     the consumer and shall not include any portion of the same 
     item that was not disputed.
       ``(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 by the consumer reporting agency unless the person 
     who furnishes the information certifies that the information 
     is complete and accurate.
       ``(ii) Notice to consumer.--If any information which has 
     been deleted from a consumer's file pursuant to subparagraph 
     (A) is reinserted in the file, the consumer reporting agency 
     shall promptly notify the consumer of the reinsertion in 
     writing or, if authorized by the consumer for that purpose, 
     by any other means available to the agency.
       ``(iii) Additional information.--As part of or in addition 
     to the notice under clause (ii), a consumer reporting agency 
     shall provide to a consumer in writing within the 5-day 
     period beginning on the date of the reinsertion--

       ``(I) a statement that the disputed information has been 
     reinserted;
       ``(II) a notice to the consumer that if requested by the 
     consumer the agency shall provide to the consumer, within 15 
     days after the date of the request, the name, business 
     address, and telephone number of any furnisher of information 
     contacted, or of any furnisher of information which contacted 
     the consumer reporting agency, in connection with the 
     reinsertion of such information;
       ``(III) the toll-free telephone number of the consumer 
     reporting agency if the agency is required to maintain such a 
     number under section 607(f), or a telephone number that the 
     consumer can use to contact the agency with respect to 
     obtaining the information described in subclause (II); and
       ``(IV) a notice that the consumer has the right to add a 
     statement to the consumer's file disputing the accuracy or 
     completeness of the disputed 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 deleted pursuant to this paragraph (other than information 
     that is reinserted in accordance with subparagraph (B)(i)).
       ``(D) Free consumer report during 12-month period after 
     deletion of information.--Upon the request of a consumer, a 
     consumer reporting agency shall make all disclosures pursuant 
     to section 609 without charge to that consumer at least once 
     during the 12-month period after the consumer receives a 
     notification under paragraph (6) or paragraph (8) of the 
     deletion of information that is found to be inaccurate or 
     cannot be verified.
       ``(E) Any nationwide consumer reporting agency that 
     maintains files on a consumer on a nationwide basis that is 
     subject to this section, shall report the results of a 
     reinvestigation that finds incomplete or inaccurate 
     information in a consumer's file to all other such agencies.
       ``(6) Notice of results of reinvestigation.--
       ``(A) In general.--A consumer reporting agency shall 
     provide written notice to a consumer of the results of a 
     reinvestigation under this subsection within 5 days after the 
     completion of the reinvestigation, by mail or, if authorized 
     by the consumer for that purpose, 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 within the 5-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) a notice that, if requested by the consumer, a 
     description of the procedure used to determine the accuracy 
     and completeness of the information shall be provided to the 
     consumer by the agency, including the name, business address, 
     and telephone number of any furnisher of information 
     contacted in connection with such information;
       ``(v) a notice that the consumer has the right to add a 
     statement to the consumer's file disputing the accuracy or 
     completeness of the information; and
       ``(vi) a notice that the consumer has the right to request 
     under subsection (d) that the consumer reporting agency 
     furnish notifications under that subsection.
       ``(7) Description of reinvestigation procedure.--A consumer 
     reporting agency shall provide to a consumer a description 
     referred to in paragraph (6)(B)(iv) by not later than 15 days 
     after receiving a request from the consumer for that 
     description.
       ``(8) Expedited dispute resolution.--If a dispute regarding 
     an item of information in a consumer's file at a consumer 
     reporting agency is resolved in accordance with paragraph 
     (5)(A) by the deletion of the disputed information by not 
     later than 3 business days after the date on which the agency 
     receives notice of the dispute from the consumer in 
     accordance with paragraph (1)(A), then the agency shall not 
     be required to comply with paragraphs (2), (6), and (7) with 
     respect to that dispute if the agency--
       ``(A) provides prompt notice of the deletion to the 
     consumer by telephone;
       ``(B) includes in that notice, or in a written notice that 
     accompanies a confirmation and consumer report provided in 
     accordance with subparagraph (C), a statement of the 
     consumer's right to request under subsection (d) that the 
     agency furnish notifications under that subsection; and
       ``(C) provides written confirmation of the deletion and a 
     copy of a consumer report on the consumer which is based on 
     the consumer's file after the deletion, within 5 days after 
     making the deletion.''.
       (b) Conforming Amendment.--Subsection (d) of section 611 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. 110. AMENDMENT RELATING TO CHARGES FOR DISCLOSURE.

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

     ``Sec. 612. Charges for certain disclosures

       ``(a) Reasonable Charges Allowed for Certain Disclosures.--
     Except as provided in subsections (b), (c), (d), and (f), a 
     consumer reporting agency may impose a reasonable charge on a 
     consumer--
       ``(1) for making a disclosure to the consumer pursuant to 
     section 609, which--
       ``(A) shall not exceed $8; and
       ``(B) shall be indicated to the consumer prior to making 
     disclosure; and
       ``(2) for furnishing a notification, statement, summary, or 
     codification to any person designated by the consumer 
     pursuant to section 611(d), which--
       ``(A) shall not exceed the charge that the agency would 
     impose on each designated recipient for a consumer report; 
     and
       ``(B) shall be indicated to the consumer prior to 
     furnishing such information.
       ``(b) Free Consumer Report After Adverse Notice to 
     Consumer.--Each consumer reporting agency that maintains a 
     file on a consumer shall make all disclosures pursuant to 
     section 609 without charge to the consumer if, within 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, the consumer makes a request under 
     section 609.
       ``(c) Free Consumer Report Under Certain Other 
     Circumstances.--Upon the request of the consumer, a consumer 
     reporting agency shall make all disclosures pursuant to 
     section 609 without charge to that consumer if the consumer 
     certifies in writing that the consumer--
       ``(1) is unemployed and intends to apply for employment in 
     the 60-day period beginning on the date the certification is 
     made;
       ``(2) is a recipient of public welfare assistance; or
       ``(3) has reason to believe that the file on the consumer 
     at the agency contains inaccurate information due to fraud.
       ``(d) Charge for Certain Notices Prohibited.--A consumer 
     reporting agency shall not impose any charge for--
       ``(1) providing any notice to a consumer required under 
     section 611; or
       ``(2) notifying a person pursuant to section 611(d) of the 
     deletion of information which is found to be inaccurate or 
     which 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) or 611(a)(8).
       ``(e) Refund of Charge in Case of Dispute.--A consumer 
     reporting agency shall refund to a consumer any charge 
     assessed to the consumer for providing a consumer report in 
     the 60-day period ending on the date on which the consumer 
     notifies the agency in accordance with section 611(a)(1), if 
     after a reinvestigation under that section any information in 
     the file of the consumer is found to be incomplete or 
     inaccurate.
       ``(f) Annual Consumer Report Upon Request 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 in any 12-month period, at the charge specified in 
     paragraph (2).
       ``(2) Charge specified.--The charge for disclosures under 
     paragraph (1) shall be an amount that does not exceed the 
     lesser of--
       ``(A) the total cost incurred by the consumer reporting 
     agency in making the disclosures; or
       ``(B) $3.''.

     SEC. 111. AMENDMENTS RELATING TO DUTIES OF USERS OF CONSUMER 
                   REPORTS AND DUTIES OF AFFILIATES SHARING 
                   CERTAIN INFORMATION.

       (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 any person 
     takes any adverse action with respect to any consumer in 
     connection with any transaction initiated by the consumer or 
     any employment determination, which 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 in writing, the name, 
     address, and telephone number of the consumer reporting 
     agency (including any toll-free telephone number established 
     by the agency pursuant to section 607(f)) which furnished the 
     report to the person; 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 from any other 
     consumer reporting agency that maintains a file on the 
     consumer and maintains files on consumers on a nationwide 
     basis, which notice shall include an indication of the 60-day 
     period under that section for obtaining such a copy; 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 Credit 
     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 Solicitations 
     on the Basis of Information Contained in Consumer Files.--
       ``(1) In general.--Any person who uses a consumer report on 
     any consumer in connection with any credit transaction which 
     is not initiated by the consumer and which consists of a firm 
     offer of credit shall provide 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 because the 
     consumer satisfied the criteria for creditworthiness under 
     which the consumer was selected for the offer;
       ``(C) if applicable, the credit may not be extended if, 
     after the consumer responds to the offer, the consumer does 
     not meet the criteria used to select the consumer for the 
     offer or any applicable criteria bearing on creditworthiness 
     or does not furnish any required collateral;
       ``(D) the consumer has a right to prohibit information 
     contained in the consumer's file with any consumer reporting 
     agency from being used in connection with any credit 
     transaction which is not initiated by the consumer; and
       ``(E) the consumer may exercise the right referred to in 
     subparagraph (D) by notifying a notification system 
     established under section 604(d).
       ``(2) Disclosure of address and telephone number.--A 
     statement under paragraph (1) shall include the address and 
     toll-free telephone number of the appropriate notification 
     system established under section 604(d).
       ``(3) Maintaining criteria on file.--A person who makes an 
     offer of credit to a consumer under a credit transaction 
     described in paragraph (1) shall maintain on file the 
     criteria used to select the consumer to receive the offer, 
     all criteria bearing on creditworthiness that are the basis 
     for determining whether or not to extend credit pursuant to 
     the offer, and any requirement for the furnishing of 
     collateral as a condition of the extension of credit, until 
     the end of the 3-year period beginning on the date on which 
     the offer is made to the consumer.
       ``(4) 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 using 
     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--
       ``(i) consented to by the consumer in writing, or
       ``(ii) with respect to existing customers, the consumer has 
     been afforded the opportunity to direct in writing that the 
     report may not be provided to or used by persons who are 
     affiliated in the manner described in subparagraph (A) and 
     has not done so.''.
       (c) Adverse Actions by Affiliates Based on Certain 
     Information.--Section 615 of the Fair Credit Reporting Act 
     (15 U.S.C. 1681m) is further amended by adding after 
     subsection (d), as added by subsection (b) of this section, 
     the following new subsection:
       ``(e) Duties of Affiliates Taking Adverse Actions Based on 
     Certain Information.--Whenever an adverse action is taken in 
     connection with any transaction initiated by a consumer or 
     any employment determination, which is based in whole or in 
     part on information that was furnished to the user of the 
     information, other than in a consumer report, by a person 
     related by common ownership or affiliated by common corporate 
     control to the user and that bears upon the consumer's credit 
     worthiness, credit standing, credit capacity, character, 
     general reputation, personal characteristics, or mode of 
     living, the user of the information shall--
       ``(1) notify the consumer in writing of the action, 
     including a statement that the consumer may obtain the 
     information in accordance with paragraph (2) and may contact 
     the toll-free telephone number required by paragraph (3);
       ``(2) upon a written request from the consumer received 
     within 60 days after transmittal of the notice required by 
     paragraph (1), disclose to the consumer in writing the nature 
     of the information on which the adverse action was based by 
     not later than 30 days after receipt of the request; and
       ``(3) make available a toll-free number at which personnel 
     are available to communicate with the consumer regarding the 
     action during normal business hours.''.
       (d) Conforming Amendment.--Section 615(c) of the Fair 
     Credit Reporting Act (15 U.S.C. 1681m(c)) is amended by 
     striking ``subsections (a) and (b)'' and inserting ``this 
     section''.

     SEC. 112. AMENDMENTS RELATING TO CIVIL LIABILITY.

       (a) Civil Liability for Willful Noncompliance, Generally.--
     Section 616 of the Fair Credit Reporting Act (15 U.S.C. 
     1681n) is amended by striking ``Any consumer reporting agency 
     or user of information which'' and inserting ``(a) In 
     General.--Any person who''.
       (b) Minimum Civil Liability for Willful Noncompliance.--
     Section 616(1) of the Fair Credit Reporting Act (15 U.S.C. 
     1681n(1)) is amended to read as follows:
       ``(1)(A) any actual damages sustained by the consumer as a 
     result of the failure; or
       ``(B) in the case of liability of a natural person for 
     obtaining a consumer report under false pretenses or 
     knowingly without a permissible purpose, such damages or 
     $1,000, whichever is greater;''.
       (c) Civil Liability for Negligent Noncompliance.--Section 
     617 of the Fair Credit Reporting Act (15 U.S.C. 1681o) is 
     amended by striking ``Any consumer reporting agency or user 
     of information which'' and inserting ``(a) In General.--Any 
     person who''.
       (d) Attorney's Fees.--
       (1) Willful noncompliance.--Section 616 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681n) is amended by adding at the 
     end the following:
       ``(b) 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 the pleading, motion, 
     or other paper.''.
       (2) Negligent noncompliance.--Section 617 of the Fair 
     Credit Reporting Act (15 U.S.C. 1681o) is amended by adding 
     at the end the following:
       ``(b) 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 the pleading, motion, 
     or other paper.''.

     SEC. 113. 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 by redesignating section 623 as 
     section 624 and inserting after section 622 the following new 
     section:

     ``Sec. 623. Responsibilities of furnishers of information to 
       consumer reporting agencies

       ``(a) Duty of Furnishers of Information To Provide Complete 
     and Accurate Information.--
       ``(1) Prohibitions.--A person shall not furnish any 
     information to any consumer reporting agency if the person 
     knows or should have known the information is incomplete or 
     inaccurate.
       ``(2) Duty to correct and update information.--A person 
     who--
       ``(A) regularly and in the ordinary course of business 
     furnishes information to one or more consumer reporting 
     agencies about the person's transactions or experiences with 
     any consumer; and
       ``(B) has furnished to a consumer reporting agency 
     information that the person determines is not complete or 
     accurate;

     shall promptly notify the consumer reporting agency of that 
     determination and 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, and shall not thereafter 
     furnish to the agency any of the information that remains not 
     complete or accurate.
       ``(3) Duty to provide notice of dispute.--If the 
     completeness or accuracy of any information furnished by any 
     person to any consumer reporting agency is disputed to such 
     person by a consumer, the person may not furnish the 
     information to any consumer reporting agency without notice 
     that such information is disputed by the consumer.
       ``(4) Duty to provide notice of closed accounts.--A person 
     who regularly and in the ordinary course of business 
     furnishes information to a consumer reporting agency 
     regarding a consumer who has a credit account with that 
     person shall notify the agency of the voluntary closure of 
     the account by the consumer, in information regularly 
     furnished for the period in which the account is closed.
       ``(5) 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.--
       ``(1) In general.--After 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--
       ``(A) complete an investigation with respect to the 
     disputed information;
       ``(B) review all relevant information provided by the 
     consumer reporting agency pursuant to section 611(a)(2);
       ``(C) report the results of the investigation to the 
     consumer reporting agency; and
       ``(D) if the investigation finds that the information is 
     incomplete or inaccurate, report those results to all other 
     consumer reporting agencies to which the person furnished the 
     information.
       ``(2) Deadline.--A person shall complete all 
     investigations, reviews, and reports required under paragraph 
     (1) regarding information provided by the person to a 
     consumer reporting agency, before the end of the period under 
     section 611(a)(1) within which the consumer reporting agency 
     is required to complete actions required by that section 
     regarding that information.
       ``(c) Limitation on Liability.--Sections 616 and 617 do not 
     apply to any failure to comply with subsection (a), except as 
     provided in section 621(c)(1)(B).''.
       (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 
     623 and inserting the following:
``623. Responsibilities of furnishers of information to consumer 
              reporting agencies.
``624. Relation to State laws.''.

     SEC. 114. INVESTIGATIVE CONSUMER REPORTS.

       Section 606 of the Fair Credit Reporting Act (15 U.S.C. 
     1681d) is amended--
       (1) in subsection (a)(1) by striking ``or'' after the 
     semicolon at the end and inserting ``and'';
       (2) by striking subsection (a)(2) and inserting the 
     following:
       ``(2) the person certifies to the consumer reporting agency 
     that--
       ``(A) the person has made the disclosures to the consumer 
     required by paragraph (1); and
       ``(B) the person will comply with subsection (b).'';
       (3) in subsection (b) by striking ``shall'' the second 
     place it appears; and
       (4) by adding at the end the following:
       ``(d) Prohibitions.--
       ``(1) Certification.--A consumer reporting agency shall not 
     prepare or furnish an investigative consumer report unless 
     the agency has received a certification under subsection 
     (a)(2) from the person who requested the report.
       ``(2) Inquiries.--A consumer reporting agency shall not 
     make an inquiry for the purpose of preparing a consumer 
     report on a consumer if the making of the inquiry by an 
     employer or prospective employer of the consumer would 
     violate any applicable Federal or State equal employment 
     opportunity law or regulation.
       ``(3) Public record information.--A consumer reporting 
     agency shall not furnish an investigative consumer report 
     which includes information which is a matter of public record 
     unless the agency has verified the accuracy of the 
     information within the 30-day period ending on the date the 
     report is furnished.
       ``(4) Certain adverse information.--A consumer reporting 
     agency shall not prepare or furnish an investigative consumer 
     report on a consumer that contains information that is 
     adverse to the interest of the consumer and that is obtained 
     through a personal interview with a neighbor, friend, or 
     associate of the consumer or with another person with whom 
     the consumer is acquainted or who has knowledge of such item 
     of information, unless--
       ``(A) the agency has followed reasonable procedures to 
     obtain confirmation of the information, from an additional 
     source that has independent and direct knowledge of the 
     information; or
       ``(B) the person interviewed is the best possible source of 
     the information.''.

     SEC. 115. INCREASED CRIMINAL PENALTIES FOR OBTAINING 
                   INFORMATION UNDER FALSE PRETENSES.

       (a) Obtaining Information Under False Pretenses.--Section 
     619 of the Fair Credit Reporting Act (15 U.S.C. 1681q) is 
     amended by striking ``fined not more than $5,000 or 
     imprisoned not more than one year, or both'' and inserting 
     ``fined under title 18, United States Code, imprisoned for 
     not more than 2 years, or both''.
       (b) Unauthorized Disclosures by Officers or Employees.--
     Section 620 of the Fair Credit Reporting Act (15 U.S.C. 
     1681r) is amended by striking ``fined not more than $5,000 or 
     imprisoned not more than one year, or both'' and inserting 
     ``fined under title 18, United States Code, imprisoned for 
     not more than 2 years, or both''.

     SEC. 116. ADMINISTRATIVE ENFORCEMENT.

       (a) Available Enforcement Powers.--The 2d sentence of 
     section 621(a) of the Fair Credit Reporting Act (15 U.S.C. 
     1681s(a)) is amended--
       (1) by striking ``Act and shall be subject to enforcement 
     by the Federal Trade Commission under section 5(b) thereof 
     with respect to any 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 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 ``, 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'' before the period.
       (b) Agencies Responsible for Enforcement.--Section 621 of 
     the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended--
       (1) in subsection (a), by inserting ``Enforcement by 
     Federal Trade Commission.--'' before ``Compliance with the 
     requirements''; and
       (2) in subsection (b), by striking the matter preceding 
     paragraph (1) and inserting the following:
       ``(b) Enforcement by Other Agencies.--Compliance with the 
     requirements imposed under this title with respect to 
     consumer reporting agencies, persons who use consumer reports 
     from such agencies, persons who furnish information to such 
     agencies, and users of information who are subject to section 
     615(e) shall be enforced under--''.

     SEC. 117. STATE ENFORCEMENT OF FAIR CREDIT REPORTING ACT.

       Section 621 of the Fair Credit Reporting Act (15 U.S.C. 
     1681s) is amended by redesignating subsection (c) as 
     subsection (d) and inserting after subsection (b) the 
     following new subsection:
       ``(c) State Action for Violations.--
       ``(1) Authority of states.--In addition to such other 
     remedies as are provided under State law, whenever the chief 
     law enforcement officer of a State, or an official or agency 
     designated by a State, has reason to believe that any person 
     has violated or is violating this title, the State--
       ``(A) may bring an action to enjoin such violation in any 
     appropriate United States district court or in any other 
     court of competent jurisdiction;
       ``(B) may bring an action on behalf of its residents to 
     recover--
       ``(i) damages for which the person is liable to such 
     residents under sections 616 and 617 as a result of the 
     violation;
       ``(ii) in the case of a violation of section 623(a), 
     damages for which the person would, but for section 623(c), 
     be liable to such residents as a result of the violation; or
       ``(iii) damages of not more than $1,000 for each willful or 
     negligent violation; and
       ``(C) in the case of any successful action under 
     subparagraph (A) or (B), shall be awarded the costs of the 
     action and reasonable attorney fees as determined by the 
     court.
       ``(2) Rights of commission.--The State shall serve prior 
     written notice of any such action upon the Federal Trade 
     Commission or the appropriate Federal regulator determined 
     under subsection (b) and provide the Commission or 
     appropriate Federal regulator with a copy of its complaint, 
     except in any case where such prior notice is not feasible, 
     in which case the State shall serve such notice immediately 
     upon instituting such action. The Commission or appropriate 
     Federal regulator 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.
       ``(3) Investigatory powers.--For purposes of bringing any 
     action under this subsection, nothing in this subsection 
     shall prevent the chief law enforcement officer, or an 
     official or agency designated by a State, from exercising the 
     powers conferred on the chief law enforcement officer or such 
     official by the laws of such State to conduct investigations 
     or to administer oaths or affirmations or to compel the 
     attendance of witnesses or the production of documentary and 
     other evidence.
       ``(4) Limitation.--Whenever the Federal Trade Commission or 
     the appropriate Federal regulator has instituted a civil 
     action for violation of this title, no State may, during the 
     pendency of such action, bring an action under this section 
     against any defendant named in the complaint of the 
     Commission or the appropriate Federal regulator for any 
     violation of this title that is alleged in that complaint.''.

     SEC. 118. FEDERAL RESERVE BOARD AUTHORITY.

       Section 621 of the Fair Credit Reporting Act (15 U.S.C. 
     1681s), is further amended by adding after subsection (d) (as 
     redesignated by section 117) the following new subsection:
       ``(e) Interpretive Authority.--The Federal Reserve Board 
     may issue interpretations of any provision of this title as 
     it may apply to any persons identified under subsection (b) 
     (1), (2), and (3), or to the holding companies and affiliates 
     of such persons, in consultation with Federal agencies 
     identified in subsection (b) (1), (2), and (3).''.

     SEC. 119. ESTABLISHMENT OF TOLL-FREE TELEPHONE NUMBER.

       Section 607 of the Fair Credit Reporting Act (15 U.S.C. 
     1681e) is amended by adding after subsection (e) (as added by 
     section 107(c) of this Act) the following new subsection:
       ``(f) Establishment of Toll-Free Telephone Number.--Each 
     consumer reporting agency that compiles and maintains files 
     on consumers on a nationwide basis shall establish (and 
     thereafter maintain) a toll-free telephone number for the 
     purpose of making agency personnel accessible to consumers 
     for communicating with the agency during normal business 
     hours.''.

     SEC. 120. PREEMPTION OF STATE LAW.

       Section 624 of the Fair Credit Reporting Act, as 
     redesignated by section 113(a) of this Act, is further 
     amended--
       (1) by striking ``This title'' and inserting ``(a) In 
     General.--Except as provided in subsections (b) and (c), this 
     title''; and
       (2) by adding at the end the following:
       ``(b) General Exceptions.--No requirement or prohibition 
     may be imposed under the laws of any State--
       ``(1) with respect to any subject matter regulated under--
       ``(A) subsection (c) or (d) of section 604, relating to the 
     prescreening of consumer reports;
       ``(B) 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 subparagraph does not 
     apply to any State law in effect on the date of the enactment 
     of the Consumer Reporting Reform Act of 1994;
       ``(C) 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;
       ``(D) section 615(d), relating to the duties of persons who 
     use a consumer report of a consumer in connection with any 
     credit transaction which is not initiated by the consumer and 
     which consists of a firm offer of credit;
       ``(E) section 605, relating to obsolete information, except 
     that this subparagraph does not apply to any State law in 
     effect on the date of the enactment of the Consumer Reporting 
     Reform Act of 1994; or
       ``(F) section 623(b)(2), relating to the time by which a 
     person must take any action required under section 623(b)(1) 
     with respect to an investigation of information furnished by 
     the person to a consumer reporting agency, except that this 
     subparagraph does not apply to any State law in effect on the 
     date of the enactment of the Consumer Reporting Reform Act of 
     1994;
       ``(2) with respect to the exchange of information among 
     persons affiliated by common ownership or common corporate 
     control; or
       ``(3) with respect to the form and content of any 
     disclosure required to be made under section 609(c).
       ``(c) Definition of Firm Offer of Credit.--Notwithstanding 
     any 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.
       ``(d) Limitations.--Subsections (b) and (c)--
       ``(1) do not affect any settlement, agreement, or consent 
     judgment between any State Attorney General and any consumer 
     reporting agency in effect on the date of the enactment of 
     the Consumer Reporting Reform Act of 1994; and
       ``(2) do not apply to any provision of State law (including 
     any provision of a State constitution) that--
       ``(A) is enacted after January 1, 2003;
       ``(B) states explicitly that the provision is intended to 
     supplement this Act; and
       ``(C) gives greater protection to consumers than is 
     provided under this Act.''.

     SEC. 121. ACTION BY FTC.

       (a) Modification of Requirements by FTC Authorized.--
       (1) In general.--Section 621 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681s), is further amended by adding after 
     subsection (e) (as added by section 118 of this Act) the 
     following:
       ``(f) Modification of Requirements by FTC Authorized.--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--
       ``(1) that are more stringent than those imposed under--
       ``(A) 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;
       ``(B) 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;
       ``(C) section 615(d), relating to the duties of persons who 
     use a consumer report on a consumer in connection with any 
     credit transaction which is not initiated by the consumer and 
     that consists of a firm offer of credit; or
       ``(D) section 623(b)(2), relating to the time by which a 
     person must take any action required under section 623(b)(1) 
     with respect to an investigation of information furnished by 
     the person to a consumer reporting agency; and
       ``(2) with respect to the form and content of any 
     disclosure required to be made under section 609(c).''.
       (2) Clerical amendments.--
       (A) The heading for section 621 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681s) is amended to read as 
     follows:

     ``Sec. 621. Administrative enforcement and authorities; State 
       actions''.

       (B) The table of contents at the beginning of the Fair 
     Credit Reporting Act is amended by striking the item relating 
     to section 621 and inserting the following:
``621. Administrative enforcement and authorities; State actions.''.

       (b) Deadline to Prescribe Matters.--The Federal Trade 
     Commission shall prescribe all matters required by this title 
     (including the amendments made by this title) to be 
     prescribed by that Commission, before the end of the 300-day 
     period beginning on the date of the enactment of this Act.

     SEC. 122. EFFECTIVE DATES OF AMENDMENTS.

       (a) In General.--Except as provided in subsection (b), the 
     amendments made by this title shall be effective after the 
     455-day period beginning on the date of the enactment of this 
     Act.
       (b) Exceptions.--
       (1) Notification system.--Section 604(d)(3) of the Fair 
     Credit Reporting Act, as amended by section 104(a), shall be 
     effective after the 365-day period beginning on the date of 
     the enactment of this Act.
       (2) FTC authority.--Subsection (a) shall not affect the 
     authority of the Federal Trade Commission to prescribe 
     matters under the amendments made by this title.

     SEC. 123. FURNISHING CONSUMER REPORTS TO FEDERAL BUREAU OF 
                   INVESTIGATION FOR COUNTERINTELLIGENCE PURPOSES.

       (a) Permissible Purpose.--Section 604 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681b) is amended in subsection (a) 
     (as designated by section 103(a)(1) of this Act) by adding at 
     the end the following:
       ``(4) To the Federal Bureau of Investigation in response to 
     a court order issued under section 625.''.
       (b) Requirements for Federal Bureau of Investigation To 
     Obtain and Use Consumer Reports.--
       (1) In general.--The Fair Credit Reporting Act (15 U.S.C. 
     1601 et seq.) is amended by adding at the end the following 
     new section:

     ``Sec. 625. Requirements for Federal Bureau of Investigation 
       to obtain and use consumer reports

       ``(a) Court Order.--If requested in writing by the Director 
     of the Federal Bureau of Investigation or a designee of the 
     Director, a court may issue an order ex parte directing a 
     consumer reporting agency to furnish a consumer report to the 
     Federal Bureau of Investigation, upon a showing in camera 
     that--
       ``(1) the consumer report is necessary for the conduct of 
     an authorized foreign counterintelligence investigation; and
       ``(2) there are specific and articulable facts giving 
     reason to believe that the consumer whose consumer report is 
     sought--
       ``(A) is an agent of a foreign power; and
       ``(B) is engaging or has engaged in international terrorism 
     (as that term is defined in section 101(c) of the Foreign 
     Intelligence Surveillance Act of 1978 (50 U.S.C. 1801(c))) or 
     clandestine intelligence activities that involve or may 
     involve a violation of criminal statutes of the United 
     States.
       ``(b) Use of Consumer Reports Procured by Federal Bureau of 
     Investigation.--
       ``(1) Limitation on use and furnishing of consumer reports 
     by fbi.--The Federal Bureau of Investigation--
       ``(A) shall not use a consumer report procured under 
     section 604(a)(4) for any purpose other than the 
     investigation for which the consumer report was procured; and
       ``(B) shall not furnish the consumer report or any 
     information obtained from the consumer report to any other 
     person, except to an officer or employee of the Department of 
     Justice as necessary for approval or conduct of the 
     investigation.
       ``(2) Limitation on further dissemination by department of 
     justice.--An officer or employee of the Department of Justice 
     shall not provide a consumer report or information obtained 
     from a consumer report to any person except for purposes of 
     the investigation for which the consumer report was procured 
     under section 604(a)(4).
       ``(3) Notification regarding completion of investigation.--
     The Federal Bureau of Investigation, within 6 months after 
     the completion of an investigation for which a consumer 
     report is procured under section 604(a)(4), shall notify the 
     consumer reporting agency that furnished the report that the 
     investigation is completed.
       ``(4) Furnishing information pursuant to subpoena, court 
     order, or enforcement proceeding not prohibited.--Nothing in 
     paragraph (1) or (2) shall be construed to prohibit the 
     furnishing of information pursuant to a subpoena or court 
     order, or in connection with a court proceeding to enforce 
     this title.
       ``(c) Prohibitions on Disclosure.--
       ``(1) Court officer or employee.--An officer or employee of 
     a court shall not disclose to any person that the Federal 
     Bureau of Investigation has sought or obtained a consumer 
     report under section 604(a)(4), except to the court or 
     another officer or employee of the court in connection with 
     the issuance of an order under subsection (a) with respect to 
     the report.
       ``(2) Consumer reporting agency officer or employee.--An 
     officer or employee of a consumer reporting agency shall not 
     disclose to any person that the Federal Bureau of 
     Investigation has sought or obtained a consumer report under 
     section 604(a)(4), except--
       ``(A) for the purpose of furnishing the report to the 
     Federal Bureau of Investigation; or
       ``(B) to the court or an officer or employee of the court 
     in connection with the issuance of an order under subsection 
     (a) with respect to the report.
       ``(3) Penalty.--A person that knowingly and willfully 
     violates paragraph (1) or (2) shall be fined under title 18, 
     United States Code, or imprisoned not more than 2 years, or 
     both.
       ``(d) Disclosure to Consumer.--
       ``(1) Notice of completion of investigation required.--
     Notwithstanding section 609(a)(3) and subject to paragraph 
     (2), a consumer reporting agency shall not disclose under 
     that section the identity of the Federal Bureau of 
     Investigation or that the agency has furnished a consumer 
     report to the Federal Bureau of Investigation, unless the 
     consumer reporting agency has received from the Federal 
     Bureau of Investigation a notice under subsection (b)(3) of 
     the completion of the investigation with respect to which the 
     report was furnished.
       ``(2) Disclosures required.--A consumer reporting agency 
     shall include with a disclosure to a consumer under section 
     609(a) information in its files on the consumer regarding the 
     furnishing of a consumer report to, or the making of any 
     inquiry by, the Federal Bureau of Investigation with respect 
     to an investigation for which the consumer reporting agency 
     received from the Federal Bureau of Investigation a notice of 
     completion of the investigation in the year preceding the 
     request from the consumer for the disclosure.
       ``(e) Civil Liability for Violations.--For each violation 
     of subsection (b) (1) or (2) with respect to a consumer 
     report on a consumer, the Federal Bureau of Investigation or 
     the Department of Justice, respectively, is liable to the 
     consumer for an amount equal to the sum of--
       ``(1) the greater of--
       ``(A) actual damages sustained by the consumer as a result 
     of the violation and such amount of punitive damages as the 
     court may allow; or
       ``(B) $500; plus
       ``(2) in a successful action to enforce any liability under 
     this section, the costs of the action and reasonable 
     attorneys' fees as determined by the court.
       ``(f) Injunctive Relief.--Any person may bring an action to 
     enjoin a violation of this section.
       ``(g) Exclusive Remedies.--No action for relief for a 
     violation of subsection (b) (1) or (2) may be brought except 
     under subsection (e) or (f).
       ``(h) Semiannual Reports.--The Attorney General shall, on a 
     semiannual basis, fully inform the Permanent Select Committee 
     on Intelligence and the Committee on Banking, Finance and 
     Urban Affairs of the House of Representatives and the Select 
     Committee on Intelligence and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate concerning all 
     requests made by the Director of the Federal Bureau of 
     Investigation or a designee of the Director for a court to 
     issue an order under this section directing a consumer 
     reporting agency to furnish a consumer report to the Federal 
     Bureau of Investigation.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of the Fair Credit Reporting Act (15 U.S.C. 1681a 
     et seq.), as amended by section 113(b) of this Act, is 
     further amended by adding at the end the following:
``625. Requirements for Federal Bureau of Investigation to obtain and 
              use consumer reports.''.

       (c) Repeal of Provisions.--
       (1) Repeal.--The following provisions of the Fair Credit 
     Reporting Act, as amended by this section, are repealed:
       (A) Section 604(a)(4).
       (B) Section 625.
       (C) In the table of contents at the beginning of the Fair 
     Credit Reporting Act, the item relating to section 625.
       (2) Effective date.--Paragraph (1) shall take effect on the 
     date that is 5 years after the date of the enactment of this 
     Act.
                 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.
``405. Disclosures.
``406. Credit repair organizations contracts.
``407. Right to cancel contract.
``408. Noncompliance with this title.
``409. Civil liability.
``410. Administrative enforcement.
``411. Statute of limitations.
``412. Relation to State law.
``413. Effective date.

     ``SEC. 401. SHORT TITLE.

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

     ``SEC. 402. FINDINGS AND PURPOSES.

       ``(a) Findings.--The Congress makes the following findings:
       ``(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 which offer to improve the credit 
     standing of such consumers.
       ``(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 
     those of limited economic means and who are inexperienced in 
     credit matters.
       ``(b) Purposes.--The purposes of this title are as follows:
       ``(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.
       ``(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--
       ``(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 any 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 any consumer's credit record, credit 
     history, or credit rating; or
       ``(ii) providing advice or assistance to any consumer with 
     regard to any activity or service described in clause (i); 
     and
       ``(B) does not include--
       ``(i) any nonprofit organization which is exempt from 
     taxation under section 501(c)(3) of the Internal Revenue Code 
     of 1986; or
       ``(ii) any 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 
     which are within the scope of regulations applicable to 
     members of such bar or such licensees.
       ``(4) Credit.--The term `credit' has the meaning given to 
     such term in section 103(e) of this Act.

     ``SEC. 404. PROHIBITED PRACTICES.

       ``(a) In General.--No person may--
       ``(1) make any statement, or counsel or advise any consumer 
     to make any statement, which is untrue or misleading (or 
     which, 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 
     any consumer's creditworthiness, credit standing, or credit 
     capacity to--
       ``(A) any consumer reporting agency (as defined in section 
     603(f) of this Act); 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;
       ``(2) make any statement, or counsel or advise any 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 information that is accurate 
     and not obsolete to--
       ``(A) any consumer reporting agency;
       ``(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 or use any untrue or misleading representation 
     of the services of the credit repair organization; or
       ``(4) 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 any person in connection with the offer or sale of the 
     services of the credit repair organization.
       ``(b) Payment in Advance.--No credit repair organization 
     may charge or receive any money or other valuable 
     consideration for the performance of any service which the 
     credit repair organization has agreed to perform for any 
     consumer before such service is fully performed.

     ``SEC. 405. DISCLOSURES.

       ``(a) Disclosure Required.--Any credit repair organization 
     shall provide any consumer with the following written 
     statement before any contract or agreement between the 
     consumer and the credit repair organization is executed:
       ```Consumer Credit File Rights Under State and Federal Law
       ```You have a right to dispute inaccurate information in 
     your credit 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 credit 
     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 credit report 
     from a credit bureau. You may be charged a reasonable fee. 
     There is no fee, however, if you have been turned down for 
     credit, employment, insurance, or a rental dwelling because 
     of information in your credit report within the preceding 60 
     days. The credit bureau must provide someone to help you 
     interpret the information in your credit file. You are 
     entitled to receive a free copy of your credit report if you 
     are unemployed and intend to apply for employment in the next 
     60 days, if you are a recipient of public welfare assistance, 
     or if you have reason to believe that there is inaccurate 
     information in your credit report due to fraud.
       ```You have a right to sue a credit repair organization 
     that violates the Credit Repair Organization Act. This law 
     prohibits deceptive practices by credit repair organizations.
       ```You have the right to cancel your contract with any 
     credit repair organization for any reason within 3 business 
     days from the date you signed it.
       ```Credit bureaus are required to follow reasonable 
     procedures to ensure that the information they report is 
     accurate. 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 or incomplete 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 the credit bureau's 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 a summary of 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:

                      The 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 which 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 any consumer's 
     statement shall be maintained in the organization's files for 
     2 years after the date on which the statement is signed by 
     the consumer.

     ``SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

       ``(a) Written Contracts Required.--No services may be 
     provided by any credit repair organization for any consumer--
       ``(1) unless a written and dated contract (for the purchase 
     of such services) which meets the requirements of subsection 
     (b) has been signed by the consumer; or
       ``(2) before the end of the 3-business-day period beginning 
     on the date the contract is signed.
       ``(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 of performance; 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 bold face 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 3rd 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.--Any consumer may cancel any contract 
     with any 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 3rd business day which begins after 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 bold 
     face type the following statement:
       ```You may cancel this contract, without any penalty or 
     obligation, at any time before midnight of the 3rd day which 
     begins after the date the contract is signed by you.
       ```To cancel this contract, mail or deliver a signed, dated 
     copy of this cancellation notice, or any other written notice 
     to [ name of credit repair organization ] at [ address of 
     credit repair organization ] before midnight on [ date ]
       ```I hereby cancel this transaction,
       [ date ]
       [ purchaser's signature ].'.
       ``(c) Consumer Copy of Contract Required.--Any consumer who 
     enters into any contract with any 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 any 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 any Federal or State court or 
     any other person.
       ``(b) Attempt To Obtain Waiver.--Any attempt by any person 
     to obtain a waiver from any 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.--Any contract for 
     services which does not comply with the applicable provisions 
     of this title--
       ``(1) shall be treated as void; and
       ``(2) may not be enforced by any Federal or State court or 
     any other person.

     ``SEC. 409. CIVIL LIABILITY.

       ``(a) Liability Established.--Any person who fails to 
     comply with any provision of this title with respect to any 
     other 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 any action by an 
     individual, such additional amount as the court may allow.
       ``(B) Class actions.--In the case of a class action, the 
     sum of--
       ``(i) the aggregate of the amount which the court may allow 
     for each named plaintiff; and
       ``(ii) the aggregate of the amount which the court may 
     allow for each other class member, without regard to any 
     minimum individual recovery.
       ``(3) Attorneys' fees.--In the case of any 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.

     ``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 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 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 Action For Violations.--
       ``(1) Authority of states.--In addition to such other 
     remedies as are provided under State law, whenever the chief 
     law enforcement officer of a State, or an official or agency 
     designated by a State, has reason to believe that any person 
     has violated or is violating this title, the State--
       ``(A) may bring an action to enjoin such violation;
       ``(B) may bring an action on behalf of its residents to 
     recover damages for which the person is liable to such 
     residents under section 409 as a result of the violation; and
       ``(C) in the case of any successful action under 
     subparagraph (A) or (B), shall be awarded the costs of the 
     action and reasonable attorney fees as determined by the 
     court.
       ``(2) Rights of commission.--
       ``(A) Notice to commission.--The State shall serve prior 
     written notice of any civil action under paragraph (1) upon 
     the Federal Trade Commission and provide the Commission with 
     a copy of its complaint, except in any case where such prior 
     notice is not feasible, in which case the State shall serve 
     such notice immediately upon instituting such action.
       ``(B) Intervention.--The Commission shall have the right--
       ``(i) to intervene in any action referred to in 
     subparagraph (A);
       ``(ii) upon so intervening, to be heard on all matters 
     arising in the action; and
       ``(iii) to file petitions for appeal.
       ``(3) Investigatory powers.--For purposes of bringing any 
     action under this subsection, nothing in this subsection 
     shall prevent the chief law enforcement officer, or an 
     official or agency designated by a State, from exercising the 
     powers conferred on the chief law enforcement officer or such 
     official by the laws of such State to conduct investigations 
     or to administer oaths or affirmations or to compel the 
     attendance of witnesses or the production of documentary and 
     other evidence.
       ``(4) Limitation.--Whenever the Federal Trade Commission 
     has instituted a civil action for violation of this title, no 
     State may, during the pendency of such action, bring an 
     action under this section against any defendant named in the 
     complaint of the Commission for any violation of this title 
     that is alleged in that complaint.

     ``SEC. 411. STATUTE OF LIMITATIONS.

       ``Any action to enforce any liability under this title may 
     be brought 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 any credit repair organization 
     has materially and willfully misrepresented any information 
     which--
       ``(A) the credit repair organization is required, by any 
     provision of this title, to disclose to any consumer; and
       ``(B) is material to the establishment of the credit repair 
     organization's liability to the consumer under this title,
     the end of the 2-year period beginning on the date of the 
     discovery by the consumer of the misrepresentation.

     ``SEC. 412. RELATION TO STATE LAW.

       ``This title shall not annul, alter, affect, or exempt any 
     person subject to the provisions of this title from complying 
     with any law of any State except to the extent that such law 
     is inconsistent with any provision of this title, and then 
     only to the extent of the inconsistency.

     ``SEC. 413. EFFECTIVE DATE.

       ``This title shall apply after the end of the 6-month 
     period beginning on the date of the enactment of the Credit 
     Repair Organizations Act, except with respect to contracts 
     entered into by a credit repair organization before the end 
     of such period.''.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas [Mr. Gonzalez] will be recognized for 20 minutes, and the 
gentleman from California [Mr. McCandless] will be recognized for 20 
minutes.
  The Chair recognized the gentleman from Texas [Mr. Gonzalez].
  Mr. GONZALEZ. Mr. Speaker, I yield myself 5 minutes.
  Mr. Speaker, the bill before the House today is one of the most 
important consumer protection bills of the session, the Consumer 
Reporting Reform Act. This legislation represents a long-overdue 
overhaul of our Nation's credit information system.
  Credit bureaus today amass mountains of sensitive financial 
information about each one of us. They know how many and what type of 
credit cards we carry. They know who owns our mortgages. They know when 
we make a late payment, do not pay our property taxes, or declare 
bankruptcy. Nearly every decision made about us--whether to approve a 
loan, rent an apartment, insure property, or offer a job--could involve 
a credit report. Credit bureaus and the companies that supply 
information to them do wield great power over our lives. Thus, they 
absolutely must get it right.
  I am sure my colleagues recognize the anguish consumers feel when a 
credit bureau computer wrongly labels them deadbeats. Worse yet, 
imagine the permanent damage that a bureau can do by refusing to 
correct an error. I know many Members of this House have experienced 
the frustration of an unresponsive credit bureau firsthand, or have 
heard the anger of their constituents. Over the past several years, the 
Banking Committee has been inundated with such horror stories. For 
example, we heard about families who could not buy a home because 
someone else's bad debts mysteriously appeared in their credit files. 
There were job applicants who remained unemployed because the company 
consulted an inaccurate credit report without their knowledge. On one 
occasion an entire Vermont town was shown delinquent on their taxes 
because of a data-entry error.
  H.R. 1015 would tighten up the rules for both credit bureaus and the 
companies who supply information to them. It requires credit bureaus to 
investigate disputed information within 30 days and it lowers the 
charge consumers currently have to pay to view their own files. The 
bill would also give consumers more control over who can access their 
information. For example, employers could no longer look at potential 
employees' credit records without their consent. And consumers who do 
not want to receive preapproved credit cards can direct credit bureaus 
not to share their information for these purposes.
  I want to commend Chairman Kennedy, Ranking Member McCandless, and 
the members of the Banking Committee on both sides of the aisle who 
worked diligently to bring this bill to the floor today. A very similar 
credit reporting bill--S. 783--recently passed the Senate by a vote of 
87 to 10, and I hope the House can do the same. I urge an ``aye'' vote.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McCANDLESS. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, the Fair Credit Reporting Act of 1970 was passed to 
ensure the accuracy and completeness of information about consumers 
that is collected, maintained, and reported by credit bureaus. Although 
the credit reporting industry has changed dramatically over the last 20 
years, the Fair Credit Reporting Act has not been substantially amended 
since its passage.
  Not surprisingly, the Fair Credit Reporting Act is out of date. It 
was written when credit reporting was a very local business activity. 
Today, however, credit reporting is a nationwide industry that utilizes 
the very latest in technology. Credit reporting is carried out today in 
ways that were not foreseen in 1970.
  Although you might think that coming up with a bill to reform and 
modernize the Fair Credit Reporting Act would be a relatively 
straightforward proposition, it has been quite an effort. We have had 
to reconcile a variety of concerns; concerns that sometimes seemed 
irreconcilable.
  First, there were privacy issues to consider. For example, we needed 
to determine just what type of information was appropriate for credit 
bureaus to collect. We also needed to decide at what point certain 
information became obsolete.
  Second, there were market issues to consider. We had to figure out a 
way to make credit reports available to those who truly need them 
without requiring credit bureaus to just give away their product.
  Finally, there were regulatory issues to consider. We had to decide 
how the Fair Credit Reporting Act should relate to existing State laws, 
how the Federal statute could best be enforced, and by whom. For any of 
my colleagues who were here in the 102d Congress, you know that I am 
speaking of the ``preemption'' issue.
  H.R. 1015 was reported by the Banking Committee earlier this year 
along party lines largely due to differences of opinion on the issues I 
just mentioned. However, since the bill was reported, we have arrived 
at a compromise version of the bill that I think can be supported by 
Democrats and Republicans alike.
  I do not want to give you the impression that the bill is perfect. It 
is not. There are provisions that I would like to see drafted 
differently. Overall however, I think that it is a satisfactory piece 
of legislation
  I want to take a few more minutes to discuss two issues that have in 
the past been obstacles to reforming the Fair Credit Reporting Act.


                               Preemption

  The issue over whether the Federal Fair Credit Reporting Act should 
preempt more stringent State laws or whether it should permit States to 
enact tougher credit reporting statutes has been one of the single 
toughest issue for the Banking Committee to tackle. On the one hand, 
many of our Members like the idea of a uniform national standard. On 
the other, we do not want to tie the hands of State legislatures. I 
think that this compromise bill resolves the issue of preemption to 
most everyone's satisfaction.
  The Fair Credit Reporting Act, as amended by this compromise bill, 
will be the law of the land for the next 8 years. It will provide 
consumers across the country with greater protection than is currently 
offered by any existing State statute. A uniform national standard will 
make compliance more straightforward and will facilitate the extension 
of credit to consumers. States will be able to enact more stringent 
legislation if necessary after 8 years.
  There are two exceptions to the general rule on preemption. State 
laws concerning obsolete information and reinvestigation time periods 
in existence upon the date of enactment will be grandfathered. Finally, 
settlement agreements and consent orders between State authorities and 
credit bureaus will not be affected by this compromise bill.


                           Free Credit Report

  The issue of whether consumers should be entitled to free copies of 
their credit reports each year has been another issue with which the 
Banking Committee has had to grapple. One the one hand, it is important 
that consumers have access to their credit reports. On the other, we 
cannot require an industry to just give away its product.
  Under this compromise bill, three groups of consumers will be 
eligible to receive free copies of their credit reports upon request: 
Those who are unemployed, those who receive public assistance, and 
those who believe they have been the victim of fraud. All other 
consumers will be eligible to request one copy of their credit report 
for $3 annually.
  All in all, I think that this compromise bill is a piece of 
legislation that Republicans and Democrats can support. I urge my 
colleagues to suspend the rules and pass this bill.

                              {time}  1250

  Mr. Speaker, I reserve the balance of my time.
  Mr. GONZALEZ. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, once again I compliment the gentleman from California 
[Mr. McCandless] for the great job he did, together with the gentleman 
from Massachusetts [Mr. Kennedy] and others.
  Also, one of the original sponsors and authors when he was chairman 
of the Subcommittee on Consumer Credit and Insurance of the Committee 
on Banking, Finance and Urban Affairs, the gentleman from California 
[Mr. Torres] is here.
  Mr. Speaker, I yield 5 minutes to the gentleman from California [Mr. 
Torres].
  (Mr. TORRES asked and was given permission to revise and extend his 
remarks.)
  Mr. TORRES. Mr. Speaker, I thank the gentleman from Texas [Mr. 
Gonzalez] for yielding time to me.
  Mr. Speaker, I rise in support of the Consumer Reporting Reform Act 
of 1994, H.R. 1015. This bill may be the most important consumer 
legislation considered by this Congress. It will increase the accuracy 
of consumer reports and better protect the privacy of those reports.
  The Fair Credit Reporting Act [FCRA] of 1970 was enacted to ensure 
that the Nation's consumer reporting system functioned fairly, 
accurately, and without undue intrusion into the consumer's privacy. 
But our country has changed dramatically over the past 23-years. The 
present state of technology and the volume of credit transactions that 
fuel the American economy have rendered the FCRA dangerously ill-
equipped to meet the needs of today's consumers.
  The FCRA sought to achieve a balance between the legitimate business 
need to obtain accurate consumer credit information and the right of 
consumers to protect the accuracy and privacy of their personal and 
financial records. That delicate balance has been lost.
  Today, consumers' lives are an open book. Sensitive personal and 
financial data is bought and sold with little or no regard for the 
privacy of the consumer. Workers are denied employment or even 
blackballed because of erroneous information in their files. Inaccurate 
credit information is almost impossible to correct.
  The human consequences of these abuses can be devastating. Moreover, 
virtually every adult in America is at risk of falling victim to an 
industry that is out of control. Whenever you apply for a loan, rent an 
apartment, buy a house, purchase insurance, or apply for a job, you are 
at the mercy of the consumer reporting industry--an industry that is 
responsible for untold horror stories. This bill will put an end to the 
pain and suffering that the consumer reporting industry is causing 
thousands of decent and responsible Americans.

  Many people have contributed to the development and promotion of this 
legislation. Our former colleague, Frank Annunzio, began the process of 
reforming the FCRA over a decade ago. Congressman Richard Lehman held a 
number of hearings on the issue and introduced comprehensive 
legislation to reform the FCRA almost 6 years ago. As the former 
chairman of the Banking Subcommittee on Consumer Affairs and Coinage, I 
took Congressman Lehman's efforts a step further and brought a reform 
bill to the House floor at the end of the 102d Congress.
  But the two most important contributors to the development and 
promotion of this legislation are unquestionably Banking Subcommittee 
Chairman Joseph Kennedy and Chairman Henry B. Gonzalez. On February 18, 
1993, Chairmen Gonzalez and Kennedy joined me in introducing this 
legislation. Since that time they have worked tirelessly to advance the 
bill to the House floor. Against great odds, and the opposition of some 
of the most powerful interests in this country, they have massaged and 
refined this bill to make it acceptable to both consumer and industry 
representatives, as well as Democrats and Republicans alike. They are 
the true heroes of this reform effort.
  Finally, I would be remiss if I did not acknowledge the efforts of 
the staff who have worked behind the scenes on this legislation. I 
particularly want to acknowledge the work of Banking Committee counsel 
Amy Friend, who has labored on this legislation for almost 4 years. 
Without her superb efforts I seriously doubt that we would be 
considering this bill today.
  Mr. Speaker, I urge my colleagues to vote for this critical piece of 
consumer legislation.
  Mr. ROSTENKOWSKI. Mr. Speaker, I rise in support of H.R. 1015, the 
Consumer Credit Reform Act. Congress first enacted the Fair Credit 
Reporting Act in 1970 in response to the then-rapidly growing credit 
reporting industry. Credit reporting agencies or credit bureaus, as 
they are sometimes called, are responsible for maintaining accuracy in 
credit reports, which provide information about consumer credit 
histories to creditors, employers, and other users.
  In recent years, however, advances in the computer and communications 
technology have provided increased availability of these credit 
reports, raising concerns about their accuracy, confidentiality, and 
relevance. Serious errors, abuses, and breaches of privacy have 
accompanied this explosion of consumer information, costing people 
jobs, homes, and credit. H.R. 1015 is a direct response to the public 
outcry about the credit reporting industry.
  The Consumer Credit Reform Act will improve the accuracy and 
confidentiality of the credit reporting industry by requiring that 
consumers are informed of their rights, and ensuring that credit 
reports are only used for proper purposes. This legislation requires 
reporting agencies to disclose to consumers all information in their 
file, including all persons who have received a copy of their report. 
It forces credit bureaus to investigate and delete inaccurate 
information within 30 days and holds banks and retailers accountable 
for information they provide to the credit bureaus.
  Mr. Speaker, H.R. 1015 makes important improvements to the Fair 
Credit Reporting Act, a law that has failed to keep pace with the 
technological advances of the last two decades and is long overdue for 
an overhaul. More importantly, this legislation provides hard working 
Americans with the kind of meaningful consumer protection that they 
deserve. I urge my colleagues to join me in supporting the Consumer 
Reporting Reform Act.
  Mr. DOOLEY. Mr. Speaker, I want to take this opportunity to thank 
Chairman Gonzalez and Congressman Kennedy for their hard work and for 
the cooperation they have shown in drafting the legislation we are 
considering today. In my view, the legislation we have before us 
increases consumer safeguards without imposing overly burdensome 
regulatory requirements on businesses involved in the credit industry.
  I am particularly pleased with the affiliate sharing and civil 
liability provisions in the legislation before us today.
  H.R. 1015 does not allow affiliated entities to establish their own 
credit bureaus. The bill allows subsidiaries to share experience 
information with each other, as well as information from a consumer's 
credit application provided that the sharing of information is clearly 
and conspicuously disclosed to the consumer and the consumer consents 
to the sharing. The legislation also requires businesses to provide 
consumers with notice of any adverse action taken by an affiliate as a 
result of shared information, so that the consumer will have the 
opportunity to correct any inaccurate information.
  In addition, the civil liability provisions of H.R. 1015 will allow 
companies to continue their current practice of furnishing valuable 
credit information to credit bureaus. Consumers depend on their credit 
history to secure new credit lines and it is vital that credit 
information be provided to bureaus. The purpose of liability is to 
punish businesses that knowingly make mistakes or fail to correct 
mistakes that are pointed out to them. This bill preserves those 
consumer protections by maintaining the Attorney General's and Federal 
Trade Commission's ability to file suit and the individual right to sue 
if proper reinvestigation does not occur.
  Again, I commend Chairman Gonzalez and Mr. Kennedy for their hard 
work on this legislation. I believe the bill makes responsible reforms 
in credit reporting. I urge my colleagues to support H.R. 1015.
  Mr. McCANDLESS. Mr. Speaker, I yield back the balance of my time.
  Mr. GONZALEZ. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Montgomery). The question is on the 
motion offered by the gentleman from Texas [Mr. Gonzalez] that the 
House suspend the rules and pass the bill, H.R. 1015, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof), the rules were suspended and the bill, as amended, was 
passed.
  A motion to reconsider was laid on the table.

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