[Congressional Record Volume 149, Number 170 (Friday, November 21, 2003)]
[House]
[Pages H12198-H12224]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONFERENCE REPORT ON H.R. 2622, FAIR AND ACCURATE CREDIT TRANSACTIONS
ACT OF 2003
Mr. OXLEY (during consideration of H. Res. 458) submitted the
following conference report and statement on the bill (H.R. 2622) to
amend the Fair Credit Reporting Act, to prevent identity theft, improve
resolution of consumer disputes, improve the accuracy of consumer
records, make improvements in the use of, and consumer access to,
credit information, and for other purposes:
Conference Report (H. Rept. 108-396)
The committee of conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
2622), to amend the Fair Credit Reporting Act, to prevent
identity theft, improve resolution of consumer disputes,
improve the accuracy of consumer records, make improvements
in the use of, and consumer access to, credit information,
and for other purposes, having met, after full and free
conference, have agreed to recommend and do recommend to
their respective Houses as follows:
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an
amendment as follows:
In lieu of the matter proposed to be inserted by the Senate
amendment, insert the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Fair and
Accurate Credit Transactions Act of 2003''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Effective dates.
TITLE I--IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION
Subtitle A--Identity Theft Prevention
Sec. 111. Amendment to definitions.
Sec. 112. Fraud alerts and active duty alerts.
Sec. 113. Truncation of credit card and debit card account numbers.
Sec. 114. Establishment of procedures for the identification of
possible instances of identity theft.
Sec. 115. Authority to truncate social security numbers.
Subtitle B--Protection and Restoration of Identity Theft Victim Credit
History
Sec. 151. Summary of rights of identity theft victims.
Sec. 152. Blocking of information resulting from identity theft.
Sec. 153. Coordination of identity theft complaint investigations.
Sec. 154. Prevention of repollution of consumer reports.
Sec. 155. Notice by debt collectors with respect to fraudulent
information.
Sec. 156. Statute of limitations.
Sec. 157. Study on the use of technology to combat identity theft.
TITLE II--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
Sec. 211. Free consumer reports.
Sec. 212. Disclosure of credit scores.
Sec. 213. Enhanced disclosure of the means available to opt out of
prescreened lists.
Sec. 214. Affiliate sharing.
Sec. 215. Study of effects of credit scores and credit-based insurance
scores on availability and affordability of financial
products.
Sec. 216. Disposal of consumer report information and records.
Sec. 217. Requirement to disclose communications to a consumer
reporting agency.
TITLE III--ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION
Sec. 311. Risk-based pricing notice.
Sec. 312. Procedures to enhance the accuracy and integrity of
information furnished to consumer reporting agencies.
Sec. 313. FTC and consumer reporting agency action concerning
complaints.
Sec. 314. Improved disclosure of the results of reinvestigation.
Sec. 315. Reconciling addresses.
Sec. 316. Notice of dispute through reseller.
Sec. 317. Reasonable reinvestigation required.
Sec. 318. FTC study of issues relating to the Fair Credit Reporting
Act.
Sec. 319. FTC study of the accuracy of consumer reports.
TITLE IV--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE
FINANCIAL SYSTEM
Sec. 411. Protection of medical information in the financial system.
Sec. 412. Confidentiality of medical contact information in consumer
reports.
TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT
Sec. 511. Short title.
Sec. 512. Definitions.
Sec. 513. Establishment of Financial Literacy and Education Commission.
Sec. 514. Duties of the Commission.
Sec. 515. Powers of the Commission.
Sec. 516. Commission personnel matters.
Sec. 517. Studies by the Comptroller General.
Sec. 518. The national public service multimedia campaign to enhance
the state of financial literacy.
Sec. 519. Authorization of appropriations.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
Sec. 611. Certain employee investigation communications excluded from
definition of consumer report.
TITLE VII--RELATION TO STATE LAWS
Sec. 711. Relation to State laws.
TITLE VIII--MISCELLANEOUS
Sec. 811. Clerical amendments.
SEC. 2. DEFINITIONS.
As used in this Act--
(1) the term ``Board'' means the Board of Governors of the
Federal Reserve System;
(2) the term ``Commission'', other than as used in title V,
means the Federal Trade Commission;
(3) the terms ``consumer'', ``consumer report'', ``consumer
reporting agency'', ``creditor'', ``Federal banking
agencies'', and ``financial institution'' have the same
meanings as in section 603 of the Fair Credit Reporting Act,
as amended by this Act; and
(4) the term ``affiliates'' means persons that are related
by common ownership or affiliated by corporate control.
SEC. 3. EFFECTIVE DATES.
Except as otherwise specifically provided in this Act and
the amendments made by this Act--
(1) before the end of the 2-month period beginning on the
date of enactment of this Act, the Board and the Commission
shall jointly prescribe regulations in final form
establishing effective dates for each provision of this Act;
and
(2) the regulations prescribed under paragraph (1) shall
establish effective dates that are as early as possible,
while allowing a reasonable time for the implementation of
the provisions of this Act, but in no case shall any such
effective date be later than 10 months after the date of
issuance of such regulations in final form.
TITLE I--IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION
Subtitle A--Identity Theft Prevention
SEC. 111. AMENDMENT TO DEFINITIONS.
Section 603 of the Fair Credit Reporting Act (15 U.S.C.
1681a) is amended by adding at the end the following:
``(q) Definitions Relating to Fraud Alerts.--
``(1) Active duty military consumer.--The term `active duty
military consumer' means a consumer in military service who--
``(A) is on active duty (as defined in section 101(d)(1) of
title 10, United States Code) or is a reservist performing
duty under a call or order to active duty under a provision
of law referred to in section 101(a)(13) of title 10, United
States Code; and
``(B) is assigned to service away from the usual duty
station of the consumer.
[[Page H12199]]
``(2) Fraud alert; active duty alert.--The terms `fraud
alert' and `active duty alert' mean a statement in the file
of a consumer that--
``(A) notifies all prospective users of a consumer report
relating to the consumer that the consumer may be a victim of
fraud, including identity theft, or is an active duty
military consumer, as applicable; and
``(B) is presented in a manner that facilitates a clear and
conspicuous view of the statement described in subparagraph
(A) by any person requesting such consumer report.
``(3) Identity theft.--The term `identity theft' means a
fraud committed using the identifying information of another
person, subject to such further definition as the Commission
may prescribe, by regulation.
``(4) Identity theft report.--The term `identity theft
report' has the meaning given that term by rule of the
Commission, and means, at a minimum, a report--
``(A) that alleges an identity theft;
``(B) that is a copy of an official, valid report filed by
a consumer with an appropriate Federal, State, or local law
enforcement agency, including the United States Postal
Inspection Service, or such other government agency deemed
appropriate by the Commission; and
``(C) the filing of which subjects the person filing the
report to criminal penalties relating to the filing of false
information if, in fact, the information in the report is
false.
``(5) New credit plan.--The term `new credit plan' means a
new account under an open end credit plan (as defined in
section 103(i) of the Truth in Lending Act) or a new credit
transaction not under an open end credit plan.
``(r) Credit and Debit Related Terms--
``(1) Card issuer.--The term `card issuer' means--
``(A) a credit card issuer, in the case of a credit card;
and
``(B) a debit card issuer, in the case of a debit card.
``(2) Credit card.--The term `credit card' has the same
meaning as in section 103 of the Truth in Lending Act.
``(3) Debit card.--The term `debit card' means any card
issued by a financial institution to a consumer for use in
initiating an electronic fund transfer from the account of
the consumer at such financial institution, for the purpose
of transferring money between accounts or obtaining money,
property, labor, or services.
``(4) Account and electronic fund transfer.--The terms
`account' and `electronic fund transfer' have the same
meanings as in section 903 of the Electronic Fund Transfer
Act.
``(5) Credit and creditor.--The terms `credit' and
`creditor' have the same meanings as in section 702 of the
Equal Credit Opportunity Act.
``(s) Federal Banking Agency.--The term `Federal banking
agency' has the same meaning as in section 3 of the Federal
Deposit Insurance Act.
``(t) Financial Institution.--The term `financial
institution' means a State or National bank, a State or
Federal savings and loan association, a mutual savings bank,
a State or Federal credit union, or any other person that,
directly or indirectly, holds a transaction account (as
defined in section 19(b) of the Federal Reserve Act)
belonging to a consumer.
``(u) Reseller.--The term `reseller' means a consumer
reporting agency that--
``(1) assembles and merges information contained in the
database of another consumer reporting agency or multiple
consumer reporting agencies concerning any consumer for
purposes of furnishing such information to any third party,
to the extent of such activities; and
``(2) does not maintain a database of the assembled or
merged information from which new consumer reports are
produced.
``(v) Commission.--The term `Commission' means the Federal
Trade Commission.
``(w) Nationwide Specialty Consumer Reporting Agency.--The
term `nationwide specialty consumer reporting agency' means a
consumer reporting agency that compiles and maintains files
on consumers on a nationwide basis relating to--
``(1) medical records or payments;
``(2) residential or tenant history;
``(3) check writing history;
``(4) employment history; or
``(5) insurance claims.''.
SEC. 112. FRAUD ALERTS AND ACTIVE DUTY ALERTS.
(a) Fraud Alerts.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended by inserting after section 605 the
following:
``Sec. 605A. Identity theft prevention; fraud alerts and
active duty alerts
``(a) One-Call Fraud Alerts.--
``(1) Initial alerts.--Upon the direct request of a
consumer, or an individual acting on behalf of or as a
personal representative of a consumer, who asserts in good
faith a suspicion that the consumer has been or is about to
become a victim of fraud or related crime, including identity
theft, a consumer reporting agency described in section
603(p) that maintains a file on the consumer and has received
appropriate proof of the identity of the requester shall--
``(A) include a fraud alert in the file of that consumer,
and also provide that alert along with any credit score
generated in using that file, for a period of not less than
90 days, beginning on the date of such request, unless the
consumer or such representative requests that such fraud
alert be removed before the end of such period, and the
agency has received appropriate proof of the identity of the
requester for such purpose; and
``(B) refer the information regarding the fraud alert under
this paragraph to each of the other consumer reporting
agencies described in section 603(p), in accordance with
procedures developed under section 621(f).
``(2) Access to free reports.--In any case in which a
consumer reporting agency includes a fraud alert in the file
of a consumer pursuant to this subsection, the consumer
reporting agency shall--
``(A) disclose to the consumer that the consumer may
request a free copy of the file of the consumer pursuant to
section 612(d); and
``(B) provide to the consumer all disclosures required to
be made under section 609, without charge to the consumer,
not later than 3 business days after any request described in
subparagraph (A).
``(b) Extended Alerts.--
``(1) In general.--Upon the direct request of a consumer,
or an individual acting on behalf of or as a personal
representative of a consumer, who submits an identity theft
report to a consumer reporting agency described in section
603(p) that maintains a file on the consumer, if the agency
has received appropriate proof of the identity of the
requester, the agency shall--
``(A) include a fraud alert in the file of that consumer,
and also provide that alert along with any credit score
generated in using that file, during the 7-year period
beginning on the date of such request, unless the consumer or
such representative requests that such fraud alert be
removed before the end of such period and the agency has
received appropriate proof of the identity of the
requester for such purpose;
``(B) during the 5-year period beginning on the date of
such request, exclude the consumer from any list of consumers
prepared by the consumer reporting agency and provided to any
third party to offer credit or insurance to the consumer as
part of a transaction that was not initiated by the consumer,
unless the consumer or such representative requests that such
exclusion be rescinded before the end of such period; and
``(C) refer the information regarding the extended fraud
alert under this paragraph to each of the other consumer
reporting agencies described in section 603(p), in accordance
with procedures developed under section 621(f).
``(2) Access to free reports.--In any case in which a
consumer reporting agency includes a fraud alert in the file
of a consumer pursuant to this subsection, the consumer
reporting agency shall--
``(A) disclose to the consumer that the consumer may
request 2 free copies of the file of the consumer pursuant to
section 612(d) during the 12-month period beginning on the
date on which the fraud alert was included in the file; and
``(B) provide to the consumer all disclosures required to
be made under section 609, without charge to the consumer,
not later than 3 business days after any request described in
subparagraph (A).
``(c) Active Duty Alerts.--Upon the direct request of an
active duty military consumer, or an individual acting on
behalf of or as a personal representative of an active duty
military consumer, a consumer reporting agency described in
section 603(p) that maintains a file on the active duty
military consumer and has received appropriate proof of the
identity of the requester shall--
``(1) include an active duty alert in the file of that
active duty military consumer, and also provide that alert
along with any credit score generated in using that file,
during a period of not less than 12 months, or such longer
period as the Commission shall determine, by regulation,
beginning on the date of the request, unless the active duty
military consumer or such representative requests that such
fraud alert be removed before the end of such period, and the
agency has received appropriate proof of the identity of the
requester for such purpose;
``(2) during the 2-year period beginning on the date of
such request, exclude the active duty military consumer from
any list of consumers prepared by the consumer reporting
agency and provided to any third party to offer credit or
insurance to the consumer as part of a transaction that was
not initiated by the consumer, unless the consumer requests
that such exclusion be rescinded before the end of such
period; and
``(3) refer the information regarding the active duty alert
to each of the other consumer reporting agencies described in
section 603(p), in accordance with procedures developed under
section 621(f).
``(d) Procedures.--Each consumer reporting agency described
in section 603(p) shall establish policies and procedures to
comply with this section, including procedures that inform
consumers of the availability of initial, extended, and
active duty alerts and procedures that allow consumers and
active duty military consumers to request initial, extended,
or active duty alerts (as applicable) in a simple and easy
manner, including by telephone.
``(e) Referrals of Alerts.--Each consumer reporting agency
described in section 603(p) that receives a referral of a
fraud alert or active duty alert from another consumer
reporting agency pursuant to this section shall, as though
the agency received the request from the consumer directly,
follow the procedures required under--
``(1) paragraphs (1)(A) and (2) of subsection (a), in the
case of a referral under subsection (a)(1)(B);
``(2) paragraphs (1)(A), (1)(B), and (2) of subsection (b),
in the case of a referral under subsection (b)(1)(C); and
``(3) paragraphs (1) and (2) of subsection (c), in the case
of a referral under subsection (c)(3).
``(f) Duty of Reseller To Reconvey Alert.--A reseller shall
include in its report any fraud alert or active duty alert
placed in the file of a consumer pursuant to this section by
another consumer reporting agency.
``(g) Duty of Other Consumer Reporting Agencies To Provide
Contact Information.--If a consumer contacts any consumer
reporting agency that is not described in section 603(p) to
communicate a suspicion that the consumer has been or is
about to become a victim of fraud or related crime, including
identity theft, the agency shall provide information to the
consumer on
[[Page H12200]]
how to contact the Commission and the consumer reporting
agencies described in section 603(p) to obtain more detailed
information and request alerts under this section.
``(h) Limitations on Use of Information for Credit
Extensions..--
``(1) Requirements for initial and active duty alerts.--
``(A) Notification.--Each initial fraud alert and active
duty alert under this section shall include information that
notifies all prospective users of a consumer report on the
consumer to which the alert relates that the consumer does
not authorize the establishment of any new credit plan or
extension of credit, other than under an open-end credit plan
(as defined in section 103(i)), in the name of the consumer,
or issuance of an additional card on an existing credit
account requested by a consumer, or any increase in credit
limit on an existing credit account requested by a consumer,
except in accordance with subparagraph (B).
``(B) Limitation on users.--
``(i) In general.--No prospective user of a consumer report
that includes an initial fraud alert or an active duty alert
in accordance with this section may establish a new credit
plan or extension of credit, other than under an open-end
credit plan (as defined in section 103(i)), in the name of
the consumer, or issue an additional card on an existing
credit account requested by a consumer, or grant any
increase in credit limit on an existing credit account
requested by a consumer, unless the user utilizes
reasonable policies and procedures to form a reasonable
belief that the user knows the identity of the person
making the request.
``(ii) Verification.--If a consumer requesting the alert
has specified a telephone number to be used for identity
verification purposes, before authorizing any new credit plan
or extension described in clause (i) in the name of such
consumer, a user of such consumer report shall contact the
consumer using that telephone number or take reasonable steps
to verify the consumer's identity and confirm that the
application for a new credit plan is not the result of
identity theft.
``(2) Requirements for extended alerts.--
``(A) Notification.--Each extended alert under this section
shall include information that provides all prospective users
of a consumer report relating to a consumer with--
``(i) notification that the consumer does not authorize the
establishment of any new credit plan or extension of credit
described in clause (i), other than under an open-end credit
plan (as defined in section 103(i)), in the name of the
consumer, or issuance of an additional card on an existing
credit account requested by a consumer, or any increase in
credit limit on an existing credit account requested by a
consumer, except in accordance with subparagraph (B); and
``(ii) a telephone number or other reasonable contact
method designated by the consumer.
``(B) Limitation on users.--No prospective user of a
consumer report or of a credit score generated using the
information in the file of a consumer that includes an
extended fraud alert in accordance with this section may
establish a new credit plan or extension of credit, other
than under an open-end credit plan (as defined in section
103(i)), in the name of the consumer, or issue an additional
card on an existing credit account requested by a consumer,
or any increase in credit limit on an existing credit account
requested by a consumer, unless the user contacts the
consumer in person or using the contact method described in
subparagraph (A)(ii) to confirm that the application for a
new credit plan or increase in credit limit, or request for
an additional card is not the result of identity theft.''.
(b) Rulemaking.--The Commission shall prescribe regulations
to define what constitutes appropriate proof of identity for
purposes of sections 605A, 605B, and 609(a)(1) of the Fair
Credit Reporting Act, as amended by this Act.
SEC. 113. TRUNCATION OF CREDIT CARD AND DEBIT CARD ACCOUNT
NUMBERS.
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) is amended by adding at the end the following:
``(g) Truncation of Credit Card and Debit Card Numbers.--
``(1) In general.--Except as otherwise provided in this
subsection, no person that accepts credit cards or debit
cards for the transaction of business shall print more than
the last 5 digits of the card number or the expiration date
upon any receipt provided to the cardholder at the point of
the sale or transaction.
``(2) Limitation.--This subsection shall apply only to
receipts that are electronically printed, and shall not apply
to transactions in which the sole means of recording a credit
card or debit card account number is by handwriting or by an
imprint or copy of the card.
``(3) Effective date.--This subsection shall become
effective--
``(A) 3 years after the date of enactment of this
subsection, with respect to any cash register or other
machine or device that electronically prints receipts for
credit card or debit card transactions that is in use before
January 1, 2005; and
``(B) 1 year after the date of enactment of this
subsection, with respect to any cash register or other
machine or device that electronically prints receipts for
credit card or debit card transactions that is first put into
use on or after January 1, 2005.''.
SEC. 114. ESTABLISHMENT OF PROCEDURES FOR THE IDENTIFICATION
OF POSSIBLE INSTANCES OF IDENTITY THEFT.
Section 615 of the Fair Credit Reporting Act (15 U.S.C.
1681m) is amended--
(1) by striking ``(e)'' at the end; and
(2) by adding at the end the following:
``(e) Red Flag Guidelines and Regulations Required.--
``(1) Guidelines.--The Federal banking agencies, the
National Credit Union Administration, and the Commission
shall jointly, with respect to the entities that are subject
to their respective enforcement authority under section 621--
``(A) establish and maintain guidelines for use by each
financial institution and each creditor regarding identity
theft with respect to account holders at, or customers of,
such entities, and update such guidelines as often as
necessary;
``(B) prescribe regulations requiring each financial
institution and each creditor to establish reasonable
policies and procedures for implementing the guidelines
established pursuant to subparagraph (A), to identify
possible risks to account holders or customers or to the
safety and soundness of the institution or customers; and
``(C) prescribe regulations applicable to card issuers to
ensure that, if a card issuer receives notification of a
change of address for an existing account, and within a short
period of time (during at least the first 30 days after such
notification is received) receives a request for an
additional or replacement card for the same account, the card
issuer may not issue the additional or replacement card,
unless the card issuer, in accordance with reasonable
policies and procedures--
``(i) notifies the cardholder of the request at the former
address of the cardholder and provides to the cardholder a
means of promptly reporting incorrect address changes;
``(ii) notifies the cardholder of the request by such other
means of communication as the cardholder and the card issuer
previously agreed to; or
``(iii) uses other means of assessing the validity of the
change of address, in accordance with reasonable policies and
procedures established by the card issuer in accordance with
the regulations prescribed under subparagraph (B).
``(2) Criteria.--
``(A) In general.--In developing the guidelines required by
paragraph (1)(A), the agencies described in paragraph (1)
shall identify patterns, practices, and specific forms of
activity that indicate the possible existence of identity
theft.
``(B) Inactive accounts.--In developing the guidelines
required by paragraph (1)(A), the agencies described in
paragraph (1) shall consider including reasonable guidelines
providing that when a transaction occurs with respect to a
credit or deposit account that has been inactive for more
than 2 years, the creditor or financial institution shall
follow reasonable policies and procedures that provide for
notice to be given to a consumer in a manner reasonably
designed to reduce the likelihood of identity theft with
respect to such account.
``(3) Consistency with verification requirements.--
Guidelines established pursuant to paragraph (1) shall not be
inconsistent with the policies and procedures required under
section 5318(l) of title 31, United States Code.''.
SEC. 115. AUTHORITY TO TRUNCATE SOCIAL SECURITY NUMBERS.
Section 609(a)(1) of the Fair Credit Reporting Act (15
U.S.C. 1681g(a)(1)) is amended by striking ``except that
nothing'' and inserting the following: ``except that--
``(A) if the consumer to whom the file relates requests
that the first 5 digits of the social security number (or
similar identification number) of the consumer not be
included in the disclosure and the consumer reporting agency
has received appropriate proof of the identity of the
requester, the consumer reporting agency shall so truncate
such number in such disclosure; and
``(B) nothing''.
Subtitle B--Protection and Restoration of Identity Theft Victim Credit
History
SEC. 151. SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS.
(a) In General.--
(1) Summary.--Section 609 of the Fair Credit Reporting Act
(15 U.S.C. 1681g) is amended by adding at the end the
following:
``(d) Summary of Rights of Identity Theft Victims.--
``(1) In general.--The Commission, in consultation with the
Federal banking agencies and the National Credit Union
Administration, shall prepare a model summary of the rights
of consumers under this title with respect to the procedures
for remedying the effects of fraud or identity theft
involving credit, an electronic fund transfer, or an account
or transaction at or with a financial institution or other
creditor.
``(2) Summary of rights and contact information.--Beginning
60 days after the date on which the model summary of rights
is prescribed in final form by the Commission pursuant to
paragraph (1), if any consumer contacts a consumer reporting
agency and expresses a belief that the consumer is a victim
of fraud or identity theft involving credit, an electronic
fund transfer, or an account or transaction at or with a
financial institution or other creditor, the consumer
reporting agency shall, in addition to any other action that
the agency may take, provide the consumer with a summary of
rights that contains all of the information required by the
Commission under paragraph (1), and information on how to
contact the Commission to obtain more detailed information.
``(e) Information Available to Victims.--
``(1) In general.--For the purpose of documenting
fraudulent transactions resulting from identity theft, not
later than 30 days after the date of receipt of a request
from a victim in accordance with paragraph (3), and subject
to verification of the identity of the victim and the claim
of identity theft in accordance with paragraph (2), a
business entity that has provided credit to, provided for
consideration products, goods, or services to, accepted
payment from, or otherwise entered into a commercial
transaction for consideration with, a person who has
allegedly made unauthorized use of the means of
identification of the victim, shall provide a copy
[[Page H12201]]
of application and business transaction records in the
control of the business entity, whether maintained by the
business entity or by another person on behalf of the
business entity, evidencing any transaction alleged to be a
result of identity theft to--
``(A) the victim;
``(B) any Federal, State, or local government law
enforcement agency or officer specified by the victim in such
a request; or
``(C) any law enforcement agency investigating the identity
theft and authorized by the victim to take receipt of records
provided under this subsection.
``(2) Verification of identity and claim.--Before a
business entity provides any information under paragraph (1),
unless the business entity, at its discretion, otherwise has
a high degree of confidence that it knows the identity of the
victim making a request under paragraph (1), the victim shall
provide to the business entity--
``(A) as proof of positive identification of the victim, at
the election of the business entity--
``(i) the presentation of a government-issued
identification card;
``(ii) personally identifying information of the same type
as was provided to the business entity by the unauthorized
person; or
``(iii) personally identifying information that the
business entity typically requests from new applicants or for
new transactions, at the time of the victim's request for
information, including any documentation described in clauses
(i) and (ii); and
``(B) as proof of a claim of identity theft, at the
election of the business entity--
``(i) a copy of a police report evidencing the claim of the
victim of identity theft; and
``(ii) a properly completed--
``(I) copy of a standardized affidavit of identity theft
developed and made available by the Commission; or
``(II) an affidavit of fact that is acceptable to the
business entity for that purpose.
``(3) Procedures.--The request of a victim under paragraph
(1) shall--
``(A) be in writing;
``(B) be mailed to an address specified by the business
entity, if any; and
``(C) if asked by the business entity, include relevant
information about any transaction alleged to be a result of
identity theft to facilitate compliance with this section
including--
``(i) if known by the victim (or if readily obtainable by
the victim), the date of the application or transaction; and
``(ii) if known by the victim (or if readily obtainable by
the victim), any other identifying information such as an
account or transaction number.
``(4) No charge to victim.--Information required to be
provided under paragraph (1) shall be so provided without
charge.
``(5) Authority to decline to provide information.--A
business entity may decline to provide information under
paragraph (1) if, in the exercise of good faith, the business
entity determines that--
``(A) this subsection does not require disclosure of the
information;
``(B) after reviewing the information provided pursuant to
paragraph (2), the business entity does not have a high
degree of confidence in knowing the true identity of the
individual requesting the information;
``(C) the request for the information is based on a
misrepresentation of fact by the individual requesting the
information relevant to the request for information; or
``(D) the information requested is Internet navigational
data or similar information about a person's visit to a
website or online service.
``(6) Limitation on liability.--Except as provided in
section 621, sections 616 and 617 do not apply to any
violation of this subsection.
``(7) Limitation on civil liability.--No business entity
may be held civilly liable under any provision of Federal,
State, or other law for disclosure, made in good faith
pursuant to this subsection.
``(8) No new recordkeeping obligation.--Nothing in this
subsection creates an obligation on the part of a business
entity to obtain, retain, or maintain information or records
that are not otherwise required to be obtained, retained, or
maintained in the ordinary course of its business or under
other applicable law.
``(9) Rule of construction.--
``(A) In general.--No provision of subtitle A of title V of
Public Law 106-102, prohibiting the disclosure of financial
information by a business entity to third parties shall be
used to deny disclosure of information to the victim under
this subsection.
``(B) Limitation.--Except as provided in subparagraph (A),
nothing in this subsection permits a business entity to
disclose information, including information to law
enforcement under subparagraphs (B) and (C) of paragraph (1),
that the business entity is otherwise prohibited from
disclosing under any other applicable provision of Federal or
State law.
``(10) Affirmative defense.--In any civil action brought to
enforce this subsection, it is an affirmative defense (which
the defendant must establish by a preponderance of the
evidence) for a business entity to file an affidavit or
answer stating that--
``(A) the business entity has made a reasonably diligent
search of its available business records; and
``(B) the records requested under this subsection do not
exist or are not reasonably available.
``(11) Definition of victim.--For purposes of this
subsection, the term `victim' means a consumer whose means of
identification or financial information has been used or
transferred (or has been alleged to have been used or
transferred) without the authority of that consumer, with the
intent to commit, or to aid or abet, an identity theft or a
similar crime.
``(12) Effective date.--This subsection shall become
effective 180 days after the date of enactment of this
subsection.
``(13) Effectiveness study.--Not later than 18 months after
the date of enactment of this subsection, the Comptroller
General of the United States shall submit a report to
Congress assessing the effectiveness of this provision.''.
(2) Relation to state laws.--Section 625(b)(1) of the Fair
Credit Reporting Act (15 U.S.C. 1681t(b)(1), as so
redesignated) is amended by adding at the end the following
new subparagraph:
``(G) section 609(e), relating to information available to
victims under section 609(e);''.
(b) Public Campaign To Prevent Identity Theft.--Not later
than 2 years after the date of enactment of this Act, the
Commission shall establish and implement a media and
distribution campaign to teach the public how to prevent
identity theft. Such campaign shall include existing
Commission education materials, as well as radio, television,
and print public service announcements, video cassettes,
interactive digital video discs (DVD's) or compact audio
discs (CD's), and Internet resources.
SEC. 152. BLOCKING OF INFORMATION RESULTING FROM IDENTITY
THEFT.
(a) In General.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended by inserting after section 605A, as
added by this Act, the following:
``Sec. 605B. Block of information resulting from identity
theft
``(a) Block.--Except as otherwise provided in this section,
a consumer reporting agency shall block the reporting of any
information in the file of a consumer that the consumer
identifies as information that resulted from an alleged
identity theft, not later than 4 business days after the date
of receipt by such agency of--
``(1) appropriate proof of the identity of the consumer;
``(2) a copy of an identity theft report;
``(3) the identification of such information by the
consumer; and
``(4) a statement by the consumer that the information is
not information relating to any transaction by the consumer.
``(b) Notification.--A consumer reporting agency shall
promptly notify the furnisher of information identified by
the consumer under subsection (a)--
``(1) that the information may be a result of identity
theft;
``(2) that an identity theft report has been filed;
``(3) that a block has been requested under this section;
and
``(4) of the effective dates of the block.
``(c) Authority To Decline or Rescind.--
``(1) In general.--A consumer reporting agency may decline
to block, or may rescind any block, of information relating
to a consumer under this section, if the consumer reporting
agency reasonably determines that--
``(A) the information was blocked in error or a block was
requested by the consumer in error;
``(B) the information was blocked, or a block was requested
by the consumer, on the basis of a material misrepresentation
of fact by the consumer relevant to the request to block; or
``(C) the consumer obtained possession of goods, services,
or money as a result of the blocked transaction or
transactions.
``(2) Notification to consumer.--If a block of information
is declined or rescinded under this subsection, the affected
consumer shall be notified promptly, in the same manner as
consumers are notified of the reinsertion of information
under section 611(a)(5)(B).
``(3) Significance of block.--For purposes of this
subsection, if a consumer reporting agency rescinds a block,
the presence of information in the file of a consumer prior
to the blocking of such information is not evidence of
whether the consumer knew or should have known that the
consumer obtained possession of any goods, services, or money
as a result of the block.
``(d) Exception for Resellers.--
``(1) No reseller file.--This section shall not apply to a
consumer reporting agency, if the consumer reporting agency--
``(A) is a reseller;
``(B) is not, at the time of the request of the consumer
under subsection (a), otherwise furnishing or reselling a
consumer report concerning the information identified by the
consumer; and
``(C) informs the consumer, by any means, that the consumer
may report the identity theft to the Commission to obtain
consumer information regarding identity theft.
``(2) Reseller with file.--The sole obligation of the
consumer reporting agency under this section, with regard to
any request of a consumer under this section, shall be to
block the consumer report maintained by the consumer
reporting agency from any subsequent use, if--
``(A) the consumer, in accordance with the provisions of
subsection (a), identifies, to a consumer reporting agency,
information in the file of the consumer that resulted from
identity theft; and
``(B) the consumer reporting agency is a reseller of the
identified information.
``(3) Notice.--In carrying out its obligation under
paragraph (2), the reseller shall promptly provide a notice
to the consumer of the decision to block the file. Such
notice shall contain the name, address, and telephone number
of each consumer reporting agency from which the consumer
information was obtained for resale.
``(e) Exception for Verification Companies.--The provisions
of this section do not apply to a check services company,
acting as such, which issues authorizations for the purpose
of approving or processing negotiable instruments, electronic
fund transfers, or similar methods of payments, except that,
beginning 4 business days after receipt of information
described in paragraphs (1) through (3) of subsection (a), a
check services company shall not
[[Page H12202]]
report to a national consumer reporting agency described in
section 603(p), any information identified in the subject
identity theft report as resulting from identity theft.
``(f) Access to Blocked Information by Law Enforcement
Agencies.--No provision of this section shall be construed as
requiring a consumer reporting agency to prevent a Federal,
State, or local law enforcement agency from accessing blocked
information in a consumer file to which the agency could
otherwise obtain access under this title.''.
(b) Clerical Amendment.--The table of sections for the Fair
Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by
inserting after the item relating to section 605 the
following new items:
``605A. Identity theft prevention; fraud alerts and active duty alerts.
``605B. Block of information resulting from identity theft.''.
SEC. 153. COORDINATION OF IDENTITY THEFT COMPLAINT
INVESTIGATIONS.
Section 621 of the Fair Credit Reporting Act (15 U.S.C.
1681s) is amended by adding at the end the following:
``(f) Coordination of Consumer Complaint Investigations.--
``(1) In general.--Each consumer reporting agency described
in section 603(p) shall develop and maintain procedures for
the referral to each other such agency of any consumer
complaint received by the agency alleging identity theft, or
requesting a fraud alert under section 605A or a block under
section 605B.
``(2) Model form and procedure for reporting identity
theft.--The Commission, in consultation with the Federal
banking agencies and the National Credit Union
Administration, shall develop a model form and model
procedures to be used by consumers who are victims of
identity theft for contacting and informing creditors and
consumer reporting agencies of the fraud.
``(3) Annual summary reports.--Each consumer reporting
agency described in section 603(p) shall submit an annual
summary report to the Commission on consumer complaints
received by the agency on identity theft or fraud alerts.''.
SEC. 154. PREVENTION OF REPOLLUTION OF CONSUMER REPORTS.
(a) Prevention of Reinsertion of Erroneous Information.--
Section 623(a) of the Fair Credit Reporting Act (15 U.S.C.
1681s-2(a)) is amended by adding at the end the following:
``(6) Duties of furnishers upon notice of identity theft-
related information.--
``(A) Reasonable procedures.--A person that furnishes
information to any consumer reporting agency shall have in
place reasonable procedures to respond to any notification
that it receives from a consumer reporting agency under
section 605B relating to information resulting from identity
theft, to prevent that person from refurnishing such blocked
information.
``(B) Information alleged to result from identity theft.--
If a consumer submits an identity theft report to a person
who furnishes information to a consumer reporting agency at
the address specified by that person for receiving such
reports stating that information maintained by such person
that purports to relate to the consumer resulted from
identity theft, the person may not furnish such information
that purports to relate to the consumer to any consumer
reporting agency, unless the person subsequently knows or is
informed by the consumer that the information is correct.''.
(b) Prohibition on Sale or Transfer of Debt Caused by
Identity Theft.--Section 615 of the Fair Credit Reporting Act
(15 U.S.C. 1681m), as amended by this Act, is amended by
adding at the end the following:
``(f) Prohibition on Sale or Transfer of Debt Caused by
Identity Theft.--
``(1) In general.--No person shall sell, transfer for
consideration, or place for collection a debt that such
person has been notified under section 605B has resulted from
identity theft.
``(2) Applicability.--The prohibitions of this subsection
shall apply to all persons collecting a debt described in
paragraph (1) after the date of a notification under
paragraph (1).
``(3) Rule of construction.--Nothing in this subsection
shall be construed to prohibit--
``(A) the repurchase of a debt in any case in which the
assignee of the debt requires such repurchase because the
debt has resulted from identity theft;
``(B) the securitization of a debt or the pledging of a
portfolio of debt as collateral in connection with a
borrowing; or
``(C) the transfer of debt as a result of a merger,
acquisition, purchase and assumption transaction, or transfer
of substantially all of the assets of an entity.''.
SEC. 155. NOTICE BY DEBT COLLECTORS WITH RESPECT TO
FRAUDULENT INFORMATION.
Section 615 of the Fair Credit Reporting Act (15 U.S.C.
1681m), as amended by this Act, is amended by adding at the
end the following:
``(g) Debt Collector Communications Concerning Identity
Theft.--If a person acting as a debt collector (as that term
is defined in title VIII) on behalf of a third party that is
a creditor or other user of a consumer report is notified
that any information relating to a debt that the person is
attempting to collect may be fraudulent or may be the result
of identity theft, that person shall--
``(1) notify the third party that the information may be
fraudulent or may be the result of identity theft; and
``(2) upon request of the consumer to whom the debt
purportedly relates, provide to the consumer all information
to which the consumer would otherwise be entitled if the
consumer were not a victim of identity theft, but wished to
dispute the debt under provisions of law applicable to that
person.''.
SEC. 156. STATUTE OF LIMITATIONS.
Section 618 of the Fair Credit Reporting Act (15 U.S.C.
1681p) is amended to read as follows:
``Sec. 618. Jurisdiction of courts; limitation of actions
``An action to enforce any liability created under this
title may be brought in any appropriate United States
district court, without regard to the amount in controversy,
or in any other court of competent jurisdiction, not later
than the earlier of--
``(1) 2 years after the date of discovery by the plaintiff
of the violation that is the basis for such liability; or
``(2) 5 years after the date on which the violation that is
the basis for such liability occurs.''.
SEC. 157. STUDY ON THE USE OF TECHNOLOGY TO COMBAT IDENTITY
THEFT.
(a) Study Required.--The Secretary of the Treasury shall
conduct a study of the use of biometrics and other similar
technologies to reduce the incidence and costs to society of
identity theft by providing convincing evidence of who
actually performed a given financial transaction.
(b) Consultation.--The Secretary of the Treasury shall
consult with Federal banking agencies, the Commission, and
representatives of financial institutions, consumer reporting
agencies, Federal, State, and local government agencies that
issue official forms or means of identification, State
prosecutors, law enforcement agencies, the biometric
industry, and the general public in formulating and
conducting the study required by subsection (a).
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of the Treasury for
fiscal year 2004, such sums as may be necessary to carry out
the provisions of this section.
(d) Report Required.--Before the end of the 180-day period
beginning on the date of enactment of this Act, the Secretary
shall submit a report to Congress containing the findings
and conclusions of the study required under subsection
(a), together with such recommendations for legislative or
administrative actions as may be appropriate.
TITLE II--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
SEC. 211. FREE CONSUMER REPORTS.
(a) In General.--Section 612 of the Fair Credit Reporting
Act (15 U.S.C. 1681j) is amended--
(1) by redesignating subsection (a) as subsection (f), and
transferring it to the end of the section;
(2) by inserting before subsection (b) the following:
``(a) Free Annual Disclosure.--
``(1) Nationwide consumer reporting agencies.--
``(A) In general.--All consumer reporting agencies
described in subsections (p) and (w) of section 603 shall
make all disclosures pursuant to section 609 once during any
12-month period upon request of the consumer and without
charge to the consumer.
``(B) Centralized source.--Subparagraph (A) shall apply
with respect to a consumer reporting agency described in
section 603(p) only if the request from the consumer is made
using the centralized source established for such purpose in
accordance with section 211(c) of the Fair and Accurate
Credit Transactions Act of 2003.
``(C) Nationwide specialty consumer reporting agency.--
``(i) In general.--The Commission shall prescribe
regulations applicable to each consumer reporting agency
described in section 603(w) to require the establishment of a
streamlined process for consumers to request consumer reports
under subparagraph (A), which shall include, at a minimum,
the establishment by each such agency of a toll-free
telephone number for such requests.
``(ii) Considerations.--In prescribing regulations under
clause (i), the Commission shall consider--
``(I) the significant demands that may be placed on
consumer reporting agencies in providing such consumer
reports;
``(II) appropriate means to ensure that consumer reporting
agencies can satisfactorily meet those demands, including the
efficacy of a system of staggering the availability to
consumers of such consumer reports; and
``(III) the ease by which consumers should be able to
contact consumer reporting agencies with respect to access to
such consumer reports.
``(iii) Date of issuance.--The Commission shall issue the
regulations required by this subparagraph in final form not
later than 6 months after the date of enactment of the Fair
and Accurate Credit Transactions Act of 2003.
``(iv) Consideration of ability to comply.--The regulations
of the Commission under this subparagraph shall establish an
effective date by which each nationwide specialty consumer
reporting agency (as defined in section 603(w)) shall be
required to comply with subsection (a), which effective
date--
``(I) shall be established after consideration of the
ability of each nationwide specialty consumer reporting
agency to comply with subsection (a); and
``(II) shall be not later than 6 months after the date on
which such regulations are issued in final form (or such
additional period not to exceed 3 months, as the Commission
determines appropriate).
``(2) Timing.--A consumer reporting agency shall provide a
consumer report under paragraph (1) not later than 15 days
after the date on which the request is received under
paragraph (1).
``(3) Reinvestigations.--Notwithstanding the time periods
specified in section 611(a)(1), a reinvestigation under that
section by a consumer
[[Page H12203]]
reporting agency upon a request of a consumer that is made
after receiving a consumer report under this subsection shall
be completed not later than 45 days after the date on which
the request is received.
``(4) Exception for first 12 months of operation.--This
subsection shall not apply to a consumer reporting agency
that has not been furnishing consumer reports to third
parties on a continuing basis during the 12-month period
preceding a request under paragraph (1), with respect to
consumers residing nationwide.'';
(3) by redesignating subsection (d) as subsection (e);
(4) by inserting before subsection (e), as redesignated,
the following:
``(d) Free Disclosures in Connection With Fraud Alerts.--
Upon the request of a consumer, a consumer reporting agency
described in section 603(p) shall make all disclosures
pursuant to section 609 without charge to the consumer, as
provided in subsections (a)(2) and (b)(2) of section 605A, as
applicable.'';
(5) in subsection (e), as redesignated, by striking
``subsection (a)'' and inserting ``subsection (f)''; and
(6) in subsection (f), as redesignated, by striking
``Except as provided in subsections (b), (c), and (d), a''
and inserting ``In the case of a request from a consumer
other than a request that is covered by any of subsections
(a) through (d), a''.
(b) Circumvention Prohibited.--The Fair Credit Reporting
Act (15 U.S.C. 1681 et seq.) is amended by adding after
section 628, as added by section 216 of this Act, the
following new section:
``Sec. 629. Corporate and technological circumvention
prohibited
``The Commission shall prescribe regulations, to become
effective not later than 90 days after the date of enactment
of this section, to prevent a consumer reporting agency from
circumventing or evading treatment as a consumer reporting
agency described in section 603(p) for purposes of this
title, including--
``(1) by means of a corporate reorganization or
restructuring, including a merger, acquisition, dissolution,
divestiture, or asset sale of a consumer reporting agency; or
``(2) by maintaining or merging public record and credit
account information in a manner that is substantially
equivalent to that described in paragraphs (1) and (2) of
section 603(p), in the manner described in section 603(p).''.
(c) Summary of Rights To Obtain and Dispute Information in
Consumer Reports and To Obtain Credit Scores.--Section 609(c)
of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended
to read as follows:
``(c) Summary of Rights To Obtain and Dispute Information
in Consumer Reports and To Obtain Credit Scores.--
``(1) Commission summary of rights required.--
``(A) In general.--The Commission shall prepare a model
summary of the rights of consumers under this title.
``(B) Content of summary.--The summary of rights prepared
under subparagraph (A) shall include a description of--
``(i) the right of a consumer to obtain a copy of a
consumer report under subsection (a) from each consumer
reporting agency;
``(ii) the frequency and circumstances under which a
consumer is entitled to receive a consumer report without
charge under section 612;
``(iii) the right of a consumer to dispute information in
the file of the consumer under section 611;
``(iv) the right of a consumer to obtain a credit score
from a consumer reporting agency, and a description of how to
obtain a credit score;
``(v) the method by which a consumer can contact, and
obtain a consumer report from, a consumer reporting agency
without charge, as provided in the regulations of the
Commission prescribed under section 211(c) of the Fair and
Accurate Credit Transactions Act of 2003; and
``(vi) the method by which a consumer can contact, and
obtain a consumer report from, a consumer reporting agency
described in section 603(w), as provided in the regulations
of the Commission prescribed under section 612(a)(1)(C).
``(C) Availability of summary of rights.--The Commission
shall--
``(i) actively publicize the availability of the summary of
rights prepared under this paragraph;
``(ii) conspicuously post on its Internet website the
availability of such summary of rights; and
``(iii) promptly make such summary of rights available to
consumers, on request.
``(2) Summary of rights required to be included with agency
disclosures.--A consumer reporting agency shall provide to a
consumer, with each written disclosure by the agency to the
consumer under this section--
``(A) the summary of rights prepared by the Commission
under paragraph (1);
``(B) in the case of a consumer reporting agency described
in section 603(p), a toll-free telephone number established
by the agency, at which personnel are accessible to consumers
during normal business hours;
``(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;
``(D) a statement that the consumer may have additional
rights under State law, and that the consumer may wish to
contact a State or local consumer protection agency or a
State attorney general (or the equivalent thereof) to learn
of those rights; and
``(E) a statement that a consumer reporting agency is not
required to remove accurate derogatory information from the
file of a consumer, unless the information is outdated under
section 605 or cannot be verified.''.
(d) Rulemaking Required.--
(1) In general.--The Commission shall prescribe regulations
applicable to consumer reporting agencies described in
section 603(p) of the Fair Credit Reporting Act, to require
the establishment of--
(A) a centralized source through which consumers may obtain
a consumer report from each such consumer reporting agency,
using a single request, and without charge to the consumer,
as provided in section 612(a) of the Fair Credit Reporting
Act (as amended by this section); and
(B) a standardized form for a consumer to make such a
request for a consumer report by mail or through an Internet
website.
(2) Considerations.--In prescribing regulations under
paragraph (1), the Commission shall consider--
(A) the significant demands that may be placed on consumer
reporting agencies in providing such consumer reports;
(B) appropriate means to ensure that consumer reporting
agencies can satisfactorily meet those demands, including the
efficacy of a system of staggering the availability to
consumers of such consumer reports; and
(C) the ease by which consumers should be able to contact
consumer reporting agencies with respect to access to such
consumer reports.
(3) Centralized source.--The centralized source for a
request for a consumer report from a consumer required by
this subsection shall provide for--
(A) a toll-free telephone number for such purpose;
(B) use of an Internet website for such purpose; and
(C) a process for requests by mail for such purpose.
(4) Transition.--The regulations of the Commission under
paragraph (1) shall provide for an orderly transition by
consumer reporting agencies described in section 603(p) of
the Fair Credit Reporting Act to the centralized source for
consumer report distribution required by section
612(a)(1)(B), as amended by this section, in a manner that--
(A) does not temporarily overwhelm such consumer reporting
agencies with requests for disclosures of consumer reports
beyond their capacity to deliver; and
(B) does not deny creditors, other users, and consumers
access to consumer reports on a time-sensitive basis for
specific purposes, such as home purchases or suspicions of
identity theft, during the transition period.
(5) Timing.--Regulations required by this subsection
shall--
(A) be issued in final form not later than 6 months after
the date of enactment of this Act; and
(B) become effective not later than 6 months after the date
on which they are issued in final form.
(6) Scope of regulations.--
(A) In general.--The Commission shall, by rule, determine
whether to require a consumer reporting agency that compiles
and maintains files on consumers on substantially a
nationwide basis, other than one described in section 603(p)
of the Fair Credit Reporting Act, to make free consumer
reports available upon consumer request, and if so, whether
such consumer reporting agencies should make such free
reports available through the centralized source described in
paragraph (1)(A).
(B) Considerations.--Before making any determination under
subparagraph (A), the Commission shall consider--
(i) the number of requests for consumer reports to, and the
number of consumer reports generated by, the consumer
reporting agency, in comparison with consumer reporting
agencies described in subsections (p) and (w) of section 603
of the Fair Credit Reporting Act;
(ii) the overall scope of the operations of the consumer
reporting agency;
(iii) the needs of consumers for access to consumer reports
provided by consumer reporting agencies free of charge;
(iv) the costs of providing access to consumer reports by
consumer reporting agencies free of charge; and
(v) the effects on the ongoing competitive viability of
such consumer reporting agencies if such free access is
required.
SEC. 212. DISCLOSURE OF CREDIT SCORES.
(a) Statement on Availability of Credit Scores.--Section
609(a) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a))
is amended by adding at the end the following new paragraph:
``(6) If the consumer requests the credit file and not the
credit score, a statement that the consumer may request and
obtain a credit score.''.
(b) Disclosure of Credit Scores.--Section 609 of the Fair
Credit Reporting Act (15 U.S.C. 1681g), as amended by this
Act, is amended by adding at the end the following:
``(f) Disclosure of Credit Scores.--
``(1) In general.--Upon the request of a consumer for a
credit score, a consumer reporting agency shall supply to the
consumer a statement indicating that the information and
credit scoring model may be different than the credit score
that may be used by the lender, and a notice which shall
include--
``(A) the current credit score of the consumer or the most
recent credit score of the consumer that was previously
calculated by the credit reporting agency for a purpose
related to the extension of credit;
``(B) the range of possible credit scores under the model
used;
``(C) all of the key factors that adversely affected the
credit score of the consumer in the model used, the total
number of which shall not exceed 4, subject to paragraph (9);
``(D) the date on which the credit score was created; and
[[Page H12204]]
``(E) the name of the person or entity that provided the
credit score or credit file upon which the credit score was
created.
``(2) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Credit score.--The term `credit score'--
``(i) means a numerical value or a categorization derived
from a statistical tool or modeling system used by a person
who makes or arranges a loan to predict the likelihood of
certain credit behaviors, including default (and the
numerical value or the categorization derived from such
analysis may also be referred to as a `risk predictor' or
`risk score'); and
``(ii) does not include--
``(I) any mortgage score or rating of an automated
underwriting system that considers one or more factors in
addition to credit information, including the loan to value
ratio, the amount of down payment, or the financial assets of
a consumer; or
``(II) any other elements of the underwriting process or
underwriting decision.
``(B) Key factors.--The term `key factors' means all
relevant elements or reasons adversely affecting the credit
score for the particular individual, listed in the order of
their importance based on their effect on the credit score.
``(3) Timeframe and manner of disclosure.--The information
required by this subsection shall be provided in the same
timeframe and manner as the information described in
subsection (a).
``(4) Applicability to certain uses.--This subsection shall
not be construed so as to compel a consumer reporting agency
to develop or disclose a score if the agency does not--
``(A) distribute scores that are used in connection with
residential real property loans; or
``(B) develop scores that assist credit providers in
understanding the general credit behavior of a consumer and
predicting the future credit behavior of the consumer.
``(5) Applicability to credit scores developed by another
person.--
``(A) In general.--This subsection shall not be construed
to require a consumer reporting agency that distributes
credit scores developed by another person or entity to
provide a further explanation of them, or to process a
dispute arising pursuant to section 611, except that the
consumer reporting agency shall provide the consumer with the
name and address and website for contacting the person or
entity who developed the score or developed the methodology
of the score.
``(B) Exception.--This paragraph shall not apply to a
consumer reporting agency that develops or modifies scores
that are developed by another person or entity.
``(6) Maintenance of credit scores not required.--This
subsection shall not be construed to require a consumer
reporting agency to maintain credit scores in its files.
``(7) Compliance in certain cases.--In complying with this
subsection, a consumer reporting agency shall--
``(A) supply the consumer with a credit score that is
derived from a credit scoring model that is widely
distributed to users by that consumer reporting agency in
connection with residential real property loans or with a
credit score that assists the consumer in understanding the
credit scoring assessment of the credit behavior of the
consumer and predictions about the future credit behavior of
the consumer; and
``(B) a statement indicating that the information and
credit scoring model may be different than that used by the
lender.
``(8) Fair and reasonable fee.--A consumer reporting agency
may charge a fair and reasonable fee, as determined by the
Commission, for providing the information required under this
subsection.
``(9) Use of enquiries as a key factor.--If a key factor
that adversely affects the credit score of a consumer
consists of the number of enquiries made with respect to a
consumer report, that factor shall be included in the
disclosure pursuant to paragraph (1)(C) without regard to the
numerical limitation in such paragraph.''.
(c) Disclosure of Credit Scores by Certain Mortgage
Lenders.--Section 609 of the Fair Credit Reporting Act (15
U.S.C. 1681g), as amended by this Act, is amended by adding
at the end the following:
``(g) Disclosure of Credit Scores by Certain Mortgage
Lenders.--
``(1) In general.--Any person who makes or arranges loans
and who uses a consumer credit score, as defined in
subsection (f), in connection with an application initiated
or sought by a consumer for a closed end loan or the
establishment of an open end loan for a consumer purpose that
is secured by 1 to 4 units of residential real property
(hereafter in this subsection referred to as the `lender')
shall provide the following to the consumer as soon as
reasonably practicable:
``(A) Information required under subsection (f).--
``(i) In general.--A copy of the information identified in
subsection (f) that was obtained from a consumer reporting
agency or was developed and used by the user of the
information.
``(ii) Notice under subparagraph (D).--In addition to the
information provided to it by a third party that provided the
credit score or scores, a lender is only required to provide
the notice contained in subparagraph (D).
``(B) Disclosures in case of automated underwriting
system.--
``(i) In general.--If a person that is subject to this
subsection uses an automated underwriting system to
underwrite a loan, that person may satisfy the obligation to
provide a credit score by disclosing a credit score and
associated key factors supplied by a consumer reporting
agency.
``(ii) Numerical credit score.--However, if a numerical
credit score is generated by an automated underwriting system
used by an enterprise, and that score is disclosed to the
person, the score shall be disclosed to the consumer
consistent with subparagraph (C).
``(iii) Enterprise defined.--For purposes of this
subparagraph, the term `enterprise' has the same meaning as
in paragraph (6) of section 1303 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992.
``(C) Disclosures of credit scores not obtained from a
consumer reporting agency.--A person that is subject to the
provisions of this subsection and that uses a credit score,
other than a credit score provided by a consumer reporting
agency, may satisfy the obligation to provide a credit score
by disclosing a credit score and associated key factors
supplied by a consumer reporting agency.
``(D) Notice to home loan applicants.--A copy of the
following notice, which shall include the name, address, and
telephone number of each consumer reporting agency providing
a credit score that was used:
`` `notice to the home loan applicant
`` `In connection with your application for a home loan,
the lender must disclose to you the score that a consumer
reporting agency distributed to users and the lender used in
connection with your home loan, and the key factors affecting
your credit scores.
`` `The credit score is a computer generated summary
calculated at the time of the request and based on
information that a consumer reporting agency or lender has on
file. The scores are based on data about your credit history
and payment patterns. Credit scores are important because
they are used to assist the lender in determining whether you
will obtain a loan. They may also be used to determine what
interest rate you may be offered on the mortgage. Credit
scores can change over time, depending on your conduct, how
your credit history and payment patterns change, and how
credit scoring technologies change.
`` `Because the score is based on information in your
credit history, it is very important that you review the
credit-related information that is being furnished to make
sure it is accurate. Credit records may vary from one company
to another.
`` `If you have questions about your credit score or the
credit information that is furnished to you, contact the
consumer reporting agency at the address and telephone number
provided with this notice, or contact the lender, if the
lender developed or generated the credit score. The consumer
reporting agency plays no part in the decision to take any
action on the loan application and is unable to provide you
with specific reasons for the decision on a loan application.
`` `If you have questions concerning the terms of the loan,
contact the lender.'.
``(E) Actions not required under this subsection.--This
subsection shall not require any person to--
``(i) explain the information provided pursuant to
subsection (f);
``(ii) disclose any information other than a credit score
or key factors, as defined in subsection (f);
``(iii) disclose any credit score or related information
obtained by the user after a loan has closed;
``(iv) provide more than 1 disclosure per loan transaction;
or
``(v) provide the disclosure required by this subsection
when another person has made the disclosure to the consumer
for that loan transaction.
``(F) No obligation for content.--
``(i) In general.--The obligation of any person pursuant to
this subsection shall be limited solely to providing a copy
of the information that was received from the consumer
reporting agency.
``(ii) Limit on liability.--No person has liability under
this subsection for the content of that information or for
the omission of any information within the report provided by
the consumer reporting agency.
``(G) Person defined as excluding enterprise.--As used in
this subsection, the term `person' does not include an
enterprise (as defined in paragraph (6) of section 1303 of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992).
``(2) Prohibition on disclosure clauses null and void.--
``(A) In general.--Any provision in a contract that
prohibits the disclosure of a credit score by a person who
makes or arranges loans or a consumer reporting agency is
void.
``(B) No liability for disclosure under this subsection.--A
lender shall not have liability under any contractual
provision for disclosure of a credit score pursuant to this
subsection.''.
(d) Inclusion of Key Factor in Credit Score Information in
Consumer Report.--Section 605(d) of the Fair Credit Reporting
Act (15 U.S.C. 1681c(d)) is amended--
(1) by striking ``Disclosed.--Any consumer reporting
agency'' and inserting ``Disclosed.--
``(1) Title 11 information.--Any consumer reporting
agency''; and
(2) by adding at the end the following new paragraph:
``(2) Key factor in credit score information.--Any consumer
reporting agency that furnishes a consumer report that
contains any credit score or any other risk score or
predictor on any consumer shall include in the report a clear
and conspicuous statement that a key factor (as defined in
section 609(f)(2)(B)) that adversely affected such score or
predictor was the number of enquiries, if such a predictor
was in fact a key factor that adversely affected such score.
This paragraph shall not apply to a check services company,
acting as such, which issues authorizations for the purpose
of approving or processing negotiable instruments, electronic
[[Page H12205]]
fund transfers, or similar methods of payments, but only to
the extent that such company is engaged in such
activities.''.
(e) Technical and Conforming Amendments.--Section 625(b) of
the Fair Credit Reporting Act (15 U.S.C. 1681t(b)), as so
designated by section 214 of this Act, is amended--
(1) by striking ``or'' at the end of paragraph (2); and
(2) by striking paragraph (3) and inserting the following:
``(3) with respect to the disclosures required to be made
under subsection (c), (d), (e), or (g) of section 609, or
subsection (f) of section 609 relating to the disclosure of
credit scores for credit granting purposes, except that this
paragraph--
``(A) shall not apply with respect to sections 1785.10,
1785.16, and 1785.20.2 of the California Civil Code (as in
effect on the date of enactment of the Fair and Accurate
Credit Transactions Act of 2003) and section 1785.15 through
section 1785.15.2 of such Code (as in effect on such date);
``(B) shall not apply with respect to sections 5-3-106(2)
and 212-14.3-104.3 of the Colorado Revised Statutes (as in
effect on the date of enactment of the Fair and Accurate
Credit Transactions Act of 2003); and
``(C) shall not be construed as limiting, annulling,
affecting, or superseding any provision of the laws of any
State regulating the use in an insurance activity, or
regulating disclosures concerning such use, of a credit-based
insurance score of a consumer by any person engaged in the
business of insurance;
``(4) with respect to the frequency of any disclosure under
section 612(a), except that this paragraph shall not apply--
``(A) with respect to section 12-14.3-105(1)(d) of the
Colorado Revised Statutes (as in effect on the date of
enactment of the Fair and Accurate Credit Transactions Act of
2003);
``(B) with respect to section 10-1-393(29)(C) of the
Georgia Code (as in effect on the date of enactment of the
Fair and Accurate Credit Transactions Act of 2003);
``(C) with respect to section 1316.2 of title 10 of the
Maine Revised Statutes (as in effect on the date of enactment
of the Fair and Accurate Credit Transactions Act of 2003);
``(D) with respect to sections 14-1209(a)(1) and 14-
1209(b)(1)(i) of the Commercial Law Article of the Code of
Maryland (as in effect on the date of enactment of the Fair
and Accurate Credit Transactions Act of 2003);
``(E) with respect to section 59(d) and section 59(e) of
chapter 93 of the General Laws of Massachusetts (as in effect
on the date of enactment of the Fair and Accurate Credit
Transactions Act of 2003);
``(F) with respect to section 56:11-37.10(a)(1) of the New
Jersey Revised Statutes (as in effect on the date of
enactment of the Fair and Accurate Credit Transactions Act of
2003); or
``(G) with respect to section 2480c(a)(1) of title 9 of the
Vermont Statutes Annotated (as in effect on the date of
enactment of the Fair and Accurate Credit Transactions Act of
2003); or''.
SEC. 213. ENHANCED DISCLOSURE OF THE MEANS AVAILABLE TO OPT
OUT OF PRESCREENED LISTS.
(a) Notice and Response Format for Users of Reports.--
Section 615(d)(2) of the Fair Credit Reporting Act (15 U.S.C.
1681m(d)(2)) is amended to read as follows:
``(2) Disclosure of address and telephone number; format.--
A statement under paragraph (1) shall--
``(A) include the address and toll-free telephone number of
the appropriate notification system established under section
604(e); and
``(B) be presented in such format and in such type size and
manner as to be simple and easy to understand, as established
by the Commission, by rule, in consultation with the Federal
banking agencies and the National Credit Union
Administration.''.
(b) Rulemaking Schedule.--Regulations required by section
615(d)(2) of the Fair Credit Reporting Act, as amended by
this section, shall be issued in final form not later than 1
year after the date of enactment of this Act.
(c) Duration of Elections.--Section 604(e) of the Fair
Credit Reporting Act (15 U.S.C. 1681b(e)) is amended in each
of paragraphs (3)(A) and (4)(B)(i)), by striking ``2-year
period'' each place that term appears and inserting ``5-year
period''.
(d) Public Awareness Campaign.--The Commission shall
actively publicize and conspicuously post on its website any
address and the toll-free telephone number established as
part of a notification system for opting out of prescreening
under section 604(e) of the Fair Credit Reporting Act (15
U.S.C. 1681b(e)), and otherwise take measures to increase
public awareness regarding the availability of the right to
opt out of prescreening.
(e) Analysis of Further Restrictions on Offers of Credit or
Insurance.--
(1) In general.--The Board shall conduct a study of--
(A) the ability of consumers to avoid receiving written
offers of credit or insurance in connection with transactions
not initiated by the consumer; and
(B) the potential impact that any further restrictions on
providing consumers with such written offers of credit or
insurance would have on consumers.
(2) Report.--The Board shall submit a report summarizing
the results of the study required under paragraph (1) to the
Congress not later than 12 months after the date of enactment
of this Act, together with such recommendations for
legislative or administrative action as the Board may
determine to be appropriate.
(3) Content of report.--The report described in paragraph
(2) shall address the following issues:
(A) The current statutory or voluntary mechanisms that are
available to a consumer to notify lenders and insurance
providers that the consumer does not wish to receive written
offers of credit or insurance.
(B) The extent to which consumers are currently utilizing
existing statutory and voluntary mechanisms to avoid
receiving offers of credit or insurance.
(C) The benefits provided to consumers as a result of
receiving written offers of credit or insurance.
(D) Whether consumers incur significant costs or are
otherwise adversely affected by the receipt of written offers
of credit or insurance.
(E) Whether further restricting the ability of lenders and
insurers to provide written offers of credit or insurance to
consumers would affect--
(i) the cost consumers pay to obtain credit or insurance;
(ii) the availability of credit or insurance;
(iii) consumers' knowledge about new or alternative
products and services;
(iv) the ability of lenders or insurers to compete with one
another; and
(v) the ability to offer credit or insurance products to
consumers who have been traditionally underserved.
SEC. 214. AFFILIATE SHARING.
(a) Limitation.--The Fair Credit Reporting Act (15 U.S.C.
1601 et seq.) is amended--
(1) by redesignating sections 624 (15 U.S.C. 1681t), 625
(15 U.S.C. 1681u), and 626 (15 U.S.C. 6181v) as sections 625,
626, and 627, respectively; and
(2) by inserting after section 623 the following:
``Sec. 624. Affiliate sharing
``(a) Special Rule for Solicitation for Purposes of
Marketing.--
``(1) Notice.--Any person that receives from another person
related to it by common ownership or affiliated by corporate
control a communication of information that would be a
consumer report, but for clauses (i), (ii), and (iii) of
section 603(d)(2)(A), may not use the information to make a
solicitation for marketing purposes to a consumer about its
products or services, unless--
``(A) it is clearly and conspicuously disclosed to the
consumer that the information may be communicated among such
persons for purposes of making such solicitations to the
consumer; and
``(B) the consumer is provided an opportunity and a simple
method to prohibit the making of such solicitations to the
consumer by such person.
``(2) Consumer choice.--
``(A) In general.--The notice required under paragraph (1)
shall allow the consumer the opportunity to prohibit all
solicitations referred to in such paragraph, and may allow
the consumer to choose from different options when electing
to prohibit the sending of such solicitations, including
options regarding the types of entities and information
covered, and which methods of delivering solicitations the
consumer elects to prohibit.
``(B) Format.--Notwithstanding subparagraph (A), the notice
required under paragraph (1) shall be clear, conspicuous, and
concise, and any method provided under paragraph (1)(B) shall
be simple. The regulations prescribed to implement this
section shall provide specific guidance regarding how to
comply with such standards.
``(3) Duration.--
``(A) In general.--The election of a consumer pursuant to
paragraph (1)(B) to prohibit the making of solicitations
shall be effective for at least 5 years, beginning on the
date on which the person receives the election of the
consumer, unless the consumer requests that such election be
revoked.
``(B) Notice upon expiration of effective period.--At such
time as the election of a consumer pursuant to paragraph
(1)(B) is no longer effective, a person may not use
information that the person receives in the manner described
in paragraph (1) to make any solicitation for marketing
purposes to the consumer, unless the consumer receives a
notice and an opportunity, using a simple method, to extend
the opt-out for another period of at least 5 years, pursuant
to the procedures described in paragraph (1).
``(4) Scope.--This section shall not apply to a person--
``(A) using information to make a solicitation for
marketing purposes to a consumer with whom the person has a
pre-existing business relationship;
``(B) using information to facilitate communications to an
individual for whose benefit the person provides employee
benefit or other services pursuant to a contract with an
employer related to and arising out of the current employment
relationship or status of the individual as a participant or
beneficiary of an employee benefit plan;
``(C) using information to perform services on behalf of
another person related by common ownership or affiliated by
corporate control, except that this subparagraph shall not be
construed as permitting a person to send solicitations on
behalf of another person, if such other person would not be
permitted to send the solicitation on its own behalf as a
result of the election of the consumer to prohibit
solicitations under paragraph (1)(B);
``(D) using information in response to a communication
initiated by the consumer;
``(E) using information in response to solicitations
authorized or requested by the consumer; or
``(F) if compliance with this section by that person would
prevent compliance by that person with any provision of State
insurance laws pertaining to unfair discrimination in any
State in which the person is lawfully doing business.
``(5) No retroactivity.--This subsection shall not prohibit
the use of information to send a solicitation to a consumer
if such information was received prior to the date on which
persons are required to comply with regulations implementing
this subsection.
[[Page H12206]]
``(b) Notice for Other Purposes Permissible.--A notice or
other disclosure under this section may be coordinated and
consolidated with any other notice required to be issued
under any other provision of law by a person that is subject
to this section, and a notice or other disclosure that is
equivalent to the notice required by subsection (a), and that
is provided by a person described in subsection (a) to a
consumer together with disclosures required by any other
provision of law, shall satisfy the requirements of
subsection (a).
``(c) User Requirements.--Requirements with respect to the
use by a person of information received from another person
related to it by common ownership or affiliated by corporate
control, such as the requirements of this section, constitute
requirements with respect to the exchange of information
among persons affiliated by common ownership or common
corporate control, within the meaning of section 625(b)(2).
``(d) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Pre-existing business relationship.--The term `pre-
existing business relationship' means a relationship between
a person, or a person's licensed agent, and a consumer, based
on--
``(A) a financial contract between a person and a consumer
which is in force;
``(B) the purchase, rental, or lease by the consumer of
that person's goods or services, or a financial transaction
(including holding an active account or a policy in force or
having another continuing relationship) between the consumer
and that person during the 18-month period immediately
preceding the date on which the consumer is sent a
solicitation covered by this section;
``(C) an inquiry or application by the consumer regarding a
product or service offered by that person, during the 3-month
period immediately preceding the date on which the consumer
is sent a solicitation covered by this section; or
``(D) any other pre-existing customer relationship defined
in the regulations implementing this section.
``(2) Solicitation.--The term `solicitation' means the
marketing of a product or service initiated by a person to a
particular consumer that is based on an exchange of
information described in subsection (a), and is intended to
encourage the consumer to purchase such product or service,
but does not include communications that are directed at the
general public or determined not to be a solicitation by the
regulations prescribed under this section.''.
(b) Rulemaking Required.--
(1) In general.--The Federal banking agencies, the National
Credit Union Administration, and the Commission, with respect
to the entities that are subject to their respective
enforcement authority under section 621 of the Fair Credit
Reporting Act and the Securities and Exchange Commission, and
in coordination as described in paragraph (2), shall
prescribe regulations to implement section 624 of the Fair
Credit Reporting Act, as added by this section.
(2) Coordination.--Each agency required to prescribe
regulations under paragraph (1) shall consult and coordinate
with each other such agency so that, to the extent possible,
the regulations prescribed by each such entity are consistent
and comparable with the regulations prescribed by each other
such agency.
(3) Considerations.--In promulgating regulations under this
subsection, each agency referred to in paragraph (1) shall--
(A) ensure that affiliate sharing notification methods
provide a simple means for consumers to make determinations
and choices under section 624 of the Fair Credit Reporting
Act, as added by this section;
(B) consider the affiliate sharing notification practices
employed on the date of enactment of this Act by persons that
will be subject to that section 624; and
(C) ensure that notices and disclosures may be coordinated
and consolidated, as provided in subsection (b) of that
section 624.
(4) Timing.--Regulations required by this subsection
shall--
(A) be issued in final form not later than 9 months after
the date of enactment of this Act; and
(B) become effective not later than 6 months after the date
on which they are issued in final form.
(c) Technical and Conforming Amendments.--
(1) Definitions.--Section 603(d)(2)(A) of the Fair Credit
Reporting Act (15 U.S.C. 1681(d)(2)(A)) is amended by
inserting ``subject to section 624,'' after ``(A)''.
(2) Relation to state laws.--Section 625(b)(1) of the Fair
Credit Reporting Act (15 U.S.C. 1681t(b)(1)), as so
designated by subsection (a) of this section, is amended--
(A) by striking ``or'' after the semicolon at the end of
subparagraph (E); and
(B) by adding at the end the following new subparagraph:
``(H) section 624, relating to the exchange and use of
information to make a solicitation for marketing purposes;
or''.
(3) Cross reference correction.--Section 627(d) of the Fair
Credit Reporting Act (15 U.S.C. 1681v(d)), as so designated
by subsection (a) of this section, is amended by striking
``section 625'' and inserting ``section 626''.
(4) Table of sections.--The table of sections for title VI
of the Consumer Credit Protection Act (15 U.S.C. 1601 et
seq.) is amended by striking the items relating to sections
624 through 626 and inserting the following:
``624. Affiliate sharing.
``625. Relation to State laws.
``626. Disclosures to FBI for counterintelligence purposes.
``627. Disclosures to governmental agencies for counterintelligence
purposes.''
(e) Studies of Information Sharing Practices.--
(1) In general.--The Federal banking agencies, the National
Credit Union Administration, and the Commission shall jointly
conduct regular studies of the consumer information sharing
practices by financial institutions and other persons that
are creditors or users of consumer reports with their
affiliates.
(2) Matters for study.--In conducting the studies required
by paragraph (1), the agencies described in paragraph (1)
shall--
(A) identify--
(i) the purposes for which financial institutions and other
creditors and users of consumer reports share consumer
information;
(ii) the types of information shared by such entities with
their affiliates;
(iii) the number of choices provided to consumers with
respect to the control of such sharing, and the degree to and
manner in which consumers exercise such choices, if at all;
and
(iv) whether such entities share or may share personally
identifiable transaction or experience information with
affiliates for purposes--
(I) that are related to employment or hiring, including
whether the person that is the subject of such information is
given notice of such sharing, and the specific uses of such
shared information; or
(II) of general publication of such information; and
(B) specifically examine the information sharing practices
that financial institutions and other creditors and users of
consumer reports and their affiliates employ for the purpose
of making underwriting decisions or credit evaluations of
consumers.
(3) Reports.--
(A) Initial report.--Not later than 3 years after the date
of enactment of this Act, the Federal banking agencies, the
National Credit Union Administration, and the Commission
shall jointly submit a report to the Congress on the results
of the initial study conducted in accordance with this
subsection, together with any recommendations for legislative
or regulatory action.
(B) Followup reports.--The Federal banking agencies, the
National Credit Union Administration, and the Commission
shall, not less frequently than once every 3 years following
the date of submission of the initial report under
subparagraph (A), jointly submit a report to the Congress
that, together with any recommendations for legislative or
regulatory action--
(i) documents any changes in the areas of study referred to
in paragraph (2)(A) occurring since the date of submission of
the previous report;
(ii) identifies any changes in the practices of financial
institutions and other creditors and users of consumer
reports in sharing consumer information with their affiliates
for the purpose of making underwriting decisions or credit
evaluations of consumers occurring since the date of
submission of the previous report; and
(iii) examines the effects that changes described in clause
(ii) have had, if any, on the degree to which such affiliate
sharing practices reduce the need for financial institutions,
creditors, and other users of consumer reports to rely on
consumer reports for such decisions.
SEC. 215. STUDY OF EFFECTS OF CREDIT SCORES AND CREDIT-BASED
INSURANCE SCORES ON AVAILABILITY AND
AFFORDABILITY OF FINANCIAL PRODUCTS.
(a) Study Required.--The Commission and the Board, in
consultation with the Office of Fair Housing and Equal
Opportunity of the Department of Housing and Urban
Development, shall conduct a study of--
(1) the effects of the use of credit scores and credit-
based insurance scores on the availability and affordability
of financial products and services, including credit cards,
mortgages, auto loans, and property and casualty insurance;
(2) the statistical relationship, utilizing a multivariate
analysis that controls for prohibited factors under the Equal
Credit Opportunity Act and other known risk factors, between
credit scores and credit-based insurance scores and the
quantifiable risks and actual losses experienced by
businesses;
(3) the extent to which, if any, the use of credit scoring
models, credit scores, and credit-based insurance scores
impact on the availability and affordability of credit and
insurance to the extent information is currently available or
is available through proxies, by geography, income,
ethnicity, race, color, religion, national origin, age, sex,
marital status, and creed, including the extent to which the
consideration or lack of consideration of certain factors by
credit scoring systems could result in negative or
differential treatment of protected classes under the Equal
Credit Opportunity Act, and the extent to which, if any, the
use of underwriting systems relying on these models could
achieve comparable results through the use of factors with
less negative impact; and
(4) the extent to which credit scoring systems are used by
businesses, the factors considered by such systems, and the
effects of variables which are not considered by such
systems.
(b) Public Participation.--The Commission shall seek public
input about the prescribed methodology and research design of
the study described in subsection (a), including from
relevant Federal regulators, State insurance regulators,
community, civil rights, consumer, and housing groups.
(c) Report Required.--
(1) In general.--Before the end of the 24-month period
beginning on the date of enactment of this Act, the
Commission shall submit a detailed report on the study
conducted pursuant to subsection (a) to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.
[[Page H12207]]
(2) Contents of report.--The report submitted under
paragraph (1) shall include the findings and conclusions of
the Commission, recommendations to address specific areas of
concerns addressed in the study, and recommendations for
legislative or administrative action that the Commission may
determine to be necessary to ensure that credit and credit-
based insurance scores are used appropriately and fairly to
avoid negative effects.
SEC. 216. DISPOSAL OF CONSUMER REPORT INFORMATION AND
RECORDS.
(a) In General.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.), as amended by this Act, is amended by adding
at the end the following:
``Sec. 628. Disposal of records
``(a) Regulations.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Federal banking agencies, the
National Credit Union Administration, and the Commission with
respect to the entities that are subject to their respective
enforcement authority under section 621, and the Securities
and Exchange Commission, and in coordination as described in
paragraph (2), shall issue final regulations requiring any
person that maintains or otherwise possesses consumer
information, or any compilation of consumer information,
derived from consumer reports for a business purpose to
properly dispose of any such information or compilation.
``(2) Coordination.--Each agency required to prescribe
regulations under paragraph (1) shall--
``(A) consult and coordinate with each other such agency so
that, to the extent possible, the regulations prescribed by
each such agency are consistent and comparable with the
regulations by each such other agency; and
``(B) ensure that such regulations are consistent with the
requirements and regulations issued pursuant to Public Law
106-102 and other provisions of Federal law.
``(3) Exemption authority.--In issuing regulations under
this section, the Federal banking agencies, the National
Credit Union Administration, the Commission, and the
Securities and Exchange Commission may exempt any person or
class of persons from application of those regulations, as
such agency deems appropriate to carry out the purpose of
this section.
``(b) Rule of Construction.--Nothing in this section shall
be construed--
``(1) to require a person to maintain or destroy any record
pertaining to a consumer that is not imposed under other law;
or
``(2) to alter or affect any requirement imposed under any
other provision of law to maintain or destroy such a
record.''.
(b) Clerical Amendment.--The table of sections for title VI
of the Consumer Credit Protection Act (15 U.S.C. 1601 et
seq.) is amended by inserting after the item relating to
section 627, as added by section 214 of this Act, the
following:
``628. Disposal of records.
``629. Corporate and technological circumvention prohibited.''.
SEC. 217. REQUIREMENT TO DISCLOSE COMMUNICATIONS TO A
CONSUMER REPORTING AGENCY.
(a) In General.--Section 623(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681s-2(a)) as amended by this Act,
is amended by inserting after paragraph (6), the following
new paragraph:
``(7) Negative information.--
``(A) Notice to consumer required.--
``(i) In general.--If any financial institution that
extends credit and regularly and in the ordinary course of
business furnishes information to a consumer reporting agency
described in section 603(p) furnishes negative information to
such an agency regarding credit extended to a customer, the
financial institution shall provide a notice of such
furnishing of negative information, in writing, to the
customer.
``(ii) Notice effective for subsequent submissions.--After
providing such notice, the financial institution may submit
additional negative information to a consumer reporting
agency described in section 603(p) with respect to the same
transaction, extension of credit, account, or customer
without providing additional notice to the customer.
``(B) Time of notice.--
``(i) In general.--The notice required under subparagraph
(A) shall be provided to the customer prior to, or no later
than 30 days after, furnishing the negative information to a
consumer reporting agency described in section 603(p).
``(ii) Coordination with new account disclosures.--If the
notice is provided to the customer prior to furnishing the
negative information to a consumer reporting agency, the
notice may not be included in the initial disclosures
provided under section 127(a) of the Truth in Lending Act.
``(C) Coordination with other disclosures.--The notice
required under subparagraph (A)--
``(i) may be included on or with any notice of default, any
billing statement, or any other materials provided to the
customer; and
``(ii) must be clear and conspicuous.
``(D) Model disclosure.--
``(i) Duty of board to prepare.--The Board shall prescribe
a brief model disclosure a financial institution may use to
comply with subparagraph (A), which shall not exceed 30
words.
``(ii) Use of model not required.--No provision of this
paragraph shall be construed as requiring a financial
institution to use any such model form prescribed by the
Board.
``(iii) Compliance using model.--A financial institution
shall be deemed to be in compliance with subparagraph (A) if
the financial institution uses any such model form prescribed
by the Board, or the financial institution uses any such
model form and rearranges its format.
``(E) Use of notice without submitting negative
information.--No provision of this paragraph shall be
construed as requiring a financial institution that has
provided a customer with a notice described in subparagraph
(A) to furnish negative information about the customer to a
consumer reporting agency.
``(F) Safe harbor.--A financial institution shall not be
liable for failure to perform the duties required by this
paragraph if, at the time of the failure, the financial
institution maintained reasonable policies and procedures to
comply with this paragraph or the financial institution
reasonably believed that the institution is prohibited, by
law, from contacting the consumer.
``(G) Definitions.--For purposes of this paragraph, the
following definitions shall apply:
``(i) Negative information.--The term `negative
information' means information concerning a customer's
delinquencies, late payments, insolvency, or any form of
default.
``(ii) Customer; financial institution.--The terms
`customer' and `financial institution' have the same meanings
as in section 509 Public Law 106-102.''.
(b) Model Disclosure Form.--Before the end of the 6-month
period beginning on the date of enactment of this Act, the
Board shall adopt the model disclosure required under the
amendment made by subsection (a) after notice duly given in
the Federal Register and an opportunity for public comment in
accordance with section 553 of title 5, United States Code.
TITLE III--ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION
SEC. 311. RISK-BASED PRICING NOTICE.
(a) Duties of Users.--Section 615 of the Fair Credit
Reporting Act (15 U.S.C. 1681m), as amended by this Act, is
amended by adding at the end the following:
``(h) Duties of Users in Certain Credit Transactions.--
``(1) In general.--Subject to rules prescribed as provided
in paragraph (6), if any person uses a consumer report in
connection with an application for, or a grant, extension, or
other provision of, credit on material terms that are
materially less favorable than the most favorable terms
available to a substantial proportion of consumers from or
through that person, based in whole or in part on a consumer
report, the person shall provide an oral, written, or
electronic notice to the consumer in the form and manner
required by regulations prescribed in accordance with this
subsection.
``(2) Timing.--The notice required under paragraph (1) may
be provided at the time of an application for, or a grant,
extension, or other provision of, credit or the time of
communication of an approval of an application for, or grant,
extension, or other provision of, credit, except as provided
in the regulations prescribed under paragraph (6).
``(3) Exceptions.--No notice shall be required from a
person under this subsection if--
``(A) the consumer applied for specific material terms and
was granted those terms, unless those terms were initially
specified by the person after the transaction was initiated
by the consumer and after the person obtained a consumer
report; or
``(B) the person has provided or will provide a notice to
the consumer under subsection (a) in connection with the
transaction.
``(4) Other notice not sufficient.--A person that is
required to provide a notice under subsection (a) cannot meet
that requirement by providing a notice under this subsection.
``(5) Content and delivery of notice.--A notice under this
subsection shall, at a minimum--
``(A) include a statement informing the consumer that the
terms offered to the consumer are set based on information
from a consumer report;
``(B) identify the consumer reporting agency furnishing the
report;
``(C) include a statement informing the consumer that the
consumer may obtain a copy of a consumer report from that
consumer reporting agency without charge; and
``(D) include the contact information specified by that
consumer reporting agency for obtaining such consumer reports
(including a toll-free telephone number established by the
agency in the case of a consumer reporting agency described
in section 603(p)).
``(6) Rulemaking.--
``(A) Rules required.--The Commission and the Board shall
jointly prescribe rules.
``(B) Content.--Rules required by subparagraph (A) shall
address, but are not limited to--
``(i) the form, content, time, and manner of delivery of
any notice under this subsection;
``(ii) clarification of the meaning of terms used in this
subsection, including what credit terms are material, and
when credit terms are materially less favorable;
``(iii) exceptions to the notice requirement under this
subsection for classes of persons or transactions regarding
which the agencies determine that notice would not
significantly benefit consumers;
``(iv) a model notice that may be used to comply with this
subsection; and
``(v) the timing of the notice required under paragraph
(1), including the circumstances under which the notice must
be provided after the terms offered to the consumer were set
based on information from a consumer report.
``(7) Compliance.--A person shall not be liable for failure
to perform the duties required by this section if, at the
time of the failure, the person maintained reasonable
policies and procedures to comply with this section.
``(8) Enforcement.--
``(A) No civil actions.--Sections 616 and 617 shall not
apply to any failure by any person to comply with this
section.
``(B) Administrative enforcement.--This section shall be
enforced exclusively under section 621 by the Federal
agencies and officials identified in that section.''.
[[Page H12208]]
(b) Relation to State Laws.--Section 625(b)(1) of the Fair
Credit Reporting Act (15 U.S.C. 1681t(b)(1)), as so
designated by section 214 of this Act, is amended by adding
at the end the following:
``(I) section 615(h), relating to the duties of users of
consumer reports to provide notice with respect to terms in
certain credit transactions;''.
SEC. 312. PROCEDURES TO ENHANCE THE ACCURACY AND INTEGRITY OF
INFORMATION FURNISHED TO CONSUMER REPORTING
AGENCIES.
(a) Accuracy Guidelines and Regulations.--Section 623 of
the Fair Credit Reporting Act (15 U.S.C. 15 U.S.C. 1681s-2)
is amended by adding at the end the following:
``(e) Accuracy Guidelines and Regulations Required.--
``(1) Guidelines.--The Federal banking agencies, the
National Credit Union Administration, and the Commission
shall, with respect to the entities that are subject to their
respective enforcement authority under section 621, and in
coordination as described in paragraph (2)--
``(A) establish and maintain guidelines for use by each
person that furnishes information to a consumer reporting
agency regarding the accuracy and integrity of the
information relating to consumers that such entities furnish
to consumer reporting agencies, and update such guidelines as
often as necessary; and
``(B) prescribe regulations requiring each person that
furnishes information to a consumer reporting agency to
establish reasonable policies and procedures for implementing
the guidelines established pursuant to subparagraph (A).
``(2) Coordination.--Each agency required to prescribe
regulations under paragraph (1) shall consult and coordinate
with each other such agency so that, to the extent possible,
the regulations prescribed by each such entity are consistent
and comparable with the regulations prescribed by each other
such agency.
``(3) Criteria.--In developing the guidelines required by
paragraph (1)(A), the agencies described in paragraph (1)
shall--
``(A) identify patterns, practices, and specific forms of
activity that can compromise the accuracy and integrity of
information furnished to consumer reporting agencies;
``(B) review the methods (including technological means)
used to furnish information relating to consumers to consumer
reporting agencies;
``(C) determine whether persons that furnish information to
consumer reporting agencies maintain and enforce policies to
assure the accuracy and integrity of information furnished to
consumer reporting agencies; and
``(D) examine the policies and processes that persons that
furnish information to consumer reporting agencies employ to
conduct reinvestigations and correct inaccurate information
relating to consumers that has been furnished to consumer
reporting agencies.''.
(b) Duty of Furnishers To Provide Accurate Information.--
Section 623(a)(1) of the Fair Credit Reporting Act (15 U.S.C.
1681s-2(a)(1)) is amended--
(1) in subparagraph (A), by striking ``knows or consciously
avoids knowing that the information is inaccurate'' and
inserting ``knows or has reasonable cause to believe that the
information is inaccurate''; and
(2) by adding at the end the following:
``(D) Definition.--For purposes of subparagraph (A), the
term `reasonable cause to believe that the information is
inaccurate' means having specific knowledge, other than
solely allegations by the consumer, that would cause a
reasonable person to have substantial doubts about the
accuracy of the information.''.
(c) Ability of Consumer To Dispute Information Directly
With Furnisher.--Section 623(a) of the Fair Credit Reporting
Act (15 U.S.C. 1681s-2(a)), as amended by this Act, is
amended by adding at the end the following:
``(8) Ability of consumer to dispute information directly
with furnisher.--
``(A) In general.--The Federal banking agencies, the
National Credit Union Administration, and the Commission
shall jointly prescribe regulations that shall identify the
circumstances under which a furnisher shall be required to
reinvestigate a dispute concerning the accuracy of
information contained in a consumer report on the consumer,
based on a direct request of a consumer.
``(B) Considerations.--In prescribing regulations under
subparagraph (A), the agencies shall weigh--
``(i) the benefits to consumers with the costs on
furnishers and the credit reporting system;
``(ii) the impact on the overall accuracy and integrity of
consumer reports of any such requirements;
``(iii) whether direct contact by the consumer with the
furnisher would likely result in the most expeditious
resolution of any such dispute; and
``(iv) the potential impact on the credit reporting process
if credit repair organizations, as defined in section 403(3),
including entities that would be a credit repair
organization, but for section 403(3)(B)(i), are able to
circumvent the prohibition in subparagraph (G).
``(C) Applicability.--Subparagraphs (D) through (G) shall
apply in any circumstance identified under the regulations
promulgated under subparagraph (A).
``(D) Submitting a notice of dispute.--A consumer who seeks
to dispute the accuracy of information shall provide a
dispute notice directly to such person at the address
specified by the person for such notices that--
``(i) identifies the specific information that is being
disputed;
``(ii) explains the basis for the dispute; and
``(iii) includes all supporting documentation required by
the furnisher to substantiate the basis of the dispute.
``(E) Duty of person after receiving notice of dispute.--
After receiving a notice of dispute from a consumer pursuant
to subparagraph (D), the person that provided the information
in dispute to a consumer reporting agency shall--
``(i) conduct an investigation with respect to the disputed
information;
``(ii) review all relevant information provided by the
consumer with the notice;
``(iii) complete such person's investigation of the dispute
and report the results of the investigation to the consumer
before the expiration of the period under section 611(a)(1)
within which a consumer reporting agency would be required to
complete its action if the consumer had elected to dispute
the information under that section; and
``(iv) if the investigation finds that the information
reported was inaccurate, promptly notify each consumer
reporting agency to which the person furnished the inaccurate
information of that determination and provide to the agency
any correction to that information that is necessary to make
the information provided by the person accurate.
``(F) Frivolous or irrelevant dispute.--
``(i) In general.--This paragraph shall not apply if the
person receiving a notice of a dispute from a consumer
reasonably determines that the dispute is frivolous or
irrelevant, including--
``(I) by reason of the failure of a consumer to provide
sufficient information to investigate the disputed
information; or
``(II) the submission by a consumer of a dispute that is
substantially the same as a dispute previously submitted by
or for the consumer, either directly to the person or through
a consumer reporting agency under subsection (b), with
respect to which the person has already performed the
person's duties under this paragraph or subsection (b), as
applicable.
``(ii) Notice of determination.--Upon making any
determination under clause (i) that a dispute is frivolous or
irrelevant, the person shall notify the consumer of such
determination not later than 5 business days after making
such determination, by mail or, if authorized by the consumer
for that purpose, by any other means available to the person.
``(iii) Contents of notice.--A notice under clause (ii)
shall include--
``(I) the reasons for the determination under clause (i);
and
``(II) identification of any information required to
investigate the disputed information, which may consist of a
standardized form describing the general nature of such
information.
``(G) Exclusion of credit repair organizations.--This
paragraph shall not apply if the notice of the dispute is
submitted by, is prepared on behalf of the consumer by, or is
submitted on a form supplied to the consumer by, a credit
repair organization, as defined in section 403(3), or an
entity that would be a credit repair organization, but for
section 403(3)(B)(i).''.
(d) Furnisher Liability Exception.--Section 623(a)(5) of
the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)(5)) is
amended--
(1) by striking ``A person'' and inserting the following:
``(A) In general.--A person'';
(2) by inserting ``date of delinquency on the account,
which shall be the'' before ``month'';
(3) by inserting ``on the account'' before ``that
immediately preceded''; and
(4) by adding at the end the following:
``(B) Rule of construction.--For purposes of this paragraph
only, and provided that the consumer does not dispute the
information, a person that furnishes information on a
delinquent account that is placed for collection, charged for
profit or loss, or subjected to any similar action, complies
with this paragraph, if--
``(i) the person reports the same date of delinquency as
that provided by the creditor to which the account was owed
at the time at which the commencement of the delinquency
occurred, if the creditor previously reported that date of
delinquency to a consumer reporting agency;
``(ii) the creditor did not previously report the date of
delinquency to a consumer reporting agency, and the person
establishes and follows reasonable procedures to obtain the
date of delinquency from the creditor or another reliable
source and reports that date to a consumer reporting agency
as the date of delinquency; or
``(iii) the creditor did not previously report the date of
delinquency to a consumer reporting agency and the date of
delinquency cannot be reasonably obtained as provided in
clause (ii), the person establishes and follows reasonable
procedures to ensure the date reported as the date of
delinquency precedes the date on which the account is placed
for collection, charged to profit or loss, or subjected to
any similar action, and reports such date to the credit
reporting agency.''.
(e) Liability and Enforcement.--
(1) Civil liability.--Section 623 of the Fair Credit
Reporting Act (15 U.S.C. 1681s-2) is amended by striking
subsections (c) and (d) and inserting the following:
``(c) Limitation on Liability.--Except as provided in
section 621(c)(1)(B), sections 616 and 617 do not apply to
any violation of--
``(1) subsection (a) of this section, including any
regulations issued thereunder;
``(2) subsection (e) of this section, except that nothing
in this paragraph shall limit, expand, or otherwise affect
liability under section 616 or 617, as applicable, for
violations of subsection (b) of this section; or
``(3) subsection (e) of section 615.
``(d) Limitation on Enforcement.--The provisions of law
described in paragraphs (1) through (3) of subsection (c)
(other than with respect to the exception described in
paragraph (2) of subsection (c)) shall be enforced
exclusively as provided under section 621 by the Federal
agencies and officials and the State officials identified in
section 621.''.
[[Page H12209]]
(2) State actions.--Section 621(c) of the Fair Credit
Reporting Act (15 U.S.C. 1681s(c)) is amended--
(A) in paragraph (1)(B)(ii), by striking ``of section
623(a)'' and inserting ``described in any of paragraphs (1)
through (3) of section 623(c)''; and
(B) in paragraph (5)--
(i) in each of subparagraphs (A) and (B), by striking ``of
section 623(a)(1)'' each place that term appears and
inserting ``described in any of paragraphs (1) through (3) of
section 623(c)''; and
(ii) by amending the paragraph heading to read as follows:
``(5) Limitations on state actions for certain
violations.--''.
(f) Rule of Construction.--Nothing in this section, the
amendments made by this section, or any other provision of
this Act shall be construed to affect any liability under
section 616 or 617 of the Fair Credit Reporting Act (15
U.S.C. 1681n, 1681o) that existed on the day before the date
of enactment of this Act.
SEC. 313. FTC AND CONSUMER REPORTING AGENCY ACTION CONCERNING
COMPLAINTS.
(a) In General.--Section 611 of the Fair Credit Reporting
Act (15 U.S.C. 1681i) is amended by adding at the end the
following:
``(e) Treatment of Complaints and Report to Congress.--
``(1) In general.--The Commission shall--
``(A) compile all complaints that it receives that a file
of a consumer that is maintained by a consumer reporting
agency described in section 603(p) contains incomplete or
inaccurate information, with respect to which, the consumer
appears to have disputed the completeness or accuracy with
the consumer reporting agency or otherwise utilized the
procedures provided by subsection (a); and
``(B) transmit each such complaint to each consumer
reporting agency involved.
``(2) Exclusion.--Complaints received or obtained by the
Commission pursuant to its investigative authority under the
Federal Trade Commission Act shall not be subject to
paragraph (1).
``(3) Agency responsibilities.--Each consumer reporting
agency described in section 603(p) that receives a complaint
transmitted by the Commission pursuant to paragraph (1)
shall--
``(A) review each such complaint to determine whether all
legal obligations imposed on the consumer reporting agency
under this title (including any obligation imposed by an
applicable court or administrative order) have been met with
respect to the subject matter of the complaint;
``(B) provide reports on a regular basis to the Commission
regarding the determinations of and actions taken by the
consumer reporting agency, if any, in connection with its
review of such complaints; and
``(C) maintain, for a reasonable time period, records
regarding the disposition of each such complaint that is
sufficient to demonstrate compliance with this subsection.
``(4) Rulemaking authority.--The Commission may prescribe
regulations, as appropriate to implement this subsection.
``(5) Annual report.--The Commission shall submit to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives an annual report regarding information
gathered by the Commission under this subsection.''.
(b) Prompt Investigation of Disputed Consumer
Information.--
(1) Study required.--The Board and the Commission shall
jointly study the extent to which, and the manner in which,
consumer reporting agencies and furnishers of consumer
information to consumer reporting agencies are complying with
the procedures, time lines, and requirements under the Fair
Credit Reporting Act for the prompt investigation of the
disputed accuracy of any consumer information, the
completeness of the information provided to consumer
reporting agencies, and the prompt correction or deletion, in
accordance with such Act, of any inaccurate or incomplete
information or information that cannot be verified.
(2) Report required.--Before the end of the 12-month period
beginning on the date of enactment of this Act, the Board and
the Commission shall jointly submit a progress report to the
Congress on the results of the study required under paragraph
(1).
(3) Considerations.--In preparing the report required under
paragraph (2), the Board and the Commission shall consider
information relating to complaints compiled by the Commission
under section 611(e) of the Fair Credit Reporting Act, as
added by this section.
(4) Recommendations.--The report required under paragraph
(2) shall include such recommendations as the Board and the
Commission jointly determine to be appropriate for
legislative or administrative action, to ensure that--
(A) consumer disputes with consumer reporting agencies over
the accuracy or completeness of information in a consumer's
file are promptly and fully investigated and any incorrect,
incomplete, or unverifiable information is corrected or
deleted immediately thereafter;
(B) furnishers of information to consumer reporting
agencies maintain full and prompt compliance with the duties
and responsibilities established under section 623 of the
Fair Credit Reporting Act; and
(C) consumer reporting agencies establish and maintain
appropriate internal controls and management review
procedures for maintaining full and continuous compliance
with the procedures, time lines, and requirements under the
Fair Credit Reporting Act for the prompt investigation of the
disputed accuracy of any consumer information and the prompt
correction or deletion, in accordance with such Act, of any
inaccurate or incomplete information or information that
cannot be verified.
SEC. 314. IMPROVED DISCLOSURE OF THE RESULTS OF
REINVESTIGATION.
(a) In General.--Section 611(a)(5)(A) of the Fair Credit
Reporting Act (15 U.S.C. 1681i(a)(5)(A)) is amended by
striking ``shall'' and all that follows through the end of
the subparagraph, and inserting the following: ``shall--
``(i) promptly delete that item of information from the
file of the consumer, or modify that item of information, as
appropriate, based on the results of the reinvestigation; and
``(ii) promptly notify the furnisher of that information
that the information has been modified or deleted from the
file of the consumer.''.
(b) Furnisher Requirements Relating to Inaccurate,
Incomplete, or Unverifiable Information.--Section 623(b)(1)
of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(b)(1)) is
amended--
(1) in subparagraph (C), by striking ``and'' at the end;
and
(2) in subparagraph (D), by striking the period at the end
and inserting the following: ``; and
``(E) if an item of information disputed by a consumer is
found to be inaccurate or incomplete or cannot be verified
after any reinvestigation under paragraph (1), for purposes
of reporting to a consumer reporting agency only, as
appropriate, based on the results of the reinvestigation
promptly--
``(i) modify that item of information;
``(ii) delete that item of information; or
``(iii) permanently block the reporting of that item of
information.''.
SEC. 315. RECONCILING ADDRESSES.
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c), as amended by this Act, is amended by adding at the
end the following:
``(h) Notice of Discrepancy in Address.--
``(1) In general.--If a person has requested a consumer
report relating to a consumer from a consumer reporting
agency described in section 603(p), the request includes an
address for the consumer that substantially differs from the
addresses in the file of the consumer, and the agency
provides a consumer report in response to the request, the
consumer reporting agency shall notify the requester of the
existence of the discrepancy.
``(2) Regulations.--
``(A) Regulations required.--The Federal banking agencies,
the National Credit Union Administration, and the Commission
shall jointly, with respect to the entities that are subject
to their respective enforcement authority under section 621,
prescribe regulations providing guidance regarding reasonable
policies and procedures that a user of a consumer report
should employ when such user has received a notice of
discrepancy under paragraph (1).
``(B) Policies and procedures to be included.--The
regulations prescribed under subparagraph (A) shall describe
reasonable policies and procedures for use by a user of a
consumer report--
``(i) to form a reasonable belief that the user knows the
identity of the person to whom the consumer report pertains;
and
``(ii) if the user establishes a continuing relationship
with the consumer, and the user regularly and in the ordinary
course of business furnishes information to the consumer
reporting agency from which the notice of discrepancy
pertaining to the consumer was obtained, to reconcile the
address of the consumer with the consumer reporting agency by
furnishing such address to such consumer reporting agency as
part of information regularly furnished by the user for the
period in which the relationship is established.''.
SEC. 316. NOTICE OF DISPUTE THROUGH RESELLER.
(a) Requirement for Reinvestigation of Disputed Information
Upon Notice From a Reseller.--Section 611(a) of the Fair
Credit Reporting Act (15 U.S.C. 1681i(a)(1)(A)) is amended--
(1) in paragraph (1)(A)--
(A) by striking ``If the completeness'' and inserting
``Subject to subsection (f), if the completeness'';
(B) by inserting ``, or indirectly through a reseller,''
after ``notifies the agency directly''; and
(C) by inserting ``or reseller'' before the period at the
end;
(2) in paragraph (2)(A)--
(A) by inserting ``or a reseller'' after ``dispute from any
consumer''; and
(B) by inserting ``or reseller'' before the period at the
end; and
(3) in paragraph (2)(B), by inserting ``or the reseller''
after ``from the consumer''.
(b) Reinvestigation Requirement Applicable to Resellers.--
Section 611 of the Fair Credit Reporting Act (15 U.S.C.
1681i), as amended by this Act, is amended by adding at the
end the following:
``(f) Reinvestigation Requirement Applicable to
Resellers.--
``(1) Exemption from general reinvestigation requirement.--
Except as provided in paragraph (2), a reseller shall be
exempt from the requirements of this section.
``(2) Action required upon receiving notice of a dispute.--
If a reseller receives a notice from a consumer of a dispute
concerning the completeness or accuracy of any item of
information contained in a consumer report on such consumer
produced by the reseller, the reseller shall, within 5
business days of receiving the notice, and free of charge--
``(A) determine whether the item of information is
incomplete or inaccurate as a result of an act or omission of
the reseller; and
``(B) if--
``(i) the reseller determines that the item of information
is incomplete or inaccurate as a result
[[Page H12210]]
of an act or omission of the reseller, not later than 20 days
after receiving the notice, correct the information in the
consumer report or delete it; or
``(ii) if the reseller determines that the item of
information is not incomplete or inaccurate as a result of an
act or omission of the reseller, convey the notice of the
dispute, together with all relevant information provided by
the consumer, to each consumer reporting agency that provided
the reseller with the information that is the subject of the
dispute, using an address or a notification mechanism
specified by the consumer reporting agency for such notices.
``(3) Responsibility of consumer reporting agency to notify
consumer through reseller.--Upon the completion of a
reinvestigation under this section of a dispute concerning
the completeness or accuracy of any information in the file
of a consumer by a consumer reporting agency that received
notice of the dispute from a reseller under paragraph (2)--
``(A) the notice by the consumer reporting agency under
paragraph (6), (7), or (8) of subsection (a) shall be
provided to the reseller in lieu of the consumer; and
``(B) the reseller shall immediately reconvey such notice
to the consumer, including any notice of a deletion by
telephone in the manner required under paragraph (8)(A).
``(4) Reseller reinvestigations.--No provision of this
subsection shall be construed as prohibiting a reseller from
conducting a reinvestigation of a consumer dispute
directly.''.
(c) Technical and Conforming Amendment.--Section
611(a)(2)(B) of the Fair Credit Reporting Act (15 U.S.C.
1681i(a)(2)(B)) is amended in the subparagraph heading, by
striking ``from consumer''.
SEC. 317. REASONABLE REINVESTIGATION REQUIRED.
Section 611(a)(1)(A) of the Fair Credit Reporting Act (15
U.S.C. 1681i(a)(1)(A)) is amended by striking ``shall
reinvestigate free of charge'' and inserting ``shall, free of
charge, conduct a reasonable reinvestigation to determine
whether the disputed information is inaccurate''.
SEC. 318. FTC STUDY OF ISSUES RELATING TO THE FAIR CREDIT
REPORTING ACT.
(a) Study Required.--
(1) In general.--The Commission shall conduct a study on
ways to improve the operation of the Fair Credit Reporting
Act.
(2) Areas for study.--In conducting the study under
paragraph (1), the Commission shall review--
(A) the efficacy of increasing the number of points of
identifying information that a credit reporting agency is
required to match to ensure that a consumer is the correct
individual to whom a consumer report relates before releasing
a consumer report to a user, including--
(i) the extent to which requiring additional points of such
identifying information to match would--
(I) enhance the accuracy of credit reports; and
(II) combat the provision of incorrect consumer reports to
users;
(ii) the extent to which requiring an exact match of the
first and last name, social security number, and address and
ZIP Code of the consumer would enhance the likelihood of
increasing credit report accuracy; and
(iii) the effects of allowing consumer reporting agencies
to use partial matches of social security numbers and name
recognition software on the accuracy of credit reports;
(B) requiring notification to consumers when negative
information has been added to their credit reports,
including--
(i) the potential impact of such notification on the
ability of consumers to identify errors on their credit
reports; and
(ii) the potential impact of such notification on the
ability of consumers to remove fraudulent information from
their credit reports;
(C) the effects of requiring that a consumer who has
experienced an adverse action based on a credit report
receives a copy of the same credit report that the creditor
relied on in taking the adverse action, including--
(i) the extent to which providing such reports to consumers
would increase the ability of consumers to identify errors in
their credit reports; and
(ii) the extent to which providing such reports to
consumers would increase the ability of consumers to remove
fraudulent information from their credit reports;
(D) any common financial transactions that are not
generally reported to the consumer reporting agencies, but
would provide useful information in determining the credit
worthiness of consumers; and
(E) any actions that might be taken within a voluntary
reporting system to encourage the reporting of the types of
transactions described in subparagraph (D).
(3) Costs and benefits.--With respect to each area of study
described in paragraph (2), the Commission shall consider the
extent to which such requirements would benefit consumers,
balanced against the cost of implementing such provisions.
(b) Report Required.--Not later than 1 year after the date
of enactment of this Act, the chairman of the Commission
shall submit a report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives containing
a detailed summary of the findings and conclusions of the
study under this section, together with such recommendations
for legislative or administrative actions as may be
appropriate.
SEC. 319. FTC STUDY OF THE ACCURACY OF CONSUMER REPORTS.
(a) Study Required.--Until the final report is submitted
under subsection (b)(2), the Commission shall conduct an
ongoing study of the accuracy and completeness of information
contained in consumer reports prepared or maintained by
consumer reporting agencies and methods for improving the
accuracy and completeness of such information.
(b) Biennial Reports Required.--
(1) Interim reports.--The Commission shall submit an
interim report to the Congress on the study conducted under
subsection (a) at the end of the 1-year period beginning on
the date of enactment of this Act and biennially thereafter
for 8 years.
(2) Final report.--The Commission shall submit a final
report to the Congress on the study conducted under
subsection (a) at the end of the 2-year period beginning on
the date on which the final interim report is submitted to
the Congress under paragraph (1).
(3) Contents.--Each report submitted under this subsection
shall contain a detailed summary of the findings and
conclusions of the Commission with respect to the study
required under subsection (a) and such recommendations for
legislative and administrative action as the Commission may
determine to be appropriate.
TITLE IV--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE
FINANCIAL SYSTEM
SEC. 411. PROTECTION OF MEDICAL INFORMATION IN THE FINANCIAL
SYSTEM.
(a) In General.--Section 604(g) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(g)) is amended to read as
follows:
``(g) Protection of Medical Information.--
``(1) Limitation on consumer reporting agencies.--A
consumer reporting agency shall not furnish for employment
purposes, or in connection with a credit or insurance
transaction, a consumer report that contains medical
information about a consumer, unless--
``(A) if furnished in connection with an insurance
transaction, the consumer affirmatively consents to the
furnishing of the report;
``(B) if furnished for employment purposes or in connection
with a credit transaction--
``(i) the information to be furnished is relevant to
process or effect the employment or credit transaction; and
``(ii) the consumer provides specific written consent for
the furnishing of the report that describes in clear and
conspicuous language the use for which the information will
be furnished; or
``(C) the information to be furnished pertains solely to
transactions, accounts, or balances relating to debts arising
from the receipt of medical services, products, or devises,
where such information, other than account status or amounts,
is restricted or reported using codes that do not identify,
or do not provide information sufficient to infer, the
specific provider or the nature of such services, products,
or devices, as provided in section 605(a)(6).
``(2) Limitation on creditors.--Except as permitted
pursuant to paragraph (3)(C) or regulations prescribed under
paragraph (5)(A), a creditor shall not obtain or use medical
information pertaining to a consumer in connection with any
determination of the consumer's eligibility, or continued
eligibility, for credit.
``(3) Actions authorized by federal law, insurance
activities and regulatory determinations.--Section 603(d)(3)
shall not be construed so as to treat information or any
communication of information as a consumer report if the
information or communication is disclosed--
``(A) in connection with the business of insurance or
annuities, including the activities described in section 18B
of the model Privacy of Consumer Financial and Health
Information Regulation issued by the National Association of
Insurance Commissioners (as in effect on January 1, 2003);
``(B) for any purpose permitted without authorization under
the Standards for Individually Identifiable Health
Information promulgated by the Department of Health and Human
Services pursuant to the Health Insurance Portability and
Accountability Act of 1996, or referred to under section 1179
of such Act, or described in section 502(e) of Public Law
106-102; or
``(C) as otherwise determined to be necessary and
appropriate, by regulation or order and subject to paragraph
(6), by the Commission, any Federal banking agency or the
National Credit Union Administration (with respect to any
financial institution subject to the jurisdiction of such
agency or Administration under paragraph (1), (2), or (3) of
section 621(b), or the applicable State insurance authority
(with respect to any person engaged in providing insurance or
annuities).
``(4) Limitation on redisclosure of medical information.--
Any person that receives medical information pursuant to
paragraph (1) or (3) shall not disclose such information to
any other person, except as necessary to carry out the
purpose for which the information was initially disclosed, or
as otherwise permitted by statute, regulation, or order.
``(5) Regulations and effective date for paragraph (2).--
``(A) Regulations required.--Each Federal banking agency
and the National Credit Union Administration shall, subject
to paragraph (6) and after notice and opportunity for
comment, prescribe regulations that permit transactions under
paragraph (2) that are determined to be necessary and
appropriate to protect legitimate operational, transactional,
risk, consumer, and other needs (and which shall include
permitting actions necessary for administrative verification
purposes), consistent with the intent of paragraph (2) to
restrict the use of medical information for inappropriate
purposes.
``(B) Final regulations required.--The Federal banking
agencies and the National Credit Union Administration shall
issue the regulations required under subparagraph (A) in
final form before the end of the 6-month period
[[Page H12211]]
beginning on the date of enactment of the Fair and Accurate
Credit Transactions Act of 2003.
``(6) Coordination with other laws.--No provision of this
subsection shall be construed as altering, affecting, or
superseding the applicability of any other provision of
Federal law relating to medical confidentiality.''.
(b) Restriction on Sharing of Medical Information.--Section
603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d))
is amended--
(1) in paragraph (2), by striking ``The term'' and
inserting ``Except as provided in paragraph (3), the term'';
and
(2) by adding at the end the following new paragraph:
``(3) Restriction on sharing of medical information.--
Except for information or any communication of information
disclosed as provided in section 604(g)(3), the exclusions in
paragraph (2) shall not apply with respect to information
disclosed to any person related by common ownership or
affiliated by corporate control, if the information is--
``(A) medical information;
``(B) an individualized list or description based on the
payment transactions of the consumer for medical products or
services; or
``(C) an aggregate list of identified consumers based on
payment transactions for medical products or services.
(c) Definition.--Section 603(i) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(i)) is amended to read as
follows:
``(i) Medical Information.--The term `medical
information'--
``(1) means information or data, whether oral or recorded,
in any form or medium, created by or derived from a health
care provider or the consumer, that relates to--
``(A) the past, present, or future physical, mental, or
behavioral health or condition of an individual;
``(B) the provision of health care to an individual; or
``(C) the payment for the provision of health care to an
individual.
``(2) does not include the age or gender of a consumer,
demographic information about the consumer, including a
consumer's residence address or e-mail address, or any other
information about a consumer that does not relate to the
physical, mental, or behavioral health or condition of a
consumer, including the existence or value of any insurance
policy.''.
(d) Effective Dates.--This section shall take effect at the
end of the 180-day period beginning on the date of enactment
of this Act, except that paragraph (2) of section 604(g) of
the Fair Credit Reporting Act (as amended by subsection (a)
of this section) shall take effect on the later of--
(1) the end of the 90-day period beginning on the date on
which the regulations required under paragraph (5)(B) of such
section 604(g) are issued in final form; or
(2) the date specified in the regulations referred to in
paragraph (1).
SEC. 412. CONFIDENTIALITY OF MEDICAL CONTACT INFORMATION IN
CONSUMER REPORTS.
(a) Duties of Medical Information Furnishers.--Section
623(a) of the Fair Credit Reporting Act (15 U.S.C. 1681s-
2(a)), as amended by this Act, is amended by adding at the
end the following:
``(9) Duty to provide notice of status as medical
information furnisher.--A person whose primary business is
providing medical services, products, or devices, or the
person's agent or assignee, who furnishes information to a
consumer reporting agency on a consumer shall be considered a
medical information furnisher for purposes of this title, and
shall notify the agency of such status.''.
(b) Restriction of Dissemination of Medical Contact
Information.--Section 605(a) of the Fair Credit Reporting Act
(15 U.S.C. 1681c(a)) is amended by adding at the end the
following:
``(6) The name, address, and telephone number of any
medical information furnisher that has notified the agency of
its status, unless--
``(A) such name, address, and telephone number are
restricted or reported using codes that do not identify, or
provide information sufficient to infer, the specific
provider or the nature of such services, products, or devices
to a person other than the consumer; or
``(B) the report is being provided to an insurance company
for a purpose relating to engaging in the business of
insurance other than property and casualty insurance.''.
(c) No Exceptions Allowed for Dollar Amounts.--Section
605(b) of the Fair Credit Reporting Act (15 U.S.C. 1681c(b))
is amended by striking ``The provisions of subsection (a)''
and inserting ``The provisions of paragraphs (1) through (5)
of subsection (a)''.
(d) Coordination With Other Laws.--No provision of any
amendment made by this section shall be construed as
altering, affecting, or superseding the applicability of any
other provision of Federal law relating to medical
confidentiality.
(e) FTC Regulation of Coding of Trade Names.--Section 621
of the Fair Credit Reporting Act (15 U.S.C. 1681s), as
amended by this Act, is amended by adding at the end the
following:
``(g) FTC Regulation of Coding of Trade Names.--If the
Commission determines that a person described in paragraph
(9) of section 623(a) has not met the requirements of such
paragraph, the Commission shall take action to ensure the
person's compliance with such paragraph, which may include
issuing model guidance or prescribing reasonable policies and
procedures, as necessary to ensure that such person complies
with such paragraph.''.
(f) Technical and Conforming Amendments.--Section 604(g) of
the Fair Credit Reporting Act (15 U.S.C. 1681b(g)), as
amended by section 411 of this Act, is amended--
(1) in paragraph (1), by inserting ``(other than medical
contact information treated in the manner required under
section 605(a)(6))'' after ``a consumer report that contains
medical information''; and
(2) in paragraph (2), by inserting ``(other than medical
information treated in the manner required under section
605(a)(6))'' after ``a creditor shall not obtain or use
medical information''.
(g) Effective Date.--The amendments made by this section
shall take effect at the end of the 15-month period beginning
on the date of enactment of this Act.
TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT
SEC. 511. SHORT TITLE.
This title may be cited as the ``Financial Literacy and
Education Improvement Act''.
SEC. 512. DEFINITIONS.
As used in this title--
(1) the term ``Chairperson'' means the Chairperson of the
Financial Literacy and Education Commission; and
(2) the term ``Commission'' means the Financial Literacy
and Education Commission established under section 513.
SEC. 513. ESTABLISHMENT OF FINANCIAL LITERACY AND EDUCATION
COMMISSION.
(a) In General.--There is established a commission to be
known as the ``Financial Literacy and Education Commission''.
(b) Purpose.--The Commission shall serve to improve the
financial literacy and education of persons in the United
States through development of a national strategy to promote
financial literacy and education.
(c) Membership.--
(1) Composition.--The Commission shall be composed of--
(A) the Secretary of the Treasury;
(B) the respective head of each of the Federal banking
agencies (as defined in section 3 of the Federal Deposit
Insurance Act), the National Credit Union Administration, the
Securities and Exchange Commission, each of the Departments
of Education, Agriculture, Defense, Health and Human
Services, Housing and Urban Development, Labor, and Veterans
Affairs, the Federal Trade Commission, the General Services
Administration, the Small Business Administration, the Social
Security Administration, the Commodity Futures Trading
Commission, and the Office of Personnel Management; and
(C) at the discretion of the President, not more than 5
individuals appointed by the President from among the
administrative heads of any other Federal agencies,
departments, or other Federal Government entities, whom the
President determines to be engaged in a serious effort to
improve financial literacy and education.
(2) Alternates.--Each member of the Commission may
designate an alternate if the member is unable to attend a
meeting of the Commission. Such alternate shall be an
individual who exercises significant decisionmaking
authority.
(d) Chairperson.--The Secretary of the Treasury shall serve
as the Chairperson.
(e) Meetings.--The Commission shall hold, at the call of
the Chairperson, at least 1 meeting every 4 months. All such
meetings shall be open to the public. The Commission may
hold, at the call of the Chairperson, such other meetings as
the Chairperson sees fit to carry out this title.
(f) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
(g) Initial Meeting.--The Commission shall hold its first
meeting not later than 60 days after the date of enactment of
this Act.
SEC. 514. DUTIES OF THE COMMISSION.
(a) Duties.--
(1) In general.--The Commission, through the authority of
the members referred to in section 513(c), shall take such
actions as it deems necessary to streamline, improve, or
augment the financial literacy and education programs,
grants, and materials of the Federal Government, including
curricula for all Americans.
(2) Areas of emphasis.--To improve financial literacy and
education, the Commission shall emphasize, among other
elements, basic personal income and household money
management and planning skills, including how to--
(A) create household budgets, initiate savings plans, and
make strategic investment decisions for education,
retirement, home ownership, wealth building, or other savings
goals;
(B) manage spending, credit, and debt, including credit
card debt, effectively;
(C) increase awareness of the availability and significance
of credit reports and credit scores in obtaining credit, the
importance of their accuracy (and how to correct
inaccuracies), their effect on credit terms, and the effect
common financial decisions may have on credit scores;
(D) ascertain fair and favorable credit terms;
(E) avoid abusive, predatory, or deceptive credit offers
and financial products;
(F) understand, evaluate, and compare financial products,
services, and opportunities;
(G) understand resources that ought to be easily accessible
and affordable, and that inform and educate investors as to
their rights and avenues of recourse when an investor
believes his or her rights have been violated by
unprofessional conduct of market intermediaries;
(H) increase awareness of the particular financial needs
and financial transactions (such as the sending of
remittances) of consumers who are targeted in multilingual
financial literacy and education programs and improve the
development and distribution of multilingual financial
literacy and education materials;
(I) promote bringing individuals who lack basic banking
services into the financial mainstream by opening and
maintaining an account with a financial institution; and
(J) improve financial literacy and education through all
other related skills, including personal finance and related
economic education,
[[Page H12212]]
with the primary goal of programs not simply to improve
knowledge, but rather to improve consumers' financial choices
and outcomes.
(b) Website.--
(1) In general.--The Commission shall establish and
maintain a website, such as the domain name
``FinancialLiteracy.gov'', or a similar domain name.
(2) Purposes.--The website established under paragraph (1)
shall--
(A) serve as a clearinghouse of information about Federal
financial literacy and education programs;
(B) provide a coordinated entry point for accessing
information about all Federal publications, grants, and
materials promoting enhanced financial literacy and
education;
(C) offer information on all Federal grants to promote
financial literacy and education, and on how to target, apply
for, and receive a grant that is most appropriate under the
circumstances;
(D) as the Commission considers appropriate, feature
website links to efforts that have no commercial content and
that feature information about financial literacy and
education programs, materials, or campaigns; and
(E) offer such other information as the Commission finds
appropriate to share with the public in the fulfillment of
its purpose.
(c) Toll-Free Hotline.--The Commission shall establish a
toll-free telephone number that shall be made available to
members of the public seeking information about issues
pertaining to financial literacy and education.
(d) Development and Dissemination of Materials.--The
Commission shall--
(1) develop materials to promote financial literacy and
education; and
(2) disseminate such materials to the general public.
(e) Coordination of Efforts.--The Commission shall take
such steps as are necessary to coordinate and promote
financial literacy and education efforts at the State and
local level, including promoting partnerships among Federal,
State, and local governments, nonprofit organizations, and
private enterprises.
(f) National Strategy.--
(1) In general.--The Commission shall--
(A) not later than 18 months after the date of enactment of
this Act, develop a national strategy to promote basic
financial literacy and education among all American
consumers; and
(B) coordinate Federal efforts to implement the strategy
developed under subparagraph (A).
(2) Strategy.--The strategy to promote basic financial
literacy and education required to be developed under
paragraph (1) shall provide for--
(A) participation by State and local governments and
private, nonprofit, and public institutions in the creation
and implementation of such strategy;
(B) the development of methods--
(i) to increase the general financial education level of
current and future consumers of financial services and
products; and
(ii) to enhance the general understanding of financial
services and products;
(C) review of Federal activities designed to promote
financial literacy and education, and development of a plan
to improve coordination of such activities; and
(D) the identification of areas of overlap and duplication
among Federal financial literacy and education activities and
proposed means of eliminating any such overlap and
duplication.
(3) National strategy review.--The Commission shall, not
less than annually, review the national strategy developed
under this subsection and make such changes and
recommendations as it deems necessary.
(g) Consultation.--The Commission shall actively consult
with a variety of representatives from private and nonprofit
organizations and State and local agencies, as determined
appropriate by the Commission.
(h) Reports.--
(1) In general.--Not later than 18 months after the date of
the first meeting of the Commission, and annually thereafter,
the Commission shall issue a report, the Strategy for
Assuring Financial Empowerment (``SAFE Strategy''), to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives on the progress of the Commission in
carrying out this title.
(2) Contents.--The report required under paragraph (1)
shall include--
(A) the national strategy for financial literacy and
education, as described under subsection (f);
(B) information concerning the implementation of the duties
of the Commission under subsections (a) through (g);
(C) an assessment of the success of the Commission in
implementing the national strategy developed under subsection
(f);
(D) an assessment of the availability, utilization, and
impact of Federal financial literacy and education materials;
(E) information concerning the content and public use of--
(i) the website established under subsection (b); and
(ii) the toll-free telephone number established under
subsection (c);
(F) a brief survey of the financial literacy and education
materials developed under subsection (d), and data regarding
the dissemination and impact of such materials, as measured
by improved financial decisionmaking;
(G) a brief summary of any hearings conducted by the
Commission, including a list of witnesses who testified at
such hearings;
(H) information about the activities of the Commission
planned for the next fiscal year;
(I) a summary of all Federal financial literacy and
education activities targeted to communities that have
historically lacked access to financial literacy materials
and education, and have been underserved by the mainstream
financial systems; and
(J) such other materials relating to the duties of the
Commission as the Commission deems appropriate.
(3) Initial report.--The initial report under paragraph (1)
shall include information regarding all Federal programs,
materials, and grants which seek to improve financial
literacy, and assess the effectiveness of such programs.
(i) Testimony.--The Commission shall annually provide
testimony by the Chairperson to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
SEC. 515. POWERS OF THE COMMISSION.
(a) Hearings.--
(1) In general.--The Commission shall hold such hearings,
sit and act at such times and places, take such testimony,
and receive such evidence as the Commission deems appropriate
to carry out this title.
(2) Participation.--In hearings held under this subsection,
the Commission shall consider inviting witnesses from, among
other groups--
(A) other Federal Government officials;
(B) State and local government officials;
(C) consumer and community groups;
(D) nonprofit financial literacy and education groups (such
as those involved in personal finance and economic
education); and
(E) the financial services industry.
(b) Information From Federal Agencies.--The Commission may
secure directly from any Federal department or agency such
information as the Commission considers necessary to carry
out this title. Upon request of the Chairperson, the head of
such department or agency shall furnish such information to
the Commission.
(c) Periodic Studies.--The Commission may conduct periodic
studies regarding the state of financial literacy and
education in the United States, as the Commission determines
appropriate.
(d) Multilingual.--The Commission may take any action to
develop and promote financial literacy and education
materials in languages other than English, as the Commission
deems appropriate, including for the website established
under section 514(b), at the toll-free number established
under section 514(c), and in the materials developed and
disseminated under section 514(d).
SEC. 516. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission
shall serve without compensation in addition to that received
for their service as an officer or employee of the United
States.
(b) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the
Commission.
(c) Assistance.--
(1) In general.--The Director of the Office of Financial
Education of the Department of the Treasury shall provide
assistance to the Commission, upon request of the Commission,
without reimbursement.
(2) Detail of government employees.--Any Federal Government
employee may be detailed to the Commission without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege.
SEC. 517. STUDIES BY THE COMPTROLLER GENERAL.
(a) Effectiveness Study.--Not later than 3 years after the
date of enactment of this Act, the Comptroller General of the
United States shall submit a report to Congress assessing the
effectiveness of the Commission in promoting financial
literacy and education.
(b) Study and Report on the Need and Means for Improving
Financial Literacy Among Consumers.--
(1) Study required.--The Comptroller General of the United
States shall conduct a study to assess the extent of
consumers' knowledge and awareness of credit reports, credit
scores, and the dispute resolution process, and on methods
for improving financial literacy among consumers.
(2) Factors to be included.--The study required under
paragraph (1) shall include the following issues:
(A) The number of consumers who view their credit reports.
(B) Under what conditions and for what purposes do
consumers primarily obtain a copy of their consumer report
(such as for the purpose of ensuring the completeness and
accuracy of the contents, to protect against fraud, in
response to an adverse action based on the report, or in
response to suspected identity theft) and approximately what
percentage of the total number of consumers who obtain a copy
of their consumer report do so for each such primary purpose.
(C) The extent of consumers' knowledge of the data
collection process.
(D) The extent to which consumers know how to get a copy of
a consumer report.
(E) The extent to which consumers know and understand the
factors that positively or negatively impact credit scores.
(3) Report required.--Before the end of the 12-month period
beginning on the date of enactment of this Act, the
Comptroller General shall submit a report to Congress on the
findings and conclusions of the Comptroller General pursuant
to the study conducted under this subsection, together with
such recommendations for legislative or administrative action
as the Comptroller General may determine to be appropriate,
including recommendations on methods for improving financial
literacy among consumers.
[[Page H12213]]
SEC. 518. THE NATIONAL PUBLIC SERVICE MULTIMEDIA CAMPAIGN TO
ENHANCE THE STATE OF FINANCIAL LITERACY.
(a) In General.--The Secretary of the Treasury (in this
section referred to as the ``Secretary''), after review of
the recommendations of the Commission, as part of the
national strategy, shall develop, implement, and conduct a
pilot national public service multimedia campaign to enhance
the state of financial literacy and education in the United
States.
(b) Program Requirements.--
(1) Public service campaign.--The Secretary, after review
of the recommendations of the Commission, shall select and
work with a nonprofit organization or organizations that are
especially well-qualified in the distribution of public
service campaigns, and have secured private sector funds to
produce the pilot national public service multimedia
campaign.
(2) Development of multimedia campaign.--The Secretary,
after review of the recommendations of the Commission, shall
develop, in consultation with nonprofit, public, or private
organizations, especially those that are well qualified by
virtue of their experience in the field of financial literacy
and education, to develop the financial literacy national
public service multimedia campaign.
(3) Focus of campaign.--The pilot national public service
multimedia campaign shall be consistent with the national
strategy, and shall promote the toll-free telephone number
and the website developed under this title.
(c) Multilingual.--The Secretary may develop the multimedia
campaign in languages other than English, as the Secretary
deems appropriate.
(d) Performance Measures.--The Secretary shall develop
measures to evaluate the effectiveness of the pilot national
public service multimedia campaign, as measured by improved
financial decision making among individuals.
(e) Report.--For each fiscal year for which there are
appropriations pursuant to the authorization in subsection
(e), the Secretary shall submit a report to the Committee on
Banking, Housing, and Urban Affairs and the Committee on
Appropriations of the Senate and the Committee on Financial
Services and the Committee on Appropriations of the House of
Representatives, describing the status and implementation of
the provisions of this section and the state of financial
literacy and education in the United States.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary, not to exceed $3,000,000
for fiscal years 2004, 2005, and 2006, for the development,
production, and distribution of a pilot national public
service multimedia campaign under this section.
SEC. 519. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Commission
such sums as may be necessary to carry out this title,
including administrative expenses of the Commission.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
SEC. 611. CERTAIN EMPLOYEE INVESTIGATION COMMUNICATIONS
EXCLUDED FROM DEFINITION OF CONSUMER REPORT.
(a) In General.--Section 603 of the Fair Credit Reporting
Act (15 U.S.C. 1681a), as amended by this Act is amended by
adding at the end the following:
``(x) Exclusion of Certain Communications for Employee
Investigations.--
``(1) Communications described in this subsection.--A
communication is described in this subsection if--
``(A) but for subsection (d)(2)(D), the communication would
be a consumer report;
``(B) the communication is made to an employer in
connection with an investigation of--
``(i) suspected misconduct relating to employment; or
``(ii) compliance with Federal, State, or local laws and
regulations, the rules of a self-regulatory organization, or
any preexisting written policies of the employer;
``(C) the communication is not made for the purpose of
investigating a consumer's credit worthiness, credit
standing, or credit capacity; and
``(D) the communication is not provided to any person
except--
``(i) to the employer or an agent of the employer;
``(ii) to any Federal or State officer, agency, or
department, or any officer, agency, or department of a unit
of general local government;
``(iii) to any self-regulatory organization with regulatory
authority over the activities of the employer or employee;
``(iv) as otherwise required by law; or
``(v) pursuant to section 608.
``(2) Subsequent disclosure.--After taking any adverse
action based in whole or in part on a communication described
in paragraph (1), the employer shall disclose to the consumer
a summary containing the nature and substance of the
communication upon which the adverse action is based, except
that the sources of information acquired solely for use in
preparing what would be but for subsection (d)(2)(D) an
investigative consumer report need not be disclosed.
``(3) Self-regulatory organization defined.--For purposes
of this subsection, the term `self-regulatory organization'
includes any self-regulatory organization (as defined in
section 3(a)(26) of the Securities Exchange Act of 1934), any
entity established under title I of the Sarbanes-Oxley Act of
2002, any board of trade designated by the Commodity Futures
Trading Commission, and any futures association registered
with such Commission.''.
(b) Technical and Conforming Amendment.--Section
603(d)(2)(D) of the Fair Credit Reporting Act (15 U.S.C.
1681a(d)(2)(D)) is amended by inserting ``or (x)'' after
``subsection (o)''.
TITLE VII--RELATION TO STATE LAWS
SEC. 711. RELATION TO STATE LAWS.
Section 625 of the Fair Credit Reporting Act (15 U.S.C.
1681t), as so designated by section 214 of this Act, is
amended--
(1) in subsection (a), by inserting ``or for the prevention
or mitigation of identity theft,'' after ``information on
consumers,'';
(2) in subsection (b), by adding at the end the following:
``(5) with respect to the conduct required by the specific
provisions of--
``(A) section 605(g);
``(B) section 605A;
``(C) section 605B;
``(D) section 609(a)(1)(A);
``(E) section 612(a);
``(F) subsections (e), (f), and (g) of section 615;
``(G) section 621(f);
``(H) section 623(a)(6); or
``(I) section 628.''; and
(3) in subsection (d)--
(A) by striking paragraph (2);
(B) by striking ``(c)--'' and all that follows through ``do
not affect'' and inserting ``(c) do not affect''; and
(C) by striking ``1996; and'' and inserting ``1996.''.
TITLE VIII--MISCELLANEOUS
SEC. 811. CLERICAL AMENDMENTS.
(a) Short Title.--Section 601 of the Fair Credit Reporting
Act (15 U.S.C. 1601 note) is amended by striking ``the Fair
Credit Reporting Act.'' and inserting ``the `Fair Credit
Reporting Act'.''.
(b) Section 604.--Section 604(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(a)) is amended in paragraphs
(1) through (5), other than subparagraphs (E) and (F) of
paragraph (3), by moving each margin 2 ems to the right.
(c) Section 605.--
(1) Section 605(a)(1) of the Fair Credit Reporting Act (15
U.S.C. 1681c(a)(1)) is amended by striking ``(1) cases'' and
inserting ``(1) Cases''.
(2)(A) Section 5(1) of Public Law 105-347 (112 Stat. 3211)
is amended by striking ``Judgments which'' and inserting
``judgments which''.
(B) The amendment made by subparagraph (A) shall be deemed
to have the same effective date as section 5(1) of Public Law
105-347 (112 Stat. 3211).
(d) Section 609.--Section 609(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681g(a)) is amended--
(1) in paragraph (2), by moving the margin 2 ems to the
right; and
(2) in paragraph (3)(C), by moving the margins 2 ems to the
left.
(e) Section 617.--Section 617(a)(1) of the Fair Credit
Reporting Act (15 U.S.C. 1681o(a)(1)) is amended by adding
``and'' at the end.
(f) Section 621.--Section 621(b)(1)(B) of the Fair Credit
Reporting Act (15 U.S.C. 1681s(b)(1)(B)) is amended by
striking ``25(a)'' and inserting ``25A''.
(g) Title 31.--Section 5318 of title 31, United States
Code, is amended by redesignating the second item designated
as subsection (l) (relating to applicability of rules) as
subsection (m).
(h) Conforming Amendment.--Section 2411(c) of Public Law
104-208 (110 Stat. 3009-445) is repealed.
And the Senate agreed to the same.
For consideration of the House bill and the Senate amendment,
and modifications committed to conference:
Michael G. Oxley,
Doug Bereuter,
Spencer Bachus,
Mike Castle,
Ed Royce,
Robert W. Ney,
Sue Kelly,
Paul Gillmor,
Steven C. LaTourette,
Judy Biggert,
Pete Sessions,
Barney Frank,
Paul E. Kanjorski,
Melvin L. Watt,
Luis V. Gutierrez,
Darlene Hooley,
Dennis Moore,
Managers on the Part of the House.
Richard Shelby,
Robert F. Bennett,
Wayne Allard,
Michael B. Enzi,
Paul Sarbanes,
Christopher J. Dodd,
Tim Johnson,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at the
conference on the disagreeing votes of the two Houses on the
amendment of the House to the bill (H.R. 2622) to amend the
Fair Credit Reporting Act, to prevent identity theft, improve
resolution of consumer disputes, improve the accuracy of
consumer records, make improvements in the use of, and
consumer access to, credit information, and for other
purposes, submit the following joint statement to the House
and the Senate in explanation of the effect of the action
agreed upon by the managers and recommended in the
accompanying conference report:
The Senate amendment to the text of the bill struck all of
the House bill after the enacting clause and inserted a
substitute text.
The House recedes from its disagreement to the amendment of
the Senate with an amendment that is a substitute for the
House bill and the Senate amendment. The Committee of
Conference met on November
[[Page H12214]]
21, 2003 (the Senate Chairing) and resolved their
differences. The differences between the House bill, the
Senate amendment, and the substitute agreed to in conference
are noted below, except for clerical corrections, conforming
changes made necessary by agreements reached by the
conferees, and minor drafting and clerical changes.
The Fair Credit Reporting Act was enacted in 1970, and
substantially amended in 1996. The amendments made at that
time were necessary to make the law relevant in an
information age. Included in the 1996 amendment were a number
of provisions that explicitly preempt state laws. These
preemptions expire on January 1, 2004.
Since 1996, the national credit markets have undergone
significant change. Most of these changes were the result of
technological innovations. Technology has expanded the
availability of credit, and permitted instant credit
decisions. Mortgage financing that once took weeks now takes
hours, and home ownership rates are at historic highs.
Consumer credit can be obtained at the point of sale for
major items like automobiles. Technology and the prudently-
regulated free flow of consumer information under the FCRA
has made much of this possible. We live in a mobile society
in which 40 million Americans move annually. The FCRA permits
consumers to transport their credit with them wherever they
go. Both Committees of jurisdiction have developed detailed
records regarding the benefits that our national credit
reporting system has visited upon consumers of financial
products.
Despite the myriad benefits of technology to the American
consumer, there has been one drawback. Namely, the free flow
information has enabled the explosive growth of a new crime--
identity theft. Both Committees developed comprehensive
hearing records regarding the growth of this crime, and the
havoc it visits upon the lives of its victims. Law
enforcement professionals are cognizant of the growth of this
crime, and have worked with the affected industries to combat
it. While criminal prosecutions and strict fraud detection
protocols can curtail identity theft, and punish the
wrongdoers, not enough had been done heretofore to aid the
real victims of this crime--the consumer whose identity is
assumed, and can spend months or years trying to rehabilitate
their credit and re-order their affairs.
The House bill and the Senate amendment contain a number of
identical provisions. In other instances, the provisions in
the respective bills addressed the same issue in a slightly
different manner. Both the House bill and the Senate
amendment addressed the provisions of the FCRA that preempted
state laws, and are due to expire on January 1, 2004. Both
bills addressed identity theft, medical information privacy
and promote greater consumer access to their credit reports.
The House bill, H.R. 2622, and the bill that served as the
core of the Senate amendment (S. 1753) are each the result of
an extensive deliberative and legislative process with a
three-fold purpose: to assist the victims of identity theft;
modernize the FCRA and; enhance the national credit reporting
system. Readers should refer to the Committee Reports for the
respective bills for further elaboration. The conference
agreement contains provisions to accomplish these goals. It
is the conferees' belief that this legislation will assist
the victims of identity theft, and ensure the operational
efficiency of our national credit system by creating a number
of preemptive national standards.
For consideration of the House bill and the Senate amendment,
and modifications committed to conference:
Michael G. Oxley,
Doug Bereuter,
Spencer Bachus,
Mike Castle,
Ed Royce,
Robert W. Ney,
Sue Kelly,
Paul Gillmor
Steven C. LaTourette,
Judy Biggert,
Pete Sessions,
Barney Frank,
Paul E. Kanjorski,
Melvin L. Watt,
Luis V. Gutierrez,
Darlene Hooley,
Dennis Moore,
Managers on the Part of the House.
Richard Shelby,
Robert F. Bennett,
Wayne Allard,
Michael B. Enzi,
Paul Sarbanes,
Christopher J. Dodd,
Tim Johnson,
Managers on the Part of the Senate.
Mr. OXLEY. Mr. Speaker, I move to suspend the rules and agree to the
conference report on the bill (H.R. 2622) to amend the Fair Credit
Reporting Act, to prevent identity theft, improve resolution of
consumer disputes, improve the accuracy of consumer records, make
improvements in the use of, and consumer access to, credit information,
and for other purposes.
The Clerk read the title of the bill.
(For conference report and statement, see prior proceedings of the
House of today.)
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Oxley) and the gentleman from Massachusetts (Mr. Frank) each
will control 20 minutes.
The Chair recognizes the gentleman from Ohio (Mr. Oxley).
General Leave
Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on the conference report and insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. OXLEY. Mr. Speaker, I yield myself 6 minutes.
Mr. Speaker, I am proud to bring before the House today the
conference report on H.R. 2622, the Fair and Accurate Credit
Transactions Act of 2003. This is a bipartisan bill that will foster
economic growth and development throughout this country. When 9/11 hit
our country, Congress responded quickly with the passage of the USA
PATRIOT Act and the Terrorism Risk Insurance Act. When corporate
scandals threatened to undermine the integrity of the stock market, we
responded with the passage of the Sarbanes-Oxley Act. And today, as the
laws governing our national credit markets are set to expire, we must
again respond swiftly and responsibly with the passage of this
bipartisan solution to keep the American economy stable and growing and
assure that the American consumer continues to enjoy the benefits of a
robust national credit granting system.
{time} 1800
One of the hallmarks of the modern U.S. economy is quick and
convenient access to consumer credit. Though it would seem unimaginable
a generation ago, consumers can now qualify for a mortgage over the
telephone, walk into a showroom and finance the purchase of a car in
one sitting, and get department store credit within minutes. As the
distinguished Federal Trade Commission chairman Tim Muris has stated,
the ``miracle of instant credit'' created by our national credit
reporting system has given American consumers a level of access to
financial services and products that is unrivaled anywhere in the
world. The protection and growth of these services, as provided for in
this legislation, are critical to the success of our economy.
Since the Fair Credit Reporting Act's uniform national standards were
established in 1996, we have achieved some of the lowest mortgage rates
and credit rates on record, with more competition and more offerings
for consumers than ever before. This has led to the record level of
credit available today to all Americans, regardless of income level.
Over the past 30 years, the availability of nonmortgage credit to
households in the lowest income bracket has increased by nearly 70
percent, including a nearly threefold increase in the number of low-
income households owning credit cards just in this last decade. The
increase of available credit, coupled with the declining price of this
credit, has also fueled the record homeownership levels we are
experiencing today, again with the largest gains achieved by low- and
moderate-income groups. These improvements in the credit and mortgage
systems have saved consumers nearly $100 billion annually, according to
some estimates.
In addition to preserving our vital national credit system, this
legislation is an extremely comprehensive consumer protection bill. The
protections are designed to meet head-on the growing crime of identity
theft which has accompanied the expanding credit market in our country.
The FTC released a study in early September which revealed the damaging
extent of this crime in our country. Ten million Americans were
victimized by identity thieves last year alone, costing consumers and
businesses over $55 billion, not counting the 300 million hours spent
by victims to try to repair damaged credit records. The financial costs
are staggering, with over $10,000 stolen in the average fraud.
The Committee on Financial Services has worked tirelessly to explore
and find solutions to this destructive crime. Over 100 witnesses have
come before the committee since last April to discuss the renewal of
the Fair Credit Reporting Act, and many of them focused their
statements on the urgent
[[Page H12215]]
need to increase safeguards designed to protect consumers and
businesses alike from this crime. With the bipartisan support in the
House, as well as valuable input and assistance from our friends in the
Senate, we have a bill before us today that empowers both consumers and
businesses as we attempt to eliminate this terrible crime. Congress
needs to pass strong, uniform identity theft protection; and it needs
to do it now.
This conference report preserves many key elements designed to fight
identity theft from the bill that passed the House with close to 400
votes. These strong new identity theft provisions standards established
by the bill will be national, ensuring uniform protection for consumers
in all 50 States.
This legislation includes provisions that allow consumers to place
fraud alerts, allowing consumers to block information from being given
to a credit bureau, providing identity theft victims with a summary of
their rights, giving consumers the right to see their credit scores,
giving all consumers the right to a free copy of their credit report,
restricting access to consumers' sensitive health information,
simplifying the way consumers can limit unsolicited marketing offers,
ensuring improved accuracy of credit reporting procedures, and
providing consumers with one-call-for-all protection by requiring
credit bureaus to share consumer calls on identity theft, including
requested fraud alert blocking.
This legislation also provides valuable tools and resources to
financial institutions to ensure accuracy and prevent identity theft.
These provisions include requiring creditors to take certain
precautions before extending credit to consumers who have placed fraud
alerts in their files; prohibiting merchants from printing more than
the last five digits of a payment card on an electronic receipt, and
others.
Mr. Speaker, this is a rather lengthy and long statement, and I will
submit this for the Record.
I want to thank my ranking member, the gentleman from Massachusetts,
for taking on this challenging and important legislation. Also to the
chairman of our Subcommittee on Financial Institutions, the gentleman
from Alabama (Mr. Bachus), who sat through hours of hearings, over 100
witnesses in eight separate hearings; to Chairman Shelby who chaired
the conference committee and also, of course, is the chairman of the
Banking Committee in the Senate, as well as Ranking Member Sarbanes for
working in good faith on this effort.
Mr. Speaker, this was indeed truly a bipartisan, bicameral effort. We
worked very closely with the White House and the Treasury to put
together this conference report. This is good public policy. It is good
for the country's economy, maintaining this constant flow of credit
that we have come to take for granted. This is positive legislation,
and I urge all Members to give it their strong support.
This legislation also provides valuable tools and resources to
financial institutions to ensure accuracy and prevent identity theft.
These provisions include:
Requiring creditors to take certain precautions before extending
credit to consumers who have placed ``fraud alerts'' in their files;
prohibiting merchants from printing more than the last 5 digits of a
payment card on an electronic receipt; requiring banks to develop
policies and procedures to identify potential instances of identity
theft; and requiring financial institutions to reconcile potentially
fraudulent consumer address information.
It is our duty to protect our national credit system and the economic
growth that this system promotes by continuing to provide Americans
with the most affordable and accessible credit market in the world
today. We must ensure that the U.S. remains the engine of growth for
the global economy.
I want to thank my ranking member from Massachusetts, Mr. Frank, for
taking on this challenging and imperative legislative project and for
engaging all the major stakeholders in crafting a bipartisan piece of
well balanced, highly effective legislation. I would also like to thank
my friends from the Senate Banking Committee, Chairman Shelby and
Ranking Member Sarbanes, for working in good faith to resolve
differences between the House and Senate products. And finally, a huge
debt of gratitude is owed by Members of this body to the gentleman from
Alabama, Spencer Bachus, who wrote the House version of this bill;
presided over countless hearings in his capacity as Chairman of the
Financial Institutions and Consumer Credit Subcommittee; and helped
lead the House conferees to a successful outcome in our negotiations
with the Senate. Without the gentleman from Alabama, we would not be
standing on the House floor today about to pass this historic consumer
protection legislation.
The final FCRA legislation states that no requirement or prohibition
may be imposed under the laws of any State with respect to the conduct
required under the nine specific provisions included in the new
identity theft preemption provision of the law. Accordingly, States
cannot act to impose any requirements or prohibitions with respect to
the conduct addressed by any of these provisions or the conduct
addressed by any of the federal regulations adopted under these nine
provisions. All of the rules and requirements governing the conduct of
any person in these areas are governed solely by federal law and any
State that attempts to impose requirements or prohibitions in these
areas would be preempted.
I should note that the legislation lists the provisions to be
preempted. However, to the extent such provisions would enjoy
preemption under another provision in the FCRA, the other provision
would control.
One of the central elements of the approach taken by the bill that
the House passed overwhelmingly last September was to make the new
fraud prevention and mitigation provisions contained in the legislation
the new uniform national standards on those subject matters. The bill
was drafted in this way because identity theft is a national concern,
not only because of its impact on our system of granting credit, but
because it knows no boundaries. The consumer victim may be in one
State, the financial institution victim in another State, and the
perpetrator may be in a third State. The credit bureaus that receive
and report information relating to a fraudulent account may be in yet a
fourth State.
In drafting the House bill, we were careful to stipulate--and to
clarify in a colloquy on the House floor among the gentleman from
Massachusetts, Mr. Frank, the gentleman from Alabama, Mr. Bachus, and
myself--that the uniform national standards for identity theft were
limited to the subject matters that the bill's provisions actually
address, such as fraud alerts, blocking bad credit information, and
truncating credit card account numbers at the point of sale. Thus, for
example, this national uniformity would not affect State criminal
statutes, or State laws governing the public display of social security
numbers.
The conference committee further refined this standard, by providing
that the new uniform national standards on identity theft created by
this legislation apply with respect to the conduct required by those
specific provisions.
I strongly urge my colleagues to vote for this Conference Report.
Mr. Speaker, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Speaker, I am glad to yield 2\1/2\
minutes to the gentlewoman from Oregon (Ms. Hooley), a member of this
committee who really did extraordinarily good work here and who early
on became our task force head on identity theft, and this bill is
really path-breaking in what it does for identity theft.
Ms. HOOLEY of Oregon. Mr. Speaker, I thank my good friend, the
gentleman from Massachusetts, for yielding me this time.
During floor debate of the Fair and Accurate Credit Transaction Act
back in September, I told a story of a constituent who had her purse
stolen and ended up spending hours trying to clean up her credit files
as a result. It got so bad, in fact, that the police officer suggested
it would be easier for her to change her name than to deal with the
damage caused by the result of a theft. At that time, I continued on to
say that something is wrong with the law when a law enforcement
official suggests changing your identity in order to protect yourself
from identity theft.
Well, I am ecstatic to report to everyone that after 4 years'
struggle, the law is changing. Today the House and Senate conferees met
and approved the Fair and Accurate Credit Transaction Act, a bill that
will do many things to protect consumers and safeguard our Nation's
credit system. Above all, however, this legislation will put in place
landmark protections against identity theft, the fastest-growing crime
in the United States.
This legislation has been a long time coming and is the result of a
lot of hard work by a number of Members of Congress. I would especially
like to thank the gentleman from Massachusetts (Mr. Frank) and the
gentleman from Ohio (Mr. Oxley) for all of their incredible work;
Senator Sarbanes and Senator Shelby for the leadership they have shown
through a bipartisan conference process; and a special thanks to
[[Page H12216]]
the gentleman from Alabama (Mr. Bachus) and the gentleman from Ohio
(Mr. LaTourette) for the long hours they put in on this piece of
legislation. Because of these leaders' work and the incredible staff
that worked with us, we have a conference report that takes the best
provisions from the Senate and the best provisions from the House to
pass this piece of legislation.
I will share a few of the consumer protections it provides, and I
will insert the remainder of this list in the Congressional Record.
First of all, it provides consumers with a free credit report, gives
consumers the right to see their credit scores, provides consumers with
broad new medical privacy rights, gives the consumers the ability to
opt out of information-sharing between affiliated companies for
marketing purposes, and establishes a financial literacy commission.
Those are just a few.
I am proud of how the committee worked together. I think we were the
poster child of how this process should be run. I am proud of the
substance of this conference report that is good for consumers and good
for businesses. I urge all of my colleagues on both sides of the aisle
to support our Nation's consumers by voting ``yes'' for the conference
report.
The agreement reached by conferees today will:
General Provisions:
Provide consumers with a free credit report every year from
each of the three national credit bureaus, from a single
centralized source;
Give consumers the right to see their credit scores;
Provide consumers with broad new medical privacy rights;
Give consumers the ability to opt-out of information
sharing between affiliated companies for marketing purposes;
Establish a financial literacy commission and a national
financial literacy campaign;
Ensure that consumers are notified if merchants are going
to report negative information to the credit bureaus about
them; and
Extend the seven expiring provisions of the Fair Credit
Reporting Act.
Identify Theft Provisions:
Allow consumers to place ``fraud alerts'' in their credit
reports to prevent identify thieves from opening accounts in
their names; including special provisions to protect active
duty military personnel;
Require creditors to take certain precautions before
extending credit to consumers who have placed ``fraud
alerts'' in their files;
Allow consumers to block information from being given to a
credit bureau and from being reported by a credit bureau if
such information results from identify theft;
Provide identify theft victims with a summary of their
rights;
Provide consumers with one-call-for-all protection by
requiring credit bureaus to share consumer calls on identify
theft, including requested fraud alert blocking.
Prohibiting merchants from printing more than the last 5
digits of a payment care on an electronic receipt;
Require banks to develop policies and procedures to
identify potential instances of identify theft;
Require financial institutions to reconcile potentially
fraudulent consumer address information; and
Require lenders to disclose their contact information on
consumer reports.
Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Alabama (Mr. Bachus), the chairman of the Subcommittee
on Financial Institutions and Consumer Credit, who has done such a
wonderful job on this bill.
Mr. BACHUS. Mr. Speaker, I thank the chairman for yielding me this
time.
I am going to limit my time to thanking Members, because this
legislation I think more than anything is a testimony of what we as
Members do when we all work in the best interests of the American
public.
This bill contains sweeping new protections against identity fraud.
It also will enable consumers, which make up 70 percent of our economy,
to have available more credit and more choices. And as important as
that is, it does a third thing. It has many different tools to ensure
that our credit information is accurately reported and that our private
information and confidential information such as medical records are
not shared.
At this time, I would like to thank the cosponsors. This bill was
introduced by me; the gentlewoman from Oregon (Ms. Hooley), whom we
have heard from; the gentlewoman from Illinois (Mrs. Biggert); and the
gentleman from Kansas (Mr. Moore). The gentlewoman from Oregon (Ms.
Hooley), the gentlewoman from Illinois (Mrs. Biggert), and the
gentleman from Kansas (Mr. Moore) all had significant input into this
legislation. The gentleman from Ohio (Mr. LaTourette), a lot of the
fraud provisions were drafted by him or the gentlewoman from Oregon
(Ms. Hooley). The gentleman from Pennsylvania (Mr. Kanjorski), the
gentleman from Delaware (Mr. Castle), the gentlewoman from New York
(Mrs. Maloney), the gentleman from Arizona (Mr. Shadegg), the gentleman
from Tennessee (Mr. Ford), the gentleman from Ohio (Mr. Tiberi), the
gentleman from Texas (Mr. Hinojosa), the gentleman from Texas (Mr.
Hensarling), the gentleman from New York (Mr. Crowley), the gentleman
from Texas (Mr. Sessions), the gentleman from Arizona (Mr. Ross), the
gentleman from Utah (Mr. Matheson), the gentleman from Alabama (Mr.
Davis), the gentleman from Louisiana (Mr. Baker), the gentleman from
New York (Mr. King), the gentleman from Oklahoma (Mr. Lucas), and the
gentleman from Kentucky (Mr. Lucas), the gentleman from Ohio (Mr. Ney),
the gentlewoman from New York (Mrs. Kelly), the gentleman from North
Carolina (Mr. Jones), the gentleman from New York (Mr. Israel), the
gentlewoman from Pennsylvania (Ms. Hart), the gentleman from North
Carolina (Mr. Miller), the gentlewoman from West Virginia (Mrs.
Capito), the gentlewoman from New York (Mrs. McCarthy), the gentleman
from South Carolina (Mr. Barrett), the gentleman from Florida (Mr.
Feeney), and the gentlewoman from Florida (Ms. Harris).
All of these Members participated in this process, and the bill,
which was passed almost unanimously by the House, went over to the
Senate; and I would like to credit the other body for working, I think,
in a professional manner and improving what we thought was a wonderful
bill. And then, in conference, I would finally like to salute the
gentleman from Ohio (Chairman Oxley), first, for giving me the
opportunity of working on this legislation; and secondly, I would like
to salute him and the gentleman from Massachusetts (Mr. Frank), our
conferees, Mr. Sarbanes and Chairman Shelby. All of the people I have
named deserve particular praise for a wonderful piece of legislation.
Mr. Speaker, I rise in strong support of the conference report to
H.R. 2622, the Fair and Accurate Credit Transactions Act (``FACT
Act''). H.R. 2622 represents the culmination of my efforts, and those
of my colleagues, to craft legislation to strengthen our economy and to
provide consumers with meaningful identity theft protections. The FACT
Act is the bi-partisan product of a thorough review of the Fair Credit
Reporting Act (``FCRA''), identity theft, and related issues, Indeed,
the legislation was approved overwhelmingly in the House by a vote of
392-30 and in the Senate by a vote of 95-2.
I want to express my deepest sense of gratitude to Chairman Oxley who
gave me the opportunity to introduce this landmark piece of legislation
and then skillfully guided it through the legislative process. In my
career as a legislator, it is only on a rare occasion when you get the
chance to draft legislation in such a bipartisan and cooperative
atmosphere. The Chairman deserves a lot of credit for establishing such
a collegial process, and I think our legislative product is better
because of his efforts.
As Chairman of the Subcommittee on Financial Institutions and
Consumer Credit. I conducted 8 hearings on the FCRA and related issues
over the past year, receiving testimony from nearly one hundred
witnesses including consumer groups, businesses, law enforcement, and
various government regulators. On June 26, 2003, I introduced H.R. 2622
with Representatives Hooley, Biggert, and Moore. The FACT Act--a
byproduct of our hearings and bipartisan cooperation--passed its
version of FCRA legislation--S. 1753--by a vote of 95-2. This week, the
conference report to H.R. 2622 was approved almost unanimously by the
conferees from both the House and Senate. H.R. 2622 is supported by a
broad coalition of interested parties, including large financial
institutions, community banks, credit unions, retailers as well as the
Administration.
H.R. 2622 will benefit consumers and our economy by ensuring the
continuity of our national uniform credit system. Indeed, our economy
depends on several national delivery systems--each represented by
incredible amounts of investment and infrastructure. For example, the
national interstate highway system and our telecommunications networks
are all critical to our national economy. Today we can drive from state
to state without worrying
[[Page H12217]]
about whether a road will come to an abrupt end at the state line. Our
consumer credit system is similar to these examples--we do not really
think about it, we just expect that it will work. Although not perfect,
our consumer credit system makes life better, easier, and cheaper for
American consumers.
Just as our highway and telecommunications networks have improved and
become more efficient over the years, so has our credit system.
Creditors have always needed to evaluate the likelihood that a borrower
would repay a loan. As a result of the framework established by the
FCRA, creditors, no longer need to ``eyeball'' an applicant and review
application materials for days or weeks. Rather, our national credit
system has produced a virtually seamless system whereby consumers can
apply for, and receive a decision on, credit within minutes. The
national uniform system has also lowered costs and increased choice and
convenience for American consumers. By far the most striking result of
our national credit system is the dramatically increased availability
of credit--or the ``democratization'' of credit. However, this system
could be put in jeopardy if the state law uniform standards in the FCRA
were permitted to expire on January 1, 2004. H.R. 2622 would ensure the
continuity of our national credit system by making these standards
permanent.
The conference report also directly addresses the problem of identity
theft.
Sec. 151 of the conference report requires that the FTC and the
federal banking regulators provide identify theft victims with a
summary of their rights. It is important for the agencies to let
consumers know that identity thieves target home computers because they
contain a goldmine of personal financial information about individuals.
In educating the public about how to avoid becoming a victim of
identity theft, the FTC and the federal banking regulators should
inform consumers about the risks associated with having an `always on'
Internet connection not secured by a firewall, not protecting against
viruses or other malicious codes, using peer-to-peer file trading
software that might expose diverse contents of their hard drives
without their knowledge, or failing to use safe computing practices in
general.
Identity theft occurs when a criminal obtains enough information
about an individual to allow the criminal to ``assume'' that
individual's identity for nefarious purposes. My Subcommittee heard
from two identity theft victims. Their stories were truly nightmarish,
and we need to work to prevent countless others from joining the ranks
of identity theft victims. Not only does identity theft harm the direct
victims, but it also has an impact on all consumers. Financial
institutions lose millions of dollars each year as a result of identity
theft. This increased cost on financial institutions is absorbed, at
least in part, through increased costs of financial products and
services to all consumers.
H.R. 2622 will also improve consumers' access and understanding of
their credit information by allowing consumers to request a free credit
report annually from each credit bureau. In addition, consumers will
have the opportunity to obtain their credit scores from credit bureaus.
Transparency in the credit granting and reporting process will increase
consumers' financial literacy and improve their confidence in the
financial services system in general.
I want to commend Chairman Oxley for the tremendous leadership he has
shown in steering this complex bill through the legislative process. I
also want to thank the Ranking Member of the Committee, Mr. Frank, for
his support of this important piece of legislation. In addition, let me
commend Ms. Hooley, Ms. Biggert, Mr. Moore, Mr. LaTourette and the
Members of the Financial Services Committee on each of their efforts. I
also appreciate the efforts of Mr. Sanders, the Ranking Member on my
subcommittee, for his work on this issue. Lastly, I want to mention my
appreciation for the input we received from the Administration,
particularly from Treasury Secretary John Snow and Treasury Assistant
Secretary for Financial Institutions Wayne Abernathy.
Let me also take this opportunity to thank the staff members on the
House Financial Services Committee who worked on this legislation. Both
Chairman Oxley and Ranking Member Frank are to be commended for
assembling such a talented group of staff to work on H.R. 2622. On the
majority side, I would like to thank Bob Foster, Hugh Halpern, Carter
McDowell, Jim Clinger; Robert Gordon, Charles Symington, Karen Lynch--
who no longer works for the committee but did a lot of work on this
issue before leaving--and Dina Ellis, my designee on the Committee. I
would also like to thank Warren Tryon of my staff for his work on this
issue. On the minority staff, I would like to thank the following staff
members: Jeanne Roslanowick, Jaime Lizarraga, Ken Swab, Erika Jeffers,
Dean Sagar and Warren Gunnels.
In conclusion, I would like to note that I am proud of the work we
have done in crafting H.R. 2622. This has been, by necessity, a long
and thorough process. I believe H.R. 2622 presents a solid achievement
in protecting the security of consumers' personal information,
enhancing the transparency of the credit reporting process, and
ensuring continued access to a wide variety of financial products at
low cost.
Mr. Speaker, our economy today is important to all of us. That goes
without saying. But what a lot of people do not realize is that two-
thirds of our economy is consumer spending. That is the driver in our
economy today. And consumer spending today is contingent upon
maintaining a national uniform credit reporting system. I urge all of
my colleagues to support our economy by voting for H.R. 2622.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Thornberry). The Chair would remind all
Members it is inappropriate to characterize the other body, even in
positive terms.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2\1/2\ minutes to
the gentleman from Vermont (Mr. Sanders), the ranking member of the
subcommittee from which this bill came.
Mr. SANDERS. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, this bill has a number of important and positive
provisions. The idea that consumers will receive free credit reports is
important. The provision strengthening identity theft is also very
important.
But basically, the positive provisions in this bill do not outweigh
the negative. And, in my view, this bill should be defeated. It should
be defeated because it preempts States throughout this country from
going forward with stronger consumer protections. And to my mind,
States, in fact, are the laboratories of democracy; and it is a bad
idea, especially from our conservative friends, who year after year
have told us how bad it was for the Federal Government to have all this
power, to now give power to the Federal Government and tell the State
of Vermont, the State of California, that if you have specific needs
dealing with consumer issues, you may not go forward. That is wrong.
And for that reason alone, this legislation should be defeated, sent
back, and strengthened in terms of consumer needs.
I would point out that virtually every consumer organization in
America, the Consumer Federation of America, U.S. Public Interest
Research Group, et cetera, oppose the preemption aspects of this
legislation.
Second of all, Mr. Speaker, one of the great rip-offs that is taking
place in America now deals with credit cards which, at a time of very,
very low interest rates, are charging people up to 25 or 29 percent
interest. And one way they do it, Mr. Speaker, is they send out notices
and they say, come in and sign up: zero interest rate. What they forget
to tell the consumer is that for any reason whatsoever, through a bait-
and-switch scam, they can raise interest rates. So 5 years before, you
were late on a student loan, you were late on an automobile payment,
suddenly, you are going to be paying 15, 20 percent interest, and you
do not know it.
This legislation rejected any effort to protect consumers in that
way, not only outlawing this bait-and-switch scam, but even preventing
strong disclosure. This legislation should be defeated, sent back, and
improved.
{time} 1815
Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from New
York (Mrs. Kelly), the chairwoman of the Subcommittee on Oversight and
Investigations.
(Mrs. KELLY asked and was given permission to revise and extend her
remarks.)
Mrs. KELLY. Mr. Speaker, it happens I do not agree with the previous
speaker. I rise in strong support of the conference report before us. I
would like to commend the gentleman from Ohio (Chairman Oxley) and the
gentleman from Massachusetts (Ranking Member Frank) and their
counterparts in the Senate for moving this legislation with great
thoroughness, deliberation, and really in a strong spirit of
bipartisanship.
At the heart of the legislation is the permanent reauthorization of
the Fair Credit Reporting Act. It has provided a national uniform
credit reporting system that has effectively lowered the cost of
credit. And it has increased the choice and convenience for millions of
Americans across the country.
[[Page H12218]]
The FCRA has helped to address other vital security issues such as
combating identity theft and blocking terrorist financing under the
U.S.A. Patriot Act, both issues that I have held hearings on in my
subcommittee.
Combating identity theft and drying up terrorist financing requires a
collaborative effort of law enforcement and regulatory agencies,
consumers, and financial institutions, all with access to appropriate
information.
We have also made some other important improvements to the FCRA in
order to protect the sanctity of privacy for the American people
throughout the credit granting process. I believe that one of the most
important pieces of that is medical information. The medical
information of consumers should be kept private. It does not need to be
shared or be distributed by creditors or listed on credit reports.
Individuals should know that their personal medical information
belongs to them and it is not released for any other purposes, whether
it is for the credit-granting process or employee background checks.
And we have done that with our legislation by coding the information.
I would like to thank the gentleman from Arkansas (Mr. Ross) and the
gentleman from North Carolina (Mr. Watt) for working with me on this
amendment that will protect medical information of individuals without
disrupting the access to low-cost credit and the security of
information.
By allowing consumers to benefit from reporting the financial aspects
of their transactions to credit bureaus while maintaining the sanctity
of their medical privacy, this legislation is a real win for all
Americans.
Finally, I am pleased we were able to include a new title in the
legislation, which creates a Commission on Financial Literacy and
Education, or the SAFE Act. As a result of that strategy, we will have
a clear vision of the future financial literacy that will be the
benefit of all Americans.
Mr. Speaker, I strongly support this legislation.
Mr. Speaker, I rise in strong support of the Conference Report before
us.
I would like to commend Chairman Oxley and Ranking Member Frank--and
their counterparts in the Senate--for moving this legislation with
great thoroughness and deliberation and in the spirit of
bipartisanship.
The legislation, ``The FACT Act'', is the result of a dozen hearings,
one hundred witnesses, and months of deliberations by my colleagues on
both sides of the aisle, and both sides of the Capitol.
At the heart of the legislation is the permanent reauthorization of
the Fair Credit Reporting Act, or FCRA. FCRA has provided a national
uniform credit reporting system that has effectively lowered the cost
of credit, and increased choice and convenience for millions of
Americans across the country.
As a conferee on this report, I can tell you that we worked with many
diverse interests before we reached a unified, solid product. And in
this product, we have built on the framework of FCRA to ensure that the
legislation continues to lower the cost of credit and help fuel our
economy--while also creating new opportunities for populations who have
never had access. That's why this legislation has overwhelmingly
bipartisan support.
FCRA has also helped address other vital security issues, such as
combating identity theft and blocking of terrorist financing under the
USA PATRIOT Act--both issues which I have held numerous hearings on in
my Oversight Subcommittee. Combating identity theft and drying up
terrorist financing requires the collaborative effort of law
enforcement and regulatory agencies, consumers and financial
institutions--all with access to appropriate information.
I am extremely pleased that this conference report addresses these
important issues, and improves our ability to combat identity theft and
help law enforcement officials track down illicit money. The
information-sharing under this legislation is essential to protecting
the American people by detecting suspicious activity and weeding out
wrongdoers.
The national uniform standards under FCRA have also facilitated a
financial institution's ability to utilize additional authentications
and identity verifications to protect consumer security. And the
increased protections incorporated in this legislation are critically
important in enabling victims to correct the damage to their credit
histories created by identity thieves.
This legislation will further help law enforcement combat financial
fraud and track down criminals and terrorists. And it adds new
protections that are important to achieving these goals.
We have also made other important improvements to FCRA in order to
protect the sanctity of privacy for the American people throughout the
credit-granting process.
I believe the medical information of consumers should be kept
private, and it does not need to be shared or distributed by creditors
or listed on credit reports. Individuals should know that their
personal medical information belongs to them and is not released for
other purposes, whether it is for the credit granting process or
employee background checks. And we have done this in our legislation by
coding this information.
I would like to thank Reps. Ross and Watt for working with me on an
amendment that will protect the medical information of individuals
without disrupting access to low cost credit and the security of
information.
By allowing consumers to benefit from reporting the financial aspects
of their transactions to credit bureaus while maintaining the sanctity
of their medical privacy, this legislation is a real win for all
Americans.
Finally, I am pleased that we were able to include a new title in the
legislation, which creates a Commission on Financial Literacy and
Education to improve the financial literacy of millions of Americans of
all ages.
At the crux of this language is the creation of the first ever
national strategy for financial literacy--which will facilitate new
public, private and nonprofit partnerships to help educate all
Americans in financial literacy. The national strategy, and its
subsequent report to Congress, will be known as ``The Strategy for
Assuring Financial Empowerment'' or ``SAFE strategy'', based on
legislation that I introduced--H.R. 3520, ``The SAFE Act''.
As as result, the ``SAFE strategy'' will provide a clear vision for
the future of financial literacy. The vision will provide a systematic
approach to identify effective ways to increase the general education
level of current, and future, consumers of financial services and
products. The Commission and the ``SAFE strategy'' will be goal-
oriented and subject to reviews by Congress through annual testimony.
Mr. Speaker, I strongly support this legislation that is crucial to
the economy and the security of the American people.
I thank you for addressing these important issues and urge my
colleagues to support this conference report.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1\1/2\ minutes to
the gentleman from Pennsylvania (Mr. Kanjorski), who is the second
ranking member of the full committee and the ranking member of the
Subcommittee on Capital Markets, Insurance and Government Sponsored
Enterprises and who has a major input to this bill.
(Mr. KANJORSKI asked and was given permission to revise and extend
his remarks, and include extraneous material.)
Mr. KANJORSKI. Mr. Speaker, just as an aside, if I may, I urge all my
colleagues on this side of the aisle and on the other side of the aisle
to support one of the most bipartisan pieces of legislation. I want to
congratulate the chairman of the committee, the gentleman from Ohio
(Mr. Oxley), the ranking member of the committee, the gentleman from
Massachusetts (Mr. Frank), and the chairman of the subcommittee, the
gentleman from Alabama (Mr. Bachus), and the ranking member of the
subcommittee on our side of the aisle for a job well done.
And the fact that we set a new course of activity here in the House
as to how this function of legislation should be done from not only the
subcommittee, the full committee, the House and Senate, and the
conference committee, but now as they work back today, I urge all my
colleagues to support the legislation.
Mr. Speaker, I would like to enter into a colloquy with the gentleman
from Alabama (Mr. Bachus) on the Federal FTC advertising campaign.
Section 213 of the bill directs the Federal Trade Commission to
increase public awareness regarding the availability of consumer rights
to opt out of receiving prescreened credit offer solicitations. Is that
his understanding as well?
I yield to the gentleman from Alabama.
Mr. BACHUS. Mr. Speaker, it is, yes.
Mr. KANJORSKI. Mr. Speaker, does the gentleman share with me the
understanding that the FTC's public awareness campaign is to be
designed to increase public awareness, not only of the right to opt out
of receiving prescreened solicitations, but also of the benefits and
consequences of opting out?
Mr. BACHUS. Mr. Speaker, yes, I share that understanding. Not only
[[Page H12219]]
should consumers know they can opt out of getting these offers, they
should also know that opting out or not affects their chances of
getting additional credit offers with competitive terms.
Mr. KANJORSKI. Mr. Speaker, and if the FTC's public awareness
campaign increases their understanding of the opt-out, consumers will
make more informed better decisions. Does the gentleman agree?
Mr. BACHUS. Mr. Speaker, yes, I agree.
Mr. KANJORSKI. Mr. Speaker, I thank the gentleman from Alabama (Mr.
Bachus).
Mr. Speaker, I rise in very strong support of the conference report
for H.R. 2622, the Fair and Accurate Credit Transactions Act.
The bill before us is an excellent piece of legislation. It advances
consumer protection. It combats identity theft. And it allows
businesses to operate efficiently when offering credit.
Moreover, the bill before us is a model of how the legislative
process should work on a bipartisan basis. We held numerous hearings on
the legislation. We deliberated on these matters thoroughly. We worked
with one another on a bipartisan basis. The results of our efforts
produced a bill that originally passed the House overwhelmingly.
If we fail to extend the expiring provisions of the Fair Credit
Reporting Act before the end of this year, conflicting state laws could
place financial institutions in a difficult compliance position, and
the current efficiencies in obtaining credit could significantly
decrease. We would, moreover, create more difficulties for our already
struggling economy.
The Fair Credit Reporting Act and its 1996 amendments, in my view,
have created a nationwide consumer credit system that works
increasingly well. This law has expanded access to credit, lowered the
price of credit, and accelerated decisions to grant credit. One reason
that the law works so well is the establishment of a uniform system of
national standards for credit reporting. As my colleagues may recall,
Mr. Speaker, I strongly supported creating these state preemptions in
the early 1990s. I also believe that we should extend them now.
In addition to extending the expiring preemptions of state law, H.R.
2622 will make a number of important improvements to current law with
respect to consumer protection. These provisions, among other things,
will improve the accuracy of and correction process for credit reports,
and establish strong privacy protections for consumers' sensitive
medical information.
Furthermore, identity theft is a growing problem in our country. A
recent report by the Federal Trade Commission found that 27.3 million
Americans have been victims of identity theft in the last five years. I
am therefore particularly pleased that H.R. 2622 includes several
provisions designed to combat these crimes and aid consumers.
Before I close, Mr. Speaker, I want to again commend the Ranking
Member of the Committee [Mr. Frank] for his work leading to a very
strong bill, as well as the gentlelady from Oregon [Ms. Hooley] for her
important work on identity theft. As I have already noted, we also
worked on a bipartisan basis and in a pragmatic way with the Chairman
of the Committee [Mr. Oxley] and the Chairman of the Subcommittee [Mr.
Bachus] to produce a very worthwhile legislative product in the House
and in the conference with the Senate on which I served.
Mr. Speaker, H.R. 2622 contains many important consumer protection
provisions in a framework of uniform national standards. It is a good
bill. I encourage my colleagues to support its passage.
Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Illinois (Mrs. Biggert).
Mrs. BIGGERT. Mr. Speaker, I would like to commend the hard work that
the gentleman from Ohio (Chairman Oxley) and the gentleman from Alabama
(Mr. Bachus), subcommittee chairman, the gentleman from Massachusetts
(Ranking Member Frank), and the committee staff have done on this
extremely important piece of legislation.
Mr. Speaker, to its sponsors and its cosponsors, every bill is an
important bill. But there are few bills that we will take up this
session or this Congress that are as critically important to our
economy as reauthorizing and making permanent the expiring protections
contained in the Fair Credit Reporting Act.
The FCRA may not be a household word, but it nonetheless touches
virtually every aspect of our lives and our economy.
Without this reauthorization, there can be no national credit system,
without a national credit system there will be less credit, slower
credit, inaccurate credit, inefficient credit, and in some cases, no
credit at all. Less, slower, inefficient and no credit will lead
inevitably to less spending, slower growth, lower incomes, and fewer
jobs.
That would be noticed by the American consumer and it would be a
disaster for the American economy. That is why FCRA is a must-pass bill
for this session.
This conference report addresses the challenges and problems created
by new technologies as well. Chief among these are the provisions
addressing identity theft. I am particularly pleased that this
conference report contains language addressing the challenges of
financial literacy.
As a member of the Committee on Financial Services and the Committee
on Education and the Workforce, I have come to recognize the positive
impact that a marriage of financial literacy and basic economics can
have on millions of future investors.
I especially want to thank Senators Enzi and Sarbanes for working
with me to perfect this language included in this conference report.
H.R. 2622 is a good bill that provides important new protections for
consumers and stops identity theft before it happens. I urge my
colleagues to support this legislation and yield back the balance of my
time.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1\1/2\ minutes to
the gentleman from Illinois (Mr. Emanuel), who was very active
particularly with regard to the medical privacy provision of this bill.
Mr. EMANUEL. Mr. Speaker, I would like to commend the Members on both
sides of the aisle who worked in a bipartisan way to draft a good,
strong bill with new identity theft protections and consumer
protection. A special thanks to the gentleman from Ohio (Chairman
Oxley), to the gentleman from Massachusetts (Mr. Frank), and to my
colleague, the gentleman from California (Mr. Ose) for cosponsoring the
amendment ensuring that this conference report has landmark provisions
preventing banks and insurance companies from accessing and using the
most sensitive private information of a consumer, medical information.
This medical privacy bill gives consumers a safe harbor they deserve
by blacking out the use of medical information and making it off limits
to banks and insurance companies. They cannot access it, period. This
agreement makes that the law.
These new protections should go a long way to addressing America's
concerns that their medical, mental health, or DNA information could be
shared or used against them by banks and credit bureaus, when they
apply for a mortgage, rent an apartment, or join a club. No one
applying for a home should have to worry about a bank using their past
cancer treatments against them. When this becomes law, they will not
have to. This is a win for consumers and for the financial services
industry.
Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Florida (Ms. Harris).
Ms. HARRIS. Mr. Speaker, I want to discuss some of the exciting
opportunities in the FCRA, specifically the aspects that Florida has
engaged in. And I would like to enter a colloquy with the gentleman
from Alabama (Mr. Bachus) to discuss those.
Mr. Speaker, I would yield to the gentleman from Alabama (Mr.
Bachus).
Mr. BACHUS. Mr. Speaker, if the gentlewoman would yield, I would be
glad to engage in a colloquy. I think what the gentlewoman from Florida
(Ms. Harris) was inquiring into was that the Florida Banking
Association has created a system that permits banks to combat identity
theft, check fraud, and other criminal activity. And as I understand
it, this system it produces reports that banks use exclusively to fight
fraud not for the purpose, either in whole or part, of determining an
individual's eligibility for credit insurance and employment.
And she has asked me to confirm that information that is provided for
the exclusive purpose of detecting, preventing, or deterring a
financial crime identity theft, or the funding of a criminal activity
does not constitute a consumer report under the Fair Credit Reporting
Act, even as amended by
[[Page H12220]]
this bill. And my response to that is that is correct. Such information
was not a consumer report under the Fair Credit Reporting Act as it
existed before this legislation, nor will it constitute a consumer
report as amended by this bill.
Ms. HARRIS. Mr. Speaker, reclaiming my time, I think that many people
were confused by that, so I really appreciate the clarification that
this information is not a consumer report under the Fair Credit Act
neither before it was passed nor after it has been amended. So I really
appreciate that clarification.
In fact, I think one of the biggest problems has been that the fraud
and identity theft has created billions of dollars of losses in the
U.S. economy and continues to create serious problems for individuals.
The technology allows criminals to perpetuate this fraud with
increasing rapidity.
Financial institutions and law enforcement need to fight the
increases in fraud and identity theft with technology. So the proposed
amendment would free the antifraud networks from compliance with
certain requirements of the Fair Credit Reporting Act. But the
amendment preserves the consumer protection features in the Fair Credit
Reporting Act because it requires a notice to consumers and an
opportunity to respond.
What is exciting about the Florida bankers is they actually created
something called Fraud Net in 2000 and it was implemented in 2002. This
is really sort of a neighborhood watch for bankers, if you will.
Because banks post alerts when they experience a fraudulent or criminal
act. It does not deal with individual transactions, opening accounts,
credit insurance, or employment. Today 14 States are employing the
specific program, and they expect 10 additional users next year.
So I thank the gentleman from Alabama (Mr. Bachus) for clarifying.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the
gentlewoman from Indiana (Ms. Carson), one of our most active and
energetic members of our committee.
Ms. CARSON of Indiana. Mr. Speaker, I would like to thank the
gentleman from Massachusetts (Mr. Frank) and the gentleman from Alabama
(Mr. Bachus) for the bipartisan spirit to move the bill to the floor.
Mr. Speaker, the Fair Credit Reporting Act has been crucial to
extending credit services to underserved populations and in protecting
consumers from egregious abuses of their financial and personal
privacy. However, the violations and abuses continue to persist. I have
assisted a number of constituents who have had credit problems because
of inaccurate credit reporting. In many instances, people have no idea
there is a problem until they try to secure a loan or credit.
What I found especially troubling is larger than expected numbers of
inaccuracies credit reporting agencies have on consumers. So H.R. 2622
provides a number of new important consumer protections that will make
credit reports less frustrating for our consumers. The bill would give
every person in America the ability to consider request an annual free
credit report.
I certainly hope every American takes advantage of this. The bill
deals a tremendous blow to identity thieves whose crimes are rising
rapidly. Consumers will be able to place fraud alerts on their credit
report when erroneous information is present. I applaud the leadership
on this bill, a very needed bill. I encourage the Members to support
it.
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from Texas
(Mr. Sessions), a distinguished member of the Committee on Rules, who
has an important measure in this legislation.
Mr. SESSIONS. Mr. Speaker, I wish to thank the great chairman of the
committee, the gentleman from Ohio (Mr. Oxley), and also the gentleman
from Massachusetts (Mr. Frank) for working with me on an important
aspect of this Fair Credit Reporting Act.
I learned, Mr. Speaker, from one of my constituents, Bill Asher back
in Dallas, Texas, during a town hall meeting about how the Federal
Trade Commission had applied privacy rules to workplace misconduct
which meant that in a workplace misconduct circumstance, a person who
violated another person or who broke the law would actually have to be
given information about any investigation that might take place against
that individual under privacy rules and regulations passed by and
supported by the Federal Trade Commission.
{time} 1830
This Federal Trade Commission now will be reversed; their ruling will
be reversed by this Fair Credit Reporting Act to make sure that
misconduct in a workplace, privacy rules do not apply.
I want to thank the gentleman from Massachusetts (Mr. Frank) for his
work on this, to ensure this became law, and also our great chairman,
the gentleman from Alabama (Mr. Bachus), and our great chairman, the
gentleman from Ohio (Mr. Oxley).
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1\1/2\ minutes to
the gentleman from New York (Mr. Crowley), another member of our
committee who played a very active role in this.
Mr. CROWLEY. Mr. Speaker, I would like to call this the comity before
the storm. It is interesting that we have such comity here in the House
on the floor dealing with the FACT Act, the Fair Credit Reporting Act.
This has been a bipartisan piece of legislation.
It is interesting that we will take up a bill later on this evening
that will not be as bipartisan, and it certainly will be a more
partisan bill. I want to thank the gentleman from Ohio (Mr. Oxley) for
his extension of his arm. I wish the other committee, the Committee on
Ways and Means, would act in kind; and hopefully that will happen at
some point.
I want to thank the ranking member, the gentleman from Massachusetts
(Mr. Frank), for his work on this bill; the gentleman from Alabama (Mr.
Bachus), the subcommittee chairman; the ranking member, the gentleman
from Vermont (Mr. Sanders). Although he has indicated he will not
support the bill, he certainly acted in a very bipartisan manner in
helping to craft the legislation.
This bill represents the best of the House where Democrats,
Republicans, and Independents work together to craft a bill that
addresses real problems. But besides good procedure, this bill is also
good policy.
It will provide permanency to our Nation's credit grantors to ensure
the easy and available flow of capital to our constituents. It toughens
up the law with respect to identity theft and ensures that health
information is walled off and cannot be used in any credit-making
decisions, ensuring the integrity of one's health privacy.
This bill is good for American consumers, and I am pleased to support
it. I only wish that later on this evening I could also support a
Medicare bill that was bipartisan as well.
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from Ohio
(Mr. Gillmor), a valuable member of the committee.
(Mr. GILLMOR asked and was given permission to revise and extend his
remarks.)
Mr. GILLMOR. Mr. Speaker, I thank the gentleman for yielding me time.
I want to commend both the chairman and the subcommittee chairman, as
well as the ranking members, for the great job they did on this bill.
I rise in strong support of the conference report. Passage of this
legislation is essential to maintaining our current national credit
reporting system. This legislation maintains the free flow of credit
reporting information to lenders, financial services providers, while
it also creates some strong new consumer protections.
It also includes a provision that I introduced, H.R. 2622, to improve
the transparency of the credit scoring systems by mandating that if the
number of credit inquiries on a consumers account negatively affect
their score, it must be disclosed in their consumer report. This
ensures a consumer and a prospective lender are fully informed; and
this important new requirement will allow conscientious consumers to
shop around for the best loans and rates.
I urge my colleagues to support the report.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1\1/2\ minutes to
the gentlewoman from New York (Mrs. Maloney), who played an important
role in this bill.
(Mrs. MALONEY asked and was given permission to revise and extend her
remarks.)
[[Page H12221]]
Mrs. MALONEY. Mr. Speaker, I thank the gentleman for yielding me
time. I thank our ranking member and chair and my colleagues.
I rise in support of this legislation that permanently reauthorizes
the Fair Credit and Reporting Act, which is extremely important to our
economy and our national credit system. It also greatly enhances legal
protections for identity theft victims, protects medical information,
and provides groundbreaking new limits on the sharing of private
consumer information among the affiliates of financial services
companies.
My constituents need this legislation because New York City claims
the sad distinction of having the largest number of identity theft
cases of any city in the entire country. The FACT Act helps break the
cycle of identity theft with new consumer protections including the
right to a free annual credit report, a new consumer-initiated fraud
alert system, new protections that will prevent the recycling or
repollution of consumer information that is known to be the product of
fraud, mandatory truncation of credit and debt card numbers to prevent
theft.
In addition to identity theft, this bill contains groundbreaking
limits on how financial services companies can share the sensitive
consumer financial information among affiliates. These are important
consumer protections given that some of today's largest financial
companies have more than 1,000 affiliates. While the identity theft and
privacy provisions will have the most direct impact on our
constituents, the FACT Act also ensures the long-term viability of our
national credit market by extending the FCRA beyond the end of the
year.
Today I rise in support of legislation that permanently reauthorizes
the Fair Credit Reporting Act (FCRA) which is very important to our
economy and our national credit system. It also greatly enhances legal
protections for identity theft victims, protects medical information,
and provides groundbreaking new limits on the sharing of private
consumer information among the affiliates of financial services
companies.
My constituents need this legislation because New York City claims
the sad distinction of having the largest number of identity theft
cases of any city in the country.
In addition, this bill contains groundbreaking limits on how
financial services companies can share their sensitive customer
financial information among affiliates.
These are important consumer protections given that some of today's
largest financial companies have more than 1,000 affiliates.
Finally, while the identity theft and privacy provisions will have
the most direct impact on our constituents, the FACT Act also ensures
the long-term viability of our national credit market by extending the
FCRA beyond the end of this year.
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from Ohio
(Mr. LaTourette), a former prosecutor, who has done such great work,
particularly in the identity theft part of the legislation.
(Mr. LaTOURETTE asked and was given permission to revise and extend
his remarks.)
Mr. LaTOURETTE. Mr. Speaker, I want to first begin by commending the
gentleman from Ohio (Mr. Oxley) and the ranking member, the gentleman
from Massachusetts (Mr. Frank), for their hard work together with the
conferees. I think the gentlewoman from Illinois (Mrs. Biggert) said
earlier that this is the most important piece of legislation to come
out of this committee this year, and I agree.
I also want to pay special tribute to the gentlewoman from Oregon
(Ms. Hooley). When we began working in the 106th Congress on identity
theft, some people had not heard of it. Today, I think every Member has
a horror story about identity theft. In my district it was Maureen
Mitchell. She and her husband found out that they owned not one, but
two, luxury SUVs in the period of a couple of hours in Chicago,
Illinois, that they had not participated in or purchased.
I think the conferees have produced a good bill. They have not only
produced a good bill; they have produced a bill that does not have a
one-size-fits-all remedy, and it still gives the regulators flexibility
to deal with the ever-evolving strategies that identify thieves come up
with.
Lastly, I want to pay tribute to the gentleman from Alabama (Mr.
Bachus), the chairman of the subcommittee, because he sat through hours
and hours of hearings to make sure that we got it right; and, lastly,
the ranking member, the gentleman from Vermont (Mr. Sanders), I think
he had some excellent ideas on bait and switch. I hope we revisit that
in the next Congress.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1\1/2\ minutes to
the gentleman from Texas (Mr. Hinojosa), another active member of our
committee.
Mr. HINOJOSA. Mr. Speaker, I rise in strong support of the conference
report to accompany the Fair and Accurate Transactions Act of 2003. And
I congratulate the gentleman from Ohio (Mr. Oxley) and the ranking
member, the gentleman from Massachusetts (Mr. Frank), the subcommittee
chairman, the gentleman from Alabama (Mr. Bachus), and the ranking
member, the gentleman from Vermont (Mr. Sanders), and all the committee
staff for the wonderful work they did in completing this conference
report.
This conference report will strengthen the provisions of the Fair
Credit Reporting Act. I am proud to have been an original co-sponsor of
this legislation, to have supported it in committee, and to have voted
in favor of it on the House floor.
Let me take this opportunity to thank the conferees for including in
the financial literacy provision of the legislation language that will
allow the financial literacy commission the bill creates to take any
action to develop and promote financial literacy and educational
materials in languages other than English. This will apply to the hot
line, Web site, and educational materials the commission produces or
recommends.
It is imperative that financial literacy materials be created and
disseminated in languages other than English to recognize the diversity
of our great Nation. I especially want to thank the ranking member, the
gentleman from Massachusetts (Mr. Frank), for his assistance with this
language and Jaime Lizarraga of his staff.
Rest assured that the Congressional Hispanic Caucus and the Hispanic
community appreciate your efforts and the language you inserted into
the conference report.
Mr. Speaker, I rise in strong support of the conference report to
accompany The Fair and Accurate Transactions Act of 2003. I
congratulate Chairman Oxley and Ranking Member Frank, Subcommittee
Chairman Bachus and Ranking Member Sanders and all the House and Senate
conferees on completing this conference report.
This conference report will strengthen the provisions of the Fair
Credit Reporting Act. I am proud to have been an original cosponsor of
this legislation, to have supported it in Committee and to have voted
in favor of it on the House floor.
I want to read at this time a portion of a letter Federal Reserve
Board Chairman Alan Greenspan sent to me dated February 28, 2003.
Chairman Greenspan was responding to a question I submitted to him in
writing asking what would happen to the U.S. economy if the exceptions
to the Fair Credit Reporting Act were allowed to expire after January
1, 2004. In his letter, Chairman Greenspan warned that: ``Limits on the
flow of information among financial market participants, or increased
costs resulting form restrictions that differ based on geography, may
lead to an increase in the price or a reduction in the availability of
credit, as well as a reduction in the optimal sharing of risk and
reward.''
I am very pleased that this conference report heeded Chairman
Greenspan's warning, and I believe that its passage will help our
struggling economy to improve.
Let me take this opportunity to thank the conferees for including in
the financial literacy provision of the legislation language that will
allow the Financial Literacy Commission the bill creates to ``take any
action to develop and promote financial literacy and education
materials in languages other than English.'' This will apply to the
hotline, website, and educational materials the Commission produces or
recommends. It is imperative that financial literacy materials be
created and disseminated in languages other than English to recognize
the diversity of our great nation.
I especially want to thank Ranking Member Frank for his assistance
with this language and Jaime Lizarraga of his staff. Rest assured that
the Congressional Hispanic Caucus and the Hispanic community appreciate
your efforts and the language you inserted into the conference report.
The SPEAKER pro tempore (Mr. Thornberry). The gentleman from Ohio
(Mr. Oxley) has 1 minute remaining. The gentleman from Massachusetts
(Mr. Frank) has 6 minutes remaining.
[[Page H12222]]
Mr. OXLEY. Mr. Speaker, does the gentleman have any further speakers?
Mr. FRANK of Massachusetts. Mr. Speaker, I have several.
Mr. OXLEY. Mr. Speaker, I reserve the balance of my time.
I have the right to close, is that correct, Mr. Speaker?
The SPEAKER pro tempore. The gentleman is correct.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1\1/4\ minutes to
the gentleman from Massachusetts (Mr. Markey), who has been so active
on the privacy issue.
Mr. MARKEY. Mr. Speaker, I thank my friend, and I congratulate him
for all the good things that are in this bill, all the credit report
and the negative statement issues that are dealt with.
But there is one concern which I have which is consumers are, by this
bill, going to see the California privacy law preempted, as they are
going to see as well other States who want to make stronger privacy
protection for their constituents something that is part of the law.
My concern is that increasingly what we see with companies like
TransUnion and Equifax is that they are sending the records off shore.
For example, TransUnion, one of the three major credit reporting
agencies' spokesman said last month, 100 percent of our mail regarding
customer disputes is going to India at some point. We expect to sign
that contract by the end of the year.
My hope is that as the years go by we will be able to return to this
issue because the globalization of the information marketplace is going
to make clear that Americans are going to want more protection as their
information is going to be put in the hands of foreigners with no laws
on the books or the ability to police them.
I rise to opposition to this legislation.
I understand that some good things have been done in this bill, such
as the provisions granting consumers free access to copies of their
credit report, notice of negative statements being added to their
credit reports, or adverse credit decisions being made based on their
credit report. I support these provisions, and I also support stronger
protections against identify theft.
The problem is that consumers are being asked to pay a price for
these provisions--their privacy. As I read this bill, we are
permanently pre-empting any stronger state privacy laws, such as the
California law, in favor of a federal standard that provides consumers
with only a very narrow ``opt-out'' right to block affiliate sharing of
the consumer's information for marketing purposes. I do not believe
that an ``Opt Out'' is appropriate. Companies should have to obtain the
affirmative consent of the consumer--an ``Opt In'' before they share
information about their transactions or experiences with the consumer
with other affiliates or with unaffiliated third parties.
Moreover, I am concerned that by limiting the ability of a consumer
to exercise their Opt-Out solely to marketing, this bill allows
affiliates to share information about the consumers for other purposes
without any consumer right to say ``No.'' I am also concerned that even
after a consumer has ``opted out,'' their decision to do so gets
sunsetted after 5 years and they have to ``opt out'' again. If the
consumer has said no, that should mean no illness and until the
consumer says yes.
I also want to raise a concern about some statements I have seen in
the press from the credit reporting agencies suggesting that if these
companies are forced to provide consumers with free credit reports,
they will accelerate their current efforts to transfer their databases
and back office operations off-shore.
TransUnion and Equifax, two out of the three major credit reporting
agencies already are in the process of offshoring the processing of
detailed credit files on 220 million U.S. consumers.
Earlier this month, a TransUnion spokesman said that ``A hundred
percent of our mail regarding customer disputes is going to go to India
at some point. We expect to sign that contract by the end of the
year.''
Equifax has had a vendor in Jamaica for four years, where Jamacian
workers handle data entry at the beginning of the reinvestigation
process for disputed credit reports.
Experian, the third of the three major credit reporting agencies, is
considering whether to offshore some of its operations: ``We definitely
are evaluating every option on the table, and offshoring is one of
them. I don't want to be quoted as saying we'll never do it.''
Privacy experts are concerned about offshoring of the Social Security
numbers, addresses and other personal information contained in credit
reports:
``Consumers should be worried. The infrastructure to protect
information just isn't there in a lot of these places.'' (Beth Givens,
director, Privacy Rights Clearing House)
``The problem is not that they're in India, the problem is that
American laws are not going to be enforced in India.'' (Chris
Hoofnagle, Electronic Privacy Information Center)
``If you're an international crime ring, and you want Social Security
numbers for identity theft, you're going to look at the weakest link,
and that's quite possibly these overseas companies.'' (Beth Givens)
In October, a Pakistani woman threatened to post UCSF patient files
on the Internet, unless she was paid for the medical transcription
services she had performed. In the email she sent to UCSF, the woman
wrote: ``Your patient records are out in the open to be exposed, so you
better track that person and make him pay my dues or otherwise I will
expose all the voice files and patient records on the Internet.''
That is the future that we are looking at with the credit reporting
agencies. Consumers may be able to call up to get a free copy of their
credit report, but the person on the other end of the line may be in
Karachi or New Delhi, where U.S. privacy standards do not apply.
Indeed, this bill may provide Americans with the most expensive
``free'' credit report they'll ever get. They'll pay with their
privacy.
That is why I think that we need to put the consumer back in control
of their own information. We need an ``opt-in'' not a limited ``opt-
out'', and we need to ensure that American's privacy does not get
offshored at the same time that their jobs are getting offshored.
I urge the defeat of this legislation.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself the balance
of my time.
Mr. Speaker, I want to begin by saying that if we on the Democratic
side were in the majority, this would be a different bill. We are not,
so we have the bill that we have here.
Given that, given that there are some differences, I must tell you
that this is a better bill than I had hoped we would see. And I am very
appreciative of my colleagues on the other side. They did not give in
on any issues of principle that are important to them. We have on both
sides of the aisle a strong commitment to making sure that the free-
market system in this country can work.
These credit allocations have become a very important part of that
free-mark system. And this bill, I believe, preserves that system, the
credit allocation system for individuals as well as need be.
We also, though, have, as we often do with the free market, a
situation where the market does well what it is supposed to do, but it
does not do everything. There are areas where we need to step in and
help the market. What is important is for us to do that in ways that do
not impinge on the market function.
I believe that working together we have come closer in doing that in
this bill than I had thought. I would like if there had been fewer
preemptions in the field, for instance, of identity theft; but as a
result of a meeting which we had this morning, I think we agreed to
preserve the integrity of the identity theft provisions that we have in
there, to make sure that they can function without interference and
without distraction, but did not unduly preempt if the States want to
be additive in other areas. So there is, in fact, room for States to do
something as long as the scheme that has been set forward in this bill
is not interfered with, detracted from, and in particular, companies
are not subjected to conflicting or confusing multiple requirements.
We have done other things. People, as a result of this, will be able
to get a lot more information. Until recently, credit and credit
scoring have been kind of mystical things to a lot of people.
Consumers, home buyers, automobile buyers, others have found their
lives affected financially by factors of which they were only dimly
aware. As a result of several provisions in this bill, the system will
be allowed to work, but consumers will have a lot more information
about it. And they will get that information in many cases early enough
to act on it.
Frankly, one of the things that some of our friends in the business
community were skeptical of I think will wind up helping them. A
requirement that people be notified if something they have either done
or failed to do will cause them to have a negative comment on the
credit report, I think that will have an incentivizing effect. I think
the first time someone is late unneccessarily with a payment for a
mortgage and is notified that this will
[[Page H12223]]
be on your credit report, you are likely to see much less lateness. We
also took steps to improve the accuracy of the data.
The system on the whole works very well, but no system works
perfectly. I think this credit system was a little bit flawed in that
it did not adequately give people a chance to correct errors. We do a
much better job of this. I would have liked there to have been a sunset
on the preemptions.
I think this bill benefits from the fact that it was here today.
Congress did this 7 years ago. There was a sunset. And as a result, we
are here today doing what everybody agrees is improving the bill. I
would have liked, and my colleague from Pennsylvania (Mr. Kanjorski)
offered an amendment to give us a chance to do that again. We lost on
the floor, and that is the way the votes went. But I do hope and I
believe that we may very well from experience learn that more has to be
done or things have to be done differently.
{time} 1845
When this bill was passed in 1996, identity theft was not a big
issue. The fact that it was sunsetted gave us a chance to deal with
identity theft I think in a very effective way. This will not be the
last time that the crooked people in this world will think of a way to
swindle the great majority of the honest ones.
So I just want to make it clear that while we will not have this
automatically coming up, I hope we are all committed, and I believe we
are, that as new problems come up we will be able to deal with them.
Given the fact that the majority is the majority, I believe that we
did a good job, not a perfect one, in adding consumer protections and
safety factors to this general system of allowing the credit allocation
to individuals to work, and for that reason, I would urge Members to
vote for the bill.
Mr. OXLEY. Mr. Speaker, I yield myself the remaining time.
First of all, I want to thank the staff. I always tend to forget to
do that, and we have been through a lot on this bill. This is a
complicated piece of legislation that got more complicated as we took
on this whole issue of identity theft, and throughout this process, the
staff on both sides of the aisle have been just superb, working late
nights and early mornings to get us where we are today, and I want to
personally thank them for their efforts. They know who they are, and I
know who they are and we most appreciate it, and also to the Members, I
think this is, Mr. Speaker, perhaps a textbook example of how the
legislative process ought to work in terms of hearings, in terms of
everybody having an opportunity to have their say, involving Members on
both sides of the aisle, many of them newer Members, freshmen Members,
to really get their feet wet on an important piece of legislation that
we bring to the floor today and this conference report that will close
it out.
This is truly a historic day, and I think in the real traditional way
that we have started in the Committee on Financial Services of turning
out good legislation in a bipartisan manner, and for that, I am very
thankful to all concerned.
Mr. BEREUTER. Mr. Speaker, as a member of the Financial Services
Committee and a conferee, this member rises today to express his strong
support for the conference report of H.R. 2622, the Fair and Accurate
Credit Transactions Act of 2003 (FACT Act). This important legislation
permanently extends those provisions in the Fair Credit Reporting Act
(FCRA) which relate to the preemption of State laws--a very necessary
step in this instance. The current provisions in the FCRA are set to
expire on December 31, 2003. Thus when this conference report is
enacted into law, it will continue the nationwide credit system while
providing important consumer protections.
This member would like to thank the distinguished gentleman from
Alabama, Mr. Bachus, the chairman of the House Financial Services
Subcommittee on Financial Institutions and Consumer Credit on which
this member serves, for introducing the legislation on which this
conference report is largely based. Furthermore, this member would like
to thank both the distinguished gentleman from Ohio, Mr. Oxley, the
chairman of the House Financial Services Committee, and the
distinguished gentleman from Massachusetts, Mr. Frank, the ranking
member of this committee, for their outstanding effort in bringing this
excellent conference report to the House floor. As was suggested at the
conclusion of the conference, this may be an instance where most of the
conferees from both the House and Senate believe the conference report
is better than either original Chamber's product.
The FCRA is the Federal law which governs the furnishing of reports
on the credit worthiness of consumers. This member supports this
conference report which would permanently extend the FCRA for many
reasons. However, he would like to focus on the following three
reasons.
First, this conference report provides for a free credit report
annually for consumers. Typically, credit reporting agencies charge
consumers up to $9 for the disclosure of the information in their
credit files. Under current law, a consumer may receive a free consumer
report from a reporting agency only under certain circumstances, such
as when a consumer receives a notice of an adverse action by a
reporting agency. The FACT Act would provider a free credit report
annually for consumers for any reason. This member believes that this
provision will promote consumer awareness of a person's credit history
as well as provide an opportunity for the consumer to correct any
inaccurate information on one's credit report.
Second, this conference report provides important provisions to curb
identity theft. To illustrate the need for these provisions, the
Federal Trade Commission (FTC) released a survey at the beginning of
September of this year which showed that a staggering 27.3 million
Americans had been victims of identity theft in the last 5 years,
including 9.9 million people in the last year alone. This conference
report, among other things, allows consumers to place ``fraud alerts''
in their credit reports to prevent identity thieves from opening
accounts in their names.
Lastly, this conference report continues the Federal preemption of
State laws as it relates to the corporate affiliate sharing of
financial information. During the consideration of the 1996 amendments
to the FCRA, this member authored a provision, which was signed into
law, that required a consumer opt-out when nontransactional information
is shared among corporate affiliates. Examples of nontransaction
information include data from a consumer credit report and information
on an application such as a consumer's income or assets. This provision
on consumer notice is very important as it was the first consumer ``opt
out'' on the sharing of financial information that this member is aware
of that was signed into Federal Law.
Mr. Speaker, in conclusion, for the reasons stated above and many
others, this member encourages his colleagues to support the conference
report of H.R. 2622.
Mr. CANTOR. Mr. Speaker, I rise today on behalf of the Fair and
Accurate Credit Transactions Act, H.R. 2622. This sound piece of
legislation will aid in the prevention of identity theft. Additionally,
it will guarantee that consumers have access to affordable credit.
I do have one concern, and I would like to clarify congressional
intent in regard to this legislation. It is vitally important for
consumers that the information reported about them to credit bureaus is
accurate. When errors occur, they must be corrected. The overwhelming
majority of disputes are properly handled through existing procedures
as defined in section 611 of the Fair Credit Reporting Act.
Nevertheless, a very small percentage of unusual disputes are not
completely resolved through the reinvestigation process. Section 312 of
the conference report for the bill provides a means by which some of
these cases could be submitted directly to the furnisher for possible
resolution.
I recognize that there are potential risks in the adoption of this
section. For example, I am very concerned that any mechanism designed
to address these few cases is not burdensome. If it becomes burdensome,
furnishers may become discouraged from reporting complete and accurate
information in the first instance. Additionally, this could lead to
misuse by credit repair clinics to overwhelm furnishers in an attempt
to cause them to change accurate information.
The conference report for H.R. 2622 has charged the relevant agencies
with issuing rules only after they have determined the benefits of a
direct resolution process. Congress has provided the agencies with four
criteria to review in connection with any rulemaking pertaining to the
direct reinvestigation of consumer disputes with furnishers. This
criteria must be satisfied before any rules are to be issued.
I believe it is a positive piece of legislation that will give
consumers the tools to fight identity theft and continue to access
affordable credit.
Mr. Speaker, I urge passage of this legislation.
The SPEAKER pro tempore (Mr. Thornberry). The question is on the
motion offered by the gentleman from Ohio (Mr. Oxley) that the House
suspend the rules and agree to the conference report on the bill, H.R.
2622.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
[[Page H12224]]
those present have voted in the affirmative.
Mr. SANDERS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________