[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.
____________________