[Congressional Record Volume 144, Number 140 (Thursday, October 8, 1998)]
[House]
[Pages H10218-H10220]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        CONSUMER REPORTING EMPLOYMENT CLARIFICATION ACT OF 1998

  Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the 
Senate bill (S. 2561) to amend the Fair Credit Reporting Act with 
respect to furnishing and using consumer reports for employment 
purposes.
  The Clerk read as follows:

                                S. 2561

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Consumer Reporting 
     Employment Clarification Act of 1998''.

     SEC. 2. USE OF CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.

       (a) Disclosure to Consumer.--Section 604(b)(2) of the Fair 
     Credit Reporting Act (15 U.S.C. 1681b(b)(2)) is amended to 
     read as follows:
       ``(2) Disclosure to consumer.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a person may not procure a consumer report, or cause a 
     consumer report to be procured, for employment purposes with 
     respect to any consumer, unless--
       ``(i) 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
       ``(ii) the consumer has authorized in writing (which 
     authorization may be made on the document referred to in 
     clause (i)) the procurement of the report by that person.
       ``(B) Application by mail, telephone, computer, or other 
     similar means.--If a consumer described in subparagraph (C) 
     applies for employment by mail, telephone, computer, or other 
     similar means, at any time before a consumer report is 
     procured or caused to be procured in connection with that 
     application--
       ``(i) the person who procures the consumer report on the 
     consumer for employment purposes shall provide to the 
     consumer, by oral, written, or electronic means, notice that 
     a consumer report may be obtained for employment purposes, 
     and a summary of the consumer's rights under section 
     615(a)(3); and
       ``(ii) the consumer shall have consented, orally, in 
     writing, or electronically to the procurement of the report 
     by that person.
       ``(C) Scope.--Subparagraph (B) shall apply to a person 
     procuring a consumer report on a consumer in connection with 
     the consumer's application for employment only if--
       ``(i) the consumer is applying for a position over which 
     the Secretary of Transportation has the power to establish 
     qualifications and maximum hours of service pursuant to the 
     provisions of section 31502 of title 49, or a position 
     subject to safety regulation by a State transportation 
     agency; and
       ``(ii) as of the time at which the person procures the 
     report or causes the report to be procured the only 
     interaction between the consumer and the person in connection 
     with that employment application has been by mail, telephone, 
     computer, or other similar means.''.
       (b) Conditions on Use for Adverse Actions.--Section 
     604(b)(3) of the Fair Credit Reporting Act (15 U.S.C. 
     1681b(b)(3)) is amended to read as follows:
       ``(3) Conditions on use for adverse actions.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     in using a consumer report for employment purposes, before 
     taking any adverse action based in whole or in part on the 
     report, the person intending to take such adverse action 
     shall provide to the consumer to whom the report relates--
       ``(i) a copy of the report; and
       ``(ii) a description in writing of the rights of the 
     consumer under this title, as prescribed by the Federal Trade 
     Commission under section 609(c)(3).
       ``(B) Application by mail, telephone, computer, or other 
     similar means.--
       ``(i) If a consumer described in subparagraph (C) applies 
     for employment by mail, telephone, computer, or other similar 
     means, and if a person who has procured a consumer report on 
     the consumer for employment purposes takes adverse action on 
     the employment application based in whole or in part on the 
     report, then the person must provide to the consumer to whom 
     the report relates, in lieu of the notices required under 
     subparagraph (A) of this section and under section 615(a), 
     within 3 business days of taking such action, an oral, 
     written or electronic notification--

       ``(I) that adverse action has been taken based in whole or 
     in part on a consumer report received from a consumer 
     reporting agency;
       ``(II) of the name, address and telephone number of the 
     consumer reporting agency that furnished the consumer report 
     (including a toll-free telephone number established by the 
     agency if the agency compiles and maintains files on 
     consumers on a nationwide basis);
       ``(III) that the consumer reporting agency did not make the 
     decision to take the adverse action and is unable to provide 
     to the consumer the specific reasons why the adverse action 
     was taken; and
       ``(IV) that the consumer may, upon providing proper 
     identification, request a free copy of a report and may 
     dispute with the consumer reporting agency the accuracy or 
     completeness of any information in a report.

       ``(ii) If, under clause (B)(i)(IV), the consumer requests a 
     copy of a consumer report from the person who procured the 
     report, then, within 3 business days of receiving the 
     consumer's request, together with proper identification, the 
     person must send or provide to the consumer a copy of a 
     report and a copy of the consumer's rights as prescribed by 
     the Federal Trade Commission under section 609(c)(3).
       ``(C) Scope.--Subparagraph (B) shall apply to a person 
     procuring a consumer report on a consumer in connection with 
     the consumer's application for employment only if--
       ``(i) the consumer is applying for a position over which 
     the Secretary of Transportation has the power to establish 
     qualifications and maximum hours of service pursuant to the 
     provisions of section 31502 of title 49, or a position 
     subject to safety regulation by a State transportation 
     agency; and
       ``(ii) as of the time at which the person procures the 
     report or causes the report to be procured the only 
     interaction between the consumer and the person in connection 
     with that employment application has been by mail, telephone, 
     computer, or other similar means.''.

     SEC. 3. PROVISION OF SUMMARY OF RIGHTS.

       Section 604(b)(1)(B) of the Fair Credit Reporting Act (15 
     U.S.C. 1681b(b)(1)(B)) is amended by inserting ``, or has 
     previously provided,'' before ``a summary''.

     SEC. 4. NATIONAL SECURITY INVESTIGATION CONFORMING 
                   AMENDMENTS.

       (a) Government as End User.--Section 609(a)(3) of the Fair 
     Credit Reporting Act (15 U.S.C. 1681g(a)(3)) is amended by 
     adding at the end the following:
       ``(C) Subparagraph (A) does not apply if--
       ``(i) the end user is an agency or department of the United 
     States Government that procures the report from the person 
     for purposes of determining the eligibility of the consumer 
     to whom the report relates to receive access or continued 
     access to classified information (as defined in section 
     604(b)(4)(E)(i)); and
       ``(ii) the head of the agency or department makes a written 
     finding as prescribed under section 604(b)(4)(A).''.
       (b) National Security Investigations.--Section 613 of the 
     Fair Credit Reporting Act (15 U.S.C. 1681k) is amended--
       (1) by inserting ``(a) In General.--'' before ``A 
     consumer''; and
       (2) by adding at the end the following:
       ``(b) Exemption for National Security Investigations.--
     Subsection (a) does not apply in the case of an agency or 
     department of the

[[Page H10219]]

     United States Government that seeks to obtain and use a 
     consumer report for employment purposes, if the head of the 
     agency or department makes a written finding as prescribed 
     under section 604(b)(4)(A).''.

     SEC. 5. CIVIL SUITS AND JUDGMENTS.

       Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 
     1681c(a)) is amended--
       (1) in paragraph (2), by striking ``Suits and Judgments 
     which'' and inserting ``Civil suits, civil judgments, and 
     records of arrest that'';
       (2) by striking paragraph (5);
       (3) in paragraph (6), by inserting ``, other than records 
     of convictions of crimes'' after ``of information''; and
       (4) by redesignating paragraph (6) as paragraph (5).

     SEC. 6. TECHNICAL AMENDMENTS.

       The Fair Credit Reporting Act (15 U.S.C. 1601 et seq.) is 
     amended--
       (1) in section 603(d)(2)(A)(iii), by striking ``any 
     communication'' and inserting ``communication'';
       (2) in section 603(o)(1), by striking ``(d)(2)(E)'' and 
     inserting ``(d)(2)(D)'';
       (3) in section 603(o)(4), by striking ``or'' at the end and 
     inserting ``and'';
       (4) in section 604(g), by striking ``or a direct marketing 
     transaction'';
       (5) in section 611(a)(7), by striking ``(6)(B)(iv)'' and 
     inserting ``(6)(B)(iii)''; and
       (6) in section 621(b), by striking ``or (e)''.

     SEC. 7. EFFECTIVE DATE.

       The amendments made by this Act shall be deemed to have the 
     same effective date as the amendments made by section 2403 of 
     the Consumer Credit Reporting Reform Act of 1996 (Public Law 
     104-208; 110 Stat. 3009-1257).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Iowa (Mr. Leach) and the gentleman from New York (Mr. LaFalce) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Iowa (Mr. Leach).
  Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. LEACH asked and was given permission to revise and extend his 
remarks.)
  Mr. LEACH. Mr. Speaker, S. 2561, the Consumer Reporting Employment 
Clarification Act of 1998 amends the Fair Crediting Reporting Act FCRA 
to revise certain changes that were made to the act last Congress. Some 
of these changes had inadvertent consequences on the trucking 
industry's hiring practices.
  Specifically, the bill amends the FCRA to remove burdensome 
restrictions so that trucking companies will be able to conduct 
background investigations of driver applicants in a timely and 
efficient manner to help ensure highway safety.
  S. 2561 has bipartisan support and the agreement of the Federal Trade 
Commission and consumer advocacy groups. The bill is also strongly 
supported by the American Trucking Association and the Truckload 
Carriers Association.
  The legislation also amends the FCRA so employers have access to 
critical information in order to make informed hiring decisions. 
Current law exempts convictions of crime from consumer reports after 7 
years for individuals applying for jobs with an annual salary of less 
than $75,000. S. 2561 would remove this exemption. Such information is 
particularly crucial in the hiring process for employers in the area of 
child or elderly care, school bus driving, and household services.
  This bill provides for small changes to the FCRA that will have a 
significant impact on the efficiency of many employers' hiring 
practices, resulting in a safer environment for all.
  I would like to commend Senator Nickles, Senator Bryan, and Senator 
Mack for their work on this legislation and the gentleman from Oklahoma 
(Mr. Lucas) and the gentleman from Oklahoma (Mr. Watts) for their 
leadership in the House and the gentleman from New York (Mr. LaFalce) 
for his cooperation in ensuring that this important legislation is able 
to be brought before us at the last moments of this Congress.
  By background, on September 30, 1996, Congress enacted amendments to 
the Fair Credit Reporting Act (FCRA) that unintentionally hindered the 
ability of trucking companies to hire safe, professional truck drivers. 
The new regulations, which went into effect last Fall, require trucking 
companies to obtain written consent from truck driver applicants before 
the company may obtain driving records and accidents history 
information required by the Federal Highway Administration.
  the hiring process in the trucking industry, which employs over 3.5 
million drivers, depends on an immediate ability to verify a driver's 
safety and employment history before a company will put a driver behind 
the wheel. Because of the high volume of applicants and the need to 
verify instantly safety and employment information, many trucking 
companies utilize an ``800'' number system. Under this system, trucking 
carriers will accept applications for employment over the telephone, 
and immediately orders a background report to determine if the 
applicant meets the carriers' hiring requirements. Due to the 
industry's high standards, the industry hires only one of every ten 
applicants.
  The new FCRA regulations have forced the trucking industry to add 
multiple, unnecessary steps to its hiring procedures, especially since 
these background checks are already required under federal law. 
Moreover, because of the burdensome paperwork requirements under these 
regulations, and because the industry is currently facing a critical 
shortage of drivers, many carriers will have no choice but to put 
drivers behind the wheel before their safety records can be verified. 
This obviously raises serious highway safety concerns. For all these 
reasons, the trucking industry strongly supports an amendment to FCRA 
that would permit trucking companies to accept an applicants consent 
over the telephone.
  Section 604 of the FCRA establishes, among other items, the 
conditions under which a consumer reporting agency may furnish a 
consumer report for employment purposes. Current law requires 
prospective employers to certify to the consumer reporting agency that 
certain notices, including a summary of rights in the event of adverse 
action, have been given to the consumer and that information from the 
report will be used for lawful purposes.
  In addition, the consumer reporting agency may only furnish a report 
to a prospective employer if the agency provides with the report the 
summary of consumer rights. The amendment establishes that the intent 
of the statute can be met without the consumer reporting agency 
providing the summary every time a report is obtained. Instead, the 
requirement is satisfied if the consumer reporting agency has 
previously provided a summary of rights. The amendment codifies 
interpretive letter of the Federal Trade Commission in this area.
  Section 4 amendments are conforming amendments for provisions added 
to Section 604(b)(4) in the Intelligence Authorization Act of 1998. 
These provisions created an exception for providing certain disclosures 
to consumers if a written determination was obtained from the relevant 
agency that the disclosure would threaten national security, endanger 
an individual's safety or hamper an official investigation. The 
proposed amendments provide for full compliance with the Intelligence 
Authorization provisions and protect consumer reporting agencies from 
unwarranted liability.
  The Intelligence Authorization Act amendments failed to make 
conforming exceptions for requirements imposed upon consumer reporting 
agencies. First, under Section 609, a consumer reporting agency must, 
upon request, disclose to the consumer the end-user of the report. The 
amendment would provide an exception to that requirement if the 
relevant agency makes the appropriate written determination.
  Second, under Section 613, consumer reporting agencies may be 
required to provide consumers with the name and address of person 
seeking consumer reports consisting of public record information. The 
amendment establishes an exception for disclosing this information in 
the context of the national security area.
  Under current law, if an individual is seeking a job with an annual 
salary below $75,000, no records of criminal activity, including 
convictions, may be reported if they antedate the report by more than 
seven years. This information may be of critical value to prospective 
employers, especially those in the areas of child or elderly care, 
school bus driving and household services. Under the bill, convictions 
of crimes from the seven-year obsolescence period would be exempted.
  All in all this is a common sense bill designed to protect the 
public. I encourage support of all members.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. LaFALCE asked and was given permission to revise and extend his 
remarks.)
  Mr. LaFALCE. Mr. Speaker, I rise in support of S. 2561, associate 
myself fully with the remarks of the distinguished chairman of the 
Committee on Banking and Financial Services, the gentleman from Iowa 
(Mr. Leach).
  Mr. Speaker, I rise in support of S. 2561, a bill to provide limited 
clarifications and technical corrections to the Fair Credit Reporting 
Act. I wish to thank the Chairman of the Banking Committee for bringing 
this legislation to the floor under suspension.
  While I believe we need to be extremely cautious in accepting any 
proposal to revise the Fair Credit Reporting Act, especially those 
offered in the rush before adjournment, let me

[[Page H10220]]

say that I have closely reviewed this bill and have no objections. The 
exceptions that the bill creates from current FCRA requirements are 
justifiable and are very narrowly targeted. In addition, the bill 
provides a number of technical improvements to FCRA that were drafted 
with the assistance and support of the Federal Trade Commission.
  The primary issue addressed by the bill relates to problems 
encountered by a limited number of firms that provide employment 
screening for national trucking companies. Under FCRA any report on an 
individual produced by a hired third party falls under the category of 
a ``consumer report''. It requires, where such reports are prepared for 
employment purposes, that certain disclosures be provided in writing to 
the individual who is the subject of the report; that the individual 
provide written authorization for release of the report and that the 
employer provide a written copy of the report to the applicant where an 
adverse decision is made based on information in the report.
  Since the companies providing employment screening for trucking firms 
seek applications in all parts of the country and communicate primarily 
by telephone, fax or mail, current FCRA requirements that disclosures 
and authorizations be made in person and in writing are inappropriate 
and burdensome. The legislation would add several narrowly crafted 
exceptions to FCRA that would permit--where employment applications are 
taken by phone, mail or electronically--greater flexibility in 
providing required disclosures and authorizations either by ``oral, 
written or electronic means'', and in permitting delivery of a credit 
report to an applicant within three days after an adverse employment 
decision.
  I believe these exceptions are reasonable and have been crafted to 
apply very narrowly only to truck driving positions that are defined 
and regulated under Federal law. The bill also makes a number of 
additional technical changes, most of which are intended to correct 
drafting errors made in the 1996 FCRA Amendments,
  Mr. Speaker, the clarifications made by S. 2561 are supported by the 
Federal Trade Commission, they have been signed-off on by U.S. PIRG, 
and they have raised no objections among the major national consumer 
organizations.
  I urge that the House suspend the rules and adopt S. 2561.
  Mr. LUCAS of Oklahoma. Mr. Speaker, I rise today in strong support of 
the ``Consumer Reporting Employment Clarification Act of 1998.''
  I would like to thank Banking Committee Chairman Leach and Ranking 
Member LaFalce, House Leadership, Senators Connie Mack and Richard 
Bryan, and Senate Assistant Majority Leader Don Nickles--Oklahoma's 
Senior Senator--for their hard work on and their support of this 
legislation that will streamline the trucking industry's hiring of 
competent, professional, and safe truck drivers.
  Unfortunately, current Fair Credit Reporting Act (FCRA) regulations 
have forced the trucking industry to add multiple, unnecessary steps to 
its hiring procedures. Worse, because of burdensome paperwork 
requirements under these regulations, and because the industry is 
currently facing a critical shortage of drivers, many carriers have 
been forced to put drivers behind the wheel before their safety records 
can be verified. This is not what Congress intended when it enacted 
changes to the FCRA.
  This legislation will expedite the process by which employment 
background information is exchanged between truck company employers and 
truck drivers. Instead of having to obtain written consent from a 
potential employee to procure a consumer report, truck company 
employers will not be able to obtain a potential employee's consent by 
mail, over the telephone, or by means of computer or fax machine.
  I encourage my colleagues to support this bill. It has received the 
endorsement of the Federal Trade Commission--which enforces the FCRA--
major credit institutions, consumer advocacy groups, and is strongly 
supported by the American Truckers Association and by trucking 
companies and truckers in Oklahoma.
  Let's put highway safety before bureaucratic red tape and correct 
this safety problem immediately, and vote for this legislation.
  Again, I would like to thank those involved in the process of 
bringing this legislation to the floor.
  Mr. LaFALCE. Mr. Speaker, I yield back the balance of my time.
  Mr. LEACH. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Iowa (Mr. Leach) that the House suspend the rules and 
pass S. 2561.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate bill was passed.
  A motion to reconsider was laid on the table.

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