[Federal Register Volume 62, Number 126 (Tuesday, July 1, 1997)]
[Rules and Regulations]
[Pages 35586-35600]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17004]

[[Page 35585]]


Part III

Federal Trade Commission


16 CFR Part 601

Notices of Rights and Duties Under the Fair Credit Reporting Act; Rule

Federal Register / Vol. 62, No. 126 / Tuesday, July 1, 1997 / Rules 
and Regulations

[[Page 35586]]


16 CFR Part 601

Notices of Rights and Duties Under the Fair Credit Reporting Act

AGENCY: Federal Trade Commission.

ACTION: Publication of guidance for prescribed notice forms.


SUMMARY: The Federal Trade Commission is publishing three notices that 
it is required to prescribe under recent amendments to the Fair Credit 
Reporting Act (FCRA). These are: A summary of consumer rights under the 
FCRA; a notice setting forth the responsibilities under the FCRA of 
those who regularly furnish consumer report information to consumer 
reporting agencies; and a notice setting forth the duties of any person 
who uses information covered by the FCRA. These notices must be 
distributed by consumer reporting agencies once the amendments to the 
FCRA become effective on September 30, 1997. A consumer reporting 
agency will be in compliance with the FCRA if it provides notices 
substantially similar to those prescribed by the Commission.

DATES: The amendments become effective September 30, 1997.

ADDRESSES: Federal Trade Commission, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Clarke Brinckerhoff or William Haynes, 
Attorneys, Division of Credit Practices, Federal Trade Commission, 
Washington, DC 20580, 202-326-3224.

originally enacted in 1970,\1\ was extensively amended in 1996. Most of 
the amendments to the law, including those discussed in this notice, go 
into effect on September 30, 1997.

    \1\ 15 U.S.C. Sections 1681-1681u; Title VI of the Consumer 
Credit Protection Act.

    As amended, the FCRA requires each consumer reporting agency 
(``CRA, usually a credit bureau) to distribute three types of notices 
in order to better educate consumers, furnishers and users of consumer 
report information as to their rights or duties under the law. Section 
609(c) of the amended FCRA mandates that each CRA provide, as part of 
its file disclosure to consumers, a written summary of consumer rights 
(``summary'' or ``consumer summary'') under the FCRA. Section 607(d) 
requires each CRA to provide a notice to persons who buy consumer 
information from the CRA of their responsibilities under the FCRA 
(``user notice''), and a notice to persons who regularly furnish 
consumer information to the CRA of their responsibilities under the 
FCRA (``furnisher notice''). The Federal Trade Commission 
(``Commission'') is required to prescribe the content of the notices, 
and, in the case of the consumer summary, the form as well. A CRA 
complies with the law if it provides the applicable party with a 
summary or notice that is substantially similar to the one prescribed 
by the Commission.
    On February 28, 1997, the Commission published for comment proposed 
versions of the three notices (collectively, ``the notices''). The 
discussion accompanying the proposed notices outlined in detail the 
relevant FCRA sections, and set forth a number of questions designed to 
facilitate public comment on the proposals. 62 FR 9123 (1997).
    The comment period closed on March 31, 1997. The Commission 
received 28 comments from credit bureaus and other CRAs, creditors (and 
other parties that make use of consumer reports and/or furnish 
information to CRAs), consumers and their representatives, regulatory 
authorities, and other interested parties. Although the Commission 
stated that it was requesting comments until March 31, 1997, comments 
received after that date were taken into account.
    This document highlights the principal areas in which the 
Commission revised the proposed versions of the notices or decided not 
to do so.

I. Consumer Summary

    The comments overwhelmingly supported the content and organization 
of the proposed summary. Many commenters praised the Commission's 
effort in offering a proposal that was thorough, understandable, 
succinct, and user-friendly. None suggested any major revision to the 
overall presentation. Accordingly, the basic framework of the notice 
remains unchanged--a two-page document that starts with an introductory 
paragraph explaining the FCRA very generally, features ten ``bullet'' 
sections to describe significant consumer FCRA rights, and includes the 
required list of the federal agencies with FCRA enforcement authority 
at the end.

A. Principal Revisions Based on Public Comments

1. Additions and Deletions
    The amended FCRA provides conflicting guidance as to whether the 
consumer summary should be brief or comprehensive. The law mandates a 
``summary of all the rights the consumer has under'' the FCRA (Section 
    The law also requires ``a brief description of * * * all rights of 
consumers'' provided by that law (Section 609(c)(2)(A)). Arguably, no 
document that is actually a ``summary''--or that constitutes a ``brief 
description'' of FCRA consumer rights--could literally include ``all'' 
consumer rights.
    The Commission specifically asked for suggestions as to areas in 
which the proposed form was too long to be effective as a summary, or, 
conversely, had omitted something important to consumers. 62 FR 9123, 
9124 (1997). The Commission has deleted three items from the proposed 
form that were persuasively cited by commenters as unnecessary or not 
helpful to the goal of educating consumers about their FCRA rights:

     The sentence noting that a CRA is not required to 
include a ``risk score'' or ``credit score'' in disclosures to 
consumers of their credit histories. The Commission included the 
sentence in the proposed summary to try to answer a question that 
consumers would otherwise ask of CRAs. Upon review of the diverse 
comments,\2\ the Commission now believes that the reference would be 
more hindrance than help, and accordingly has deleted it.

    \2\ This sentence in the second bullet (``You can find out what 
is in your file'') was based on a clause specifically added to 
Section 609(a)(1). One comment from major creditors stated that the 
reference should be expanded to refer to ``any information 
concerning'' such scores ``or other predictors.'' A more frequent 
view, offered by a major CRA, a trade association, and a federal 
regulatory agency stated that the section was unnecessary and would 
confuse rather than educate consumers.

     A discussion of FCRA litigants' ability to obtain 
attorney's fees from one another. The comments made it clear that 
the topic cannot be covered both briefly and precisely because of 
the complexity of this portion of the amended FCRA.\3\ For that 
reason, and because the issue is ancillary to the consumer's right 
to sue for damages that continues to be emphasized in this portion 
of the summary, the Commission decided not to retain the discussion 
of attorney's fees.

    \3\ This sentence, which appeared in the last bullet (``You may 
seek damages from violators''), was an effort to synthesize the 
various applicable provisions of Sections 616-17, as amended. The 
Commission's decision to delete this reference follows the 
recommendation of two commenters from disparate points of view--a 
nationwide credit bureau and a nationwide consumer advocacy 
organization. Other comments suggested expanding it further to make 
it more precise.

     The reference to a toll-free number in the case of 
nationwide CRAs. National CRAs are required to include this number 
in their file disclosures; however (as noted by one such CRA), it 
need not be part of the summary.\4\

    \4\ This appeared in the proposed notice after the tenth and 
last bullet, before the list of federal agencies.


[[Page 35587]]

    Conversely, other commenters noted that the summary needed more 
discussion of the rights of consumers who dispute file data with CRAs. 
These rights, which are central to the FCRA and provide important 
protections for consumers, are found in Section 611.\5\ Accordingly, 
the Commission has added a discussion of (1) the right provided 
consumers by Section 611(b) to add a brief statement to their files 
when they continue to dispute information that the CRA has investigated 
and concluded to be accurate, and (2) the right of consumers under 
Section 611(d) to have revised reports provided to all recent 
recipients of information from their files.\6\

    \5\ Because of space limitations, the proposed notice focused on 
the rights provided for the first time by the amended section 
611(a): the 30-day period for CRA investigations; the CRA obligation 
to consider (and pass on to the furnisher of the item) ``all 
relevant information'' submitted by the consumer when a dispute 
occurs; the consumer's right to a written statement of results of an 
investigation; and limits on the ability of CRAs to re-inserts an 
item of information deleted pursuant to a consumer dispute.
    \6\ These items are now included in the third bullet of the 
prescribed notice (``You can dispute inaccurate information with the 
CRA''). The sentence dealing with limits on CRA ability to re-insert 
information after it had been deleted, previously located there, now 
appears in the fourth bullet (``Inaccurate information must be 
corrected or deleted'').

2. Editorial Revisions
    The Commission's most significant editorial revisions to the 
summary are two adjustments in the opening paragraph to avoid 
misleading consumers about the range of parties covered by the FCRA, 
and to emphasize consumer rights under state law. In the first case, a 
major credit bureau asserted that the proposed summary focused on CRAs 
to a degree that is unwarranted in view of the fact that the amended 
FCRA also imposes substantial duties on users and furnishers of CRA 
data. The Commission therefore revised the text to eliminate the 
unnecessary reference to FCRA rights ``in dealing with CRAs (which 
must) provide you with a summary of these rights as listed below'' \7\ 
that preceded the body of the summary. In the second case, state 
regulatory authorities asserted that the discussion of state law, which 
is specifically required by Section 609(c)(2)(D), should be featured 
more prominently. Accordingly, the Commission increased the emphasis by 
moving the reference to the opening paragraph. The Commission did not 
intend the proposed notice to single out CRAs, or to give short shrift 
to state law; these two revisions to the opening paragraph of the 
prescribed summary should make that clear.

    \7\ Partially in response to the same comment, the Commission 
also revised the tenth and last bullet to refer to the liability of 
users and furnishers (as well as CRAs) in civil actions.

    The Commission also adopted some suggestions for stylistic or 
technical changes where the Commission believed the change would make 
the summary appreciably more precise or useful for consumers. For 
example, in the second sentence of the introductory paragraph, the 
Commission added an example of consumer report users (landlords) that a 
state regulator recommended as useful and deleted a type of CRA 
information (where consumers work and live) that industry 
representatives cited as a poor example for a summary. Also, the 
Commission revised a sentence, formerly in the fourth (now in the third 
bullet, to make it clear that national CRAs are not required to report 
erroneous information to one another; rather, furnishers must report to 
them any disputed data that they find to be inaccurate or incomplete, a 
task made easier by an automated system to be created by national CRAs.
    The Commission also made some minor changes to improve the 
technical legal accuracy of the summary. The heading to the fourth 
bullet was expanded (``Inaccurate information must be corrected or 
deleted'') to describe precisely a CRA's options when its investigation 
shows that disputed information is not accurate.\8\ Similarly, the 
statement of consumer's right to sue violators has been amended to 
state that furnishers can be sued only ``in some cases'' because the 
amended FCRA limits the situations in which consumers are authorized to 
sue directly for damages.\9\

    \8\ Both industry and consumer representatives asserted that the 
summary should clearly inform consumers that a CRA may cure an 
inaccuracy with respect to a disputed item of information by either 
deleting the information or amending it to make it accurate.
    \9\ Section 623(c) of the amended FCRA specifically bars 
consumers from bringing suit against furnishers of information for 
violation of the accuracy and reporting duties imposed by Section 
623(a), allowing only regulatory authorities to enforce those 

B. Principal Public Comments Not Adopted

    Commenters made suggestions for stylistic revisions of the consumer 
summary, many of which were adopted because they improved the clarity 
or comprehensibility of the summary. However, the Commission could not 
make all of these changes without unduly lengthening the document.
    Because of the large volume of suggested wording and other changes 
contained in more than 170 pages of comments received by the 
Commission, it is not feasible to discuss them all in this notice. This 
section is intended to identify some of the more significant comments 
that are not reflected in the finally-prescribed consumer summary.
1. Form of the Summary
    The principal credit bureau trade association expressed the view 
that the Commission specifications for the form of the summary were 
unduly ``rigid'' in two ways. First, the Commission proposed that the 
summary be on paper no smaller that 8\1/2\  x  11 inches in size. The 
commenter noted that continuous feed forms are not always perforated as 
8\1/2\  x  11-inch sheets, and that the requirement that the summary be 
``on paper'' would inhibit the possibility of electronic disclosures. 
Second, the Commission proposed that the notice be in 12-point type (8-
point for the table at the end). The commenter stated that type sizes 
may vary based on the font being used.
    Section 609(c)(3) of the amended FCRA specifically states that the 
``Commission shall prescribe the form and substance of'' the summary 
(emphasis added). The Commission is required by law to prescribe a 
format that ensures that consumers will receive a summary that is 
readable and useful, and believes that the format prescribed in the 
proposed is appropriate for that purpose. However, the Commission does 
not intend to impose an absolutely ``rigid'' standard, which would be 
inappropriate under the statute. Section 609(a)(3) requires only that a 
summary be ``substantially similar'' (i.e., not identical) to the 
Commission-prescribed version. Therefore, a format that approximates 
that published by the Commission as ``Appendix A'' (which meets the 
type size requirements and can be printed, with comfortable margins, on 
two 8\1/2\ x 11-inch pages) will comply, even if the print is 
technically not 12-point in size because of a different font, or it is 
provided on computer paper that is slightly smaller is size. Similarly, 
an electronic submission that normally allows the recipient to receive 
it in a format similar to the prescribed version will also comply.\10\ 
Such summaries will not result in the consumer receiving a form that is 
harder to read or use than the exact prescribed version.\11\

    \10\ Section 610(a)(12 provides that file disclosures are 
normally to be made in writing. However, Section 610(b)(2) allows 
the consumer to specify disclosure by other means, including 
electronic means if available from the CRA.
    \11\ In some cases, a CRA may use an entirely different format 
to respond to a consumer request under Section 610(b)(2), or to 
accommodate visually (or otherwise) impaired consumers pursuant to 
relevant federal or local laws.


[[Page 35588]]

2. Items Required by Section 609(c)(2)
    The Commission received a number of comments relating to each of 
three sections the amended FCRA requires be included in the summary: 
(1) A reference to rights provided by state law, (2) a statement that 
the CRAs are not required to delete accurate data that is not obsolete 
under Section 605, and (3) a list of federal agencies that have 
authority to enforce the FCRA. The Commission made few additions or 
deletions in these areas, because Congress has given precise 
instructions. This section describes the nature of those comments and 
the basis for the Commission's decision in most cases not to change the 
proposed form.
    State regulators suggested a substantial expansion of the reference 
to state law required by Section 609(c) (2) (D), including multiple 
references to state and local authorities, and more detailed 
instructions on how to reach them. As noted above (para.I-A-2), the 
Commission has decided to feature the statutorily-required section more 
prominently in the summary. However, the Commission does not believe 
the section should be expanded because it currently uses the language 
prescribed by Congress.
    Several commenters offered revisions of the sentences, required by 
Section 609(c)(2)(E), reminding consumers in bold letters that they 
cannot require CRAs to remove information that is accurate and not 
outdated. The Commission adopted a suggestion by a CFR trade 
association to add a parenthetical cross-reference to clarify that 
``outdated'' means the FCRA's seven year period (ten for bankruptcies), 
a change that made the bold statement more precise. It did not adopt 
suggestions for change that were not specifically authorized by the 

    \12\ One CRA accurately pointed out that it is not technically 
correct to imply that a CRA must ``remove'' outdated accurate 
information from its files, because such data may be retained to be 
reported in situations listed in Section 605(b) where the 
obsolescence provisions do not apply. However, it is common practice 
for credit bureaus to delete information from their files before the 
time periods set forth in Section 605; thus, it makes sense that 
Section 609(c) (2) (E) should direct that a summary, as opposed to a 
legal brief, include a statement concerning limits on the CRA's duty 
to ``remove'' outdated data.

    Similarly, the Commission did not adopt suggestions by commenters 
to reduce the list of federal agencies with regulatory authority. 
Section 609(c) (2) (C) requires that the summary include ``a list of 
all federal agencies responsible for enforcing [the FCRA] 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.'' 
Suggestions for pruning this section involved using a narrative to 
replace the required ``list,'' reducing the list from ``all'' agencies 
by eliminating those deemed to be of low interest to consumers, and 
other revisions that would delete or reduce the jurisdictional 
summaries designed to ``assist the consumer in selecting the 
appropriate agency.'' The comments appeared well-intended, but the 
Commission concluded that the summary should reflect the specific 
instructions of Congress on this point.
3. Use of ``CRA'' as an Acronym
    A number of commenters from different sectors asserted that ``CRA'' 
is an awkward acronym for ``consumer reporting agency; most of them 
suggested that ``credit bureau'' would be more easily understood. Some 
opined that ``CRA'' is too easily confused with a common acronym for 
the Community Reinvestment Act.
    The term ``credit bureau'' is certainly known to more consumers 
than ``CRA,'' but it has major drawbacks that the Commission believes 
make its use inappropriate here. The FCRA unquestionably applies to all 
consumer reporting agencies, a universe that includes more than credit 
bureaus (e.g., specialized CRAs that report only on mortgage or tenant 
applications, or only on consumers' check writing habits). It thus 
would be legally inaccurate to use ``credit bureau'' as a replacement. 
In addition, it would make the summary confusing to a consumer who 
receives it from a CRA that is not a credit bureau. While some 
commenters who are knowledgeable about financial laws may be accustomed 
to `CRA'' as an acronym for the Community Reinvestment Act, only a 
small fraction of consumers who get this summary may make such a 

    \13\ Of course, a credit bureau may elect to replace ``CRA'' 
with ``agency'' or some other appropriate term in the notice it 
provides to any party, because it would be ``substantially similar'' 
to the Commission's form under Section 609(c) (3).

II. Notices to Furnishers and Users

    The furnisher and user notices occasioned relatively few comments, 
and thus are little changed from the proposed versions. The Commission, 
responding to a suggestion by state regulators, added a sentence to 
each notice referring to the possible applicability of state law. With 
the exception of a few subjects discussed in the following sections on 
each of these notices, the only changes were revisions that were very 
slight adjustments that the Commission believes, based on the comments, 
would make the notice more clearly reflect the FCRA and be of 
assistance to the recipients.
    The Commission specifically asked whether the public wanted 
guidance as to the timing and frequency of notice distribution, in view 
of the amended FCRA's silence on the point. 62 FR 9123, 9125, (1997). 
The overwhelming majority of the commenters did not address the issue, 
and those who commented gave very different views--a comment from state 
regulators advocated requiring frequent notices, two furnishers/users 
asked for a ruling limiting or not requiring multiple notices, and a 
CRA trade association urged that the marketplace be allowed to work its 
will in light of the FCRA silence. Based on the limited number of (and 
wide disagreement among) commenters, formal guidance on these issues at 
this early stage seems unwise. If experience after the amendments 
become effective indicates a need for such action, the Commission can 
revisit the issue.

A. Furnisher Notice

    The one significant change in the furnisher notice is the addition 
of a reference to the fact that two of the sections apply only to 
parties that furnish information to CRAs regularly and in the ordinary 
course of their business.\14\ The Commission specifically asked for 
public comment on this issue. 62 FR 9123, 9125 (1997). There was a 
consensus among the commenters that the notice should be revised to 
include reference to the different standards that apply to occasional 

    \14\ Sections 623 (a)(2) and (a)(4) provide that the obligations 
described in the notice as ``Duty to Correct and Update 
Information'' and ``Duty to Report Voluntary Closing of Credits 
Accounts'' apply only to such parties.

    Representatives of different furnishers suggested two additions 
that the Commission did not adopt. First, credit card issuers advocated 
adding a section spelling out the limitations on consumers' ability to 
sue furnishers, a topic that seemed inappropriate for a Commission-
prescribed notice of duties to furnishers. Second, debt collectors and 
creditors urged that the notice specify that a furnisher's duty to 
report an item as ``disputed'' lasts only while it is investigating the 
dispute. This point involves an issue of statutory interpretation that 
is more appropriately resolved in another forum.
    Finally, the Commission asked for comments on whether the 

[[Page 35589]]

form should include the text of Section 623. 62 FR 9123, 9125 (1997). 
The Commission has not included the text, because the commenters 
generally stated that it was unnecessary. However, a CRA form that does 
so will be ``substantially similar'' and thus in compliance with 
Section 609(c).

B. User Notice

    The Commission asked for comment as to whether it should prescribe 
separate notices for different types of specialized users (62 FR 9125). 
The overwhelming majority of the commenters stated that a single notice 
(as the Commission proposed) was best.
    One commenter representing specialized reporting services, while 
agreeing that a single notice is appropriate for most CRAs, stated that 
its members' business activities are so focused that the information 
provided to their clients would never relate to some of the points in 
the comprehensive notice. As an example, the commenter asserted that 
the portions of the proposed notice concerning employment reports 
(section II of the Notice), investigative reports (section III), 
medical information (section IV) or precreened lists (section V) might 
not be pertinent to purposes of any clients of a mortgage reporting 
company. Similarly, it noted that a different set of sections might not 
be relevant to the purposes of any customers of a CRA that provides 
reports only for employment or tenant screening uses. The Commission 
agrees that a CRA may delete sections of the notice that are irrelevant 
to the business purposes for which any user is contractually authorized 
to purchase consumer reports for the CRA, in the same fashion that a 
creditor may omit inapplicable sections of prescribed forms under other 

    \15\ Creditors are required to notify consumers of their rights 
under the Fair Credit Billing Act, Regulation Z Sec. 226.6(d), 12 
CFR 226.6(d). The Federal Reserve Board has prescribed forms for 
that purpose. Regulation Z, Appendix G, Forms G-3 and G-4. However, 
creditors that do not issue credit cards may omit a section in the 
form on the rights of cardholders, and creditors that are not able 
to debit a savings or checking account for payment may omit a 
section about the consumer's right to stop such debits. Official 
Staff Commentary for Regulation Z, Appendix G-3, 12 CFR part 226, 
Supp. I.

    The only significant addition to the user notice is in Section I-B 
of the notice, concerning the certification of permissible purpose that 
users must provide to CRAs that sell consumer reports to them. Several 
parties advocated that the Commission expand this Section to account 
for the possibility of a general certification, as permitted by Section 
604(f). The Commission has done so, but added the words ``as 
appropriate'' to make it clear that some consumer report users whose 
activities involve both permissible and impermissible purposes,\16\ or 
who have given the CRA reason to believe they have violated a general 
certification, must be required to provide individual certifications 
for each consumer report.

    \16\ Certain businesses typically have both permissible and 
impermissible purposes--e.g., an attorney could obtain a consumer 
report to decide whether to hire a job applicant or to extend credit 
to a client, but not to decide whether to name a person as a 
defendant in a tort action.

III. Impact on Small Businesses

    In publishing the proposed notices, the Commission stated that the 
notices would not have a significant economic impact on a substantial 
number of small entities. The Commission explained that it is 
prescribing that notices at the direction of Congress, so that any 
economic costs imposed on small entities by the required dissemination 
of the notices are in fact imposed by statute. The Commission noted 
further that its publication of forms for the proposed notices could be 
said to lessen the burden on small businesses, since the entities can--
but need not--adopt the Commission's forms, and thereby avoid the risk 
and expense of developing their notices independently. The Commission 
nevertheless requested comments in order to ensure that it did not 
overlook any substantial economic impact on small businesses.
    The Commission received four comments addressing the question of 
the notices' economic impact on small businesses. Two commenters agreed 
that the Commission's publication of the notices would not have a 
significant economic impact on a substantial number of small 
businesses. One commenter disagreed, but provided data supporting the 
conclusion that the statutory requirement would create a significant 
economic impact, rather than any evidence that the Commission's 
publication of the model forms for the notices would do so. Finally, 
one commenter stated that small businesses would be significantly 
burdened if the Commission were to require repeated distribution of the 
notices. As stated in the second paragraph of Section II above, the 
Commission has determined not to impose any requirements concerning the 
timing and frequency of dissemination of the notices at this time. 
Accordingly, the Commission has determined that public comments and 
information before the Commission do not alter the conclusion that its 
pbulicaiton in final form of the models for the prescribed notices will 
not have a significant economic impact on a substantial number of small 

IV. Paperwork Reduction Act

    In its initial review of the proposed notices, the Commission 
considered whether it was ``sponsoring or conducting'' any 
``collection[s] of information'' that would trigger the provisions of 
the Paperwork Reduction Act, 44 U.S.C. Chapter 35. In this regard, the 
Commission observed that the notices contain only statutorily imposed 
investigation disclosure, and recordkeeping requirements; the FTC 
introduces no additional elements. Further, two of the notices will 
become effective on September 30, 1997, regardless of whether the FTC 
has provided the language for these forms by that time. In this 
situation, the Commission does not ``require'' or ``cause'' the 
disclosures to occur.
    The Commission also observed that the three notices contain all the 
information that subject firms will be required to disclose to third 
parties. The reporting agencies can simply adopt these notices for 
distribution without any change to the language. Therefore, the three 
notices fall within an exception to the definition of a ``collection of 
information'' as being ``[t]he public disclosure of information 
originally suppled by the Federal government to the recipient for the 
purpose of disclosure to the public.'') 5 CFR 1320.3(c)(2). 
Accordingly, none of the three require approval by OMB. Nonetheless, 
the Commission requested public comment on this matter. No comments 
were received.

List of Subjects in 16 CFR Part 601

    Credit, Trade practices.

    Pursuant to 15 U.S.C. 1681g and 1681s, the FTC hereby adds to 
Subchapter F of Chapter I of 16 CFR a new Part 601 to read as follows:


601.1  Authority and purpose.
601.2  Legal effect.
Appendix A to Part 601--Prescribed Summary of Consumer Rights
Appendix B to Part 601--Prescribed Notice of Furnisher 
Appendix C to Part 601--Prescribed Notice of User Responsibilities

    Authority: 15 U.S.C. 1681g and 1681s.

[[Page 35590]]

Sec. 601.1  Authority and purpose.

    (a) Authority. This part is issued by the Commission pursuant to 
the provisions of the Fair Credit Reporting Act (15 U.S.C. 1681 et 
seq.), as most recently amended by the Consumer Credit Reporting Reform 
Act of 1996 (Title II, Subtitle D, Chapter 1, of the Omnibus 
Consolidated Appropriations Act for Fiscal Year 1997), Public Law 104-
208, 110 Stat. 3009-426 (Sept. 30, 1996).
    (b) Purpose. The purpose of this part is to comply with sections 
607(c) and 609(c) of the Fair Credit Reporting Act, as amended. Section 
609(c)(3) directs the FTC to prescribe the form and content of a 
summary of consumers' legal rights under the FCRA that the amended law 
requires each consumer reporting agency to provide when disclosing the 
information in its file to consumers, and section 609(c)(4) provides 
that the summary need not be provided until the FTC has in fact 
prescribed its form and content. Section 607(d)(2) directs the FTC to 
prescribe the content of notices that consumer reporting agencies are 
required to provide to parties that supply information to, or purchase 
consumer reports from, the agency. These notices will set forth the 
responsibilities under the FCRA of all persons who furnish information 
to consumer reporting agencies or use information subject to the FCRA.

Sec. 601.2  Legal effect.

    The forms prescribed by the FTC do not constitute a trade 
regulation rule. They carry out the directive in the statute that the 
FTC prescribe the summary and notices. A consumer reporting agency that 
provides notices substantially similar to those prescribed by the FTC 
will be in compliance with Section 607(d) or 609(c) of the FCRA, as 

Appendix A to Part 601--Prescribed Summary of Consumer Rights

    The prescribed form for this summary is as a separate document, 
on paper no smaller than 8\1/2\ x 11 inches in size, with text no 
less than 12-point type (8-point for the chart of federal agencies), 
in bold or capital letters as indicated. The form in this appendix 
prescribes both the content and the sequence of items in the 
required summary. A summary may accurately reflect changes in 
numerical items that change over time (e.g., dollar amounts, or 
phone numbers and addresses of federal agencies), and remain in 


[[Page 35591]]


[[Page 35592]]


[[Page 35593]]


[[Page 35594]]


[[Page 35595]]


[[Page 35596]]


[[Page 35597]]


[[Page 35598]]


[[Page 35599]]


[[Page 35600]]


    By direction of the Commission.
Donald S. Clark,
[FR Doc. 97-17004 Filed 6-30-97; 8:45 am]