[Federal Register Volume 72, Number 239 (Thursday, December 13, 2007)]
[Proposed Rules]
[Pages 70944-70986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23549]



[[Page 70943]]

  
  
  
  
  
  
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Part II

Department of the Treasury



Office of the Comptroller of the Currency



12 CFR Part 41



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Federal Reserve System

12 CFR Part 222



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Federal Deposit Insurance Corporation

12 CFR Part 334



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Department of the Treasury



 Office of Thrift Supervision

12 CFR Part 571



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National Credit Union Administration

12 CFR Part 717



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Federal Trade Commission

16 CFR Part 660



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Section 312 of the Fair and Accurate Credit Transactions Act; Proposed 
Rule

  Federal Register / Vol. 72, No. 239 / Thursday, December 13, 2007 / 
Proposed Rules  

[[Page 70944]]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 41

[Docket ID OCC-2007-0019]
RIN 1557-AC89

FEDERAL RESERVE SYSTEM

12 CFR Part 222

[Docket No. R-1300]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 334

RIN 3064-AC99

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 571

[Docket No. OTS-2007-0022]
RIN 1550-AC01

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 717

FEDERAL TRADE COMMISSION

16 CFR Part 660

RIN 3084-AA94


Interagency Notice of Proposed Rulemaking: Procedures To Enhance 
the Accuracy and Integrity of Information Furnished to Consumer 
Reporting Agencies Under Section 312 of the Fair and Accurate Credit 
Transactions Act

AGENCIES: Office of the Comptroller of the Currency, Treasury (OCC); 
Board of Governors of the Federal Reserve System (Board); Federal 
Deposit Insurance Corporation (FDIC); Office of Thrift Supervision, 
Treasury (OTS); National Credit Union Administration (NCUA); and 
Federal Trade Commission (FTC).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The OCC, Board, FDIC, OTS, NCUA, and FTC (Agencies) are 
publishing for comment proposed regulations and guidelines to implement 
the accuracy and integrity provisions in section 312 of the Fair and 
Accurate Credit Transactions Act of 2003 (FACT Act).\1\ The proposed 
regulations and guidelines would implement the requirement that the 
Agencies issue guidelines for use by furnishers regarding the accuracy 
and integrity of the information about consumers that they furnish to 
consumer reporting agencies and prescribe regulations requiring 
furnishers to establish reasonable policies and procedures for 
implementing the guidelines. The Agencies also are publishing for 
comment proposed regulations to implement the direct dispute provisions 
in section 312. The proposed regulations would implement the 
requirement that the Agencies issue regulations identifying the 
circumstances under which a furnisher must reinvestigate disputes about 
the accuracy of information contained in a consumer report based on a 
direct request from a consumer.
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    \1\ Pub. L. 108-159, 117 Stat. 1952 (Dec. 4, 2003).

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DATES: Comments must be submitted by February 11, 2008.

ADDRESSES: Because paper mail in the Washington, DC area and at the 
Agencies is subject to delay, commenters are encouraged to submit 
comments by e-mail, if possible. Commenters are also encouraged to use 
the title ``Procedures to Enhance the Accuracy and Integrity of 
Information Furnished to Consumer Reporting Agencies'' to facilitate 
the organization and distribution of the comments. Comments submitted 
to one or more of the Agencies will be made available to all of the 
Agencies. Interested parties are invited to submit comments to:
    OCC: You may submit comments by any of the following methods:
     Federal eRulemaking Portal--``Regulations.gov'': Go to 
http://www.regulations.gov, select ``Comptroller of the Currency'' from 
the agency drop-down menu, then click ``Submit.'' In the ``Docket ID'' 
column, select ``OCC-2007-0019'' to submit or view public comments and 
to view supporting and related materials for this notice of proposed 
rulemaking. The ``User Tips'' link at the top of the Regulations.gov 
home page provides information on using Regulations.gov, including 
instructions for submitting or viewing public comments, viewing other 
supporting and related materials, and viewing the docket after the 
close of the comment period.
     Mail: Office of the Comptroller of the Currency, 250 E 
Street, SW., Mail Stop 1-5, Washington, DC 20219.
     E-mail: [email protected].
     Fax: (202) 874-4448.
     Hand Delivery/Courier: 250 E Street, SW., Attn: Public 
Information Room, Mail Stop 1-5, Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket Number OCC-2007-0019'' in your comment. In general, OCC will 
enter all comments received into the docket and publish them on 
Regulations.gov without change, including any business or personal 
information that you provide such as name and address information, e-
mail addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not enclose any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials by any of the 
following methods:
     Viewing Comments Electronically: Go to http://www.regulations.gov, select the ``Search for All Documents (Open and 
Closed for Comment)'' option, select ``Comptroller of the Currency'' 
from the agency drop-down menu, then click ``Submit.'' In the ``Docket 
ID'' column, select ``OCC-2007-0019'' to view public comments for this 
notice of proposed rulemaking.
     Viewing Comments Personally: You may personally inspect 
and photocopy comments at the OCC's Public Information Room, 250 E 
Street, SW., Washington, DC. You can make an appointment to inspect 
comments by calling (202) 874-5043.
     Docket: You may also view or request available background 
documents and project summaries using the methods described above.
    Board: You may submit comments, identified by Docket No. R-1300, by 
any of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include docket 
number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.

All public comments are available from the Board's Web site at 
www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted,

[[Page 70945]]

unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper in Room MP-500 
of the Board's Martin Building (20th and C Streets, NW.) between 9 a.m. 
and 5 p.m. on weekdays.
    FDIC: You may submit comments, identified by the RIN for this 
rulemaking, by any of the following methods:
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow instructions for submitting comments on 
the Agency Web site.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-Mail: [email protected]. Include the RIN number in the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.
     Hand Delivery/Courier: Guard station at the rear of the 
550 17th Street Building (located on F Street) on business days between 
7 a.m. and 5 p.m.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal/propose.html, 
including any personal information provided. Comments may be inspected 
and photocopied at the FDIC Public Information Center, Room E-1002, 
3501 North Fairfax Drive, Arlington, VA 22226, between 9 a.m. and 5 
p.m. (EST) on business days. Paper copies of public comments may be 
ordered from the Public Information Center by telephone at (877) 275-
3342 or (703) 562-2200.
    OTS: You may submit comments, identified by OTS-2007-0022, by any 
of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov, select ``Office of Thrift Supervision'' from the 
agency drop-down menu, then click submit. Select Docket ID ``OTS-2007-
0022'' to submit or view public comments and to view supporting and 
related materials for this notice of proposed rulemaking. The ``User 
Tips'' link at the top of the page provides information on using 
Regulations.gov, including instructions for submitting or viewing 
public comments, viewing other supporting and related materials, and 
viewing the docket after the close of the comment period.
     Mail: Regulation Comments, Chief Counsel's Office, Office 
of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552, 
Attention: OTS-2007-0022.
     Fax: (202) 906-6518.
     Hand Delivery/Courier: Guard's Desk, East Lobby Entrance, 
1700 G Street, NW., from 9 a.m. to 4 p.m. on business days, Attention: 
Regulation Comments, Chief Counsel's Office, Attention: OTS-2007-0022.
     Instructions: All submissions received must include the 
agency name and docket number for this rulemaking. All comments 
received will be entered into the docket and posted on Regulations.gov 
without change, including any personal information provided. Comments, 
including attachments and other supporting materials received are part 
of the public record and subject to public disclosure. Do not enclose 
any information in your comment or supporting materials that you 
consider confidential or inappropriate for public disclosure.
     Viewing Comments Electronically: Go to http://www.regulations.gov, select ``Office of Thrift Supervision'' from the 
agency drop-down menu, then click ``Submit.'' Select Docket ID ``OTS-
2007-0022'' to view public comments for this notice of proposed 
rulemaking.
     Viewing Comments On-Site: You may inspect comments at the 
Public Reading Room, 1700 G Street, NW., by appointment. To make an 
appointment for access, call (202) 906-5922, send an e-mail to 
public.info@ots.treas.gov">public.info@ots.treas.gov, or send a facsimile transmission to (202) 
906-6518. (Prior notice identifying the materials you will be 
requesting will assist us in serving you.) We schedule appointments on 
business days between 10 a.m. and 4 p.m. In most cases, appointments 
will be available the next business day following the date we receive a 
request.
    NCUA: You may submit comments by any of the following methods 
(please send comments by one method only):
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs.html. Follow the 
instructions for submitting comments.
     E-mail: Address to [email protected]. Include ``[Your 
name] Comments on Notice of Proposed Rulemaking Part 717, Procedures to 
Enhance the Accuracy and Integrity of Information Furnished to Consumer 
Reporting Agencies under Section 312 of the Fair and Accurate Credit 
Transactions Act'' in the e-mail subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for e-mail.
     Mail: Address to Mary Rupp, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, VA 
22314-3428.
     Hand Delivery/Courier: Address to Mary Rupp, Secretary of 
the Board, National Credit Union Administration. Deliver to guard 
station in the lobby of 1775 Duke Street, Alexandria, VA 22314-3428, on 
business days between 8 a.m. and 5 p.m.

All public comments are available on the agency's Web site at http://www.ncua.gov/RegulationsOpinionsLaws/comments as submitted, except as 
may not be possible for technical reasons. Public comments will not be 
edited to remove any identifying or contact information. Paper copies 
of comments may be inspected in NCUA's law library, at 1775 Duke 
Street, Alexandria, VA 22314, by appointment weekdays between 9 a.m. 
and 3 p.m. To make an appointment, call (703) 518-6546 or send an e-
mail to [email protected].
    FTC: Comments should refer to ``Procedures to Enhance the Accuracy 
and Integrity of Information Furnished to Consumer Reporting Agencies 
under Section 312 of the Fair and Accurate Credit Transactions Act, 
Project No. R611017,'' and may be submitted by any of the following 
methods. Comments containing confidential material must be filed in 
paper form, must be clearly labeled ``Confidential,'' and must comply 
with Commission Rule 4.9(c).\2\
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    \2\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See Commission Rule 4.9(c), 
16 CFR 4.9(c).
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     E-mail: https://secure.commentworks.com/ftc-FACTAfurnishers. To ensure that the Commission considers an electronic 
comment, you must file it on the Web-based form found at this Web link 
and follow the instructions on that form.
     Federal eRulemaking Portal: http://www.regulations.gov. 
You may visit this Web site to read this request for public comment and 
to file an electronic comment. The Commission will consider all 
comments that regulations.gov forwards to it.
     Mail or Hand Delivery: A comment filed in paper form 
should refer, both in the text and on the envelope, to the name and 
project number identified above, and should be mailed or delivered to 
the following address:

[[Page 70946]]

Federal Trade Commission/Office of the Secretary, Room 159-H (Annex C), 
600 Pennsylvania Avenue, NW., Washington, DC 20580.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at http://www.ftc.gov/os/publiccomments.htm. As a matter 
of discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT:
    OCC: Stephen Van Meter, Assistant Director, Community and Consumer 
Law Division, (202) 874-5750; Patrick T. Tierney, Senior Attorney, 
Legislative and Regulatory Activities Division, (202) 874-5090; or Paul 
Utterback, National Bank Examiner, Compliance Policy, (202) 874-4428, 
Office of the Comptroller of the Currency, 250 E Street, SW., 
Washington, DC 20219.
    Board: David A. Stein, Counsel, Amy E. Burke, Attorney, or Jelena 
McWilliams, Attorney, Division of Consumer and Community Affairs, (202) 
452-3667 or (202) 452-2412; or Anne B. Zorc, Senior Attorney, (202) 
452-3876, or Kara L. Handzlik, Attorney, (202) 452-3852, Legal 
Division, Board of Governors of the Federal Reserve System, 20th and C 
Streets, NW., Washington, DC 20551.
    FDIC: David P. Lafleur, Policy Analyst, (202) 898-6569, or John 
Jackwood, Senior Policy Analyst, (202) 898-3991, Division of 
Supervision and Consumer Protection; Richard M. Schwartz, Counsel, 
(202) 898-7424, or Richard B. Foley, Counsel, (202) 898-3784, Legal 
Division; 550 17th St., NW., Washington, DC 20429.
    OTS: Suzanne McQueen, Consumer Regulations Analyst, Compliance and 
Consumer Protection Division, (202) 906-6459; or Richard Bennett, 
Senior Compliance Counsel, Regulations and Legislation Division, (202) 
906-7409, at 1700 G Street, NW., Washington, DC 20552.
    NCUA: Linda Dent or Regina Metz, Attorneys, Office of General 
Counsel, phone (703) 518-6540 or fax (703) 518-6569, National Credit 
Union Administration, 1775 Duke Street, Alexandria, VA 22314.
    FTC: Clarke W. Brinckerhoff and Pavneet Singh, Attorneys, (202) 
326-2252, Bureau of Consumer Protection, Federal Trade Commission, 600 
Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Fair Credit Reporting Act (FCRA), which was enacted in 1970, 
sets standards for the collection, communication, and use of 
information bearing on a consumer's creditworthiness, credit standing, 
credit capacity, character, general reputation, personal 
characteristics, or mode of living.\3\ In 1996, the Consumer Credit 
Reporting Reform Act extensively amended the FCRA.\4\ The FACT Act 
further amended the FCRA for various purposes, including to increase 
the accuracy of consumer reports.
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    \3\ 15 U.S.C. 1681-1681x.
    \4\ Pub. L. 104-208, 110 Stat. 3009 (Sept. 20, 1996).
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    Section 623 of the FCRA describes the responsibilities of persons 
that furnish information about consumers (furnishers) to consumer 
reporting agencies (CRAs).\5\ Section 312 of the FACT Act amended 
section 623 by requiring the Agencies to issue guidelines for use by 
furnishers regarding the accuracy and integrity of the information 
about consumers that they furnish to consumer reporting agencies and to 
prescribe regulations requiring furnishers to establish reasonable 
policies and procedures for implementing the guidelines (referred to in 
this proposal as the accuracy and integrity regulations and 
guidelines). Section 312 also requires the Agencies to issue 
regulations identifying the circumstances under which a furnisher must 
reinvestigate disputes concerning the accuracy of information provided 
by a furnisher to a CRA and contained in a consumer report based on a 
direct request from a consumer (referred to in this proposal as the 
direct dispute regulations). The Agencies are proposing to adopt 
accuracy and integrity regulations and guidelines and direct dispute 
regulations to satisfy the requirements of section 312.\6\
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    \5\ Section 623 is codified at 15 U.S.C. 1681s-2.
    \6\ The FACT Act also directs the FTC to ``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.'' See section 319 of the FACT Act. The FTC 
submitted its first interim report to Congress on this study on 
December 9, 2004, http://www.ftc.gov/reports/facta/041209factarpt.pdf (last visited Oct. 4, 2007). The FTC submitted 
its second interim report to Congress in December 2006, http://www.ftc.gov/reports/FACTACT/FACT_Act_Report_2006.pdf (last 
visited Oct. 4, 2007).
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II. Statutory Requirements

Accuracy and Integrity Regulations and Guidelines

    As added by section 312 of the FACT Act, section 623(e)(1)(A) of 
the FCRA requires the Agencies to establish and maintain guidelines for 
use by each furnisher ``regarding the accuracy and integrity of the 
information relating to consumers'' that the furnisher provides to 
CRAs. In developing the guidelines, section 623(e)(3) directs the 
Agencies to:
     Identify patterns, practices, and specific forms of 
activity that can compromise the accuracy and integrity of information 
furnished to CRAs;
     Review the methods (including technological means) used to 
furnish information relating to consumers to CRAs;
     Determine whether furnishers maintain and enforce policies 
to assure the accuracy and integrity of information furnished to CRAs; 
and
     Examine the policies and processes employed by furnishers 
to conduct reinvestigations and correct inaccurate information relating 
to consumers that has been furnished to CRAs.

The Agencies also are required to update the guidelines as often as 
necessary.
    Section 623(e)(1)(B) of the FCRA requires the Agencies to prescribe 
regulations requiring furnishers to ``establish reasonable policies and 
procedures for implementing the guidelines'' established pursuant to 
section 623(e)(1)(A). Section 623(e)(2) of the FCRA provides that the 
Agencies must consult and coordinate with one another so that, to the 
extent possible, the regulations prescribed by each Agency are 
consistent and comparable with the regulations prescribed by each of 
the other Agencies.

Direct Disputes

    As amended by section 312 of the FACT Act, section 623(a)(8) of the 
FCRA directs the Agencies jointly to prescribe regulations that 
identify the circumstances under which a furnisher is required to 
reinvestigate a dispute concerning the accuracy of information 
contained in a consumer report on the consumer, based on a direct 
request by the consumer. In prescribing the direct dispute regulations, 
section 623(a)(8) directs the Agencies to weigh the following specific 
factors:
     The benefits to consumers and the costs to furnishers and 
the credit reporting system;

[[Page 70947]]

     The impact on the overall accuracy and integrity of 
consumer reports of any direct dispute requirements;
     Whether direct contact by the consumer with the furnisher 
would likely result in the most expeditious resolution of any dispute; 
and
     The potential impact on the credit reporting process if 
credit repair organizations are able to circumvent the provisions in 
subparagraph G of section 623(a)(8), which generally states that the 
direct dispute rules shall not apply when credit repair organizations 
provide notices of dispute on behalf of consumers.

III. The Agencies' Consideration of the Statutory Accuracy and 
Integrity Criteria and Direct Dispute Factors

The Agencies' Advance Notice of Proposed Rulemaking

    In order to obtain information pertaining to the criteria that 
Congress directed the Agencies to consider in developing the accuracy 
and integrity guidelines and the factors that Congress directed the 
Agencies to weigh in prescribing the direct dispute regulations, the 
Agencies issued an advance notice of proposed rulemaking (ANPR) in 
March 2006.\7\ The ANPR contained detailed requests for comment on ten 
issues related to the statutory criteria governing the development of 
the accuracy and integrity guidelines, and on eight issues related to 
the statutory factors that the Agencies must weigh when promulgating 
the direct dispute regulations. The Agencies also specifically 
requested comment on how the issues presented by the ANPR might differ 
depending on the type of furnisher, the types of information furnished, 
the frequency with which a furnisher reports information about 
consumers to CRAs, or the type of CRA that receives the furnished 
information.
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    \7\ 71 FR 14,419 (March 22, 2006).
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    The Agencies received a total of 197 comments. Commenters included 
depository institutions, other financial services companies, trade 
associations, a CRA, a credit score service provider, a mortgage 
company, consumer groups, and individual consumers. Key issues 
identified and comments received on the accuracy and integrity criteria 
and on the direct dispute factors are summarized separately in the next 
two sections.

Comments Pertaining to Accuracy and Integrity Regulations and 
Guidelines

    Burden of accuracy and integrity regulations and guidelines. A 
consistent theme among industry commenters on the ANPR was that the 
proposed guidelines and regulations should be sensitive to the 
voluntary nature of the reporting of information about consumers by 
furnishers to CRAs and not create undue burdens on furnishers that 
would discourage reporting. These commenters asserted that imposing 
burden on furnishers may result in furnishers reporting less 
information than they do presently or ceasing to report at all, thereby 
decreasing the effectiveness of the current credit reporting system for 
both consumers and industry.
    Types of errors, omissions, or other problems that may impair the 
accuracy and integrity of furnished information. Many commenters 
detailed the types of errors that may impair the accuracy of 
information furnished to CRAs. Industry commenters, consumer groups, 
and individuals stated that some furnishers do not report consumers' 
positive payment histories, a practice that can lead to lower credit 
scores than consumers may merit. Similarly, commenters also noted that 
some furnishers do not report credit limits, which may likewise lead to 
lower credit scores. Consumer groups reported that sales of consumer 
accounts to collection agencies also result in accounts being ``re-
aged,'' meaning that a debt receives a new origination date when the 
collection account is opened, resulting in the debt being included on a 
consumer's credit file longer than legally permissible. In addition, a 
number of industry commenters mentioned that data entry errors by 
furnishers and different data processing procedures by the CRAs can 
result in ``mixed files''--files that include information from two or 
more consumers. Commenters noted that furnishing inaccurate information 
can adversely affect consumer credit scores and result in higher costs 
of credit for some consumers and increased credit risk for lenders.
    Patterns, practices, and specific forms of activity that can 
compromise the accuracy and integrity of furnished information. 
Industry commenters and consumer groups stated that a number of 
furnishers do not use the industry standard format for reporting 
information about consumers to CRAs, which results in the reporting of 
inaccurate information. In addition, industry and consumer groups 
mentioned that sales of debt to collection agencies or to other 
creditors results in inaccurate information reported to the CRAs (e.g., 
duplicative reporting of accounts and re-aged accounts). Consumer 
groups and a trade association noted problems with inaccurate 
bankruptcy information being reported--some furnishers continue to 
report a debt as not included in bankruptcy, fail to record a debt as 
discharged, or continue to show a balance owed after bankruptcy 
discharge. Several industry commenters stated that some furnishers do 
not provide data to CRAs in a timely manner, which may result in 
delinquent debtors appearing as current on their loans.
    Business, economic, or other reasons for the patterns, practices, 
and specific forms of activity that can compromise the accuracy and 
integrity of furnished information. A few consumer groups and trade 
associations indicated that some creditors omit good payment history or 
credit limit information in order to protect their proprietary 
underwriting systems and prevent competitors from soliciting business 
from their customers. Some commenters also asserted that collection 
agencies have little economic incentive to report updated or accurate 
information because they typically do not use consumer report 
information to determine credit risk.
    Recommendations and descriptions of policies and procedures that a 
furnisher should implement and maintain to identify, prevent, or 
mitigate patterns, practices, and specific forms of activity that can 
compromise the accuracy and integrity of information furnished to a 
CRA. Some individual and industry commenters recommended that 
furnishers report all consumer account information to CRAs and not omit 
information. Consumer groups and some industry commenters recommended 
that furnishers should report using the Metro 2 format--a standard 
reporting format created by the credit reporting industry--or a similar 
standardized format. Some depository institutions and trade 
associations suggested that the accuracy and integrity guidelines 
should be flexible and take into consideration the diversity of 
furnishers with regard to size and business complexity.
    Methods (including technological means) used to furnish information 
about consumers to CRAs. Industry commenters stated that most 
furnishers are reporting to the three nationwide CRAs electronically 
using the Metro 2 format, although some furnishers transmit information 
via magnetic tape, disks, or paper. Some trade associations commented 
that errors can be introduced into a consumer's credit file when a CRA 
translates the furnisher's raw data into the CRA's database.

[[Page 70948]]

    Maintenance and enforcement of policies and procedures to ensure 
the accuracy and integrity of information furnished to CRAs. Industry 
commenters stated that, in general, furnishers have policies and 
procedures in place to ensure the accuracy of information and perform 
internal audits to verify accuracy. Industry commenters also stated 
that furnishers have a business incentive to maintain and report 
accurate information in order to maintain good customer relations.
    Methods (including any technological means) that a furnisher should 
use to ensure the accuracy and integrity of information about consumers 
furnished to CRAs. Industry commenters suggested that furnishers should 
use internal reports to verify the accuracy of information transmitted 
to the CRAs. Consumer groups recommended that furnishers take 
appropriate steps to ensure that they report bankruptcy discharge 
information accurately.
    Descriptions of policies, procedures, and processes used by 
furnishers to conduct reinvestigations and to correct inaccurately 
furnished information and recommendations that furnishers should adopt. 
Industry commenters indicated that most furnishers use an electronic 
automated system (e-OSCAR) for receiving and transmitting consumer 
dispute information from and to the three nationwide CRAs. Although 
each furnisher has its own procedures for investigating disputes, 
furnishers generally review the information provided by the CRA and 
compare it to the information in the consumer's file at the furnisher. 
A few industry commenters stated that using the e-OSCAR system to 
conduct reinvestigations is adequate. One trade association stated that 
furnishers should establish better reinvestigation procedures and 
provide staff training for processing credit disputes.
    Consumer groups commented that furnishers' reinvestigation 
procedures are inadequate in that they only verify that the reported 
information is consistent with the furnishers' records, not the 
underlying accuracy of such information. Consumer groups recommended 
that furnishers should perform in-depth investigations beyond verifying 
that information reported to CRAs matches furnishers' records, 
including contacting consumers to obtain additional information, if 
necessary. Consumer groups also noted that CRAs do not provide 
furnishers with documentation provided by consumers to support their 
claims.
    Description of the policies and procedures of CRAs for ensuring the 
accuracy and integrity of furnished information and whether and to what 
extent those policies, procedures, or other requirements address 
particular problems that may affect information accuracy and integrity. 
A few industry commenters noted that CRAs have implemented policies to 
ensure the accuracy of information that they receive from furnishers. 
One industry commenter asserted that once CRAs incorporate data into 
their databases, furnishers do not know how CRAs actually apply the 
data to consumer credit files or whether the data is applied to the 
correct consumers.

Comments Pertaining to Direct Dispute Regulations

    Circumstances under which a furnisher should be required to 
investigate a dispute. Industry commenters indicated that furnishers 
generally are voluntarily investigating disputes that are directly 
submitted to them using a process that is similar to the one furnishers 
use to investigate disputes that CRAs forward to the furnishers. 
Industry commenters, however, also stated that investigations of direct 
disputes should be required only in instances of fraud or identity 
theft that can be documented by the consumer, or where the consumer has 
provided a written detailed dispute to the furnisher. Other industry 
commenters believe that investigations of direct disputes should only 
be required if the consumer has already disputed the item with the CRA 
and received a response. Consumer groups favored a broad application of 
the direct dispute rule, noting that many furnishers already have an 
obligation to investigate other types of disputes for major product 
categories under other laws, such as the Truth in Lending Act, Real 
Estate Settlement Procedures Act, and Electronic Fund Transfer Act. 
Some individuals commented that furnishers should always be required to 
reinvestigate a consumer's account upon the consumer's request.
    Benefits or costs to consumers that may result from a direct 
dispute right. Consumer groups commented that consumers would benefit 
from direct disputes because the dispute requirement would eliminate 
the problem of CRAs not forwarding disputes and supporting 
documentation to furnishers and would provide furnishers with necessary 
documentation to investigate errors or fraud. One individual noted that 
consumers would benefit by being able to deal with one entity, the 
furnisher, rather than the three nationwide CRAs. Some industry 
commenters noted that consumers would benefit from direct disputes in 
complex cases or where the consumer needs to provide the furnisher with 
supporting documentation.
    Benefits to furnishers, consumer reporting agencies, or the credit 
reporting system that may result if furnishers are required to 
investigate direct disputes. Consumer groups stated that direct 
disputes will result in a more accurate credit reporting system and 
would afford industry the opportunity to standardize the dispute 
resolution process. A few industry commenters stated that direct 
disputes would yield faster dispute resolution for consumers. Some 
industry commenters mentioned that direct disputes may be beneficial 
for providing to furnishers additional documentation for complex 
disputes, noting that such information may not be forwarded by CRAs.
    Costs to furnishers, consumer reporting agencies, or the credit 
reporting system of implementing a direct dispute requirement. Industry 
commenters believed that a direct dispute requirement would impose 
significant costs on furnishers resulting from an expected increase in 
the number of direct disputes. One depository institution reported that 
the costs of resolving a direct dispute are related to whether the 
disputed information contains derogatory information and the nature of 
the consumer's dispute. Some industry commenters noted that reviewing 
consumers' lengthy payment histories can be costly. One industry 
commenter noted that a direct dispute requirement would shift costs 
from CRAs to furnishers.
    One consumer group commented that start-up costs should not be 
burdensome as many furnishers already have direct dispute 
responsibilities for their major products (such as credit cards). This 
commenter asserted that the cost for processing a direct dispute ranges 
from $25 to $200, and that this cost is exceeded by the harms to 
consumers who are adversely affected due to reporting errors.
    Impact on the overall accuracy and integrity of consumer reports if 
furnishers are required to investigate direct disputes. Some industry 
commenters stated that they expect an adverse impact on overall 
accuracy and integrity of consumer reports as a result of an increase 
in duplicate disputes and costs, decreased efficiency in processing 
disputes, and the likelihood that some furnishers would stop reporting 
or report less information than they currently do.
    Whether direct contact by the consumer with the furnisher would 
likely result in the most expeditious

[[Page 70949]]

resolution of a dispute. Industry commenters generally believed that 
direct contact by the consumer is most appropriate in instances of 
fraud, identity theft, or where detailed information is needed in order 
to resolve the consumer dispute. Some industry commenters also stated 
that direct contact by the consumer would not be appropriate where the 
error lies with the CRA or an aggregator rather than with the 
furnisher.
    Potential impact on the credit reporting process if credit repair 
organizations are able to circumvent the FCRA's prohibition of their 
submission of direct disputes. Consumer groups and an individual 
commented that attorneys should be permitted to assist consumers with 
disputes and not be considered credit repair organizations. Industry 
commenters predicted an increase in costs resulting from a significant 
increase in the number of direct disputes that would be filed by credit 
repair organizations, which, these commenters contended, are often 
deliberately vague or overbroad.
    Additional, specific comments are mentioned, as appropriate, in the 
section-by-section analysis.
    The Agencies have carefully considered the comments received in 
response to the ANPR in developing the proposed accuracy and integrity 
regulations and guidelines and the proposed direct dispute regulations. 
The Agencies also reviewed a number of studies that have identified 
potential issues that may affect the accuracy of consumer report 
information. These studies indicate that consumer report accuracy may 
be affected by the presence of stale account information, the practice 
of furnishing only negative information about an account, inaccurate or 
incomplete public record data, inaccurate or incomplete collection 
account data, and unreported credit limits.\8\
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    \8\ See Robert B. Avery, Raphael W. Bostic, Paul S. Calem & 
Glenn B. Canner, An Overview of Consumer Data and Credit Reporting, 
Federal Reserve Bulletin, vol. 89, at 47-73 (Feb. 2003); Robert B. 
Avery, Paul S. Calem, Glenn B. Canner & Shannon C. Mok, Credit 
Report Accuracy and Access to Credit, Federal Reserve Bulletin, vol. 
90, at 297-322 (Summer 2004); Consumer Federation of America & 
National Credit Reporting Association, Credit Score Accuracy and 
Implications for Consumers (Dec. 17, 2002), http://www.consumerfed.org/pdfs/121702CFA_NCRA_Credit_Score_Report_Final.pdf (last visited Oct. 4, 2007); Federal Trade Commission and 
Board of Governors of the Federal Reserve System, Report to Congress 
on the Fair Credit Reporting Act Dispute Process (Aug. 2006).
---------------------------------------------------------------------------

IV. Section-by-Section Analysis \9\
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    \9\ The OCC, Board, FDIC, OTS and NCUA would place the proposed 
regulations and guidelines implementing section 312 in the part of 
their regulations that implement the FCRA--12 CFR parts 41, 222, 
334, 571, and 717, respectively. For ease of reference, the 
discussion in the Supplementary Information section uses the shared 
numerical suffix of each of these agency's regulations. The FTC also 
would place the proposed regulations and guidelines in the part of 
its regulations implementing the FCRA, specifically 16 CFR part 660. 
However, the FTC uses different numerical suffixes that equate to 
the numerical suffixes discussed in the Supplementary Information 
section as follows: Suffix .40 = FTC suffix .1, suffix .41 = FTC 
suffix .2, suffix .42 = FTC suffix .3, and suffix .43 = FTC suffix 
.4. In addition, Appendix E referenced in the Supplementary 
Information section is the FTC's Appendix A.
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    The following describes the three components of this rulemaking: 
the proposed accuracy and integrity regulations, the proposed accuracy 
and integrity guidelines, and the proposed direct dispute regulations.

Proposed Accuracy and Integrity Regulations

Section --.40 Scope
    Section --.40 sets forth the scope of each Agency's proposed 
regulations requiring furnishers to establish reasonable policies and 
procedures for implementing the accuracy and integrity guidelines. Each 
of the Agencies has tailored this section to describe those entities to 
which this subpart applies. The FDIC requests comment on whether it 
would be useful to include a cross-reference in its proposed regulation 
to the definition of ``subsidiary'' in the Federal Deposit Insurance 
Act.\10\
---------------------------------------------------------------------------

    \10\ See 12 U.S.C. 1813(w)(4).
---------------------------------------------------------------------------

Section --.41 Definitions.
    Two approaches to defining the terms ``accuracy'' and 
``integrity.''
    Section 623(e) of the FCRA requires the Agencies to establish and 
maintain guidelines for use by furnishers regarding the accuracy and 
integrity of the information about consumers that they furnish to CRAs. 
The statute does not define the terms ``accuracy'' or ``integrity.''
    Consumer group and industry commenters on the ANPR provided 
suggestions for defining the terms ``accuracy'' and ``integrity.'' 
Consumer groups proposed that the Agencies define the term ``accuracy'' 
to mean ``conformity to fact,'' rather than conformity to data records. 
They said that an accuracy standard should rely not only upon a 
furnisher's data records, but also upon original documents such as 
credit agreements. Some consumer groups also said that information 
should not be considered ``accurate'' if it is overly general, 
incomplete, out-of-date, or misleading. Consumer groups also proposed 
that the Agencies make clear that information lacks ``integrity'' if it 
is technically accurate, but misleads users of consumer reports because 
it does not include critical information.
    Industry commenters, citing the legislative history of the FACT 
Act, suggested that the term ``integrity'' does not mean completeness, 
but rather, that the information a furnisher provides to a CRA is 
factually correct.
    In the Agencies' view, neither the text nor the legislative history 
of the FACT Act resolves how the terms ``accuracy'' and ``integrity'' 
should be defined. Although the terms used in section 623(e) differ 
from terms used in other provisions of the FCRA,\11\ the text of 
section 623(e) provides no direction to the Agencies about the meaning 
or significance of that difference.\12\ The Agencies have reviewed the 
legislative history, and note that the Congressional Record includes 
post-enrollment statements regarding section 623(e) made by the 
Chairman of the House Financial Services Committee and by the Ranking 
Member of the Senate Committee on Banking, Housing and Urban 
Affairs.\13\ Those statements,

[[Page 70950]]

however, provide different views on the meaning of the terms.
---------------------------------------------------------------------------

    \11\ See FCRA section 623(b)(1), 15 U.S.C. 1681s-2(b)(1) 
(requiring entities that furnish information to CRAs to conduct 
investigations in response to complaints regarding the 
``completeness or accuracy'' of furnished information); sections 
FCRA 623(a)(2)(A)-(B), 15 U.S.C. 1681s-2(a)(2)(A)-(B) (requiring 
furnishers to correct and update information that the furnisher 
determines is ``not complete or accurate'' and to refrain from 
refurnishing information that remains ``not complete or accurate'').
    \12\ Earlier versions of the legislation that became the FACT 
Act required the agencies to prescribe regulations and guidelines 
regarding the ``accuracy and completeness'' of information relating 
to consumers. This language also was contained in the bill passed by 
the Senate and referred to the Conference Committee. However, the 
bill reported by the Conference Committee used the phrase ``accuracy 
and integrity.'' Compare 149 Cong. Rec. S13990 (Nov. 5, 2003) (bill 
as passed by the Senate) with 149 Cong. Rec. H12198 (Nov. 21, 2003) 
(bill as reported by the Conference Committee).
    \13\ See 149 Cong. Rec. E2512, E2516 (Nov. 4, 2003) (extension 
of remarks of Chairman Michael Oxley, entered into the Congressional 
Record on Dec. 9, 2003) (`` `[a]ccuracy and integrity' was selected 
[by the Congress] as the relevant standard rather than `accuracy and 
completeness' as used in Sections 313 and 319 [of the FACT Act], to 
focus on the quality of the information furnished rather than the 
completeness of the information furnished.''); 149 Cong. Rec. 
S15806-02 (Nov. 24, 2003) (statement of Ranking Member Paul 
Sarbanes) (`` `[A]ccuracy' relates to whether the information that 
is provided by data furnishers to credit reporting agencies is 
factually correct. The term `integrity' relates to whether all 
relevant information that is used to assess credit risk and to grant 
credit is accurately provided. Integrity of information is not 
achieved when furnishers do not fully provide data that, by its 
absence, could have a positive or negative effect on a consumer's 
credit score, or on his or her ability to obtain credit under the 
most favorable terms for which he or she qualifies.'').
---------------------------------------------------------------------------

    In light of these considerations, the Agencies are proposing for 
comment two alternative approaches to defining the terms ``accuracy'' 
and ``integrity'' in the text of the regulations and guidelines. 
Although the definition of ``accuracy'' is the same under both 
alternatives, the two approaches differ in terms of both the substance 
of the definition of ``integrity'' and the placement of the 
definitions. Accordingly, the Agencies request comment on which 
definition of ``integrity'' should be adopted in the final rule, and on 
whether the definitions of ``accuracy'' and ``integrity'' should be 
placed in the regulations or in the guidelines.

A. Regulatory Definition Approach

    Under the first approach, the Agencies would provide specific 
definitions for the terms ``accuracy'' and ``integrity'' in the 
regulations. This approach, labeled ``Regulatory Definition Approach,'' 
appears at Sec. Sec.  --.41(a) and --.41(b) in the text of the proposed 
regulations. Under proposed Sec.  --.41(a), the term ``accuracy'' means 
that any information that a furnisher provides to a CRA about an 
account or other relationship with the consumer reflects without error 
the terms of and liability for the account or other relationship and 
the consumer's performance or other conduct with respect to the account 
or other relationship. This proposed definition of ``accuracy'' is 
intended to require that furnishers have reasonable procedures in place 
to ensure that the information they provide to CRAs is factually 
correct. The Agencies solicit comment on whether the definition of 
accuracy should specifically provide that accuracy includes updating 
information as necessary to ensure that information furnished is 
current.
    Under proposed Sec.  --.41(b), the term ``integrity'' means that 
any information that a furnisher provides to a CRA about an account or 
other relationship with the consumer does not omit any term, such as a 
credit limit or opening date, of that account or other relationship, 
the absence of which can reasonably be expected to contribute to an 
incorrect evaluation by a user of a consumer report of a consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living. Thus, the 
Regulatory Definition Approach provides that information furnished to a 
CRA may be technically ``accurate'' yet lack ``integrity'' because it 
presents a misleading picture of the consumer's creditworthiness by 
omitting critical information, such as a credit limit on a revolving 
credit account.\14\
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    \14\ ``A key factor that credit evaluators consider when they 
assess the creditworthiness of an individual is credit utilization. 
If a creditor fails to report a credit limit for an account, credit 
evaluators must either ignore utilization or use a substitute 
measure such as the highest-balance level--that is, the largest 
amount ever owed on the account. Substituting the highest balance 
level for the credit limit generally results in a higher estimate of 
credit utilization because the highest-balance amount is typically 
lower than the credit limit: the higher estimate leads, in turn, to 
a higher perceived level of credit risk for affected consumers.'' 
Robert B. Avery, Paul S. Calem, Glenn B. Canner, Credit Report 
Accuracy and Access to Credit; Federal Reserve Bulletin, Summer 
2004, p. 306.
---------------------------------------------------------------------------

    Under the Regulatory Definition Approach--and as described in 
further detail in the section-by-section analysis of the guidelines--
the Agencies would include in the guidelines six objectives that a 
furnisher's policies and procedures should be designed to achieve. The 
six objectives seek to ensure that: Information is furnished 
accurately; information is furnished with integrity; the furnisher 
conducts reasonable investigations of consumer disputes about the 
accuracy or integrity of information in consumer reports and takes 
appropriate actions based on the outcome of such investigations; 
information is reported in a form and manner designed to minimize the 
likelihood that it will be erroneously reflected in the consumer's 
report; information furnished is substantiated by the furnisher's 
records; and the furnisher updates information it furnishes as 
necessary to reflect the current status of the consumer's account or 
other relationship. The first two of these objectives would reflect the 
regulatory definitions of ``accuracy'' and ``integrity.''
    Thus, under the Regulatory Definition Approach, the guidelines 
would provide that a furnisher should have written policies and 
procedures reasonably designed to ensure that the information it 
furnishes about accounts or other relationships with a consumer:
     Accurately identifies the appropriate consumer;
     Accurately reports the terms of those accounts or other 
relationships; and
     Accurately reports the consumer's performance and other 
conduct with respect to the account or other relationship.

Further, the guidelines would provide that a furnisher should have 
policies and procedures reasonably designed to ensure that the 
information it furnishes about accounts or other relationships with a 
consumer avoids misleading users of consumer reports about the 
consumer's creditworthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode of 
living.
    Consistent with the FCRA, under which the furnishing of information 
about consumers is voluntary, the proposed definitions would apply only 
to information that the furnisher elects to report to CRAs. The 
Agencies are aware that some furnishers may be subject to separate 
obligations to report all available information about an account or 
other relationship.\15\ These proposed definitions, however, are not 
intended to require furnishers to do so.
---------------------------------------------------------------------------

    \15\ Furnishers that report information about consumers to CRAs 
related to mortgage loans may be required by Freddie Mac, Fannie 
Mae, and the Federal Housing Administration to report full-file 
information. See Fannie Mae Servicing Guide, Part I, Section 304.09 
and Part VII, Section 107; Freddie Mac Service Guide, Section 55.4: 
Reports to credit repositories; and the Federal Housing 
Administration Servicing Handbook, Section 4330.1(c) (Rev-5) 
(incorporating by reference the Fannie Mae Servicing Guide). 
Further, the Department of Housing and Urban Development has defined 
``Mortgages contrary to good lending practices'' to include a 
mortgage or a group or category of mortgages entered into by a 
lender and purchased by Fannie Mae or Freddie Mac where it can be 
shown that a lender engaged in a practice of failing to report 
monthly on borrowers' repayment history to credit repositories on 
the status of each loan purchased by Fannie Mae or Freddie Mac that 
a lender is servicing. 24 CFR 81.2(b).
---------------------------------------------------------------------------

B. Guidelines Definition Approach

    The second approach contained in the proposal, labeled the 
``Guidelines Definition Approach,'' would define the terms ``accuracy'' 
and ``integrity'' in the guidelines--rather than in the regulations--
with reference to the objectives that a furnisher's policies and 
procedures should be designed to accomplish.
    Under the Guidelines Definition Approach, the Agencies have 
identified four objectives that pertain to the accuracy and integrity 
of information furnished and related matters. Definitions for the terms 
``accuracy'' and ``integrity'' would be incorporated into the first two 
of these objectives. Thus, the guidelines would provide that a 
furnisher should have written policies and procedures reasonably 
designed to ensure that the information it furnishes about accounts or 
other relationships with a consumer is accurate. The guidelines would 
define ``accuracy'' to mean that any information that a furnisher 
provides to a CRA about an account or other relationship with the 
consumer reflects without error the terms of and liability for the 
account or other relationship and the consumer's performance or other 
conduct with

[[Page 70951]]

respect to the account or other relationship. This is the same 
definition of ``accuracy'' used in the Regulatory Definition Approach.
    Additionally, the guidelines would provide that a furnisher's 
policies and procedures should ensure that the information it furnishes 
about accounts or other relationships with a consumer is furnished with 
integrity. The guidelines would define ``integrity'' to mean that any 
information that a furnisher provides to a CRA about an account or 
other relationship with the consumer: (1) Is reported in a form and 
manner that is designed to minimize the likelihood that the 
information, although accurate, may be erroneously reflected in a 
consumer report; and (2) should be substantiated by the furnisher's own 
records. In addition to being placed in a different location, this 
definition is substantively different from that used in the Regulatory 
Definition Approach.
    Under the Guidelines Definition Approach, the definition of 
``integrity'' does not address the omission of any term the absence of 
which could contribute to an incorrect evaluation by a user of a 
consumer's creditworthiness. Instead, the proposed definition of 
``integrity'' addresses two potential issues with furnished 
information. First, accurate information may be attributed to the wrong 
consumer or the wrong account, or may be associated with an erroneous 
date. Second, if the accuracy of the furnished information is disputed, 
the furnisher should be able to substantiate, or verify, the 
information through its own records. The Regulatory Definition Approach 
also includes these two concepts in the guidelines as objectives that a 
furnisher's policies and procedures should be designed to achieve. The 
Guidelines Definition Approach, like the Regulatory Definition 
Approach, also includes as objectives: Ensuring that the furnisher 
conducts reasonable investigations of consumer disputes about the 
accuracy or integrity of information in consumer reports and takes 
appropriate actions based on the outcome of such investigations; and 
ensuring that the furnisher updates information it furnishes as 
necessary to reflect the current status of the consumer's account or 
other relationship.
    As noted above, the Agencies invite comment on these alternative 
definitions of ``integrity,'' and on whether the definitions of 
``accuracy'' and ``integrity'' should be placed in the regulatory text 
or in the guidelines.
Furnisher
    Proposed Sec.  --.41(c) would define the term ``furnisher'' to mean 
an entity other than an individual consumer that furnishes information 
relating to consumers to one or more CRAs. An entity is not a furnisher 
under the proposed definition when it provides information to a CRA 
solely to obtain a consumer report under sections 604(a) and (f) of the 
FCRA, which enumerate the circumstances under which a CRA may provide a 
consumer report and prohibit persons from obtaining or using consumer 
reports for impermissible purposes. Users of consumer reports may 
provide information about consumers to CRAs in order to obtain such 
reports, but they do not do so for the purpose of having such 
information included in consumer reports. Although the user's request 
for the report may be reflected in the consumer report as an inquiry, 
the Agencies do not believe it would be appropriate to subject such 
furnishing of information to the regulations and guidelines proposed 
here. In addition, by defining the term ``furnisher'' in terms of an 
entity other than an individual consumer, the proposal makes clear that 
consumers are not furnishers, even if they self-report information 
about themselves to a CRA.
Identity Theft
    Proposed Sec.  --.41(d) provides that the term ``identity theft'' 
has the same meaning as in the FTC's regulations at 16 CFR 603.2(a). 
Section 603.2(a), which was adopted pursuant to section 111 of the FACT 
Act,\16\ defines the term ``identity theft'' to mean ``a fraud 
committed or attempted using the identifying information of another 
person without authority.'' This definition also is used in the 
interagency regulations implementing section 114 of the FACT Act (Red 
Flags).
---------------------------------------------------------------------------

    \16\ Section 111 provides for a definition of the term 
``identity theft,'' and authorizes the FTC to refine that 
definition. See section 603(q)(3) of the FCRA, 15 U.S.C. 
1681a(q)(3).
---------------------------------------------------------------------------

Direct Dispute
    Proposed Sec.  --.41(e) defines ``direct dispute'' to mean a 
dispute submitted directly to a furnisher by a consumer concerning the 
accuracy of any information contained in a consumer report relating to 
the consumer. Although the definition of ``direct dispute'' uses the 
term accuracy, the proposed Regulatory Definition Approach provides a 
definition of accuracy for purposes of the definition of ``direct 
dispute,'' but the Guidelines Definition Approach does not.
    The Agencies solicit comment on whether the definition of 
``accuracy'' should be made applicable to direct disputes, if the 
Guidelines Definition Approach is adopted. The Agencies also solicit 
comment on whether the proposed definition of ``accuracy'' is 
appropriate for the direct dispute provision.\17\
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    \17\ The Agencies note that section 623(a)(8) only requires a 
furnisher to handle direct disputes about ``accuracy.'' In contrast, 
section 611(a) requires a CRA to handle disputes about 
``completeness or accuracy'' and section 623(b) requires furnishers 
to reinvestigate disputes about ``completeness or accuracy'' if the 
disputes come through a CRA. The Agencies particularly request 
comment on whether the definition of ``accuracy'' needs to be 
clarified in order to more clearly delineate those disputes that, 
while subject to the CRA dispute process, would not be subject to 
the direct disputes rule.
---------------------------------------------------------------------------

Section --.42 Reasonable Policies and Procedures Concerning the 
Accuracy and Integrity of Furnished Information
    Paragraph (a) of proposed Sec.  --.42 would require each furnisher 
to establish and implement reasonable written policies and procedures 
regarding the accuracy and integrity of the information about consumers 
that it furnishes to a CRA. The policies and procedures must be 
appropriate to the nature, size, complexity, and scope of the 
furnisher's activities.
    The requirement that furnishers' policies and procedures be written 
facilitates effective implementation and enables the Agencies to assess 
furnishers' compliance with the rules. The Agencies do not believe that 
the requirement for written policies and procedures will be unduly 
burdensome, particularly since, under the guidelines, a furnisher may 
include any of its existing policies and procedures that are relevant 
and appropriate. As noted previously, industry commenters responding to 
the ANPR noted that, in general, furnishers have policies and 
procedures in place to ensure the accuracy of information furnished to 
CRAs. The Agencies invite comment on any burden and effects on 
furnishers, particularly small furnishers, regarding the requirement 
that the policies and procedures be written.
    The Agencies recognize that there is substantial diversity among 
furnishers with respect to their structure, operations, and the types 
of business they conduct, such that a ``one-size-fit-all'' approach to 
the implementation of the guidelines is inappropriate. The requirement 
that the furnisher's policies and procedures must be appropriate to the 
nature, size, complexity, and scope of the furnisher's activities 
permits furnishers to tailor their policies and procedures to their 
business activities.

[[Page 70952]]

The Agencies expect, for example, that the policies and procedures for 
a small retail entity would differ from those of a multi-billion dollar 
financial services company.
    Proposed Sec.  --.42(b) requires each furnisher to consider the 
accuracy and integrity guidelines in developing its policies and 
procedures and to incorporate those guidelines that are appropriate. 
Furnishers should consider the guidelines in the context of the nature, 
size, complexity, and scope of their activities and incorporate the 
guidelines that are appropriate to ensure the accuracy and integrity of 
the information about consumers that they provide to CRAs.
    Some of the commenters on the ANPR specifically suggested that the 
Agencies require furnishers to review or audit their furnishing 
policies and procedures in order to ensure that the information about 
consumers continues to be furnished accurately and with integrity. 
Proposed Sec.  --.42(c) incorporates these commenters' suggestions and 
would require each furnisher to review its policies and procedures 
periodically and update them as necessary to ensure their continued 
effectiveness.

Proposed Accuracy and Integrity Guidelines

    The accuracy and integrity guidelines appear as Appendix E to the 
appropriate part of each Agency's regulations. In the introductory 
language to the guidelines, the Agencies encourage voluntary furnishing 
of information about consumers to CRAs. This reflects the recognition 
that the voluntary system of consumer reporting produces substantial 
benefits for consumers, users of consumer reports, and the economy as a 
whole. The introduction also reminds furnishers that Sec.  --.42 of the 
proposed regulations would require each furnisher to establish and 
implement reasonable written policies and procedures concerning the 
accuracy and integrity of the information about consumers it furnishes 
to CRAs and to consider the guidelines in developing those policies and 
procedures.
Section I--Nature, Scope, and Objectives of Policies and Procedures
    The Nature and Scope section of the guidelines references the 
requirement, at proposed Sec.  --.42(a), that a furnisher's policies 
and procedures must be appropriate to the nature, size, complexity, and 
scope of the furnisher's activities and provides the following examples 
of aspects of a furnisher's business activities that its policies and 
procedures should reflect: The types of business activities in which 
the furnisher engages; the nature and frequency of the information 
about consumers the furnisher provides to CRAs; and the technology used 
by the furnisher to provide information to CRAs.
    The Objectives section of the guidelines provides that a furnisher 
should have written policies and procedures reasonably designed to 
accomplish the specified objectives. As described earlier in the 
discussion of the terms ``accuracy'' and ``integrity,'' the wording of 
some of the objectives set out in the guidelines is related to the 
alternative approaches to construing the term ``integrity'' that the 
Agencies are proposing in the text.
    In connection with the Regulatory Definition Approach, the first 
two objectives of the guidelines would provide that a furnisher should 
have written policies and procedures reasonably designed to ensure that 
the information it furnishes about accounts or other relationships with 
a consumer accurately identifies the appropriate consumer; accurately 
reports the terms of those accounts or other relationships; accurately 
reports the consumer's performance and other conduct with respect to 
the account or other relationship; and designed to ensure that the 
information it furnishes about accounts or other relationships with a 
consumer avoids misleading a consumer report user as to the consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living.
    Under the Guidelines Definition Approach, definitions of 
``accuracy'' and ``integrity'' would be incorporated into the first two 
objectives. Thus, the guidelines would provide that a furnisher should 
have written policies and procedures reasonably designed to ensure that 
the information it furnishes about accounts or other relationships with 
a consumer is accurate. The guidelines would define ``accuracy'' to 
mean that with respect to any information that a furnisher provides 
about an account or other relationship with the consumer to a CRA 
reflects without error the terms of and liability for the account or 
other relationship and the consumer's performance and other conduct 
with respect to the account or other relationship.
    Additionally, under the Guidelines Definition Approach, the 
guidelines would provide that a furnisher's written policies and 
procedures should be reasonably designed to ensure that the information 
it furnishes about accounts or other relationships with a consumer is 
furnished with integrity. The guidelines would define ``integrity'' to 
mean, that any information that a furnisher provides to a CRA about an 
account or other relationship with the consumer is:
     Reported in a form and manner that is designed to minimize 
the likelihood that the information, although accurate, may be 
erroneously reflected in a consumer report, for example, by ensuring 
that the information is: (A) Reported with appropriate identifying 
information about the consumer to which it pertains; (B) reported in a 
standardized and clearly understandable form and manner; and (C) 
reported with a date specifying the time period to which the 
information pertains; and
     Substantiated by the furnisher's own records.
    As indicated in the discussion of the proposed accuracy and 
integrity regulations, the Agencies invite comment on the alternative 
approaches to defining the term ``integrity'' and the appropriate 
placement of the definitions. When responding to these issues raised by 
the Agencies, commenters may wish to address, among other relevant 
factors, how the approaches would impact the quality of information in 
consumer reports, the burdens on furnishers, and the relative benefits 
to consumers, the credit reporting system, and users of consumer 
reports.
    The third proposed objective under both approaches states that a 
furnisher's policies and procedures should ensure that the furnisher 
conducts reasonable investigations of consumer disputes about the 
accuracy or integrity of information in consumer reports and takes 
appropriate actions based on the outcome of such investigations. This 
objective addresses concerns raised by commenters that some furnishers 
perform perfunctory investigations of consumer disputes in cases where 
a proper investigation would require reviewing information beyond the 
account status listed in the furnisher's electronic records, and that 
some furnishers do not update their own records when errors are 
discovered, resulting in incorrect information being reported again to 
the CRAs.
    The fourth proposed objective under both approaches states that a 
furnisher should have written policies and procedures reasonably 
designed to ensure that the furnisher updates information it furnishes 
as necessary to reflect the current status of the consumer's account or 
other relationship, including: (a) Any transfer of an account (e.g., by 
sale or assignment for collection) to a third

[[Page 70953]]

party; and (b) any cure of the consumer's failure to abide by the terms 
of the account or other relationship.
    The fifth proposed objective under the Regulatory Definition 
Approach states that the information a furnisher furnishes about 
accounts or other relationships with a consumer is reported in a form 
and manner that is designed to minimize the likelihood that the 
information, although accurate, may be erroneously reflected in a 
consumer report, for example, by ensuring that the information is 
reported with appropriate identifying information about the consumer to 
which it pertains, in a standardized and clearly understandable form 
and manner, with a date specifying the time period to which the 
information pertains.
    The sixth proposed objective under the Regulatory Definition 
Approach states that the information a furnisher furnishes about 
accounts or other relationships with a furnisher should be 
substantiated by the furnisher's own records.
Section II--Accuracy and Integrity Duties of Furnishers Under the FCRA
    This section reminds furnishers of their statutory duties that 
relate to the accuracy and integrity of the information about consumers 
they provide to CRAs. This section states that a furnisher's policies 
and procedures should address compliance with all applicable 
requirements imposed on the furnisher under the FCRA and lists certain 
of those requirements, including the duty to investigate direct 
disputes as required by proposed Sec.  --.43 and section 623(a)(8) of 
the FCRA. This section also lists requirements such as the duty to 
provide to CRAs corrections or additional information necessary to make 
furnished information complete and accurate under the circumstances 
specified under section 623(a)(2) of the FCRA.
Section III--Establishing and Implementing Policies and Procedures
    This section identifies three steps that furnishers should take 
when establishing accuracy and integrity policies and procedures. 
First, a furnisher should identify its practices or activities that can 
compromise the accuracy and integrity of information about consumers 
furnished to CRAs. Methods appropriate for this purpose include:
     Reviewing the furnisher's existing practices and 
activities;
     Reviewing historical records relating to accuracy or 
integrity or to disputes, or other information relating to the accuracy 
and integrity of information provided by the furnisher to CRAs and the 
types of errors, omissions, or other problems that may have affected 
the accuracy and integrity of such information about consumers; and
     Obtaining feedback from CRAs, consumers, the furnisher's 
staff, or other appropriate parties.
    Second, a furnisher should evaluate the effectiveness of its 
existing policies and procedures regarding the accuracy and integrity 
of information about consumers furnished to CRAs and consider whether 
additions or modifications to the policies and procedures are 
necessary. As is specifically mentioned in the introduction to the 
guidelines, a furnisher may incorporate in its accuracy and integrity 
policies and procedures any of its existing policies and procedures 
that are relevant and appropriate.
    Third, a furnisher should evaluate the effectiveness of specific 
methods (including technological means) the furnisher uses to provide 
information about consumers to CRAs and determine whether changes to 
those methods are appropriate to enhance the accuracy and integrity of 
that information.
Section IV--Specific Components of Policies and Procedures
    This section serves to address specific problems raised by 
commenters on the ANPR, studies regarding the consumer reporting 
system, and other information gathered by the Agencies in the course of 
developing this proposal. The proposed guidelines detail specific 
components that should be addressed in a furnisher's policies and 
procedures. These include:
     Establishing and implementing a system for furnishing 
information about consumers to CRAs that is appropriate to the nature, 
size, complexity, and scope of the furnisher's business operations.
     Using standard data reporting formats and standard 
procedures for compiling and furnishing data, where feasible, such as 
the electronic transmission of information about consumers to CRAs.
     Ensuring that the furnisher maintains its own records for 
a reasonable period of time, not less than any applicable recordkeeping 
requirement, in order to substantiate the accuracy of any information 
about consumers it furnishes that may be subject to a direct dispute. 
Thus, a furnisher's policies and procedures should incorporate any 
applicable recordkeeping requirements such as those contained in 
regulations implementing the Truth in Lending Act and the Equal Credit 
Opportunity Act,\18\ or agency-specific requirements.\19\ The Agencies 
note that section 611(a)(5) of the FCRA contains no time limit on the 
requirement that if a CRA reinvestigates a consumer dispute, it must 
modify or delete items that cannot be verified. The Agencies seek 
comment on whether a specific time period for recordkeeping should be 
incorporated in the final regulations.
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    \18\ See 12 CFR 226.25(a) and 12 CFR 202.11(b).
    \19\ See, e.g., 12 CFR 561.2 (savings associations must retain 
accurate and complete records of all business transactions) and OTS 
Examination Handbook Sec.  310 (savings associations should retain 
original business transaction records until the savings association 
has two regular examinations and has resolved any supervisory 
matters raised in the examinations).
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     Establishing and implementing appropriate internal 
controls regarding the accuracy and integrity of information about 
consumers furnished to CRAs, such as by implementing standard 
procedures, verifying random samples, and conducting regular reviews of 
information provided to CRAs.
     Training staff that participates in activities related to 
the furnishing of information about consumers to CRAs to implement the 
policies and procedures.
     Providing for appropriate and effective oversight of 
relevant service providers whose activities may affect the accuracy and 
integrity of information about consumers furnished to CRAs to ensure 
compliance with the policies and procedures.
     Furnishing information about consumers to CRAs following 
mergers, portfolio acquisitions or sales, or other acquisitions or 
transfers of accounts or other debts, in a manner that prevents re-
aging of information, duplicative reporting, or other problems 
affecting the accuracy or integrity of the information furnished.
     Attempting to obtain the information listed in Sec.  
--.43(d) from a consumer before determining that the consumer's dispute 
is frivolous or irrelevant.
     Ensuring that deletions, updates, and corrections 
furnished to CRAs are reflected in business systems to avoid furnishing 
erroneous information.
     Conducting investigations of direct disputes in a manner 
that promotes the efficient resolution of such disputes.
     Ensuring that technological and other means of 
communication with CRAs are designed to prevent duplicative reporting 
of accounts, erroneous association of information with the wrong 
consumer(s), and other

[[Page 70954]]

occurrences that may compromise the accuracy and integrity of 
information contained in consumer reports.
     Providing CRAs with sufficient identifying information in 
the furnisher's possession about each consumer about whom information 
is furnished to enable the CRA properly to identify the consumer.
     Conducting a periodic evaluation of its own practices, CRA 
practices of which the furnisher is aware, investigations of disputed 
information, corrections of inaccurate information, means of 
communication, and other factors that may affect the accuracy and 
integrity of information furnished to CRAs.

Proposed Regulations Concerning Direct Disputes

    The third component of this notice of proposed rulemaking comprises 
the Agencies' proposed regulations implementing section 623(a)(8) of 
the FCRA, which directs the Agencies jointly to prescribe regulations 
that identify the circumstances under which a furnisher is required to 
reinvestigate a dispute concerning the accuracy of information about 
the consumer contained in a consumer report,\20\ based on a direct 
request by the consumer. The statute sets forth procedural and other 
requirements applicable to any such reinvestigations.
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    \20\ For purposes of the proposed Sec.  --.43(c) and (d) of the 
direct disputes provision, a ``consumer report'' means a disclosure 
a CRA provides to a consumer as referenced in section 609(a) of the 
FCRA. CRAs may provide such disclosures in a different format than a 
consumer report they provide to a third party and refer to them as 
``file disclosures.''
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    We note that a number of industry commenters on the ANPR indicated 
that they are already voluntarily investigating direct disputes as a 
matter of good customer relations and sound business practices. The 
Agencies encourage furnishers to continue voluntary investigations of 
consumer disputes as one way to enhance the accuracy and integrity of 
the information about consumers they provide to CRAs.\21\
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    \21\ The Agencies note that many entities, including depository 
institutions and their affiliates, also investigate disputes about 
information they furnish to CRAs that consumers raise through the 
consumer complaint processes established by their respective 
supervisory agencies. See generally FRB, ``How to File a Consumer 
Complaint Against a Bank,'' http://www.federalreserveconsumerhelp.gov (last visited October 26, 2007); 
FDIC, ``Consumer Affairs Brochure: Fostering Consumer Confidence in 
Banking, How to file a Written Complaint'' (October 2005), http://www.fdic.gov/consumers/questions/consumer/complaint.html (last 
visited November 1, 2007); OTS, ``How to Resolve a Consumer 
Complaint'' (February 2007), http://www.ots.treas.gov/docs/4/480924.pdf (last visited October 24, 2007); and OCC, ``Assistance 
for Customers of National Banks'' (April 2005), http://www.occ.gov/customer.pdf (last visited October 24, 2007).
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Section --.43(a) General Rule
    The proposed general rule would require a furnisher to investigate 
a direct dispute if it relates to:
     The consumer's liability for a credit account or other 
debt with the furnisher, such as direct disputes relating to whether 
there is or has been identity theft or fraud against the consumer, 
whether there is individual or joint liability on an account, or 
whether the consumer is an authorized user of a credit account;
     The terms of a credit account or other debt with the 
furnisher, such as direct disputes relating to the type of account, 
principal balance, scheduled payment amount on an account, or the 
amount of the reported credit limit on an open-end account;
     The consumer's performance or other conduct concerning a 
credit account or other debt with the furnisher, such as direct 
disputes relating to the current payment status, high balance, date a 
payment was made, the amount of a payment made, or the date an account 
was opened or closed; or
     Any other information contained in a consumer report 
regarding an account or other relationship with the furnisher that 
bears on the consumer's creditworthiness, credit standing, credit 
capacity, character, general reputation, personal characteristics, or 
mode of living attributed to the furnisher on the consumer report.
    The proposed rule is designed to permit direct disputes in 
virtually all circumstances involving disputes with respect to the 
types of information typically provided by the furnisher to a CRA, 
while excepting out certain types of information from the direct 
dispute process. The Agencies are proposing this approach in light of 
the considerations set forth in the statute to be weighed by the 
Agencies, including the benefits to consumers, the impact on the 
overall accuracy and integrity of consumer reports, and whether direct 
disputes would lead to the most expeditious resolutions of consumer 
disputes. The exceptions in the proposed rule relate to information 
where the disputes are more appropriately directed to the CRA, such as 
information derived from public records, which may be obtained directly 
from public sources,\22\ and information about requests for consumer 
reports (``inquiries''). The Agencies specifically request comment on 
whether this approach appropriately weighs all of the relevant 
considerations.
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    \22\ The public records exception applies only to information 
``derived'' by the CRA from public records. It would not exempt a 
consumer's dispute of the accuracy of a furnisher's reference to a 
particular account being included in bankruptcy, for example.
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    In developing the proposed rule, the Agencies considered more 
targeted approaches based, for example, on commenters' suggestions that 
fraud and identity theft should be the only circumstances when a 
furnisher must investigate a direct dispute. The Agencies also 
considered other commenters' suggestions about when investigations of a 
direct dispute would be appropriate, such as for disputing account 
ownership and complex issues requiring analysis of supporting 
documentation. The Agencies are not proposing these approaches, 
however, as these approaches would likely present at least one 
disadvantage, namely, that it would be difficult for consumers and 
furnishers to know whether there is a direct dispute right in any 
particular circumstance.
    In addition, the Agencies considered another commenter's suggestion 
to require investigation of direct disputes only where the consumer 
first raises the dispute with a CRA, but that process does not resolve 
the matter to the consumer's satisfaction. The Agencies are not 
proposing such an approach, however, because it could impose 
unnecessary barriers and delays for consumers wishing to avoid the CRA 
dispute process and bring disputes immediately to the furnisher.\23\
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    \23\ The Agencies note further that section 623(a)(8)(F) states 
that the obligation to reinvestigate direct disputes shall not apply 
if the dispute is ``frivolous or irrelevant'' because the consumer 
submitted a dispute that is substantially the same as a dispute 
previously submitted to a furnisher or through a CRA. The Agencies 
note that under the proposed rule, a direct dispute is not 
substantially the same if a consumer's dispute includes information 
listed in Sec.  --.43(d) that had not previously been provided to 
the furnisher.
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    The Agencies believe that the approach adopted by the proposed rule 
more closely comports with consumer expectations that they be able to 
submit a dispute directly to the furnisher (with certain exceptions) 
when the issue in dispute relates to information for which the 
furnisher is responsible. The Agencies request comment on whether a 
more targeted approach would represent a more appropriate balancing of 
relevant policy considerations.
    The Agencies also specifically invite comment on how direct dispute 
requirements would affect furnishers to smaller and specialty CRAs, 
such as CRAs that report medical information,

[[Page 70955]]

check writing history, apartment rental history, or insurance claim 
filings.
Section --.43(b) Exceptions
    A consumer report may include identifying information about a 
consumer (e.g., names, addresses), trade line information (e.g., name 
of creditor, payment history, loan amount), past and present employer 
information, and public record information (e.g., information received 
from courts or other governmental authorities that are related to 
bankruptcies, judgments, or liens). Any given furnisher is the source 
of some, but not all, of the information included on a consumer report. 
A furnisher should only be responsible for investigating disputes about 
information regarding an account or other relationship between the 
furnisher and the consumer. Accordingly, the proposal requires a 
furnisher to investigate direct disputes only with respect to the types 
of information that it typically provides to CRAs. In most cases, the 
information subject to direct dispute will be part of a furnisher's 
trade line entry or entries on a consumer report.
    Proposed Sec.  --.43(b) excepts from the investigation requirement 
any direct dispute that relates to:
     The consumer's identifying information (other than a 
direct dispute relating to a consumer's liability for a credit account 
or other debt with the furnisher, as provided in Sec.  
--.43(a)(1)),\24\ such as name(s), date of birth, Social Security 
number, telephone number(s), or address(es);
---------------------------------------------------------------------------

    \24\ A direct dispute that relates both to identifying 
information and a consumer's liability for a credit account or other 
debt with the furnisher, such as in cases of identity theft, must be 
investigated by a furnisher pursuant to Sec.  --.43(a)(1).
---------------------------------------------------------------------------

     The identity of past or present employers; \25\
---------------------------------------------------------------------------

    \25\ For this category of information concerning the identity of 
past or present employers, the Agencies believe that direct contact 
by the consumer would be unlikely to result in the most expeditious 
resolution of an employer identity-related dispute. For example, 
consumer reports sometimes contain certain ``employment history'' 
information, which is typically obtained from sources other than 
employers (such as credit applications). In those cases, an 
identified employer would be unable to correct disputed information 
because it was provided by another source.
---------------------------------------------------------------------------

     Inquiries or requests for a consumer report;
     Information derived from public records, such as 
judgments, bankruptcies, liens, and other legal matters (unless 
provided by a furnisher having a relationship with the consumer); or
     Information related to fraud alerts or active duty alerts.
    Proposed Sec.  --.43(b) also excepts from the investigation 
requirement any direct dispute if the notice of 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 
15 U.S.C. 1679a(3),\26\ or an entity that would be a credit repair 
organization but for 15 U.S.C. 1679a(3)(B)(i), which excludes tax-
exempt section 501(c)(3) organizations.
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    \26\ Under this provision of the Credit Repair Organizations 
Act, the term ``credit repair organization''--
    (A) means any person who uses any instrumentality of interstate 
commerce or the mails to sell, provide, or perform (or represent 
that such person can or will sell, provide, or perform) any service, 
in return for the payment of money or other valuable consideration, 
for the express or implied purpose of--
    (i) improving any consumer's credit record, credit history, or 
credit rating; or
    (ii) providing advice or assistance to any consumer with regard 
to any activity or service described in clause (i).
---------------------------------------------------------------------------

Section --.43(c) Direct Dispute Address
    As added by section 312 of the FACT Act, section 623(a)(8)(D) of 
the FCRA requires a consumer to provide a direct dispute notice ``at 
the address specified'' by the furnisher. The statute and legislative 
history provide no guidance about how this address is to be specified 
by furnishers and effectively communicated to consumers. The Agencies 
believe that, in order for the direct dispute right to be implemented 
and to operate as Congress intended, it is necessary to clarify how a 
furnisher's direct dispute address is to be specified and communicated 
to consumers.
    Proposed Sec.  --.43(c) would require a furnisher to investigate a 
direct dispute only if a consumer submits a dispute notice to the 
furnisher at:
     The address of the furnisher provided by a furnisher and 
set forth on a consumer report relating to the consumer (i.e., the 
disclosure under section 609(a) of the FCRA);
     An address clearly and conspicuously specified by the 
furnisher for submitting direct disputes that is provided in writing or 
electronically (if the consumer has agreed to the electronic delivery 
of information from the furnisher); or
     Any business address of the furnisher, if the furnisher 
has not so specified and provided an address for submitting direct 
disputes.

Thus, a consumer would always be able to submit a direct dispute to the 
appropriate address appearing on the consumer report. The consumer 
would also be able to submit a direct dispute to any other business 
address of the furnisher unless the furnisher has separately specified 
an address to the consumer in accordance with the regulation. A 
furnisher choosing to specify an address must do so in a manner that is 
both reasonably understandable and designed to call the consumer's 
attention to the fact that the address is the one to use for submitting 
direct disputes about the accuracy of information in a consumer report. 
The Agencies note that a furnisher that specifies such an address for 
this purpose will not be deemed to have specified an address for 
purposes of section 623(a)(1)(B) of the FCRA, relating to the general 
duty to provide accurate information to the CRAs.
    The Agencies believe that it will benefit consumers and be 
operationally feasible to allow consumers to submit a dispute notice to 
the address of the furnisher specified on the consumer report. The 
Agencies understand that in a large majority of cases, the consumer 
report includes an address supplied by the furnisher and the furnisher 
can control such address.\27\ In addition, the Agencies believe that 
allowing consumers to submit dispute notices to the address of the 
furnisher set forth on the consumer report will increase the likelihood 
that the consumers will know where to send that dispute (because that 
address will be seen by consumers contemporaneous in time and location 
with the disputed information) and will encourage consumers to obtain 
and review their consumer reports prior to submitting a dispute to a 
furnisher. A furnisher will not be in violation of this provision for 
failure to investigate a dispute submitted to the address set forth on 
the consumer report if that address is incorrect due to an error by the 
CRA and does not reflect any business address of the furnisher.
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    \27\ Allowing consumers to submit dispute notices to the address 
of the furnisher set forth on the consumer report is consistent with 
existing Federal and some state laws because these laws already 
impose related obligations. Section 611(a)(6)(B)(iii) of the FCRA 
requires the CRA to provide, upon the consumer's request, the 
business name and address, and phone number if reasonably available, 
of any furnisher the CRA contacts in connection with information 
reinvestigated in response to a consumer complaint filed with the 
CRA. California law requires that upon request of the consumer, the 
CRA must provide the consumer with the ``names, addresses and, if 
provided by the sources of information, the telephone numbers 
identified for customer service for the sources of information.'' 
Cal. Civil Code Sec.  1785.10(c). It is the Agencies' understanding 
that CRAs commonly include the furnisher's business name, address, 
and telephone number on the consumer report (where the furnisher 
provides it) so that consumers will automatically learn how to 
contact the furnisher about a dispute upon receipt of the consumer 
report without the need to request that information from the CRA.

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[[Page 70956]]

    The Agencies request comment on whether there are circumstances 
under which it would not be appropriate for a consumer to submit a 
dispute notice to the address of the furnisher set forth on the 
consumer report. The Agencies also invite comment on whether Sec.  
--.43(c)(3) should exclude certain types of business addresses, such as 
a business address that is used for reasons other than for receiving 
correspondence from consumers or business locations where business is 
not conducted with consumers.
    In addition, the Agencies request comment on whether Sec.  
--.43(c)(2) should be amended to permit furnishers to notify consumers 
orally of the address for direct disputes. The agencies also request 
comment on whether and, if so, how an oral notice can be provided 
clearly and conspicuously.
Section --.43(d) Direct Dispute Notice Contents
    Section 623(a)(8)(D) of the FCRA provides that a furnisher is not 
required to investigate a dispute unless a consumer provides the 
furnisher with a notice of dispute that:
     Identifies the specific information that is being 
disputed;
     Explains the basis for the dispute; and
     Includes all supporting documentation required by the 
furnisher to substantiate the basis of the dispute.
    Proposed Sec.  --.43(d) would implement 623(a)(8)(D) by requiring 
that a notice of dispute include:
     The name, address, and telephone number of the consumer;
     Sufficient information to identify the account or other 
relationship that is in dispute, such as an account number;
     The specific information that the consumer is disputing 
and an explanation of the basis for the dispute; and
     All supporting documentation or other information 
reasonably required by the furnisher to substantiate the basis of the 
dispute, such as a copy of the consumer report that contains the 
allegedly inaccurate information, a police report, a fraud or identity 
theft affidavit, a court order, or account statements.
    Section 609(c)(2) of the FCRA requires the FTC to promulgate, and 
CRAs to disseminate with their provision of consumer reports to 
consumers, a ``General Summary of Consumer Rights.'' The FTC intends to 
update the existing General Summary of Consumer Rights to reflect 
additional rights provided to consumers by the FACT Act and the 
implementing rules, including consumers' direct dispute rights. The 
Agencies invite comment on what additional mechanisms should be 
required, if any, for informing consumers of their direct dispute 
rights.
Section --.43(e) Frivolous or Irrelevant Disputes
    Section 623(a)(8)(F) of the FCRA provides that a furnisher is not 
required to investigate a dispute that a furnisher reasonably 
determines to be frivolous or irrelevant. That statutory provision 
states that a frivolous or irrelevant dispute includes situations 
involving:
     The failure of a consumer to provide sufficient 
information to investigate the disputed information; or
     The submission by a consumer of a dispute that is 
substantially the same as a dispute previously submitted by or on 
behalf of the consumer, either directly to the furnisher or through a 
CRA under section 623(b) of the FCRA, with respect to which the 
furnisher already completed its investigation duties.
    Proposed Sec.  --.43(e) implements these statutory provisions, 
including these two types of frivolous or irrelevant disputes. Under 
the statute, when a furnisher determines that a dispute is frivolous or 
irrelevant, it must send a notice of that determination (including the 
reasons for the determination) to the consumer. In cases involving 
insufficient information, furnishers should make a good faith attempt 
to obtain sufficient information from a consumer before sending such a 
notice to the consumer as noted in section IV(I) of the guidelines.
    The Agencies note that the language of section 623(a)(8)(F) 
specifies two situations, but does not limit frivolous or irrelevant 
disputes solely to those two situations. The Agencies are proposing to 
specify a third situation involving a frivolous or irrelevant dispute. 
Under proposed Sec.  --.43(e)(1)(iii), a dispute would be frivolous or 
irrelevant if the furnisher is not otherwise required to investigate 
the direct dispute under the proposed regulation.\28\ This provision is 
intended to provide clarity for furnishers regarding their duty to 
investigate direct disputes and their responsibilities when no such 
investigation is required. This provision also would ensure that 
consumers in this situation receive notice from the furnisher that 
their dispute was deemed frivolous or irrelevant, as required by the 
FCRA in sections 623(a)(8)(F)(ii) and (iii).\29\
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    \28\ For example, under proposed Sec.  --.43(b)(2), a furnisher 
would not be required to investigate a direct dispute that 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. Thus, such a dispute would be frivolous or irrelevant 
under proposed Sec.  --.43(e)(1)(iii).
    \29\ 15 U.S.C. 1681s-2(a)(8)(F)(ii) and (iii). Those provisions 
of the FCRA generally set out a furnisher's responsibilities 
regarding the notice it must provide to a consumer once it 
determines that a dispute is frivolous or irrelevant.
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    Section --.43(e)(2) would incorporate the FCRA's section 
623(a)(8)(F)(ii) requirement that a furnisher must notify a consumer of 
its determination that a dispute is frivolous or irrelevant not later 
than five business days after making the determination. Section 
--.43(e)(3) likewise would incorporate from section 623(a)(8)(F)(iii) 
of the FCRA the content requirements for a notice of determination that 
a dispute is frivolous or irrelevant. Such notices are to include the 
reasons for the determination and identify any information required to 
investigate the disputed information.

V. Request for Comment

    The Agencies invite comment on all aspects of the proposed accuracy 
and integrity regulations and guidelines and of the proposed direct 
dispute regulations, on the factors to be considered by the Agencies 
under sections 623(a)(8) and 623(e) of the FCRA, and on the specific 
issues on which comment is solicited elsewhere in the Supplementary 
Information, including the following:
     The alternative definitions of ``integrity'' and the 
alternative placement of the definitions of ``accuracy'' and 
``integrity'' in regulatory text or in the guidelines;
     Whether the definition of accuracy should specifically 
provide that ``accuracy'' includes updating information as necessary to 
ensure that information furnished is current;
     Whether the definition of ``accuracy'' should be made 
applicable to direct disputes if the Guidelines Definition Approach is 
adopted;
     Whether the proposed definition of ``accuracy'' is 
appropriate for the direct dispute rule, and, in particular, whether 
the definition of ``accuracy'' needs to be clarified in order to more 
clearly delineate those disputes that, while subject to the CRA dispute 
process, would not be subject to the direct dispute rule;
     Whether the Agencies' approach to direct disputes 
appropriately reflects the relevant considerations, or whether a more 
targeted approach would represent a more appropriate balancing of 
relevant policy considerations;
     Whether proposed Sec.  --.43(c)(2) should be amended to 
permit furnishers to notify consumers orally of the

[[Page 70957]]

address for direct disputes and, if so, how an oral notice can be 
provided clearly and conspicuously;
     What additional mechanisms should be required, if any, for 
informing consumers of their direct dispute rights;
     How direct dispute requirements would affect furnishers to 
smaller and specialty CRAs, such as CRAs that report medical 
information, check writing history, apartment rental history, or 
insurance claim filings;
     Whether the guidelines should incorporate a specific time 
period for retaining records in order to provide for meaningful 
investigations of direct disputes, and, if so, what record retention 
time period would be appropriate; and
     Whether Sec.  --.42(c)(2) should exclude certain types of 
business addresses, such as a business address that is used for reasons 
other than for receiving correspondence from consumers or business 
locations where business is not conducted with consumers.
    In addition, the Agencies specifically invite comment as follows:
    The Agencies invite comment from individuals and public interest 
and consumer advocacy organizations on the effect this proposal may 
have on consumers and the credit reporting industry.
    The Agencies recognize that small institutions operate with more 
limited resources than larger institutions. Thus, the Agencies 
specifically request comment on the impact of this proposal on small 
institutions' current resources, including personnel resources, and 
whether the goals of the proposal could be achieved for small 
institutions through an alternative approach.
    The Agencies invite comment from businesses other than depository 
institutions that furnish information about consumers to CRAs, 
including non-depository institution mortgage lenders, debt collectors, 
consumer finance companies, and retailers. The Agencies also invite 
comment from persons who furnish information about consumers to 
specialized types of CRAs, such as CRAs that collect information for 
the purpose of making decisions regarding insurance, employment or 
tenant screening, or check verification. Similarly, the Agencies 
request comments from CRAs, including nontraditional CRAs that may only 
provide information to a limited class of businesses (e.g., medical 
information providers and tenant screening services).
    The Agencies also invite comment on ways to minimize the burden of 
the final rule.

VI. Regulatory Analysis

A. Paperwork Reduction Act

Request for Comment on Proposed Information Collection
    In accordance with section 3512 of the Paperwork Reduction Act of 
1995, 44 U.S.C. 3501-3521 (``PRA''), the Agencies may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information collection unless it displays a currently valid Office of 
Management and Budget (``OMB'') control number. The information 
collection requirements contained in this joint notice of proposed 
rulemaking have been submitted by the OCC, FDIC, OTS, NCUA, and FTC to 
OMB for review and approval under section 3506 of the PRA and Sec.  
1320.11 of OMB's implementing regulations (5 CFR Part 1320). The review 
and authorization information for the Board is provided later in this 
section along with the Board's burden estimates. The proposed rule 
contains requirements subject to the PRA. The requirements are found in 
12 CFR Sec. Sec.  --.42(a), --.43(e)(2), and --.43(e)(3) and 16 CFR 
Sec. Sec.  660.3(a), 660.4(e)(2), and 660.4(e)(3).
    Comments are invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the Agencies' functions, including whether the 
information has practical utility;
    (b) The accuracy of the estimates of the burden of the information 
collection, including the validity of the methodology and assumptions 
used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    All comments will become a matter of public record.
    Comments should be addressed to:
    OCC: Communications Division, Office of the Comptroller of the 
Currency, Public Information Room, Mailstop 1-5, Attention: 1557-NEW, 
250 E Street, SW., Washington, DC 20219. In addition, comments may be 
sent by fax to (202) 874-4448, or by electronic mail to 
[email protected]. You can inspect and photocopy comments at 
the OCC's Public Information Room, 250 E Street, SW., Washington, DC 
20219. For security reasons, the OCC requires that visitors make an 
appointment to inspect comments. You may do so by calling (202) 874-
5043. Upon arrival, visitors will be required to present valid 
government-issued photo identification and submit to security screening 
in order to inspect and photocopy comments.
    Board: You may submit comments, identified by R-1300, by any of the 
following methods:
     Agency Web Site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments on the http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include docket 
number in the subject line of the message.
     Fax: 202-452-3819 or 202-452-3102.
     Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.
    All public comments are available from the Board's Web site at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons. Accordingly, your 
comments will not be edited to remove any identifying or contact 
information. Public comments may also be viewed electronically or in 
paper in Room MP-500 of the Board's Martin Building (20th and C 
Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.
    FDIC: You may submit written comments, which should refer to 3064-
AC99, by any of the following methods:
     Agency Web Site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments 
on the FDIC Web site.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected].
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, FDIC, 550 17th Street, NW., Washington, DC 20429.
     Hand Delivery/Courier: Guard station at the rear of the 
550 17th Street Building (located on F Street) on business days between 
7 a.m. and 5 p.m.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal/propose/html 
including any

[[Page 70958]]

personal information provided. Comments may be inspected at the FDIC 
Public Information Center, Room E-1007, 3501 North Fairfax Drive, 
Arlington, Virginia, between 9 a.m. and 4:30 p.m. on business days.
    OTS: Information Collection Comments, Chief Counsel's Office, 
Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; 
send a facsimile transmission to (202) 906-6518; or send an e-mail to 
[email protected]. OTS will post comments and the 
related index on the OTS Internet site at http://www.ots.treas.gov. In 
addition, interested persons may inspect the comments at the Public 
Reading Room, 1700 G Street, NW., by appointment. To make an 
appointment, call (202) 906-5922, send an e-mail to 
public.info@ots.treas.gov">public.info@ots.treas.gov, or send a facsimile transmission to (202) 
906-7755.
    NCUA: You may submit comments by any of the following methods 
(Please send comments by one method only):
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposedregs/proposedregs.html. Follow the 
instructions for submitting comments.
     E-mail: Address to [email protected]. Include ``[Your 
name] Comments on Notice of Proposed Rulemaking Part 717, Procedures to 
Enhance the Accuracy and Integrity of Information Furnished to Consumer 
Reporting Agencies under Section 312 of the Fair and Accurate Credit 
Transactions Act'' in the e-mail subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for e-mail.
     Mail: Address to Neil McNamara, Deputy Chief Information 
Officer, National Credit Union Administration, 1775 Duke Street, 
Alexandria, VA 22314-3428.
     Hand Delivery/Courier: Same as mail address.

Additionally, you should send a copy of your comments to the OMB Desk 
Officer for the Agencies, by mail to U.S. Office of Management and 
Budget, 725 17th Street, NW., 10235, Washington, DC 20503, or by fax to 
(202) 395-6974.
    FTC: Comments should refer to ``Furnisher Rules, Project No. 
R611017,'' and may be submitted by any of the following methods. 
However, if the comment contains any material for which confidential 
treatment is requested, it must be filed in paper form, and the first 
page of the document must be clearly labeled ``Confidential.'' \30\
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    \30\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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     E-mail: Comments filed in electronic form should be 
submitted by clicking on the following Web link: https://secure.commentworks.com/ftc-FACTAfurnishers and following the 
instructions on the Web-based form. To ensure that the Commission 
considers an electronic comment, you must file it on the Web-based form 
at https://secure.commentworks.com/ftc-FACTAfurnishers.
     Federal eRulemaking Portal: If this notice appears at 
http://www.regulations.gov, you may also file an electronic comment 
through that Web site. The Commission will consider all comments that 
regulations.gov forwards to it.
     Mail or Hand Delivery: A comment filed in paper form 
should include ``Furnisher Rules: Project No. R611017,'' both in the 
text and on the envelope and should be mailed or delivered, with two 
complete copies, to the following address: Federal Trade Commission/
Office of the Secretary, Room H-135 (Annex M), 600 Pennsylvania Avenue, 
NW., Washington, DC 20580. Because paper mail in the Washington area 
and at the Commission is subject to delay, please consider submitting 
your comments in electronic form, as prescribed above. The FTC is 
requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible.
    Comments on any proposed filing, recordkeeping, or disclosure 
requirements that are subject to paperwork burden review under the 
Paperwork Reduction Act should additionally be submitted to: Office of 
Management and Budget, Attention: Desk Officer for the Federal Trade 
Commission. Comments should be submitted via facsimile to (202) 395-
6974 because U.S. Postal Mail is subject to lengthy delays due to 
heightened security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at http://www.ftc.gov/os/publiccomments.htm. As a matter 
of discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Proposed Information Collection

    Title of Information Collection: Accuracy and Integrity of 
Information Furnished to Consumer Reporting Agencies.
    Frequency of Response: On occasion.
    Affected Public:
    OCC: National banks, Federal branches and agencies of foreign 
banks, and their respective operating subsidiaries that are not 
functionally regulated within the meaning of section 5(c)(5) of the 
Bank Holding Company Act of 1956, as amended (12 U.S.C. 1844(c)(5)).
    Board: State member banks, uninsured state agencies and branches of 
foreign banks, commercial lending companies owned or controlled by 
foreign banks, and Edge and agreement corporations.
    FDIC: Insured nonmember banks, insured state branches of foreign 
banks, and certain subsidiaries of these entities.
    OTS: Savings associations and certain of their subsidiaries.
    NCUA: Federally-chartered credit unions.
    FTC: Businesses that furnish information to a consumer reporting 
agency, and are subject to administrative enforcement by the FTC 
pursuant to section 621(a)(1) of the FCRA (15 U.S.C. 1681s(a)(1).
    Abstract: Proposed section .42(a) \31\ would require a furnisher to 
implement reasonable written policies and procedures regarding the 
accuracy and integrity of information relating to consumers that it 
provides to a CRA. Furnishers already have an ongoing responsibility 
under section 623 of the FCRA for accurate reporting, which has been in 
place for several years, long before the FACT Act. This proposed rule 
would require furnishers to put into writing policies and procedures 
that address their section 312 responsibilities regarding the accuracy 
and integrity of information. Furnishers' accuracy and integrity 
policies and

[[Page 70959]]

procedures may include their existing policies and procedures that are 
reasonable and appropriate. The Agencies estimate it would take 
furnishers a total of 21 hours per institution to comply with this 
requirement.
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    \31\ For purposes of the FTC regulations, this proposed section 
is 16 CFR 660.3(a).
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    Proposed section .43(a) \32\ would allow consumers to initiate 
disputes directly with the furnishers, instead of using the existing 
FCRA process through the CRAs. This gives consumers a new way to 
dispute consumer report information; instead of having to go through a 
CRA, consumers would have the right to go directly to the furnisher in 
certain circumstances. Furnishers already have affirmative 
responsibilities to research and respond and, if necessary, make any 
corrections when a dispute is initiated by consumers through a CRA. 
Under this proposed rule, furnishers would have to follow a 
substantially similar process for disputes consumers submit directly to 
furnishers. Furnishers would need to amend their procedures to ensure 
that disputes received directly from consumers are handled the same way 
as complaints from CRAs. The Agencies estimate that furnishers would 
have to devote four hours per institution to amend their procedures in 
this manner. Proposed section --.43(e)(2) \33\ incorporates the section 
312 requirement that a furnisher must notify a consumer by mail or 
other means (if authorized by the consumer) within five business days 
after making a determination that a dispute is frivolous or irrelevant. 
Proposed section --.43(e)(3) \34\ incorporates the content requirements 
of such notices as specified by section 312. The Agencies estimate that 
furnishers would have to devote four hours per institution to implement 
this notice requirement, including the time necessary to develop 
policies and procedures regarding the provision of the notices to 
consumers and to initially prepare the notices.
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    \32\ 16 CFR 660.4(a) in the FTC regulations.
    \33\ 16 CFR 660.4(e)(2) in the FTC regulations.
    \34\ CFR 660.4(e)(3) in the FTC regulations.
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    With respect to estimating the potential burden associated with 
providing the notices to consumers, the Agencies received one comment 
on the ANPR from a financial institution stating that it is estimated 
that 50% of disputes received are frivolous or irrelevant. In contrast, 
one trade association commented that in only 25% of disputes is the 
information in the consumer report being challenged verified as 
correct; thus, even assuming that every time the information in the 
consumer report is verified as correct the underlying dispute was 
frivolous or irrelevant, a maximum of 25% of disputes could be 
frivolous or irrelevant. The Agencies are also aware that a significant 
number of furnishers are already providing consumers with a written 
notice in response to direct disputes. Further, commenters from both 
industry and consumer groups observed that disputes filed with CRAs 
from credit repair organizations have been particularly likely to be 
rejected, though they disagreed on the reasons. Considering all of 
these comments and information, and taking into account that direct 
disputes from credit repair organizations are prohibited by section 
623(a)(8)(G) of the FCRA, the Agencies believe it is reasonable to 
estimate that the number of written notices that furnishers provide to 
consumers in response to direct disputes that are frivolous or 
irrelevant would increase by 10%. The Agencies estimate that furnishers 
would devote five minutes per notice to provide a notice to a consumer.
    Estimated Burden: \35\
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    \35\ The Estimated Burden section reflects the views of all of 
the Agencies except the FTC, which has prepared a separate analysis.
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    Thus, the burden associated with this collection of information may 
be summarized as follows.
OCC
    Number of respondents: 1,800.
    Number of frivolous or irrelevant dispute notices: 312,335.
    Estimated burden per notice: 5 minutes.
    Estimated burden per respondent: 21 hours to implement written 
policies and procedures and training associated with the written 
policies and procedures, 4 hours to amend procedures for handling 
complaints received directly from consumers, 4 hours to implement the 
new dispute notice requirement.
    Total estimated annual burden: 78,228 hours.
Board
    In accordance with the PRA (44 U.S.C. 3506; 5 CFR part 1320, 
Appendix A.1), the Board has reviewed the proposed rule under its 
authority delegated by OMB. The proposed information collections 
associated with this rulemaking, if approved, will be incorporated into 
the Recordkeeping and Disclosure Requirements Associated with 
Regulation V (Fair Credit Reporting) and will be assigned OMB No. 7100-
0308. The burden estimates provided below pertain only to the 
information collections associated with this proposed rulemaking.
    Number of respondents: 1,172.
    Number of frivolous or irrelevant dispute notices: 116,582.
    Estimated burden per respondent: 21 hours to implement written 
policies and procedures and training associated with the written 
policies and procedures, 4 hours to amend procedures for handling 
complaints received directly from consumers, 4 hours to implement the 
new dispute notice requirement, and 5 minutes per notice for 
distribution.
    Total estimated annual burden: 43,703 hours.
FDIC
    Number of respondents: 5,260.
    Number of frivolous or irrelevant dispute notices: 24,198.
    Estimated burden per respondent to implement written policies and 
procedures regarding accuracy and integrity and the frivolous or 
irrelevant dispute notice: 29 hours.
    Estimated burden per frivolous or irrelevant dispute notice: 5 
minutes.
    Total estimated annual burden: 154,557 hours.
OTS
    Number of respondents: 829.
    Number of frivolous or irrelevant dispute notices: 15,001.
    Estimated burden per respondent: 21 hours to implement written 
policies and procedures and training associated with the written 
policies and procedures, 4 hours to amend procedures for handling 
complaints received directly from consumers, 4 hours to implement the 
new dispute notice requirement, and 5 minutes per notice for 
distribution.
    Total estimated annual burden: 25,286 hours.
NCUA
    Number of respondents: 5,103.
    Estimated burden per respondent: 29 hours.
    Number of frivolous or irrelevant dispute notices: 3,044.
    Estimated burden per notice: 5 minutes.
    Total estimated annual burden: 148,241 hours.
FTC \36\
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    \36\ Due to the varied nature of the entities subject to the 
jurisdiction of the FTC, this Estimated Burden section reflects only 
the view of the FTC. The banking regulatory agencies have jointly 
prepared a separate analysis.
---------------------------------------------------------------------------

    Section 660.3:
    Estimated Hours Burden:
    As discussed above, the proposed regulations would require 
furnishers to establish and implement reasonable written policies and 
procedures regarding the accuracy and integrity of

[[Page 70960]]

the information relating to consumers that it furnishes to a CRA. The 
proposed regulations would define ``furnisher'' to mean an entity other 
than an individual consumer that furnishes information relating to 
consumers to one or more CRAs, except when it provides information to a 
CRA solely to obtain a consumer report for a permissible purpose under 
the FCRA.\37\ Given the broad scope of furnishers, it is difficult to 
determine precisely the number of furnishers that are subject to the 
FTC's jurisdiction. Nonetheless, FTC staff estimates that the proposed 
regulations in section 660.3 will affect approximately 6,133 furnishers 
subject to the FTC's jurisdiction.\38\ The Commission invites comment 
and information about the categories and number of furnishers subject 
to its jurisdiction. As detailed below, FTC staff estimates that the 
average annual information collection burden during the three-year 
period for which OMB clearance is sought will be 51,000 hours (rounded 
to the nearest thousand). The estimated annual labor cost associated 
with this burden is $1,985,000 (rounded to the nearest thousand).
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    \37\ 15 U.S.C. 1681b(a).
    \38\ This estimate is derived from the number of furnishers 
reporting to the three nationwide CRAs (approximately 18,000), minus 
the number of entities subject to jurisdiction by the federal 
financial agencies and the NCUA (14,167 combined), and adding the 
number of furnishers to medical information bureaus (approximately 
500) and the number of insurance companies furnishing information to 
other types of CRAs (approximately 1,800).
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    The proposed regulations are drafted in a flexible manner that 
allows entities to establish and implement different types of written 
policies and procedures based upon the nature, size, complexity, and 
scope of their activities. A furnisher may include any of its existing 
policies and procedures in place to ensure the accuracy of information. 
The Commission believes that many entities have already implemented a 
significant portion of the policies and procedures required by the 
proposed rule. Entities have had an ongoing requirement under Section 
623 of the FCRA to provide accurate information when they choose to 
furnish data to consumer reporting agencies. The written policies and 
procedures proposed in the rule would formalize the processes and 
controls necessary for accurate reporting. Accordingly, FTC staff 
estimates that entities will require 21 hours to establish and 
implement written policies and procedures, including the incremental 
time to train staff to implement these policies and procedures, with an 
annual recurring burden of 2 hours.
    FTC staff estimates that the proposed regulations implementing 
section 623(e) affect 6,133 furnishers subject to the FTC's 
jurisdiction at an average annual burden of 8.33 hours per entity 
[average annual burden over 3-year clearance period for establishment 
and implementation of written policies and procedures (25 hours/3)], 
for a cumulative total of 51,000 hours (rounded to the nearest 
thousand).
    Estimated Cost Burden:
    The FTC staff derived labor costs by applying appropriate estimated 
hourly cost figures to the burden hours described above. It is 
difficult to calculate with precision the labor costs associated with 
the proposed regulations, as they entail varying compensation levels of 
management and/or technical staff among companies of different sizes. 
In calculating the cost figures, staff assumes that managerial and/or 
professional technical personnel will draft the written policies and 
procedures and train staff, at an hourly rate of $38.93.\39\
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    \39\ This cost is derived from the median hourly wage from the 
2006 National Occupational Employment and Wage Estimates by the 
Bureau of Labor Statistics for management occupations.
---------------------------------------------------------------------------

    Based on the above estimates and assumptions, the total annual 
labor costs for all categories of covered entities under the proposed 
regulations in section 660.3 are $1,985,000 (rounded to the nearest 
thousand) [(51,000 hours x $38.93)].
    Section 660.4:
    Estimated Hours Burden:
    The proposed regulations would also require entities that furnish 
information about consumers to respond to direct disputes from 
consumers. FTC staff estimates that the proposed regulations in section 
660.4 will also affect approximately 6,133 furnishers subject to the 
FTC's jurisdiction. As detailed below, FTC staff estimates that the 
average annual information collection burden during the three-year 
period for which OMB clearance is sought will be 17,000 hours (rounded 
to the nearest thousand). The estimated annual labor cost associated 
with this burden is $641,000 (rounded to the nearest thousand).
    FTC staff estimates that it will take furnishers four hours to 
amend their procedures to ensure that disputes received directly from 
consumers are handled the same way as complaints from CRAs. FTC staff 
believes that furnishers of information to CRAs will have automated the 
process of responding to direct disputes in the first year of the 
clearance, therefore, there will be no annual recurring burden. FTC 
staff estimates that it will take furnishers four hours in the first 
year to implement the requirement to notify a consumer by mail or other 
means (if authorized by the consumer) within five business days after 
making a determination that a dispute is frivolous or irrelevant. FTC 
staff believes that furnishers will also automate this process in the 
first year of clearance, so there will be no annual recurring burden.
    FTC staff further estimates that to prepare and distribute a notice 
to a consumer after a furnisher determines that a dispute is frivolous 
or irrelevant will require approximately five minutes per notice. FTC 
staff projects that furnishers under its jurisdiction would receive 
5,430 frivolous or irrelevant disputes requiring a notice each 
year.\40\ Accordingly, FTC staff estimates it will take furnishers 452 
hours for each of the three years for which OMB clearance is sought. 
The estimated annual labor cost associated with this burden is $6,102.
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    \40\ This number is derived from an estimate of disputes per 
year that relate to information provided by an entity under the 
FTC's jurisdiction and the Agencies' estimated 10% increase of the 
number of written notices that furnishers will provide to consumers 
in response to direct disputes that are frivolous or irrelevant.
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    Estimated Cost Burden:
    The FTC staff derived labor costs by applying appropriate estimated 
hourly cost figures to the burden hours described above. It is 
difficult to calculate with precision the labor costs associated with 
the proposed regulations, as they entail varying compensation levels of 
different types of support staff among companies of different sizes. 
Nonetheless, in calculating the cost figures, staff assumes managerial 
and/or professional technical personnel will amend procedures to ensure 
that disputes received directly from consumers are handled the same way 
as complaints from CRAs and will implement the requirement to notify a 
consumer by mail or other means, after making a determination that a 
dispute is frivolous or irrelevant, at an hourly rate of $38.93.\41\ 
Staff assumes that administrative support personnel will provide the 
required notices to consumers, at an hourly rate of $13.50.\42\
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    \41\ This cost is derived from the median hourly wage from the 
2006 National Occupational Employment and Wage Estimates by the 
Bureau of Labor Statistics for management occupations.
    \42\ This cost is derived from the median hourly wage from the 
2006 National Occupational Employment and Wage Estimates by the 
Bureau of Labor Statistics for office and administrative support 
occupations.
---------------------------------------------------------------------------

    Based on the above estimates and assumptions, the total average 
annual labor costs for all categories of covered

[[Page 70961]]

entities under the proposed regulations in section 660.4 are $641,000 
(rounded to the nearest thousand) [((1.33 + 1.33 hours) x 6,133 x 
$38.93) + $6102].

B. Regulatory Flexibility Act

    OCC: The Regulatory Flexibility Act (5 U.S.C. 601--612) (RFA) 
requires an agency to either provide an Initial Regulatory Flexibility 
Analysis with a proposed rule or certify that the proposed rule will 
not have a significant economic impact on a substantial number of small 
entities. For purposes of the RFA and OCC-regulated entities, a ``small 
entity'' is a national bank with assets of $165 million or less (small 
national bank). Based on its analysis and for the reason stated below, 
OCC certifies that this proposed rule will not have a significant 
economic impact on a substantial number of small entities. Based on two 
tests used to evaluate the impact of the proposed rule (compliance 
costs as a percent of labor costs and compliance costs as a percent of 
non-interest expenses) the OCC estimates that the proposed rule would 
have a significant economic impact on 7 of 948 small national banks 
(.074 percent); the OCC does not consider this to be a substantial 
number of small entities.
1. Reasons for Proposed Rule
    The FACT Act amends the FCRA and was enacted, in part, for the 
purpose of enhancing the accuracy and integrity of information 
furnished to CRAs. Section 312 of the FACT Act generally requires the 
Agencies to issue guidelines for use by furnishers regarding the 
accuracy and integrity of the information about consumers that they 
furnish to consumer reporting agencies and prescribe regulations 
requiring furnishers to establish reasonable policies and procedures 
for implementing the guidelines. Section 312 also requires the Agencies 
to prescribe regulations identifying the circumstances under which a 
furnisher must reinvestigate disputes about the accuracy of information 
contained in a consumer report based on a direct request from a 
consumer. OCC is issuing this proposed rule to implement section 312 of 
the FACT Act.
2. Statement of Objectives and Legal Basis
    The objectives of the proposed rule are described in the 
SUPPLEMENTARY INFORMATION section. In sum, the objectives are: (1) To 
implement the general statutory provision that requires the Agencies to 
issue guidelines for use by furnishers regarding the accuracy and 
integrity of the information about consumers that they furnish to 
consumer reporting agencies and prescribe regulations requiring 
furnishers to establish reasonable policies and procedures for 
implementing the guidelines and (2) to fulfill the statutory mandate 
requiring the Agencies to prescribe regulations identifying the 
circumstances under which a furnisher must reinvestigate disputes about 
the accuracy of information contained in a consumer report based on a 
direct request from a consumer. The legal bases for the proposed rule 
are the National Bank Act found at 12 U.S.C. 1 et seq., 24 (Seventh), 
481, and 484; the Depository Institutions Deregulation and Monetary 
Control Act of 1980 found at 12 U.S.C. 93a; the Federal Deposit 
Insurance Act found at 12 U.S.C. 1818; and the Fair Credit Reporting 
Act found at 15 U.S.C. 1681 et seq.
3. Description and Estimate of Small Entities Affected by the Final 
Rule
    The proposed rule would apply to national banks, Federal branches 
and agencies of foreign banks, and any of their operating subsidiaries 
that are not functionally regulated within the meaning of section 
5(c)(5) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 
1844(c)(5)) (national banks).
    OCC estimates that its proposed rule would apply to 948 small 
national banks with assets of $165 million or less.
4. Projected Recordkeeping, Reporting, and Other Compliance 
Requirements
    The compliance requirements of the proposed rules are described in 
the SUPPLEMENTARY INFORMATION above.
    In general, the proposal would require each furnisher subject to 
the rule to establish and implement reasonable policies and procedures 
regarding the accuracy and integrity of the information relating to 
consumers that it furnishes to a consumer reporting agency. Furnishers 
would be required to consider the guidelines in Appendix E to the 
proposed rule in developing these policies and procedures and to 
incorporate those guidelines that are appropriate. The Agencies have 
sought to reduce the burden associated with these proposed accuracy and 
integrity regulations and guidelines in several ways. First, the 
proposed guidelines provide that a furnisher may include in its 
policies and procedures concerning the accuracy and integrity of 
information it furnishes to consumer reporting agencies any of its 
existing policies and procedures that are relevant and appropriate. 
Furnishers have a preexisting obligation under Section 623 of the FCRA 
to provide accurate information when they furnish data to consumer 
reporting agencies. The OCC believes that many furnishers are likely to 
have existing policies and procedures regarding accurate reporting in 
order to satisfy their obligations under section 623, and that these 
policies and procedures could be incorporated in the policies and 
procedures required by the proposed rule.
    Furnishers subject to the proposed rule also would be required, 
under certain circumstances, to investigate disputes concerning the 
accuracy of information about the consumer contained in a consumer 
report based on a direct request of a consumer. While the rule would 
require new procedural requirements, the OCC believes that 
investigating direct disputes will not create significant additional 
burdens on small institutions, for a number of reasons.
    First, most furnishers already investigate similar disputes that 
are provided to them by a consumer reporting agency pursuant to the 
existing dispute provisions contained in section 611 of the FCRA.
    Second, commenters on the ANPR noted that many furnishers already 
investigate direct disputes as a matter of good customer relations, 
sound business practices, or because they are required to do so under 
other consumer protection laws. National banks also investigate 
disputes referred to them by the OCC's Customer Assistance Group as 
well as other state and Federal regulators.
    Finally, the proposed rule does not require investigation of direct 
disputes when such disputes are frivolous or irrelevant.
    The OCC seeks information and comment on any costs, compliance 
requirements, or changes in operating procedures arising from the 
application of the proposed rule to small national banks.
5. Identification of Duplicative, Overlapping, or Conflicting Federal 
Rules
    The OCC is unable to identify any statutes or rules, which would 
overlap or conflict with the proposed regulation. The OCC seeks comment 
and information about any such statutes or rules, as well as any other 
state, local, or industry rules or policies that require a covered 
institution to implement business practices that would comply with the 
requirements of the proposed rule.

[[Page 70962]]

6. Discussion of Significant Alternatives
    As required by the FACT Act, the proposed rules and guidelines 
apply to all covered institutions, regardless of the size of the 
institution. One approach to minimizing the burden on small entities 
would be to provide a specific exemption for small institutions. The 
OCC has no authority under section 312 of the FACT Act to grant an 
exception that would remove small institutions from the scope of the 
rule.
    The proposed rule does, however, provide substantial flexibility so 
that any national bank, regardless of size, may tailor its practices to 
its individual needs. For example, to minimize burden the proposal 
would permit institutions to include in their accuracy and integrity 
policies and procedures their existing policies and procedures that are 
relevant and appropriate. Furthermore, OCC and the other Agencies have 
attempted to minimize burden by: Adopting consistent rules; proposing 
and soliciting comment on two approaches for defining the terms 
``accuracy'' and ``integrity''; incorporating into the proposed rule at 
Sec.  41.42(a) a statement that policies and procedures should be 
appropriate to the nature, size, complexity, and scope of a furnisher's 
activities; and providing furnishers with three options for providing 
their direct disputes address to consumers under proposed Sec.  
41.43(c).
    The OCC welcomes comments on any significant alternatives that are 
consistent with section 312 of the FACT Act.
    Board: The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
requires an agency either to provide an initial regulatory flexibility 
analysis with a proposed rule or certify that the proposed rule will 
not have a significant economic impact on a substantial number of small 
entities (defined for purposes of the RFA to include commercial banks 
and other depository institutions with $165 million or less in assets). 
The Board requests public comment in the following areas.
1. Reasons for the Proposed Rule
    Section 312 of the FACT Act (which amends section 623 of the FCRA) 
requires the Agencies to issue regulations and guidelines relating to 
the responsibilities of furnishers of information about consumers to 
consumer reporting agencies for the purpose of enhancing the accuracy 
and integrity of the information furnished. Specifically, the Agencies 
must: (i) Establish and maintain guidelines for use by furnishers 
regarding the accuracy and integrity of the information relating to 
consumers that they furnish to consumer reporting agencies, and update 
those guidelines as often as necessary; and (ii) prescribe regulations 
requiring furnishers to establish reasonable policies and procedures 
for implementing the guidelines. In addition, the Agencies must 
prescribe joint regulations that identify the circumstances, if any, 
under which furnishers must investigate disputes about the accuracy of 
the information contained in a consumer report on the consumer based on 
a direct request by a consumer, rather than requiring consumers to 
initiate a dispute through a consumer reporting agency.
2. Statement of Objectives and Legal Basis
    The SUPPLEMENTARY INFORMATION above contains this information. The 
legal basis for the proposed rule is section 312 of the FACT Act.
3. Description of Small Entities to Which the Rule Applies
    The proposed regulations would apply to all banks that are members 
of the Federal Reserve System (other than national banks) and their 
respective operating subsidiaries, branches and Agencies of foreign 
banks (other than Federal branches, Federal Agencies, and insured State 
branches of foreign banks), commercial lending companies owned or 
controlled by foreign banks, and organizations operating under section 
25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq., and 611 et 
seq.). The Board's proposed regulations would apply to the following 
institutions (numbers approximate): State member banks (881), operating 
subsidiaries that are not functionally regulated with in the meaning of 
section 5(c)(5) of the Bank Holding Company Act of 1956, as amended 
(877), U.S. branches and agencies of foreign banks (219), commercial 
lending companies owned or controlled by foreign banks (3), and Edge 
and agreement corporations (64), for a total of approximately 2,044 
institutions. The Board estimates that more than 1,448 of these 
institutions could be considered small entities with assets of $165 
million or less.
    All small entities covered by the Board's rule potentially could be 
subject to the proposed rule. However, the proposed rule would not 
impose any requirements on small entities that do not furnish 
information about consumers to consumer reporting agencies.
4. Projected Reporting, Recordkeeping and Other Compliance Requirements
    The compliance requirements of the proposed rules are described in 
the SUPPLEMENTARY INFORMATION above.
    In general, the proposal would require each furnisher subject to 
the rule to establish and implement reasonable policies and procedures 
regarding the accuracy and integrity of the information relating to 
consumers that it furnishes to a consumer reporting agency. Such 
furnishers would be required to consider the guidelines in Appendix E 
to the proposed rule in developing these policies and procedures, and 
to incorporate those guidelines that are appropriate. The Agencies have 
sought to reduce the burden associated with these proposed accuracy and 
integrity regulations and guidelines in several ways. First, the 
proposed guidelines provide that a furnisher may include in its 
policies and procedures concerning the accuracy and integrity of 
information it furnishes to consumer reporting agencies any of its 
existing policies and procedures that are relevant and appropriate. 
Furnishers have a preexisting obligation under Section 623 of the FCRA 
to provide accurate information when they furnish data to consumer 
reporting agencies. The Board believes that many furnishers are likely 
to have existing policies and procedures regarding accurate reporting 
in order to satisfy their obligations under section 623, and that these 
policies and procedures could be incorporated in the policies and 
procedures required by the proposed rule.
    Furnishers subject to the proposed rule also would be required, 
under the circumstances described in the proposed rule, to investigate 
disputes concerning the accuracy of information about the consumer 
contained in a consumer report based on a direct request of a consumer. 
While the rule would require new procedural requirements, the Board 
believes that investigating direct disputes will not create significant 
additional burdens on small institutions, for a number of reasons. 
First, most furnishers already investigate similar disputes upon 
receipt from the relevant consumer reporting agency pursuant to the 
existing dispute provisions contained in section 611 of the FCRA. 
Second, commenters on the ANPR noted that many furnishers already 
investigate direct disputes as a matter of good customer relations and 
sound business practices or because they are required to under other 
consumer protection laws. Finally, the proposed rule does not

[[Page 70963]]

require investigation of direct disputes when such disputes are 
frivolous or irrelevant.
    The Board seeks information and comment on any costs, compliance 
requirements, or changes in operating procedures arising from the 
application of the proposed rule to small institutions.
5. Identification of Duplicative, Overlapping, or Conflicting Federal 
Rules
    The Board has not identified any federal statutes or regulations 
that would duplicate, overlap, or conflict with the proposed rule. The 
Board seeks comment regarding any statutes or regulations, including 
state or local statutes or regulations, that would duplicate, overlap, 
or conflict with the proposed rule.
6. Discussion of Significant Alternatives
    The proposed rule provides substantial flexibility so that each 
institution, regardless of its size, may tailor its practices to its 
individual needs. For example, as discussed above, in order to minimize 
burden the proposal would permit institutions to include in their 
accuracy and integrity policies and procedures any of their existing 
policies and procedures that are relevant and appropriate.
    The Board welcomes comments on any significant alternatives, 
consistent with the requirements of section 312 of the FACT Act, that 
would minimize the impact of the proposed rule on small entities.
    FDIC: In accordance with the Regulatory Flexibility Act (5 U.S.C. 
601-612) (RFA), an agency must publish an initial regulatory 
flexibility analysis with its proposed rule, unless the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities (defined for purposes of the RFA 
to include banks with less than $165 million in assets). The FDIC 
hereby certifies that the proposed rule would not have a significant 
economic impact on a substantial number of small entities.
    The proposed rule would apply to most FDIC-insured state nonmember 
banks, approximately 3,400 of which are small entities. Under the 
proposed rule, financial institutions that furnish information about 
consumers to one or more consumer reporting agencies must have written 
policies and procedures regarding the accuracy and integrity of that 
information. The program must be appropriate to the nature, size, 
complexity and scope of the furnishing activities. A furnisher may 
include any of its existing policies and procedures in place to ensure 
the accuracy of information. Institutions have had an ongoing 
requirement under Section 623 of the FCRA to provide accurate 
information when they choose to furnish data to consumer reporting 
agencies. The written policies and procedures proposed in the rule 
would formalize the processes and controls necessary for accurate 
reporting. Similarly, the proposed guidelines in Section II of Appendix 
E of the Regulation contain requirements that were already in the FCRA. 
Federal Financial Institutions Examination Council examination 
procedures exist and have been used for years to evaluate compliance 
with the aspects of Section 623 of the FCRA. Based on our examination 
of the financial institutions we supervise, the FDIC believes that many 
of these institutions have already implemented a significant portion of 
the policies and procedures required by the proposed rule, whether 
under the definition of ``integrity'' proposed in the Regulatory 
Definition Approach or the definition in the Guidelines Definition 
Approach, as discussed in the Supplementary Information above. The 
process of furnishing information to consumer reporting agencies is 
largely automated. With regard to the two alternatives concerning the 
``integrity'' of information, the automated furnishing systems already 
support for the type of information that a furnisher would provide 
under either approach.
    Nonetheless, the FDIC specifically requests comment and specific 
data on the size of the incremental burden on small banks in 
formalizing the policies and procedures not currently included, given 
the banks' current practices and compliance with existing requirements.
    The proposed rule would also require financial institutions that 
furnish information about consumers to respond to direct dispute 
requests from consumers with regard to certain perceived inaccuracies. 
While the rule would require new procedural requirements, including 
direct dispute notices, the FDIC believes that investigating direct 
disputes will not create significant additional burdens on small banks, 
for a number of reasons.
    First, most furnishers are already investigating similar disputes, 
which under the current law are brought directly to the relevant 
consumer reporting agency, which then contacts the furnisher for an 
investigation. Under this procedure, furnishers are already required to 
review all relevant information provided by the consumer reporting 
agency along with the notice; report the results of the investigation 
to the consumer reporting agency; if the disputed information is found 
to be incomplete or inaccurate, report those results to all nationwide 
consumer reporting agencies to which the financial institution 
previously provided the information; and if the disputed information is 
incomplete, inaccurate, or not verifiable by the financial institution, 
promptly, for purposes of reporting to the consumer reporting agency 
modify the item of information, delete the item of information, or 
permanently block the reporting of that item of information.
    Second, many of these furnishers are already investigating direct 
disputes as a matter of good customer relations and sound business 
practices or under other consumer protection laws.
    Third, the proposed rule does not require investigation in cases 
that are frivolous or irrelevant. Nonetheless, the FDIC again 
specifically requests comment and specific data on the size of the 
incremental burden creating a program would have on small banks, given 
their current practices and compliance with existing requirements.
    OTS: The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) 
requires an agency to either provide an Initial Regulatory Flexibility 
Analysis with a proposed rule or certify that the proposed rule will 
not have a significant economic impact on a substantial number of small 
entities. For purposes of the RFA and OTS-regulated entities, a ``small 
entity'' is a savings association with assets of $165 million or less 
(small savings association). Based on its analysis and for the reason 
stated below, OTS certifies that this proposed rule will not have a 
significant economic impact on a substantial number of small entities.
1. Reasons for Proposed Rule
    The FACT Act amends the FCRA and was enacted, in part, for the 
purpose of enhancing the accuracy and integrity of information 
furnished to CRAs. Section 312 of the FACT Act generally requires the 
Agencies to issue guidelines for use by furnishers regarding the 
accuracy and integrity of the information about consumers that they 
furnish to consumer reporting agencies and prescribe regulations 
requiring furnishers to establish reasonable policies and procedures 
for implementing the guidelines. Section 312 also requires the Agencies 
to prescribe regulations identifying the circumstances under which a 
furnisher must reinvestigate disputes about the accuracy of information 
contained in a consumer report based on a direct request from a 
consumer. OTS is issuing

[[Page 70964]]

this proposed rule to implement section 312 of the FACT Act.
2. Statement of Objectives and Legal Basis
    The objectives of the proposed rule are described in the 
SUPPLEMENTARY INFORMATION section. In sum, the objectives are: (1) To 
implement the general statutory provision that requires the Agencies to 
issue guidelines for use by furnishers regarding the accuracy and 
integrity of the information about consumers that they furnish to 
consumer reporting agencies and prescribe regulations requiring 
furnishers to establish reasonable policies and procedures for 
implementing the guidelines and (2) to fulfill the statutory mandate 
requiring the Agencies to prescribe regulations identifying the 
circumstances under which a furnisher must reinvestigate disputes about 
the accuracy of information contained in a consumer report based on a 
direct request from a consumer. The primary legal basis for the 
proposed rule is the Fair Credit Reporting Act found at 15 U.S.C. 1681 
et seq.
3. Description and Estimate of Small Entities Affected by the Final 
Rule
    The proposed rule would apply to savings associations and operating 
subsidiaries of federal savings associations that are not functionally 
regulated within the meaning of section 5(c)(5) of the Bank Holding 
Company Act of 1956, as amended (12 U.S.C. 1844(c)(5)).
    OTS estimates that its proposed rule would apply to 412 small 
savings associations with assets of $165 million or less.
4. Projected Recordkeeping, Reporting, and Other Compliance 
Requirements
    Under the proposed rule, financial institutions that furnish 
information about consumers to one or more consumer reporting agencies 
must have written policies and procedures regarding the accuracy and 
integrity of that information. The program must be appropriate to the 
nature, size, complexity and scope of the furnishing activities. A 
furnisher may include any of its existing policies and procedures in 
place to ensure the accuracy of information. Institutions have had an 
ongoing requirement under Section 623 of the FCRA to provide accurate 
information when they choose to furnish data to consumer reporting 
agencies. The written policies and procedures proposed in the rule 
would formalize the processes and controls necessary for accurate 
reporting. Similarly, the proposed guidelines in Section II of Appendix 
E of the Regulation contain requirements that were already in the FCRA. 
Federal Financial Institutions Examination Council examination 
procedures exist and have been used for years to evaluate compliance 
with the aspects of Section 623 of the FCRA. Based on our examination 
of the financial institutions we supervise, OTS believes that many of 
these institutions have already implemented a significant portion of 
the policies and procedures required by the proposed rule, whether 
under the definition of ``integrity'' proposed in the Regulatory 
Definition Approach or the definition in the Guidelines Definition 
Approach, as discussed in the Supplementary Information above. The 
process of furnishing information to consumer reporting agencies is 
largely automated. With regard to the two alternatives concerning the 
``integrity'' of information, the automated furnishing systems already 
support the type of information that a furnisher would provide under 
either approach.
    Nonetheless, OTS specifically requests comment and specific data on 
the size of the incremental burden on small savings associations in 
formalizing the policies and procedures not currently included, given 
the associations' current practices and compliance with existing 
requirements.
    The proposed rule would also require financial institutions that 
furnish information about consumers to respond to direct dispute 
requests from consumers with regard to certain perceived inaccuracies. 
While the rule would require new procedural requirements, including 
direct dispute notices, OTS believes that investigating direct disputes 
will not create significant additional burdens on small savings 
associations, for a number of reasons.
    First, most furnishers are already investigating similar disputes, 
which under the current law are brought directly to the relevant 
consumer reporting agency, which then contacts the furnisher for an 
investigation. Under this procedure, furnishers are already required to 
review all relevant information provided by the consumer reporting 
agency along with the notice; report the results of the investigation 
to the consumer reporting agency; if the disputed information is found 
to be incomplete or inaccurate, report those results to all nationwide 
consumer reporting agencies to which the financial institution 
previously provided the information; and if the disputed information is 
incomplete, inaccurate, or not verifiable by the financial institution, 
promptly, for purposes of reporting to the consumer reporting agency 
modify the item of information, delete the item of information, or 
permanently block the reporting of that item of information.
    Second, many of these furnishers are already investigating direct 
disputes as a matter of good customer relations and sound business 
practices. Many are also investigating disputes brought to the 
institution through OTS's customer complaint system.
    Third, the proposed rule does not require investigation for 
disputes that are frivolous or irrelevant.
    Fourth, savings associations already have mechanisms and processes 
in place to handle consumer complaints brought under other laws such as 
the Truth in Lending Act, Real Estate Settlement Procedures Act, and 
Electronic Funds Transfer Act. OTS believes many of these mechanisms 
and processes can be readily adapted to handle consumer disputes about 
their consumer reports.
    Nonetheless, OTS specifically requests comment and specific data on 
the size of the incremental burden creating a program would have on 
small savings associations, given their current practices and 
compliance with existing requirements.
5. Identification of Duplicative, Overlapping, or Conflicting Federal 
Rules
    OTS is unable to identify any statutes or rules, which would 
overlap or conflict with the proposed regulation. OTS seeks comment and 
information about any such statutes or rules, as well as any other 
state, local, or industry rules or policies that require a covered 
institution to implement business practices that would comply with the 
requirements of the proposed rule.
6. Discussion of Significant Alternatives
    As required by the FACT Act, the proposed rules and guidelines 
apply to all covered institutions, regardless of the size of the 
institution. One approach to minimizing the burden on small entities 
would be to provide a specific exemption for small institutions. OTS 
has no authority under section 312 of the FACT Act to grant an 
exception that would remove small institutions from the scope of the 
rule.
    The proposed rule does, however, provide substantial flexibility so 
that any savings association, regardless of size, may tailor its 
practices to its individual needs. For example, to minimize burden the 
proposal would permit institutions to include in their accuracy and 
integrity policies and

[[Page 70965]]

procedures their existing policies and procedures that are relevant and 
appropriate. Furthermore, OTS and the other Agencies have attempted to 
minimize burden by: Adopting consistent rules; proposing and soliciting 
comment on two approaches for defining the terms ``accuracy'' and 
``integrity''; incorporating into the proposed rule at Sec.  --.42(a) a 
statement that policies and procedures must be appropriate to the 
nature, size, complexity, and scope of a furnisher's activities; and 
providing furnishers with a three options for providing their direct 
disputes address to consumers under proposed Sec.  --.43(c).
    OTS welcomes comments on any significant alternatives that are 
consistent with section 312.
    NCUA: Under the RFA, NCUA must publish an initial regulatory 
flexibility analysis with its proposed rule, unless NCUA certifies the 
rule will not have a significant economic impact on a substantial 
number of small entities. For NCUA, these are federal credit unions 
with less than $10 million in assets. NCUA certifies this proposed rule 
would not have a significant economic impact on a substantial number of 
small entities.
    Under the proposed rule, federal credit unions furnishing 
information about consumers to consumer reporting agencies (CRAs) must 
have a written program on the information's accuracy and integrity. The 
program must be appropriate to the nature, size, complexity and scope 
of the furnishing activities. The federal credit union can include its 
existing policies and procedures in its program under the proposed 
rule. Federal credit unions already are required under FCRA section 623 
to provide accurate information when they furnish data to CRAs. The 
proposed rule would formalize the processes and controls for accurate 
reporting. Likewise, the proposed guidelines contain requirements 
already in the FCRA section 623.
    Accordingly, NCUA requests comment and specific data on any 
additional burden on small federal credit unions in making their 
current accuracy and integrity programs consistent with existing 
requirements.
    The proposed rule would also require federal credit unions that 
furnish consumer information to CRAs to respond to consumers' direct 
dispute requests to correct credit report inaccuracies. The rule would 
require new procedural requirements, including direct dispute notices, 
but the NCUA believes that investigating direct disputes will not 
create significant additional burdens on small federal credit unions, 
for the following reasons.
    First, most furnishers already investigate consumer dispute 
requests, even if under the current law, the consumers complain 
directly to the relevant CRA, which then contacts the federal credit 
union to investigate. Currently, furnishers must review all relevant 
information the CRA provides with the notice; report the investigation 
results to the CRA; if the disputed information is determined to be 
incomplete or inaccurate, report this to all nationwide CRAs to which 
the federal credit union previously provided the information; and if 
the disputed information is incomplete, inaccurate, or not verifiable 
by the federal credit union, promptly, for purposes of reporting to the 
CRA, modify the item of information, delete the item of information, or 
permanently block the reporting of that item of information.
    Second, many federal credit unions already investigate direct 
disputes as part of good member relations and sound business practices 
or under other consumer protection laws.
    Third, the proposed rule does not require investigation in cases 
that are frivolous or irrelevant. Nonetheless, NCUA specifically 
requests comment and specific data on the size of the incremental 
burden creating a program would have on small federal credit unions, 
given their current practices and compliance with existing 
requirements.
    FTC: The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-612, 
requires that the Commission provide an Initial Regulatory Flexibility 
Analysis (``IRFA'') with a proposed rule and a Final Regulatory 
Flexibility Analysis (``FRFA'') with the final rule, unless the 
Commission certifies that the rule will not have a significant economic 
impact on a substantial number of small entities. See 5 U.S.C. 603-605.
    Based on its analysis and for the reasons stated below, the 
Commission does not anticipate that the proposed regulations will have 
a significant economic impact on a substantial number of small 
entities. This document serves as notice to the Small Business 
Administration of the FTC's certification of no effect. To ensure the 
accuracy of this certification, however, the Commission requests 
comments on whether the proposed regulations will have a significant 
impact on a substantial number of small entities, including specific 
information on the number of entities that would be covered by the 
proposed regulations, the number of these companies that are ``small 
entities,'' and the average annual burden for each entity. Although the 
Commission certifies under the RFA that the regulations proposed in 
this notice would not, if promulgated, have a significant economic 
impact on a substantial number of small entities, the Commission has 
determined, nonetheless, that it is appropriate to publish an IRFA in 
order to inquire into the impact of the proposed regulations on small 
entities. Therefore, the Commission has prepared the following 
analysis:
1. Description of the Reasons That Action by the Agency Is Being Taken
    The Federal Trade Commission is charged with enforcing the 
requirements of section 312 of the Fair and Accurate Credit 
Transactions Act of 2003 (FACT Act) (15 U.S.C. 1681a-2(a)(8) and 1681a-
2(e)), which require the agency to issue these proposed regulations.
2. Statement of the Objectives of, and Legal Basis for, the Proposed 
Regulations
    The objectives of the proposed rule are described in the 
SUPPLEMENTARY INFORMATION section. In sum, the objectives are: (1) To 
implement the general statutory provision that requires the Agencies to 
issue guidelines for use by furnishers regarding the accuracy and 
integrity of the information about consumers that they furnish to 
consumer reporting agencies and prescribe regulations requiring 
furnishers to establish reasonable policies and procedures for 
implementing the guidelines and (2) to fulfill the statutory mandate 
requiring the Agencies to prescribe regulations identifying the 
circumstances under which a furnisher must reinvestigate disputes about 
the accuracy of information contained in a consumer report based on a 
direct request from a consumer. The legal basis for the proposed 
regulations is 15 U.S.C. 1681a-2(a)(8) and 1681a-2(e).
3. Small Entities To Which the Proposed Rule Will Apply
    The proposed rule would apply to ``an entity other than an 
individual consumer that furnishes information relating to consumers to 
one or more consumer reporting agencies,'' except when it ``provides 
information to a consumer reporting agency solely to obtain a consumer 
report in accordance with sections 604(a) and (f) of the FCRA.'' In 
short, the rule would apply to any entity that (1) is under the FTC's 
jurisdiction pursuant to the FCRA and (2) furnishes information 
relating to consumers to one or more consumer reporting agencies.

[[Page 70966]]

    Generally, the proposed regulations would apply to financial 
institutions, creditors, and other entities that furnish information 
relating to consumers to consumer reporting agencies. In particular, 
entities under FTC's jurisdiction covered by section 312 include state-
chartered credit unions, non-bank lenders, insurers, debt collectors, 
and any other entity other than an individual consumer that furnishes 
information relating to consumers to one or more consumer reporting 
agencies. The available data is not sufficient for the Commission to 
realistically estimate the number of entities the Commission regulates 
that would be subject to the proposed rule and that are small as 
defined by the Small Business Administration.\43\ The Commission 
invites comment and information on the number and type of small 
entities affected by the proposed rule.
---------------------------------------------------------------------------

    \43\ The size standard to be considered a small business for the 
majority of the non-bank creditors, insurers, and debt collectors 
that are subject to the Commission's jurisdiction is to have average 
annual receipts that are $6.5 million or less. A list of the SBA's 
size standards for all industries can be found at http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
---------------------------------------------------------------------------

4. Projected Reporting, Recordkeeping and Other Compliance Requirements
    Under the proposed rule, entities that furnish information about 
consumers to one or more consumer reporting agencies must have written 
policies and procedures regarding the accuracy and integrity of that 
information. The program must be appropriate to the nature, size, 
complexity, and scope of the furnishing activities. A furnisher may 
include any of its existing policies and procedures in place to ensure 
the accuracy of information. Entities have had an ongoing requirement 
under Section 623 of the FCRA to provide accurate information when they 
choose to furnish data to consumer reporting agencies. The written 
policies and procedures proposed in the rule would formalize the 
processes and controls necessary for accurate reporting. Similarly, the 
proposed guidelines in Section II of Appendix A of the Regulation 
contain requirements that are already included in the FCRA.
    Entities under the FTC's jurisdiction covered by this rule include 
state-chartered credit unions, non-bank lenders, insurers, debt 
collectors, and any other entity other than an individual consumer that 
furnishes information relating to consumers to one or more consumer 
reporting agencies. In calculating costs, FTC staff assumes that for 
all entities, managerial and/or professional technical personnel will 
draft the written policies and procedures regarding the accuracy and 
integrity of furnished information.
    The Commission believes that many entities have already implemented 
a significant portion of the policies and procedures required by the 
proposed rule, whether under the definition of ``integrity'' proposed 
in the Regulatory Definition Approach or the definition in the 
Guidelines Definition Approach, as discussed in the SUPPLEMENTARY 
INFORMATION above. The process of furnishing information to consumer 
reporting agencies is often automated. With regard to the two 
alternatives concerning the ``integrity'' of information, the automated 
furnishing systems already support the type of information that a 
furnisher would provide under either approach.
    Nonetheless, the Commission specifically requests comment and 
specific data on the size of the incremental burden on small entities 
in formalizing the policies and procedures not currently included, 
given the entities' current practices and compliance with existing 
requirements.
    The proposed rule would also require entities that furnish 
information about consumers to respond to direct disputes from 
consumers. The rule would require new procedural requirements, 
including direct dispute notices.
    Entities under the FTC's jurisdiction covered by this rule include 
state-chartered credit unions, non-bank lenders, insurers, debt 
collectors, and any other entity other than an individual consumer that 
furnishes information relating to consumers to one or more consumer 
reporting agencies. In calculating costs, FTC staff assumes that 
managerial and/or professional technical personnel will adapt 
mechanisms and processes to handle consumer disputes about their 
consumer reports and administrative support personnel will provide any 
required notices to consumers.
    The Commission believes that investigating direct disputes will not 
create significant additional burdens on covered entities for a number 
of reasons.
    First, most furnishers are already investigating similar disputes, 
which under the current law are brought directly to the relevant 
consumer reporting agency, which then contacts the furnisher for an 
investigation. Under this procedure, furnishers are already required to 
review all relevant information provided by the consumer reporting 
agency along with the notice of dispute; report the results of the 
investigation to the consumer reporting agency; if the disputed 
information is found to be incomplete or inaccurate, report those 
results to all nationwide consumer reporting agencies to which the 
furnisher previously provided the information; and if the disputed 
information is incomplete, inaccurate, or not verifiable by the 
financial institution, promptly, for the purposes of reporting to the 
consumer reporting agency to modify the item of information, delete the 
item of information, or permanently block the reporting of that item of 
information.
    Second, many of these furnishers are already investigating direct 
disputes as a matter of good customer relations and sound business 
practices.
    Third, the proposed rule does not require investigation for 
disputes that are frivolous or irrelevant.
    Fourth, many furnishers already have mechanisms and processes in 
place to handle consumer disputes brought under other laws such as the 
Fair Debt Collection Practices Act (15 U.S.C. 1692-1692p), Truth in 
Lending Act (15 U.S.C. 1601-1665b), Fair Credit Billing Act (15 U.S.C. 
1666-1666j), Real Estate Settlement Procedures Act (12 U.S.C. 2601-
2627), and Electronic Funds Transfer Act (15 U.S.C. 1693-1693r). The 
Commission believes that many of these mechanisms and processes can be 
readily adapted to handle consumer disputes about their consumer 
reports.
    Nonetheless, the Commission specifically requests comment and 
specific data on the size of the incremental burden that creating a 
program would have on small entities, given their current practices and 
compliance with existing requirements.
5. Duplicative, Overlapping, or Conflicting Federal Rules
    The Commission has not identified any federal statutes, rules, or 
policies that would duplicate, overlap, or conflict with the proposed 
Rule. As noted in Section 4, however, compliance with some provisions 
of other federal statutes will facilitate compliance with the proposed 
rule by furnishers of information to consumer reporting agencies. The 
Commission invites comment and information about any statutes or rules 
that may duplicate, overlap, or conflict with the proposed Rule.
6. Significant Alternatives to the Proposed Rule
    The standards in the proposed Rule are flexible so that a covered 
entity, regardless of size, may tailor its practices to its individual 
needs. For example, to minimize the burden the proposal would permit 
entities to include in their accuracy and integrity

[[Page 70967]]

policies and procedures their existing policies and procedures that are 
relevant and appropriate. Furthermore, the FTC and other Agencies have 
attempted to minimize the burden by: adopting consistent rules; 
incorporating into the proposed rule at Sec.  660.3 a statement that 
policies and procedures should be appropriate to the nature, size, 
complexity, and scope of a furnisher's activities; and providing 
furnishers with three options for providing their direct disputes 
address to consumers under proposed Sec.  660.4. Nevertheless, the 
Commission seeks comment and information on the need, if any, for 
alternative compliance methods that, consistent with the statutory 
requirement, would reduce the economic impact of the rule on small 
entities.
    If the comments filed in response to this notice identify small 
entities that are affected by the rule, as well as alternative methods 
of compliance that would reduce the economic impact of the rule on such 
entities, the Commission will consider the feasibility of such 
alternatives and determine whether they should be incorporated into the 
final rule.

C. OCC and OTS Executive Order 12866 Determinations

    The OCC and OTS each determined that its portion of the proposed 
rulemaking is not a significant regulatory action under Executive Order 
12866.

D. OCC and OTS Executive Order 13132 Determinations

    The OCC and the OTS each determined that its portion of the 
proposed rulemaking does not have any federalism implications for 
purposes of Executive Order 13132.

E. NCUA Executive Order 13132 Determination

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on State and local interests. In 
adherence to fundamental federalism principles, the NCUA, an 
independent regulatory agency as defined in 44 U.S.C. 3502(5) 
voluntarily complies with the Executive Order. The proposed rules and 
guidelines apply only to federally chartered credit unions and would 
not have substantial direct effects on the States, on the connection 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
The NCUA has determined that these proposed rules and guidelines do not 
constitute a policy that has federalism implications for purposes of 
the Executive Order.

F. OCC and OTS Unfunded Mandates Reform Act of 1995 Determinations

    Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4 (Unfunded Mandates Act) requires that an agency prepare a 
budgetary impact statement before promulgating a rule that includes a 
Federal mandate that may result in expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. If a budgetary impact statement is 
required, section 205 of the Unfunded Mandates Act also requires an 
agency to identify and consider a reasonable number of regulatory 
alternatives before promulgating a rule. The OCC and OTS each 
determined that this proposed rule will not result in expenditures by 
State, local, and tribal governments, or by the private sector, of $100 
million or more. Accordingly, neither the OCC nor the OTS has prepared 
a budgetary impact statement or specifically addressed the regulatory 
alternatives considered.

G. NCUA: The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this proposed rule would not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 
2681 (1998).

VII. Solicitation of Comments on Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, Pub. L. 106-102, sec. 
722, 113 Stat. 1338, 1471 (Nov. 12, 1999), requires the OCC, Board, 
FDIC, and OTS to use plain language in all proposed and final rules 
published after January 1, 2000. Therefore, these agencies specifically 
invite your comments on how to make this proposal easier to understand. 
For example:
     Have we organized the material to suit your needs? If not, 
how could this material be better organized?
     Are the requirements in the proposed regulations and 
guidelines clearly stated? If not, how could the regulations and 
guidelines be more clearly stated?
     Do the proposed regulations and guidelines contain 
language or jargon that is not clear? If so, which language requires 
clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulations and guidelines 
easier to understand? If so, what changes to the format would make them 
easier to understand?
     What else could we do to make the regulations and 
guidelines easier to understand?

VIII. Communications by Outside Parties to FTC Commissioners or Their 
Advisors

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding from any 
outside party to any FTC Commissioner or FTC Commissioner's advisor 
will be placed on the public record. See 16 CFR 1.26(b)(5).

List of Subjects

12 CFR Part 41

    Banks, banking, Consumer protection, National Banks, Reporting and 
recordkeeping requirements.

12 CFR Part 222

    Banks, banking, Holding companies, state member banks.

12 CFR Part 334

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Reporting and recordkeeping requirements, Safety and 
soundness.

12 CFR Part 571

    Consumer protection, Credit, Fair credit reporting, Privacy, 
Reporting and recordkeeping requirements, Savings associations.

12 CFR Part 717

    Consumer protection, Credit unions, Fair credit reporting, Privacy, 
Reporting and recordkeeping requirements.

16 CFR Part 660

    Consumer reports, Consumer reporting agencies, Fair credit 
reporting, Information furnishers, Identity theft, Trade practices.

Department of the Treasury

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

    For the reasons discussed in the joint preamble, the Office of the 
Comptroller of the Currency proposes to amend chapter I of title 12 of 
the Code of Federal Regulations by amending 12 CFR part 41 as follows:

PART 41--FAIR CREDIT REPORTING

    1. Revise the authority citation for part 41 to read as follows:


[[Page 70968]]


    Authority: 12 U.S.C. 1 et seq., 24 (Seventh), 93a, 481, 484, and 
1818; 15 U.S.C. 1681a, 1681b, 1681c, 1681m, 1681s, 1681s-2, 1681s-3, 
1681t, and 1681w; Sec. 214, Pub. L. 108-159, 117 Stat. 1952.

    2. Add a new subpart E to part 41 to read as follows:
Subpart E--Duties of Furnishers of Information
Sec.
41.40 Scope.
41.41 Definitions.
41.42 Reasonable policies and procedures concerning the accuracy and 
integrity of furnished information.
41.43 Direct disputes.

Subpart E--Duties of Furnishers of Information


Sec.  41.40  Scope.

    This subpart applies to a national bank, Federal branch and agency 
of a foreign bank, and their respective operating subsidiaries that are 
not functionally regulated within the meaning of section 5(c)(5) of the 
Bank Holding Company Act of 1956, as amended (12 U.S.C. 1844(c)(5)).


Sec.  41.41  Definitions.

    For purposes of this subpart and Appendix E of this part, the 
following definitions apply:
    Regulatory Definition Approach for Defining ``Accuracy'' and 
``Integrity'' Follows
    (a) Accuracy means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer reflects without error the terms of and liability for 
the account or other relationship and the consumer's performance and 
other conduct with respect to the account or other relationship.
    (b) Integrity means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer does not omit any term, such as a credit limit or 
opening date, of that account or other relationship, the absence of 
which can reasonably be expected to contribute to an incorrect 
evaluation by a user of a consumer report of a consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living.
    (c) Furnisher means an entity other than an individual consumer 
that furnishes information relating to consumers to one or more 
consumer reporting agencies. An entity is not a furnisher when it 
provides information to a consumer reporting agency solely to obtain a 
consumer report in accordance with sections 604(a) and (f) of the FCRA.
    (d) Identity theft has the same meaning as in 16 CFR 603.2(a).
    (e) Direct dispute means a dispute submitted directly to a 
furnisher by a consumer concerning the accuracy of any information 
contained in a consumer report relating to the consumer.


Sec.  41.42  Reasonable policies and procedures concerning the accuracy 
and integrity of furnished information.

    (a) Policies and procedures. Each furnisher must establish and 
implement reasonable written policies and procedures regarding the 
accuracy and integrity of the information relating to consumers that it 
furnishes to a consumer reporting agency. The policies and procedures 
must be appropriate to the nature, size, complexity, and scope of each 
furnisher's activities.
    (b) Guidelines. Each furnisher must consider the guidelines in 
Appendix E of this part in developing its policies and procedures 
required by this section, and incorporate those guidelines that are 
appropriate.
    (c) Reviewing and updating policies and procedures. Each furnisher 
must review its policies and procedures required by this section 
periodically and update them as necessary to ensure their continued 
effectiveness.


Sec.  41.43  Direct disputes.

    (a) General rule. Except as otherwise provided in this section, a 
furnisher must investigate a direct dispute if it relates to:
    (1) The consumer's liability for a credit account or other debt 
with the furnisher, such as direct disputes relating to whether there 
is or has been identity theft or fraud against the consumer, whether 
there is individual or joint liability on an account, or whether the 
consumer is an authorized user of a credit account;
    (2) The terms of a credit account or other debt with the furnisher, 
such as direct disputes relating to the type of account, principal 
balance, scheduled payment amount on an account, or the amount of the 
reported credit limit on an open-end account;
    (3) The consumer's performance or other conduct concerning an 
account or other relationship with the furnisher, such as direct 
disputes relating to the current payment status, high balance, date a 
payment was made, the amount of a payment made, or the date an account 
was opened or closed; or
    (4) Any other information contained in a consumer report regarding 
an account or other relationship with the furnisher that bears on the 
consumer's creditworthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode of 
living.
    (b) Exceptions. The requirements of paragraph (a) of this section 
do not apply to a furnisher if:
    (1) The direct dispute relates to:
    (i) The consumer's identifying information (other than a direct 
dispute relating to a consumer's liability for a credit account or 
other debt with the furnisher, as provided in paragraph (a)(1) of this 
section) such as name(s), date of birth, Social Security number, 
telephone number(s), or address(es);
    (ii) The identity of past or present employers;
    (iii) Inquiries or requests for a consumer report;
    (iv) Information derived from public records, such as judgments, 
bankruptcies, liens, and other legal matters (unless provided by a 
furnisher with an account or other relationship with the consumer); or
    (v) Information related to fraud alerts or active duty alerts; or
    (2) The direct 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 15 U.S.C. 1679a(3), or an 
entity that would be a credit repair organization, but for 15 U.S.C. 
1679a(3)(B)(i).
    (c) Direct dispute address. A furnisher is required to investigate 
a direct dispute only if a consumer submits a dispute notice to the 
furnisher at:
    (1) The address of a furnisher provided by a furnisher and set 
forth on a consumer report relating to the consumer;
    (2) An address clearly and conspicuously specified by the furnisher 
for submitting direct disputes that is provided to the consumer in 
writing or electronically (if the consumer has agreed to the electronic 
delivery of information from the furnisher); or
    (3) Any business address of the furnisher if the furnisher has not 
so specified and provided an address for submitting direct disputes 
under paragraph (c)(2) of this section.
    (d) Direct dispute notice contents. A dispute notice must include:
    (1) The name, address, and telephone number of the consumer;
    (2) Sufficient information to identify the account or other 
relationship that is in dispute, such as an account number;
    (3) The specific information that the consumer is disputing and an 
explanation of the basis for the dispute; and
    (4) All supporting documentation or other information reasonably 
required

[[Page 70969]]

by the furnisher to substantiate the basis of the dispute. This 
documentation may include, for example: A copy of the consumer report 
that contains the allegedly inaccurate information; a police report; a 
fraud or identity theft affidavit; a court order; or account 
statements.
    (e) Frivolous or irrelevant disputes. (1) A furnisher is not 
required to investigate a direct dispute if the furnisher has 
reasonably determined that the dispute is frivolous or irrelevant. A 
dispute may be frivolous or irrelevant if:
    (i) The consumer did not provide sufficient information to 
investigate the disputed information as required by paragraph (d) of 
this section;
    (ii) The direct dispute is substantially the same as a dispute 
previously submitted by or on behalf of the consumer, either directly 
to the furnisher or through a consumer reporting agency, with respect 
to which the furnisher has already satisfied the applicable 
requirements of the Act or this section; provided, however, that a 
direct dispute is not substantially the same as a dispute previously 
submitted if the dispute includes information listed in paragraph (d) 
of this section that had not previously been provided to the furnisher; 
or
    (iii) The furnisher is not required to investigate the direct 
dispute under this section.
    (2) Notice of determination. Upon making a determination that a 
dispute is frivolous or irrelevant, the furnisher must notify the 
consumer of the determination not later than five business days after 
making the determination, by mail or, if authorized by the consumer for 
that purpose, by any other means available to the furnisher.
    (3) Contents of notice of determination that a dispute is frivolous 
or irrelevant. A notice of determination that a dispute is frivolous or 
irrelevant must include the reasons for such determination and identify 
any information required to investigate the disputed information, which 
notice may consist of a standardized form describing the general nature 
of such information.
    3. Add a new appendix E to read as follows:

Appendix E to Part 41--Interagency Guidelines Concerning the Accuracy 
and Integrity of Information Furnished to Consumer Reporting Agencies

    The OCC encourages voluntary furnishing of information to 
consumer reporting agencies. Section 41.42 of this part requires 
each furnisher to establish and implement reasonable written 
policies and procedures concerning the accuracy and integrity of the 
information it furnishes to consumer reporting agencies. Under Sec.  
41.42(b), the furnisher must consider the guidelines set forth below 
in developing these policies and procedures. In establishing these 
policies and procedures, a furnisher may include any of its existing 
policies and procedures that are relevant and appropriate.

I. Nature, Scope, and Objectives of Policies and Procedures

    A. Nature and Scope. Section 41.42(a) of this part requires that 
a furnisher's policies and procedures be appropriate to the nature, 
size, complexity, and scope of the furnisher's activities. The 
furnisher's policies and procedures should reflect, for example:
    1. The types of business activities in which the furnisher 
engages;
    2. The nature and frequency of the information the furnisher 
provides to consumer reporting agencies; and
    3. The technology used by the furnisher to furnish information 
to consumer reporting agencies.
    Regulatory Definition Approach for Paragraph B Follows
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer:
    (a) Accurately identifies the appropriate consumer;
    (b) Accurately reports the terms of those accounts or other 
relationships; and
    (c) Accurately reports the consumer's performance and other 
conduct with respect to the account or other relationship with the 
consumer;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer avoids misleading a consumer 
report user as to the consumer's creditworthiness, credit standing, 
credit capacity, character, general reputation, personal 
characteristics, or mode of living;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations;
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship;
    5. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is reported in a form and manner 
that is designed to minimize the likelihood that the information, 
although accurate, may be erroneously reflected in a consumer 
report, for example, by ensuring that the information is reported 
with appropriate identifying information about the consumer to whom 
it pertains, in a standardized and clearly understandable form and 
manner, and with a date specifying the time period to which the 
information pertains; and
    6. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is substantiated by the 
furnisher's own records.
    Guidelines Definition Approach for Paragraph B Follows
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is accurate. Accuracy means that 
any information that a furnisher provides to a consumer reporting 
agency about an account or other relationship with the consumer 
reflects without error the terms of and liability for the account or 
other relationship and the consumer's performance and other conduct 
with respect to the account or other relationship;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is furnished with integrity. 
Integrity means that any information that a furnisher provides to a 
consumer reporting agency about an account or other relationship 
with the consumer is:
    (i) Reported in a form and manner that is designed to minimize 
the likelihood that the information, although accurate, may be 
erroneously reflected in a consumer report, for example, by ensuring 
that the information is:
    (A) Reported with appropriate identifying information about the 
consumer to whom it pertains;
    (B) Reported in a standardized and clearly understandable form 
and manner; and
    (C) Reported with a date specifying the time period to which the 
information pertains; and
    (ii) Substantiated by the furnisher's own records;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations; and
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship.

II. Accuracy and Integrity Duties of Furnishers Under the FCRA

    A furnisher's policies and procedures should address compliance 
with all applicable requirements imposed on the furnisher under the 
FCRA, including the duties to:\1\
---------------------------------------------------------------------------

    \1\ This is not a complete listing of furnisher duties relating 
to accuracy and integrity. Furnishers should consult the FCRA to 
determine what additional duties may apply.

---------------------------------------------------------------------------

[[Page 70970]]

    A. Promptly notify the consumer reporting agency of the 
furnisher's determination that furnished information is not complete 
or accurate, for a furnisher that regularly and in the ordinary 
course of business furnishes information; provide any corrections, 
or any additional information, that is necessary to make the 
furnished information complete and accurate; and not thereafter 
furnish information that remains incomplete or inaccurate. 15 U.S.C. 
1681s-2(a)(2).
    B. Provide notice of a dispute by a consumer about the accuracy 
or completeness of information furnished to a consumer reporting 
agency. 15 U.S.C. 1681s-2(a)(3).
    C. Report voluntary closure of a credit account by the consumer 
in information regularly furnished for the period in which the 
credit account is closed, for a furnisher that regularly and in the 
ordinary course of business furnishes information about consumer 
credit accounts. 15 U.S.C. 1681s-2(a)(4).
    D. Notify the consumer reporting agency of the date of 
delinquency on an account not later than 90 days after the furnisher 
furnishes information to the consumer reporting agency regarding 
action taken on the delinquent account (including placement for 
collection, charge to profit or loss, or any similar action). Date 
of delinquency means the month and year of the commencement of the 
delinquency on the account that immediately preceded the action. 15 
U.S.C. 1681s-2(a)(5).
    E. Have in place reasonable procedures to respond to any 
notification that the furnisher receives from a consumer reporting 
agency under section 605B of the FCRA, relating to the blocking of 
information resulting from identity theft and to prevent the 
refurnishing of such blocked information. 15 U.S.C. 1681s-
2(a)(6)(A).
    F. Not furnish to a consumer reporting agency information that 
purports to relate to the consumer if the consumer submits an 
identity theft report to the furnisher (at the address specified by 
that furnisher for receiving such reports) stating that such 
information maintained by that furnisher resulted from identity 
theft. (This restriction does not apply if the furnisher 
subsequently knows or is informed by the consumer that the 
information is correct.) 15 U.S.C. 1681s-2(a)(6)(B).
    G. After receiving a notice of dispute from a consumer reporting 
agency, in a timely manner: Conduct an investigation; review all 
relevant information the consumer reporting agency provides; report 
the results of the investigation to the consumer reporting agency; 
report incomplete or inaccurate information to all nationwide 
consumer reporting agencies to which it reported the information; 
and modify, delete, or permanently block incomplete or inaccurate 
information or information that cannot be verified. 15 U.S.C. 1681s-
2(b).
    H. Investigate direct disputes as required by 12 CFR 41.43 and 
15 U.S.C. 1681s-2(a)(8).

III. Establishing and Implementing Policies and Procedures

    In establishing and implementing its policies and procedures, a 
furnisher should:
    A. Identify practices or activities of the furnisher that can 
compromise the accuracy and integrity of information furnished to 
consumer reporting agencies, such as by:
    1. Reviewing its existing practices and activities, including 
the technological means and other methods it uses to furnish 
information to consumer reporting agencies and the frequency and 
timing of its furnishing of information, such as through an audit;
    2. Reviewing historical records relating to accuracy or 
integrity or to disputes, or other information relating to the 
accuracy and integrity of information provided by the furnisher to 
consumer reporting agencies and the types of errors, omissions, or 
other problems that may have affected the accuracy and integrity of 
information it has furnished about consumers to consumer reporting 
agencies; and
    3. Obtaining feedback from consumer reporting agencies, 
consumers, the furnisher's staff, or other appropriate parties.
    B. Evaluate the effectiveness of existing policies and 
procedures of the furnisher regarding the accuracy and integrity of 
information furnished to consumer reporting agencies; consider 
whether new, additional, or different policies and procedures are 
necessary; and consider whether implementation of existing policies 
and procedures should be modified to enhance the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies.
    C. Evaluate the effectiveness of specific methods (including 
technological means) the furnisher uses to provide information to 
consumer reporting agencies; how those methods may affect the 
accuracy and integrity of the information it provides to consumer 
reporting agencies; and whether new, additional, or different 
methods (including technological means) should be used to provide 
information to consumer reporting agencies to enhance the accuracy 
and integrity of that information.

IV. Specific Components of Policies and Procedures

    A furnisher's policies and procedures should address the 
following:
    A. Establishing and implementing a system for furnishing 
information about consumers to consumer reporting agencies that is 
appropriate to the nature, size, complexity, and scope of the 
furnisher's business operations.
    B. Using standard data reporting formats and standard procedures 
for compiling and furnishing data, where feasible, such as the 
electronic transmission of information about consumers to consumer 
reporting agencies.
    C. Ensuring that the furnisher maintains its own records for a 
reasonable period of time, not less than any applicable 
recordkeeping requirement, in order to substantiate the accuracy of 
any information about consumers it furnishes that is subject to a 
direct dispute.
    D. Establishing and implementing appropriate internal controls 
regarding the accuracy and integrity of information about consumers 
furnished to consumer reporting agencies, such as by implementing 
standard procedures, verifying random samples, and conducting 
regular reviews of information provided to consumer reporting 
agencies.
    E. Training staff that participates in activities related to the 
furnishing of information about consumers to consumer reporting 
agencies to implement the policies and procedures.
    F. Providing for appropriate and effective oversight of relevant 
service providers whose activities may affect the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies to ensure compliance with the policies and 
procedures.
    G. Furnishing information about consumers to consumer reporting 
agencies following mergers, portfolio acquisitions or sales, or 
other acquisitions or transfers of accounts or other debts in a 
manner that prevents re-aging of information, duplicative reporting, 
or other problems affecting the accuracy or integrity of the 
information furnished.
    H. Attempting to obtain the information listed in Sec.  41.43(d) 
from a consumer before determining that the consumer's dispute is 
frivolous or irrelevant.
    I. Ensuring that deletions, updates, and corrections furnished 
to consumer reporting agencies are reflected in business systems to 
avoid furnishing erroneous information.
    J. Conducting investigations of direct disputes in a manner that 
promotes the efficient resolution of such disputes.
    K. Ensuring that technological and other means of communication 
with consumer reporting agencies are designed to prevent duplicative 
reporting of accounts, erroneous association of information with the 
wrong consumer(s), and other occurrences that may compromise the 
accuracy and integrity of information contained in consumer reports.
    L. Providing consumer reporting agencies with sufficient 
identifying information in the furnisher's possession about each 
consumer about whom information is furnished to enable the consumer 
reporting agency properly to identify the consumer.
    M. Conducting a periodic evaluation of its own practices, 
consumer reporting agency practices of which the furnisher is aware, 
investigations of disputed information, corrections of inaccurate 
information, means of communication, and other factors that may 
affect the accuracy and integrity of information furnished to 
consumer reporting agencies.

Board of Governors of the Federal Reserve System

12 CFR Chapter II

Authority and Issuance

    For the reasons set forth in the joint preamble, part 222 of title 
12, chapter II, of the Code of Federal Regulations is proposed to be 
amended as follows:

PART 222--FAIR CREDIT REPORTING (REGULATION V)

    1. The authority citation for part 222 continues to read as 
follows:

    Authority: 15 U.S.C. 1681a, 1681b, 1681c, 1681m, 1681s, 1681s-2, 
1681s-3, 1681t, and

[[Page 70971]]

1681w; Secs. 3 and 214, Pub. L. 108-159, 117 Stat. 1952.

    2. A new Subpart E is added to part 222 to read as follows:
Subpart E--Duties of Furnishers of Information
Sec.
222.40 Scope.
222.41 Definitions.
222.42 Reasonable policies and procedures concerning the accuracy 
and integrity of furnished information.
222.43 Direct disputes.

Subpart E--Duties of Furnishers of Information


Sec.  222.40  Scope.

    Subpart E of this part applies to member banks of the Federal 
Reserve System (other than national banks) and their respective 
operating subsidiaries that are not functionally regulated within the 
meaning of section 5(c)(5) of the Bank Holding Company Act, as amended 
(12 U.S.C. 1844(c)(5)), branches and Agencies of foreign banks (other 
than Federal branches, Federal Agencies, and insured State branches of 
foreign banks), commercial lending companies owned or controlled by 
foreign banks, and organizations operating under section 25 or 25A of 
the Federal Reserve Act (12 U.S.C. 601 et seq., and 611 et seq.).


Sec.  222.41  Definitions.

    For purposes of this subpart and Appendix E of this part, the 
following definitions apply:
    Regulatory Definition Approach for Defining ``Accuracy'' and 
``Integrity'' Follows:
    (a) Accuracy means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer reflects without error the terms of and liability for 
the account or other relationship and the consumer's performance and 
other conduct with respect to the account or other relationship.
    (b) Integrity means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer does not omit any term, such as a credit limit or 
opening date, of that account or other relationship, the absence of 
which can reasonably be expected to contribute to an incorrect 
evaluation by a user of a consumer report of a consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living.
    (c) Furnisher means an entity other than an individual consumer 
that furnishes information relating to consumers to one or more 
consumer reporting agencies. An entity is not a furnisher when it 
provides information to a consumer reporting agency solely to obtain a 
consumer report in accordance with sections 604(a) and (f) of the FCRA.
    (d) Identity theft has the same meaning as in 16 CFR 603.2(a).
    (e) Direct dispute means a dispute submitted directly to a 
furnisher by a consumer concerning the accuracy of any information 
contained in a consumer report relating to the consumer.


Sec.  222.42  Reasonable policies and procedures concerning the 
accuracy and integrity of furnished information.

    (a) Policies and procedures. Each furnisher must establish and 
implement reasonable written policies and procedures regarding the 
accuracy and integrity of the information relating to consumers that it 
furnishes to a consumer reporting agency. The policies and procedures 
must be appropriate to the nature, size, complexity, and scope of each 
furnisher's activities.
    (b) Guidelines. Each furnisher must consider the guidelines in 
Appendix E of this part in developing its policies and procedures 
required by this section, and incorporate those guidelines that are 
appropriate.
    (c) Reviewing and updating policies and procedures. Each furnisher 
must review its policies and procedures required by this section 
periodically and update them as necessary to ensure their continued 
effectiveness.


Sec.  222.43  Direct disputes.

    (a) General rule. Except as otherwise provided in this section, a 
furnisher must investigate a direct dispute if it relates to:
    (1) The consumer's liability for a credit account or other debt 
with the furnisher, such as direct disputes relating to whether there 
is or has been identity theft or fraud against the consumer, whether 
there is individual or joint liability on an account, or whether the 
consumer is an authorized user of a credit account;
    (2) The terms of a credit account or other debt with the furnisher, 
such as direct disputes relating to the type of account, principal 
balance, scheduled payment amount on an account, or the amount of the 
reported credit limit on an open-end account;
    (3) The consumer's performance or other conduct concerning an 
account or other relationship with the furnisher, such as direct 
disputes relating to the current payment status, high balance, date a 
payment was made, the amount of a payment made, or the date an account 
was opened or closed; or
    (4) Any other information contained in a consumer report regarding 
an account or other relationship with the furnisher that bears on the 
consumer's creditworthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode of 
living.
    (b) Exceptions. The requirements of paragraph (a) of this section 
do not apply to a furnisher if:
    (1) The direct dispute relates to:
    (i) The consumer's identifying information (other than a direct 
dispute relating to a consumer's liability for a credit account or 
other debt with the furnisher, as provided in paragraph (a)(1) of this 
section) such as name(s), date of birth, Social Security number, 
telephone number(s), or address(es);
    (ii) The identity of past or present employers;
    (iii) Inquiries or requests for a consumer report;
    (iv) Information derived from public records, such as judgments, 
bankruptcies, liens, and other legal matters (unless provided by a 
furnisher with an account or other relationship with the consumer); or
    (v) Information related to fraud alerts or active duty alerts; or
    (2) The direct 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 15 U.S.C. 1679a(3), or an 
entity that would be a credit repair organization, but for 15 U.S.C. 
1679a(3)(B)(i).
    (c) Direct dispute address. A furnisher is required to investigate 
a direct dispute only if a consumer submits a dispute notice to the 
furnisher at:
    (1) The address of a furnisher provided by a furnisher and set 
forth on a consumer report relating to the consumer;
    (2) An address clearly and conspicuously specified by the furnisher 
for submitting direct disputes that is provided to the consumer in 
writing or electronically (if the consumer has agreed to the electronic 
delivery of information from the furnisher); or
    (3) Any business address of the furnisher if the furnisher has not 
so specified and provided an address for submitting direct disputes 
under paragraph (c)(2) of this section.
    (d) Direct dispute notice contents. A dispute notice must include:
    (1) The name, address, and telephone number of the consumer;
    (2) Sufficient information to identify the account or other 
relationship that is in dispute, such as an account number;

[[Page 70972]]

    (3) The specific information that the consumer is disputing and an 
explanation of the basis for the dispute; and
    (4) All supporting documentation or other information reasonably 
required by the furnisher to substantiate the basis of the dispute. 
This documentation may include, for example: a copy of the consumer 
report that contains the allegedly inaccurate information; a police 
report; a fraud or identity theft affidavit; a court order; or account 
statements.
    (e) Frivolous or irrelevant disputes. (1) A furnisher is not 
required to investigate a direct dispute if the furnisher has 
reasonably determined that the dispute is frivolous or irrelevant. A 
dispute may be frivolous or irrelevant if:
    (i) The consumer did not provide sufficient information to 
investigate the disputed information as required by paragraph (d) of 
this section;
    (ii) The direct dispute is substantially the same as a dispute 
previously submitted by or on behalf of the consumer, either directly 
to the furnisher or through a consumer reporting agency, with respect 
to which the furnisher has already satisfied the applicable 
requirements of the Act or this section; provided, however, that a 
direct dispute is not substantially the same as a dispute previously 
submitted if the dispute includes information listed in paragraph (d) 
of this section that had not previously been provided to the furnisher; 
or
    (iii) The furnisher is not required to investigate the direct 
dispute under this section.
    (2) Notice of determination. Upon making a determination that a 
dispute is frivolous or irrelevant, the furnisher must notify the 
consumer of the determination not later than five business days after 
making the determination, by mail or, if authorized by the consumer for 
that purpose, by any other means available to the furnisher.
    (3) Contents of notice of determination that a dispute is frivolous 
or irrelevant. A notice of determination that a dispute is frivolous or 
irrelevant must include the reasons for such determination and identify 
any information required to investigate the disputed information, which 
may notice consist of a standardized form describing the general nature 
of such information.
    3. A new Appendix E is added to part 222 to read as follows:

Appendix E to Part 222--Interagency Guidelines Concerning the Accuracy 
and Integrity of Information Furnished to Consumer Reporting Agencies

    The Board encourages voluntary furnishing of information to 
consumer reporting agencies. Section 222.42 of this part requires 
each furnisher to establish and implement reasonable written 
policies and procedures concerning the accuracy and integrity of the 
information it furnishes to consumer reporting agencies. Under Sec.  
222.42(b), the furnisher must consider the guidelines set forth 
below in developing these policies and procedures. In establishing 
these policies and procedures, a furnisher may include any of its 
existing policies and procedures that are relevant and appropriate.

I. Nature, Scope, and Objectives of Policies and Procedures

    A. Nature and Scope. Section 222.42(a) of this part requires 
that a furnisher's policies and procedures be appropriate to the 
nature, size, complexity, and scope of the furnisher's activities. 
The furnisher's policies and procedures should reflect, for example:
    1. The types of business activities in which the furnisher 
engages;
    2. The nature and frequency of the information the furnisher 
provides to consumer reporting agencies; and
    3. The technology used by the furnisher to furnish information 
to consumer reporting agencies.
    Regulatory Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer:
    (a) Accurately identifies the appropriate consumer;
    (b) Accurately reports the terms of those accounts or other 
relationships; and
    (c) Accurately reports the consumer's performance and other 
conduct with respect to the account or other relationship with the 
consumer;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer avoids misleading a consumer 
report user as to the consumer's creditworthiness, credit standing, 
credit capacity, character, general reputation, personal 
characteristics, or mode of living;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations;
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship;
    5. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is reported in a form and manner 
that is designed to minimize the likelihood that the information, 
although accurate, may be erroneously reflected in a consumer 
report, for example, by ensuring that the information is reported 
with appropriate identifying information about the consumer to whom 
it pertains, in a standardized and clearly understandable form and 
manner, and with a date specifying the time period to which the 
information pertains; and
    6. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is substantiated by the 
furnisher's own records.
    Guidelines Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is accurate. Accuracy means that 
any information that a furnisher provides to a consumer reporting 
agency about an account or other relationship with the consumer 
reflects without error the terms of and liability for the account or 
other relationship and the consumer's performance and other conduct 
with respect to the account or other relationship;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is furnished with integrity. 
Integrity means that any information that a furnisher provides to a 
consumer reporting agency about an account or other relationship 
with the consumer is:
    (i) Reported in a form and manner that is designed to minimize 
the likelihood that the information, although accurate, may be 
erroneously reflected in a consumer report, for example, by ensuring 
that the information is:
    (A) Reported with appropriate identifying information about the 
consumer to whom it pertains;
    (B) Reported in a standardized and clearly understandable form 
and manner; and
    (C) Reported with a date specifying the time period to which the 
information pertains; and
    (ii) Substantiated by the furnisher's own records;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations; and
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship.

[[Page 70973]]

II. Accuracy and Integrity Duties of Furnishers Under the FCRA

    A furnisher's policies and procedures should address compliance 
with all applicable requirements imposed on the furnisher under the 
FCRA, including the duties to: \1\
---------------------------------------------------------------------------

    \1\ This is not a complete listing of furnisher duties relating 
to accuracy and integrity. Furnishers should consult the FCRA to 
determine what additional duties may apply.
---------------------------------------------------------------------------

    A. Promptly notify the consumer reporting agency of the 
furnisher's determination that furnished information is not complete 
or accurate, for a furnisher that regularly and in the ordinary 
course of business furnishes information; provide any corrections, 
or any additional information, that is necessary to make the 
furnished information complete and accurate; and not thereafter 
furnish information that remains incomplete or inaccurate. 15 U.S.C. 
1681s-2(a)(2).
    B. Provide notice of a dispute by a consumer about the accuracy 
or completeness of information furnished to a consumer reporting 
agency. 15 U.S.C. 1681s-2(a)(3).
    C. Report voluntary closure of a credit account by the consumer 
in information regularly furnished for the period in which the 
credit account is closed, for a furnisher that regularly and in the 
ordinary course of business furnishes information about consumer 
credit accounts. 15 U.S.C. 1681s-2(a)(4).
    D. Notify the consumer reporting agency of the date of 
delinquency on an account not later than 90 days after the furnisher 
furnishes information to the consumer reporting agency regarding 
action taken on the delinquent account (including placement for 
collection, charge to profit or loss, or any similar action). Date 
of delinquency means the month and year of the commencement of the 
delinquency on the account that immediately preceded the action. 15 
U.S.C. 1681s-2(a)(5).
    E. Have in place reasonable procedures to respond to any 
notification that the furnisher receives from a consumer reporting 
agency under section 605B of the FCRA, relating to the blocking of 
information resulting from identity theft and to prevent the 
refurnishing of such blocked information. 15 U.S.C. 1681s-
2(a)(6)(A).
    F. Not furnish to a consumer reporting agency information that 
purports to relate to the consumer if the consumer submits an 
identity theft report to the furnisher (at the address specified by 
that furnisher for receiving such reports) stating that such 
information maintained by that furnisher resulted from identity 
theft. (This restriction does not apply if the furnisher 
subsequently knows or is informed by the consumer that the 
information is correct.) 15 U.S.C. 1681s-2(a)(6)(B).
    G. After receiving a notice of dispute from a consumer reporting 
agency, in a timely manner: Conduct an investigation; review all 
relevant information the consumer reporting agency provides; report 
the results of the investigation to the consumer reporting agency; 
report incomplete or inaccurate information to all nationwide 
consumer reporting agencies to which it reported the information; 
and modify, delete, or permanently block incomplete or inaccurate 
information or information that cannot be verified. 15 U.S.C. 1681s-
2(b).
    H. Investigate direct disputes as required by 12 CFR 222.43 and 
15 U.S.C. 1681s-2(a)(8).

III. Establishing and Implementing Policies and Procedures

    In establishing and implementing its policies and procedures, a 
furnisher should:
    A. Identify practices or activities of the furnisher that can 
compromise the accuracy and integrity of information furnished to 
consumer reporting agencies, such as by:
    1. Reviewing its existing practices and activities, including 
the technological means and other methods it uses to furnish 
information to consumer reporting agencies and the frequency and 
timing of its furnishing of information, such as through an audit;
    2. Reviewing historical records relating to accuracy or 
integrity or to disputes, or other information relating to the 
accuracy and integrity of information provided by the furnisher to 
consumer reporting agencies and the types of errors, omissions, or 
other problems that may have affected the accuracy and integrity of 
information it has furnished about consumers to consumer reporting 
agencies; and
    3. Obtaining feedback from consumer reporting agencies, 
consumers, the furnisher's staff, or other appropriate parties.
    B. Evaluate the effectiveness of existing policies and 
procedures of the furnisher regarding the accuracy and integrity of 
information furnished to consumer reporting agencies; consider 
whether new, additional, or different policies and procedures are 
necessary; and consider whether implementation of existing policies 
and procedures should be modified to enhance the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies.
    C. Evaluate the effectiveness of specific methods (including 
technological means) the furnisher uses to provide information to 
consumer reporting agencies; how those methods may affect the 
accuracy and integrity of the information it provides to consumer 
reporting agencies; and whether new, additional, or different 
methods (including technological means) should be used to provide 
information to consumer reporting agencies to enhance the accuracy 
and integrity of that information.

IV. Specific Components of Policies and Procedures

    A furnisher's policies and procedures should address the 
following:
    A. Establishing and implementing a system for furnishing 
information about consumers to consumer reporting agencies that is 
appropriate to the nature, size, complexity, and scope of the 
furnisher's business operations.
    B. Using standard data reporting formats and standard procedures 
for compiling and furnishing data, where feasible, such as the 
electronic transmission of information about consumers to consumer 
reporting agencies.
    C. Ensuring that the furnisher maintains its own records for a 
reasonable period of time, not less than any applicable 
recordkeeping requirement, in order to substantiate the accuracy of 
any information about consumers it furnishes that is subject to a 
direct dispute.
    D. Establishing and implementing appropriate internal controls 
regarding the accuracy and integrity of information about consumers 
furnished to consumer reporting agencies, such as by implementing 
standard procedures, verifying random samples, and conducting 
regular reviews of information provided to consumer reporting 
agencies.
    E. Training staff that participates in activities related to the 
furnishing of information about consumers to consumer reporting 
agencies to implement the policies and procedures.
    F. Providing for appropriate and effective oversight of relevant 
service providers whose activities may affect the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies to ensure compliance with the policies and 
procedures.
    G. Furnishing information about consumers to consumer reporting 
agencies following mergers, portfolio acquisitions or sales, or 
other acquisitions or transfers of accounts or other debts in a 
manner that prevents re-aging of information, duplicative reporting, 
or other problems affecting the accuracy or integrity of the 
information furnished.
    H. Attempting to obtain the information listed in Sec.  
222.43(d) of this part from a consumer before determining that the 
consumer's dispute is frivolous or irrelevant.
    I. Ensuring that deletions, updates, and corrections furnished 
to consumer reporting agencies are reflected in business systems to 
avoid furnishing erroneous information.
    J. Conducting investigations of direct disputes in a manner that 
promotes the efficient resolution of such disputes.
    K. Ensuring that technological and other means of communication 
with consumer reporting agencies are designed to prevent duplicative 
reporting of accounts, erroneous association of information with the 
wrong consumer(s), and other occurrences that may compromise the 
accuracy and integrity of information contained in consumer reports.
    L. Providing consumer reporting agencies with sufficient 
identifying information in the furnisher's possession about each 
consumer about whom information is furnished to enable the consumer 
reporting agency properly to identify the consumer.
    M. Conducting a periodic evaluation of its own practices, 
consumer reporting agency practices of which the furnisher is aware, 
investigations of disputed information, corrections of inaccurate 
information, means of communication, and other factors that may 
affect the accuracy and integrity of information furnished to 
consumer reporting agencies.

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

    For the reasons discussed in the joint preamble, the Federal 
Deposit Insurance

[[Page 70974]]

Corporation proposes to amend chapter III of title 12 of the Code of 
Federal Regulations by amending 12 CFR part 334 as follows:

PART 334--FAIR CREDIT REPORTING

    1. The authority citation for part 334 is revised to read as 
follows:

    Authority: 12 U.S.C. 1818, 1819 (Tenth), and 1831p-1; 15 U.S.C. 
1681a, 1681b, 1681c, 1681m, 1681s, 1681s-2, 1681s-3, 1681t, 1681w, 
and 6801 et seq.; Pub. L. 108-159, 117 Stat. 1952.
    2. Add subpart E to part 334 to read as follows:
Subpart E--Duties of Furnishers of Information
Sec.
334.40 Scope.
334.41 Definitions.
334.42 Reasonable policies and procedures concerning the accuracy 
and integrity of furnished information.
334.43 Direct disputes.

Subpart E--Duties of Furnishers of Information


Sec.  334.40  Scope.

    This subpart applies to a financial institution or creditor that is 
an insured state nonmember bank, insured state licensed branch of a 
foreign bank, or a subsidiary of such entities (except dealers, persons 
providing insurance, investment companies, and investment advisers).


Sec.  334.41  Definitions.

    For purposes of this subpart and Appendix E of this part, the 
following definitions apply:
    Regulatory Definition Approach for Defining ``Accuracy'' and 
``Integrity'' Follows:
    (a) Accuracy means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer that reflects without error the terms of and 
liability for the account or other relationship and the consumer's 
performance and other conduct with respect to the account or other 
relationship.
    (b) Integrity means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer does not omit any term, such as a credit limit or 
opening date, of that account or other relationship, the absence of 
which can reasonably be expected to contribute to an incorrect 
evaluation by a user of a consumer report of a consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living.
    (c) Furnisher means an entity that furnishes information relating 
to consumers to one or more consumer reporting agencies. An entity is 
not a furnisher when it provides information to a consumer reporting 
agency solely to obtain a consumer report in accordance with sections 
604(a) and (f) of the FCRA.
    (d) Identity theft has the same meaning as in 16 CFR 603.2(a).
    (e) Direct dispute means a dispute submitted directly to a 
furnisher by a consumer concerning the accuracy of any information 
contained in a consumer report relating to the consumer.


Sec.  334.42  Reasonable policies and procedures concerning the 
accuracy and integrity of furnished information.

    (a) Policies and procedures. Each furnisher must establish and 
implement reasonable written policies and procedures regarding the 
accuracy and integrity of the information relating to consumers that it 
furnishes to a consumer reporting agency. The policies and procedures 
must be appropriate to the nature, size, complexity, and scope of each 
furnisher's activities.
    (b) Guidelines. Each furnisher must consider the guidelines in 
Appendix E of this part in developing its policies and procedures 
required by this section, and incorporate those guidelines that are 
appropriate.
    (c) Reviewing and updating policies and procedures. Each furnisher 
must review its policies and procedures required by this section 
periodically and update them as necessary to ensure their continued 
effectiveness.


Sec.  334.43  Direct disputes.

    (a) General rule. Except as otherwise provided in this section, a 
furnisher must investigate a direct dispute if it relates to:
    (1) The consumer's liability for a credit account or other debt 
with the furnisher, such as direct disputes relating to whether there 
is or has been identity theft or fraud against the consumer, whether 
there is individual or joint liability on an account, or whether the 
consumer is an authorized user of a credit account;
    (2) The terms of a credit account or other debt with the furnisher, 
such as direct disputes relating to the type of account, principal 
balance, scheduled payment amount on an account, or the amount of the 
reported credit limit on an open-end account;
    (3) The consumer's performance or other conduct concerning an 
account or other relationship with the furnisher, such as direct 
disputes relating to the current payment status, high balance, date a 
payment was made, the amount of a payment made, or the date an account 
was opened or closed; or
    (4) Any other information contained in a consumer report regarding 
an account or other relationship with the furnisher that bears on the 
consumer's credit worthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode of 
living.
    (b) Exceptions. The requirements of paragraph (a) of this section 
do not apply to a furnisher if:
    (1) The direct dispute relates to:
    (i) The consumer's identifying information (other than a direct 
dispute relating to a consumer's liability for a credit account or 
other debt with the furnisher, as provided in paragraph (a)(1) of this 
section) such as name(s), date of birth, Social Security number, 
telephone number(s), or address(es);
    (ii) The identity of past or present employers;
    (iii) Inquiries or requests for a consumer report;
    (iv) Information derived from public records, such as judgments, 
bankruptcies, liens, and other legal matters; or
    (v) Information related to fraud alerts or active duty alerts; or
    (2) The direct 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 15 U.S.C. 1679a(3), or an 
entity that would be a credit repair organization, but for 15 U.S.C. 
1679a(3)(B)(i).
    (c) Direct dispute address. A furnisher is required to investigate 
a direct dispute only if a consumer submits a dispute notice to the 
furnisher at:
    (1) The address of a furnisher provided by a furnisher and set 
forth on a consumer report relating to the consumer;
    (2) An address clearly and conspicuously specified by the furnisher 
for submitting direct disputes that is provided to the consumer in 
writing or electronically (if the consumer has agreed to the electronic 
delivery of information from the furnisher); or
    (3) Any business address of the furnisher if the furnisher has not 
so specified and provided an address for submitting direct disputes 
under paragraph (c)(2) of this section.
    (d) Direct dispute notice contents. A dispute notice must include:
    (1) The name, address, and telephone number of the consumer;
    (2) Sufficient information to identify the account or other 
relationship that is in dispute, such as an account number;

[[Page 70975]]

    (3) The specific information that the consumer is disputing and an 
explanation of the basis for the dispute; and
    (4) All supporting documentation or other information reasonably 
required by the furnisher to substantiate the basis of the dispute. 
This documentation may include, for example: a copy of the consumer 
report that contains the allegedly inaccurate information; a police 
report; a fraud or identity theft affidavit; a court order; or account 
statements.
    (e) Frivolous or irrelevant disputes. (1) A furnisher is not 
required to investigate a direct dispute if the furnisher has 
reasonably determined that the dispute is frivolous or irrelevant. A 
dispute may be frivolous or irrelevant if:
    (i) The consumer did not provide sufficient information to 
investigate the disputed information as required by paragraph (d) of 
this section;
    (ii) The direct dispute is substantially the same as a dispute 
previously submitted by or on behalf of the consumer, either directly 
to the furnisher or through a consumer reporting agency, with respect 
to which the furnisher has already satisfied the applicable 
requirements of the Act or this section; provided, however, that a 
direct dispute is not substantially the same as a dispute previously 
submitted if the dispute includes information listed in paragraph (d) 
of this section that had not previously been provided to the furnisher; 
or
    (iii) The furnisher is not required to investigate the direct 
dispute under this section.
    (2) Notice of determination. Upon making a determination that a 
dispute is frivolous or irrelevant, the furnisher must notify the 
consumer of the determination not later than five business days after 
making the determination, by mail or, if authorized by the consumer for 
that purpose, by any other means available to the furnisher.
    (3) Contents of notice of determination that a dispute is frivolous 
or irrelevant. A notice of determination that a dispute is frivolous or 
irrelevant must include the reasons for such determination and identify 
any information required to investigate the disputed information, which 
may consist of a standardized form describing the general nature of 
such information.
    3. Add Appendix E to part 334 to read as follows:

Appendix E to Part 334--Interagency Guidelines Concerning the Accuracy 
and Integrity of Information Furnished to Consumer Reporting Agencies

    The FDIC encourages voluntary furnishing of information to 
consumer reporting agencies. Section 334.42 of this part requires 
each furnisher to establish and implement reasonable written 
policies and procedures concerning the accuracy and integrity of the 
information it furnishes to consumer reporting agencies. Under Sec.  
334.42(b), the furnisher must consider the guidelines set forth 
below in developing these policies and procedures. In establishing 
these policies and procedures, a furnisher may include any of its 
existing policies and procedures that are relevant and appropriate.

I. Nature, Scope, and Objectives of Policies and Procedures

    A. Nature and Scope. Section 334.42(a) of this part requires 
that a furnisher's policies and procedures be appropriate to the 
nature, size, complexity, and scope of the furnisher's activities. 
The furnisher's policies and procedures should reflect, for example:
    1. The types of business activities in which the furnisher 
engages;
    2. The nature and frequency of the information the furnisher 
provides to consumer reporting agencies; and
    3. The technology used by the furnisher to furnish information 
to consumer reporting agencies.
    Regulatory Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer:
    (a) Accurately identifies the appropriate consumer;
    (b) Accurately reports the terms of those accounts or other 
relationships;
    (c) Accurately reports the consumer's performance and other 
conduct with respect to the account or other relationship with the 
consumer;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer avoids misleading a consumer 
report user as to the consumer's creditworthiness, credit standing, 
credit capacity, character, general reputation, personal 
characteristics, or mode of living;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations;
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship;
    5. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is reported in a form and manner 
that is designed to minimize the likelihood that the information, 
although accurate, may be erroneously reflected in a consumer 
report, for example, by ensuring that the information is reported 
with appropriate identifying information about the consumer to which 
it pertains, in a standardized and clearly understandable form and 
manner, with a date specifying the time period to which the 
information pertains; and
    6. Ensure that the information it furnishes about accounts or 
other relationships with a furnisher is substantiated by the 
furnisher's own records.
    Guidelines Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is accurate. Accuracy means that 
any information that a furnisher provides to a consumer reporting 
agency about an account or other relationship with the consumer 
reflects without error the terms of and liability for the account or 
other relationship and the consumer's performance and other conduct 
with respect to the account or other relationship;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is furnished with integrity. 
Integrity means that any information that a furnisher provides to a 
consumer reporting agency about an account or other relationship 
with the consumer is:
    (i) Reported in a form and manner that is designed to minimize 
the likelihood that the information, although accurate, may be 
erroneously reflected in a consumer report, for example, by ensuring 
that the information is:
    (A) Reported with appropriate identifying information about the 
consumer to whom it pertains;
    (B) Reported in a standardized and clearly understandable form 
and manner; and
    (C) Reported with a date specifying the time period to which the 
information pertains; and
    (ii) Substantiated by the furnisher's own records;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations; and
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship.

[[Page 70976]]

II. Accuracy and Integrity Duties of Furnishers Under the FCRA

    A furnisher's policies and procedures should address compliance 
with all applicable requirements imposed on the furnisher under the 
FCRA, including the duties to: \1\
---------------------------------------------------------------------------

    \1\ This is not a complete listing of furnisher duties relating 
to accuracy and integrity. Furnishers should consult the FCRA to 
determine what additional duties may apply.
---------------------------------------------------------------------------

    A. Promptly notify the consumer reporting agency of the 
furnisher's determination that furnished information is not complete 
or accurate, for a furnisher that regularly and in the ordinary 
course of business furnishes information; provide any corrections, 
or any additional information, that is necessary to make the 
furnished information complete and accurate; and not thereafter 
furnish information that remains incomplete or inaccurate. 15 U.S.C. 
1681s-2(a)(2).
    B. Provide notice of a dispute by a consumer about the accuracy 
or completeness of information furnished to a consumer reporting 
agency. 15 U.S.C. 1681s-2(a)(3).
    C. Report voluntary closure of a credit account by the consumer 
in information regularly furnished for the period in which the 
credit account is closed, for a furnisher that regularly and in the 
ordinary course of business furnishes information about consumer 
credit accounts. 15 U.S.C. 1681s-2(a)(4).
    D. Notify the consumer reporting agency of the date of 
delinquency on an account not later than 90 days after the furnisher 
furnishes information to the consumer reporting agency regarding 
action taken on the delinquent account (including placement for 
collection, charge to profit or loss, or any similar action). Date 
of delinquency means the month and year of the commencement of the 
delinquency on the account that immediately preceded the action. 15 
U.S.C. 1681s-2(a)(5).
    E. Have in place reasonable procedures to respond to any 
notification that the furnisher receives from a consumer reporting 
agency under section 605B of the FCRA, relating to the blocking of 
information resulting from identity theft and to prevent the 
refurnishing of such blocked information. 15 U.S.C. 1681s-
2(a)(6)(A).
    F. Not furnish to a consumer reporting agency information that 
purports to relate to the consumer if the consumer submits an 
identity theft report to the furnisher (at the address specified by 
that furnisher for receiving such reports) stating that such 
information maintained by that furnisher resulted from identity 
theft. (This restriction does not apply if the furnisher 
subsequently knows or is informed by the consumer that the 
information is correct.) 15 U.S.C. 1681s-2(a)(6)(B).
    G. After receiving a notice of dispute from a consumer reporting 
agency, in a timely manner: Conduct an investigation; review all 
relevant information the consumer reporting agency provides; report 
the results of the investigation to the consumer reporting agency; 
report incomplete or inaccurate information to all nationwide 
consumer reporting agencies to which it reported the information; 
and modify, delete, or permanently block incomplete or inaccurate 
information or information that cannot be verified. 15 U.S.C. 1681s-
2(b).
    H. Investigate direct disputes as required by 12 CFR 334.43 and 
15 U.S.C. 1681s-2(a)(8).

III. Establishing and Implementing Policies and Procedures

    In establishing and implementing its policies and procedures, a 
furnisher should:
    A. Identify practices or activities of the furnisher that can 
compromise the accuracy and integrity of information furnished to 
consumer reporting agencies, such as by:
    1. Reviewing its existing practices and activities, including 
the technological means and other methods it uses to furnish 
information to consumer reporting agencies and the frequency and 
timing of its furnishing of information, such as through an audit;
    2. Reviewing historical records relating to accuracy or 
integrity or to disputes, or other information relating to the 
accuracy and integrity of information provided by the furnisher to 
consumer reporting agencies and the types of errors, omissions, or 
other problems that may have affected the accuracy and integrity of 
information it has furnished about consumers to consumer reporting 
agencies; and
    3. Obtaining feedback from consumer reporting agencies, 
consumers, the furnisher's staff, or other appropriate parties.
    B. Evaluate the effectiveness of existing policies and 
procedures of the furnisher regarding the accuracy and integrity of 
information furnished to consumer reporting agencies; consider 
whether new, additional, or different policies and procedures are 
necessary; and consider whether implementation of existing policies 
and procedures should be modified to enhance the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies.
    C. Evaluate the effectiveness of specific methods (including 
technological means) the furnisher uses to provide information to 
consumer reporting agencies; how those methods may affect the 
accuracy and integrity of the information it provides to consumer 
reporting agencies; and whether new, additional, or different 
methods (including technological means) should be used to provide 
information to consumer reporting agencies to enhance the accuracy 
and integrity of that information.

IV. Specific Components of Policies and Procedures

    A furnisher's policies and procedures should address the 
following:
    A. Establishing and implementing a system for furnishing 
information about consumers to consumer reporting agencies that is 
appropriate to the nature, size, complexity, and scope of the 
furnisher's business operations.
    B. Using standard data reporting formats and standard procedures 
for compiling and furnishing data, where feasible, such as the 
electronic transmission of information about consumers to consumer 
reporting agencies.
    C. Ensuring that the furnisher maintains its own records for a 
reasonable period of time, not less than any applicable 
recordkeeping requirement, in order to substantiate the accuracy of 
any information about consumers it furnishes that is subject to a 
direct dispute.
    D. Establishing and implementing appropriate internal controls 
regarding the accuracy and integrity of information about consumers 
furnished to consumer reporting agencies, such as by implementing 
standard procedures, verifying random samples, and conducting 
regular reviews of information provided to consumer reporting 
agencies.
    E. Training staff that participates in activities related to the 
furnishing of information about consumers to consumer reporting 
agencies to implement the policies and procedures.
    F. Providing for appropriate and effective oversight of relevant 
service providers whose activities may affect the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies to ensure compliance with the policies and 
procedures.
    G. Furnishing information about consumers to consumer reporting 
agencies following mergers, portfolio acquisitions or sales, or 
other acquisitions or transfers of accounts or other debts in a 
manner that prevents re-aging of information, duplicative reporting, 
or other problems affecting the accuracy or integrity of the 
information furnished.
    H. Attempting to obtain the information listed in Sec.  --.43(d) 
from a consumer before determining that the consumer's dispute is 
frivolous or irrelevant.
    I. Ensuring that deletions, updates, and corrections furnished 
to consumer reporting agencies are reflected in business systems to 
avoid furnishing erroneous information.
    J. Conducting investigations of direct disputes in a manner that 
promotes the efficient resolution of such disputes.
    K. Ensuring that technological and other means of communication 
with consumer reporting agencies are designed to prevent duplicative 
reporting of accounts, erroneous association of information with the 
wrong consumer(s), and other occurrences that may compromise the 
accuracy and integrity of information contained in consumer reports.
    L. Providing consumer reporting agencies with sufficient 
identifying information in the furnisher's possession about each 
consumer about whom information is furnished to enable the consumer 
reporting agency properly to identify the consumer.
    M. Conducting a periodic evaluation of its own practices, 
consumer reporting agency practices, investigations of disputed 
information, corrections of inaccurate information, means of 
communication, and other factors that may affect the accuracy and 
integrity of information furnished to consumer reporting agencies.

Department of the Treasury

Office of Thrift Supervision

12 CFR Chapter V

Authority and Issuance

    For the reasons discussed in the joint preamble, the Office of 
Thrift

[[Page 70977]]

Supervision proposes to amend chapter V of title 12 of the Code of 
Federal Regulations by amending 12 CFR part 571 as follows:

PART 571--FAIR CREDIT REPORTING

    1. The authority citation for part 571 is revised to read as 
follows:

    Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 1828, 1831p-1, 
and 1881-1884; 15 U.S.C. 1681b, 1681c, 1681m, 1681s, 1681s-2, 1681s-
3, 1681t, and 1681w; 15 U.S.C. 6801 and 6805; Sec. 214 Pub. L. 108-
159, 117 Stat. 1952.

Subpart A--General Provisions

    2. Amend Sec.  571.1 by adding a new paragraph (b)(5) to read as 
follows:


Sec.  571.1  Purpose and scope.

* * * * *
    (b) * * *
    (5) The scope of subpart E of this part is stated in Sec.  571.40 
of this part.
* * * * *
    3. Add a new Subpart E to part 571 to read as follows:
Subpart E--Duties of Furnishers of Information
Sec.
571.40 Scope.
571.41 Definitions.
571.42 Reasonable policies and procedures concerning the accuracy 
and integrity of furnished information.
571.43 Direct disputes.

Subpart E--Duties of Furnishers of Information


Sec.  571.40  Scope.

    Subpart C of this part applies to savings associations whose 
deposits are insured by the Federal Deposit Insurance Corporation or, 
in accordance with Sec.  559.3(h)(1) of this chapter, federal savings 
association operating subsidiaries that are not functionally regulated 
within the meaning of section 5(c)(5) of the Bank Holding Company Act 
of 1956, as amended (12 U.S.C. 1844(c)(5).


Sec.  571.41  Definitions.

    For purposes of this subpart and Appendix E of this part, the 
following definitions apply:
    Regulatory Definition Approach for Defining ``Accuracy'' and 
``Integrity'' Follows:
    (a) Accuracy means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer reflects without error the terms of and liability for 
the account or other relationship and the consumer's performance and 
other conduct with respect to the account or other relationship.
    (b) Integrity means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer does not omit any term, such as a credit limit or 
opening date, of that account or other relationship, the absence of 
which can reasonably be expected to contribute to an incorrect 
evaluation by a user of a consumer report of a consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living.
    (c) Furnisher means an entity other than an individual consumer 
that furnishes information relating to consumers to one or more 
consumer reporting agencies. An entity is not a furnisher when it 
provides information to a consumer reporting agency solely to obtain a 
consumer report in accordance with sections 604(a) and (f) of the FCRA.
    (d) Identity theft has the same meaning as in 16 CFR 603.2(a).
    (e) Direct dispute means a dispute submitted directly to a 
furnisher by a consumer concerning the accuracy of any information 
contained in a consumer report relating to the consumer.


Sec.  571.42  Reasonable policies and procedures concerning the 
accuracy and integrity of furnished information.

    (a) Policies and procedures. Each furnisher must establish and 
implement reasonable written policies and procedures regarding the 
accuracy and integrity of the information relating to consumers that it 
furnishes to a consumer reporting agency. The policies and procedures 
must be appropriate to the nature, size, complexity, and scope of each 
furnisher's activities.
    (b) Guidelines. Each furnisher must consider the guidelines in 
Appendix E of this part in developing its policies and procedures 
required by this section, and incorporate those guidelines that are 
appropriate.
    (c) Reviewing and updating policies and procedures. Each furnisher 
must review its policies and procedures required by this section 
periodically and update them as necessary to ensure their continued 
effectiveness.


Sec.  571.43  Direct disputes.

    (a) General rule. Except as otherwise provided in this section, a 
furnisher must investigate a direct dispute if it relates to:
    (1) The consumer's liability for a credit account or other debt 
with the furnisher, such as direct disputes relating to whether there 
is or has been identity theft or fraud against the consumer, whether 
there is individual or joint liability on an account, or whether the 
consumer is an authorized user of a credit account;
    (2) The terms of a credit account or other debt with the furnisher, 
such as direct disputes relating to the credit limit on an open-end 
account, type of account, principal balance, scheduled payment amount 
on an account, or the amount of the reported credit limit on an open-
end account;
    (3) The consumer's performance or other conduct concerning an 
account or other relationship with the furnisher, such as direct 
disputes relating to the current payment status, high balance, date a 
payment was made, the amount of a payment made, or the date an account 
was opened or closed; or
    (4) Any other information contained in a consumer report regarding 
an account or other relationship with the furnisher that bears on the 
consumer's creditworthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode of 
living.
    (b) Exceptions. The requirements of paragraph (a) of this section 
do not apply to a furnisher if:
    (1) The direct dispute relates to:
    (i) The consumer's identifying information (other than a direct 
dispute relating to a consumer's liability for a credit account or 
other debt with the furnisher, as provided in paragraph (a)(1) of this 
section) such as name(s), date of birth, Social Security number, 
telephone number(s), or address(es);
    (ii) The identity of past or present employers;
    (iii) Inquiries or requests for a consumer report;
    (iv) Information derived from public records, such as judgments, 
bankruptcies, liens, and other legal matters (unless provided by a 
furnisher with an account or other relationship with the consumer); or
    (v) Information related to fraud alerts or active duty alerts; or
    (2) The direct 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 15 U.S.C. 1679a(3), or an 
entity that would be a credit repair organization, but for 15 U.S.C. 
1679a(3)(B)(i).
    (c) Direct dispute address. A furnisher is required to investigate 
a direct dispute only if a consumer submits a dispute notice to the 
furnisher at:
    (1) The address of a furnisher provided by a furnisher and set 
forth on a consumer report relating to the consumer;

[[Page 70978]]

    (2) An address clearly and conspicuously specified by the furnisher 
for submitting direct disputes that is provided to the consumer in 
writing or electronically (if the consumer has agreed to the electronic 
delivery of information from the furnisher); or
    (3) Any business address of the furnisher if the furnisher has not 
so specified and provided an address for submitting direct disputes 
under paragraph (c)(2) of this section.
    (d) Direct dispute notice contents. A dispute notice must include:
    (1) The name, address, and telephone number of the consumer;
    (2) Sufficient information to identify the account or other 
relationship that is in dispute, such as an account number;
    (3) The specific information that the consumer is disputing and an 
explanation of the basis for the dispute; and
    (4) All supporting documentation or other information reasonably 
required by the furnisher to substantiate the basis of the dispute. 
This documentation may include, for example: A copy of the consumer 
report that contains the allegedly inaccurate information; a police 
report; a fraud or identity theft affidavit; a court order; or account 
statements.
    (e) Frivolous or irrelevant disputes. (1) A furnisher is not 
required to investigate a direct dispute if the furnisher has 
reasonably determined that the dispute is frivolous or irrelevant. A 
dispute may be frivolous or irrelevant if:
    (i) The consumer did not provide sufficient information to 
investigate the disputed information as required by paragraph (d) of 
this section;
    (ii) The direct dispute is substantially the same as a dispute 
previously submitted by or on behalf of the consumer, either directly 
to the furnisher or through a consumer reporting agency, with respect 
to which the furnisher has already satisfied the applicable 
requirements of the Act or this section; provided, however, that a 
direct dispute is not substantially the same as a dispute previously 
submitted if the dispute includes information listed in paragraph (d) 
of this section that had not previously been provided to the furnisher; 
or
    (iii) The furnisher is not required to investigate the direct 
dispute under this section.
    (2) Notice of determination. Upon making a determination that a 
dispute is frivolous or irrelevant, the furnisher must notify the 
consumer of the determination not later than five business days after 
making the determination by mail or, if authorized by the consumer for 
that purpose, by any other means available to the furnisher.
    (3) Contents of notice of determination that a dispute is frivolous 
or irrelevant. A notice of determination that a dispute is frivolous or 
irrelevant must include the reasons for such determination and identify 
any information required to investigate the disputed information, which 
may consist of a standardized form describing the general nature of 
such information.
    4. Add a new Appendix E to part 571 to read as follows:

Appendix E to Part 571--Interagency Guidelines Concerning the Accuracy 
and Integrity of Information Furnished to Consumer Reporting Agencies

    OTS encourages voluntary furnishing of information to consumer 
reporting agencies. Section 571.42 of this part requires each 
furnisher to establish and implement reasonable written policies and 
procedures concerning the accuracy and integrity of the information 
it furnishes to consumer reporting agencies. Under Sec.  571.42(b) 
of this part, the furnisher must consider the guidelines set forth 
below in developing these policies and procedures. In establishing 
these policies and procedures, a furnisher may include any of its 
existing policies and procedures that are relevant and appropriate.

I. Nature, Scope, and Objectives of Policies and Procedures

    A. Nature and Scope. Section 571.42(a) of this part requires 
that a furnisher's policies and procedures be appropriate to the 
nature, size, complexity, and scope of the furnisher's activities. 
The furnisher's policies and procedures should reflect, for example:
    1. The types of business activities in which the furnisher 
engages;
    2. The nature and frequency of the information the furnisher 
provides to consumer reporting agencies; and
    3. The technology used by the furnisher to furnish information 
to consumer reporting agencies.
    Regulatory Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer:
    (a) Accurately identifies the appropriate consumer;
    (b) Accurately reports the terms of those accounts or other 
relationships; and
    (c) Accurately reports the consumer's performance and other 
conduct with respect to the account or other relationship with the 
consumer;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer avoids misleading a consumer 
report user as to the consumer's creditworthiness, credit standing, 
credit capacity, character, general reputation, personal 
characteristics, or mode of living;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations;
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship;
    5. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is reported in a form and manner 
that is designed to minimize the likelihood that the information, 
although accurate, may be erroneously reflected in a consumer 
report, for example, by ensuring that the information is reported 
with appropriate identifying information about the consumer to whom 
it pertains, in a standardized and clearly understandable form and 
manner, and with a date specifying the time period to which the 
information pertains; and
    6. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is substantiated by the 
furnisher's own records.
    Guidelines Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is accurate. Accuracy means that 
any information that a furnisher provides to a consumer reporting 
agency about an account or other relationship with the consumer 
reflects without error the terms of and liability for the account or 
other relationship and the consumer's performance and other conduct 
with respect to the account or other relationship;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is furnished with integrity. 
Integrity means that any information that a furnisher provides to a 
consumer reporting agency about an account or other relationship 
with the consumer is:
    (i) Reported in a form and manner that is designed to minimize 
the likelihood that the information, although accurate, may be 
erroneously reflected in a consumer report, for example, by ensuring 
that the information is:
    (A) Reported with appropriate identifying information about the 
consumer to whom it pertains;
    (B) Reported in a standardized and clearly understandable form 
and manner; and
    (C) Reported with a date specifying the time period to which the 
information pertains; and
    (ii) Substantiated by the furnisher's own records;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about

[[Page 70979]]

the accuracy or integrity of information in consumer reports and 
takes appropriate actions based on the outcome of such 
investigations; and
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship.

II. Accuracy and Integrity Duties of Furnishers Under the FCRA

    A furnisher's policies and procedures should address compliance 
with all applicable requirements imposed on the furnisher under the 
FCRA, including the duties to: \1\
---------------------------------------------------------------------------

    \1\ This is not a complete listing of furnisher duties relating 
to accuracy and integrity. Furnishers should consult the FCRA to 
determine what additional duties may apply.
---------------------------------------------------------------------------

    A. Promptly notify the consumer reporting agency of the 
furnisher's determination that furnished information is not complete 
or accurate, for a furnisher that regularly and in the ordinary 
course of business furnishes information; provide any corrections, 
or any additional information, that is necessary to make the 
furnished information complete and accurate; and not thereafter 
furnish information that remains incomplete or inaccurate. 15 U.S.C. 
1681s-2(a)(2).
    B. Provide notice of a dispute by a consumer about the accuracy 
or completeness of information furnished to a consumer reporting 
agency. 15 U.S.C. 1681s-2(a)(3).
    C. Report voluntary closure of a credit account by the consumer 
in information regularly furnished for the period in which the 
credit account is closed, for a furnisher that regularly and in the 
ordinary course of business furnishes information about consumer 
credit accounts. 15 U.S.C. 1681s-2(a)(4).
    D. Notify the consumer reporting agency of the date of 
delinquency on an account not later than 90 days after the furnisher 
furnishes information to the consumer reporting agency regarding 
action taken on the delinquent account (including placement for 
collection, charge to profit or loss, or any similar action). Date 
of delinquency means the month and year of the commencement of the 
delinquency on the account that immediately preceded the action. 15 
U.S.C. 1681s-2(a)(5).
    E. Have in place reasonable procedures to respond to any 
notification that the furnisher receives from a consumer reporting 
agency under section 605B of the FCRA, relating to the blocking of 
information resulting from identity theft and to prevent the 
refurnishing of such blocked information. 15 U.S.C. 1681s-
2(a)(6)(A).
    F. Not furnish to a consumer reporting agency information that 
purports to relate to the consumer if the consumer submits an 
identity theft report to the furnisher (at the address specified by 
that furnisher for receiving such reports) stating that such 
information maintained by that furnisher resulted from identity 
theft. (This restriction does not apply if the furnisher 
subsequently knows or is informed by the consumer that the 
information is correct.) 15 U.S.C. 1681s-2(a)(6)(B).
    G. After receiving a notice of dispute from a consumer reporting 
agency, in a timely manner: Conduct an investigation; review all 
relevant information the consumer reporting agency provides; report 
the results of the investigation to the consumer reporting agency; 
report incomplete or inaccurate information to all nationwide 
consumer reporting agencies to which it reported the information; 
and modify, delete, or permanently block incomplete or inaccurate 
information or information that cannot be verified. 15 U.S.C. 1681s-
2(b).
    H. Investigate direct disputes as required by Sec.  571.43 of 
this part and 15 U.S.C. 1681s-2(a)(8).

III. Establishing and Implementing Policies and Procedures

    In establishing and implementing its policies and procedures, a 
furnisher should:
    A. Identify practices or activities of the furnisher that can 
compromise the accuracy and integrity of information furnished to 
consumer reporting agencies, such as by:
    1. Reviewing its existing practices and activities, including 
the technological means and other methods it uses to furnish 
information to consumer reporting agencies and the frequency and 
timing of its furnishing of information, such as through an audit;
    2. Reviewing historical records relating to accuracy or 
integrity or to disputes, or other information relating to the 
accuracy and integrity of information provided by the furnisher to 
consumer reporting agencies and the types of errors, omissions, or 
other problems that may have affected the accuracy and integrity of 
information it has furnished about consumers to consumer reporting 
agencies; and
    3. Obtaining feedback from consumer reporting agencies, 
consumers, the furnisher's staff, or other appropriate parties.
    B. Evaluate the effectiveness of existing policies and 
procedures of the furnisher regarding the accuracy and integrity of 
information furnished to consumer reporting agencies; consider 
whether new, additional, or different policies and procedures are 
necessary; and consider whether implementation of existing policies 
and procedures should be modified to enhance the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies.
    C. Evaluate the effectiveness of specific methods (including 
technological means) the furnisher uses to provide information to 
consumer reporting agencies; how those methods may affect the 
accuracy and integrity of the information it provides to consumer 
reporting agencies; and whether new, additional, or different 
methods (including technological means) should be used to provide 
information to consumer reporting agencies to enhance the accuracy 
and integrity of that information.

IV. Specific Components of Policies and Procedures

    A furnisher's policies and procedures should address the 
following:
    A. Establishing and implementing a system for furnishing 
information about consumers to consumer reporting agencies that is 
appropriate to the nature, size, complexity, and scope of the 
furnisher's business operations.
    B. Using standard data reporting formats and standard procedures 
for compiling and furnishing data, where feasible, such as the 
electronic transmission of information about consumers to consumer 
reporting agencies.
    C. Ensuring that the furnisher maintains its own records for a 
reasonable period of time, not less than any applicable 
recordkeeping requirement, in order to substantiate the accuracy of 
any information about consumers it furnishes that is subject to a 
direct dispute.
    D. Establishing and implementing appropriate internal controls 
regarding the accuracy and integrity of information about consumers 
furnished to consumer reporting agencies, such as by implementing 
standard procedures, verifying random samples, and conducting 
regular reviews of information provided to consumer reporting 
agencies.
    E. Training staff that participates in activities related to the 
furnishing of information about consumers to consumer reporting 
agencies to implement the policies and procedures.
    F. Providing for appropriate and effective oversight of relevant 
service providers whose activities may affect the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies to ensure compliance with the policies and 
procedures.
    G. Furnishing information about consumers to consumer reporting 
agencies following mergers, portfolio acquisitions or sales, or 
other acquisitions or transfers of accounts or other debts in a 
manner that prevents re-aging of information, duplicative reporting, 
or other problems affecting the accuracy or integrity of the 
information furnished.
    H. Attempting to obtain the information listed in Sec.  
571.43(d) of this part from a consumer before determining that the 
consumer's dispute is frivolous or irrelevant.
    I. Ensuring that deletions, updates, and corrections furnished 
to consumer reporting agencies are reflected in business systems to 
avoid furnishing erroneous information.
    J. Conducting investigations of direct disputes in a manner that 
promotes the efficient resolution of such disputes.
    K. Ensuring that technological and other means of communication 
with consumer reporting agencies are designed to prevent duplicative 
reporting of accounts, erroneous association of information with the 
wrong consumer(s), and other occurrences that may compromise the 
accuracy and integrity of information contained in consumer reports.
    L. Providing consumer reporting agencies with sufficient 
identifying information in the furnisher's possession about each 
consumer about whom information is furnished to enable the consumer 
reporting agency properly to identify the consumer.
    M. Conducting a periodic evaluation of its own practices, 
consumer reporting agency

[[Page 70980]]

practices of which the furnisher is aware, investigations of 
disputed information, corrections of inaccurate information, means 
of communication, and other factors that may affect the accuracy and 
integrity of information furnished to consumer reporting agencies.

National Credit Union Administration

12 CFR Chapter VII

Authority and Issuance

    For the reasons discussed in the joint preamble, the National 
Credit Union Administration proposes to amend chapter VII of title 12 
of the Code of Federal Regulations by amending 12 CFR part 717 as 
follows:

PART 717--FAIR CREDIT REPORTING

    1. Revise the authority citation for part 717 to read as follows:

    Authority: 12 U.S.C. 1751 et seq.; 15 U.S.C. 1681a, 1681b, 
1681c, 1681m, 1681s, 1681s-1, 1681t, 1681w, 6801 and 6805; Public 
Law 108-159, 117 Stat. 1952.

    2. Add a new subpart E to part 717 to read as follows:
Subpart E--Duties of Furnishers of Information
Sec.
717.40 Scope.
717.41 Definitions.
717.42 Reasonable policies and procedures concerning the accuracy 
and integrity of furnished information.
717.43 Direct disputes.

Subpart E--Duties of Furnishers of Information


Sec.  717.40  Scope.

    This subpart applies to a federal credit union that furnishes 
information to a consumer reporting agency.


Sec.  717.41  Definitions.

    For purposes of this subpart and Appendix E of this part, the 
following definitions apply:
    Regulatory Definition Approach for Defining ``Accuracy'' and 
``Integrity'' Follows:
    (a) Accuracy means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer reflects without error the terms of and liability for 
the account or other relationship and the consumer's performance and 
other conduct with respect to the account or other relationship.
    (b) Integrity means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer does not omit any term, such as a credit limit or 
opening date, of that account or other relationship, the absence of 
which can reasonably be expected to contribute to an incorrect 
evaluation by a user of a consumer report of a consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living.
    (c) Furnisher means an entity other than an individual consumer 
that furnishes information relating to consumers to one or more 
consumer reporting agencies. An entity is not a furnisher when it 
provides information to a consumer reporting agency solely to obtain a 
consumer report in accordance with sections 604(a) and (f) of the FCRA.
    (d) Identity theft has the same meaning as in 16 CFR 603.2(a).
    (e) Direct dispute means a dispute submitted directly to a 
furnisher by a consumer concerning the accuracy of any information 
contained in a consumer report relating to the consumer.


Sec.  717.42  Reasonable policies and procedures concerning the 
accuracy and integrity of furnished information.

    (a) Policies and procedures. Each furnisher must establish and 
implement reasonable written policies and procedures regarding the 
accuracy and integrity of the information relating to consumers that it 
furnishes to a consumer reporting agency. The policies and procedures 
must be appropriate to the nature, size, complexity, and scope of each 
furnisher's activities.
    (b) Guidelines. Each furnisher must consider the guidelines in 
Appendix E of this part in developing its policies and procedures 
required by this section, and incorporate those guidelines that are 
appropriate.
    (c) Reviewing and updating policies and procedures. Each furnisher 
must review its policies and procedures required by this section 
periodically and update them as necessary to ensure their continued 
effectiveness.


Sec.  717.43  Direct disputes.

    (a) General rule. Except as otherwise provided in this section, a 
furnisher must investigate a direct dispute if it relates to:
    (1) The consumer's liability for a credit account or other debt 
with the furnisher, such as direct disputes relating to whether there 
is or has been identity theft or fraud against the consumer, whether 
there is individual or joint liability on an account, or whether the 
consumer is an authorized user of a credit account;
    (2) The terms of a credit account or other debt with the furnisher, 
such as direct disputes relating to the type of account, principal 
balance, scheduled payment amount on an account, or the amount of the 
reported credit limit on an open-end account;
    (3) The consumer's performance or other conduct concerning an 
account or other relationship with the furnisher, such as direct 
disputes relating to the current payment status, high balance, date a 
payment was made, the amount of a payment made, or the date an account 
was opened or closed; or
    (4) Any other information contained in a consumer report regarding 
an account or other relationship with the furnisher that bears on the 
consumer's creditworthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode of 
living.
    (b) Exceptions. The requirements of paragraph (a) of this section 
do not apply to a furnisher if:
    (1) The direct dispute relates to:
    (i) The consumer's identifying information (other than a direct 
dispute relating to a consumer's liability for a credit account or 
other debt with the furnisher, as provided in paragraph (a)(1) of this 
section) such as name(s), date of birth, Social Security number, 
telephone number(s), or address(es);
    (ii) The identity of past or present employers;
    (iii) Inquiries or requests for a consumer report;
    (iv) Information derived from public records, such as judgments, 
bankruptcies, liens, and other legal matters (unless provided by a 
furnisher with an account or other relationship with the consumer); or
    (v) Information related to fraud alerts or active duty alerts; or
    (2) The direct 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 15 U.S.C. 1679a(3), or an 
entity that would be a credit repair organization, but for 15 U.S.C. 
1679a(3)(B)(i).
    (c) Direct dispute address. A furnisher is required to investigate 
a direct dispute only if a consumer submits a dispute notice to the 
furnisher at:
    (1) The address of a furnisher provided by a furnisher and set 
forth on a consumer report relating to the consumer;
    (2) An address clearly and conspicuously specified by the furnisher 
for submitting direct disputes that is provided to the consumer in 
writing or electronically (if the consumer has agreed to the electronic 
delivery of information from the furnisher); or

[[Page 70981]]

    (3) Any business address of the furnisher if the furnisher has not 
so specified and provided an address for submitting direct disputes 
under paragraph (c)(2) of this section.
    (d) Direct dispute notice contents. A dispute notice must include:
    (1) The name, address, and telephone number of the consumer;
    (2) Sufficient information to identify the account or other 
relationship that is in dispute, such as an account number;
    (3) The specific information that the consumer is disputing and an 
explanation of the basis for the dispute; and
    (4) All supporting documentation or other information reasonably 
required by the furnisher to substantiate the basis of the dispute. 
This documentation may include, for example: a copy of the consumer 
report that contains the allegedly inaccurate information; a police 
report; a fraud or identity theft affidavit; a court order; or account 
statements.
    (e) Frivolous or irrelevant disputes. (1) A furnisher is not 
required to investigate a direct dispute if the furnisher has 
reasonably determined that the dispute is frivolous or irrelevant. A 
dispute may be frivolous or irrelevant if:
    (i) The consumer did not provide sufficient information to 
investigate the disputed information as required by paragraph (d) of 
this section;
    (ii) The direct dispute is substantially the same as a dispute 
previously submitted by or on behalf of the consumer, either directly 
to the furnisher or through a consumer reporting agency, with respect 
to which the furnisher has already satisfied the applicable 
requirements of the Act or this section; provided, however, that a 
direct dispute is not substantially the same as a dispute previously 
submitted if the dispute includes information listed in paragraph (d) 
of this section that had not previously been provided to the furnisher; 
or
    (iii) The furnisher is not required to investigate the direct 
dispute under this section.
    (2) Notice of determination. Upon making a determination that a 
dispute is frivolous or irrelevant, the furnisher must notify the 
consumer of the determination not later than five business days after 
making the determination by mail or, if authorized by the consumer for 
that purpose, by any other means available to the furnisher.
    (3) Contents of notice of determination that a dispute is frivolous 
or irrelevant. A notice of determination that a dispute is frivolous or 
irrelevant must include the reasons for such determination and identify 
any information required to investigate the disputed information, which 
notice may consist of a standardized form describing the general nature 
of such information.
    3. Add a new appendix E to read as follows:

Appendix E to Part 717--Interagency Guidelines Concerning the Accuracy 
and Integrity of Information Furnished to Consumer Reporting Agencies

    The NCUA encourages voluntary furnishing of information to 
consumer reporting agencies. Section 717.42 of this part requires 
each furnisher to establish and implement reasonable written 
policies and procedures concerning the accuracy and integrity of the 
information it furnishes to consumer reporting agencies. Under Sec.  
717.42(b), the furnisher must consider the guidelines set forth 
below in developing these policies and procedures. In establishing 
these policies and procedures, a furnisher may include any of its 
existing policies and procedures that are relevant and appropriate.

I. Nature, Scope, and Objectives of Policies and Procedures

    A. Nature and Scope. Section 717.42(a) of this part requires 
that a furnisher's policies and procedures be appropriate to the 
nature, size, complexity, and scope of the furnisher's activities. 
The furnisher's policies and procedures should reflect, for example:
    1. The types of business activities in which the furnisher 
engages;
    2. The nature and frequency of the information the furnisher 
provides to consumer reporting agencies; and
    3. The technology used by the furnisher to furnish information 
to consumer reporting agencies.
    Regulatory Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer:
    (a) Accurately identifies the appropriate consumer;
    (b) Accurately reports the terms of those accounts or other 
relationships; and
    (c) Accurately reports the consumer's performance and other 
conduct with respect to the account or other relationship with the 
consumer;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer avoids misleading a consumer 
report user as to the consumer's creditworthiness, credit standing, 
credit capacity, character, general reputation, personal 
characteristics, or mode of living;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations;
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship;
    5. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is reported in a form and manner 
that is designed to minimize the likelihood that the information, 
although accurate, may be erroneously reflected in a consumer 
report, for example, by ensuring that the information is reported 
with appropriate identifying information about the consumer to whom 
it pertains, in a standardized and clearly understandable form and 
manner, and with a date specifying the time period to which the 
information pertains; and
    6. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is substantiated by the 
furnisher's own records.
    Guidelines Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is accurate. Accuracy means that 
any information that a furnisher provides to a consumer reporting 
agency about an account or other relationship with the consumer 
reflects without error the terms of and liability for the account or 
other relationship and the consumer's performance and other conduct 
with respect to the account or other relationship;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is furnished with integrity. 
Integrity means that any information that a furnisher provides to a 
consumer reporting agency about an account or other relationship 
with the consumer is:
    (i) Reported in a form and manner that is designed to minimize 
the likelihood that the information, although accurate, may be 
erroneously reflected in a consumer report, for example, by ensuring 
that the information is:
    (A) Reported with appropriate identifying information about the 
consumer to whom it pertains;
    (B) Reported in a standardized and clearly understandable form 
and manner; and
    (C) Reported with a date specifying the time period to which the 
information pertains; and
    (ii) Substantiated by the furnisher's own records;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations; and
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:

[[Page 70982]]

    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship.

II. Accuracy and Integrity Duties of Furnishers Under the FCRA

    A furnisher's policies and procedures should address compliance 
with all applicable requirements imposed on the furnisher under the 
FCRA, including the duties to: \1\
---------------------------------------------------------------------------

    \1\ This is not a complete listing of furnisher duties relating 
to accuracy and integrity. Furnishers should consult the FCRA to 
determine what additional duties may apply.
---------------------------------------------------------------------------

    A. Promptly notify the consumer reporting agency of the 
furnisher's determination that furnished information is not complete 
or accurate, for a furnisher that regularly and in the ordinary 
course of business furnishes information; provide any corrections, 
or any additional information, that is necessary to make the 
furnished information complete and accurate; and not thereafter 
furnish information that remains incomplete or inaccurate. 15 U.S.C. 
1681s-2(a)(2).
    B. Provide notice of a dispute by a consumer about the accuracy 
or completeness of information furnished to a consumer reporting 
agency. 15 U.S.C. 1681s-2(a)(3).
    C. Report voluntary closure of a credit account by the consumer 
in information regularly furnished for the period in which the 
credit account is closed, for a furnisher that regularly and in the 
ordinary course of business furnishes information about consumer 
credit accounts. 15 U.S.C. 1681s-2(a)(4).
    D. Notify the consumer reporting agency of the date of 
delinquency on an account not later than 90 days after the furnisher 
furnishes information to the consumer reporting agency regarding 
action taken on the delinquent account (including placement for 
collection, charge to profit or loss, or any similar action). Date 
of delinquency means the month and year of the commencement of the 
delinquency on the account that immediately preceded the action. 15 
U.S.C. 1681s-2(a)(5).
    E. Have in place reasonable procedures to respond to any 
notification that the furnisher receives from a consumer reporting 
agency under section 605B of the FCRA, relating to the blocking of 
information resulting from identity theft and to prevent the 
refurnishing of such blocked information. 15 U.S.C. 1681s-
2(a)(6)(A).
    F. Not furnish to a consumer reporting agency information that 
purports to relate to the consumer if the consumer submits an 
identity theft report to the furnisher (at the address specified by 
that furnisher for receiving such reports) stating that such 
information maintained by that furnisher resulted from identity 
theft. (This restriction does not apply if the furnisher 
subsequently knows or is informed by the consumer that the 
information is correct.) 15 U.S.C. 1681s-2(a)(6)(B).
    G. After receiving a notice of dispute from a consumer reporting 
agency, in a timely manner: Conduct an investigation; review all 
relevant information the consumer reporting agency provides; report 
the results of the investigation to the consumer reporting agency; 
report incomplete or inaccurate information to all nationwide 
consumer reporting agencies to which it reported the information; 
and modify, delete, or permanently block incomplete or inaccurate 
information or information that cannot be verified. 15 U.S.C. 1681s-
2(b).
    H. Investigate direct disputes as required by 12 CFR 717.43 and 
15 U.S.C. 1681s-2(a)(8).

III. Establishing and Implementing Policies and Procedures

    In establishing and implementing its policies and procedures, a 
furnisher should:
    A. Identify practices or activities of the furnisher that can 
compromise the accuracy and integrity of information furnished to 
consumer reporting agencies, such as by:
    1. Reviewing its existing practices and activities, including 
the technological means and other methods it uses to furnish 
information to consumer reporting agencies and the frequency and 
timing of its furnishing of information, such as through an audit;
    2. Reviewing historical records relating to accuracy or 
integrity or to disputes, or other information relating to the 
accuracy and integrity of information provided by the furnisher to 
consumer reporting agencies and the types of errors, omissions, or 
other problems that may have affected the accuracy and integrity of 
information it has furnished about consumers to consumer reporting 
agencies; and
    3. Obtaining feedback from consumer reporting agencies, 
consumers, the furnisher's staff, or other appropriate parties.
    B. Evaluate the effectiveness of existing policies and 
procedures of the furnisher regarding the accuracy and integrity of 
information furnished to consumer reporting agencies; consider 
whether new, additional, or different policies and procedures are 
necessary; and consider whether implementation of existing policies 
and procedures should be modified to enhance the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies.
    C. Evaluate the effectiveness of specific methods (including 
technological means) the furnisher uses to provide information to 
consumer reporting agencies; how those methods may affect the 
accuracy and integrity of the information it provides to consumer 
reporting agencies; and whether new, additional, or different 
methods (including technological means) should be used to provide 
information to consumer reporting agencies to enhance the accuracy 
and integrity of that information.

IV. Specific Components of Policies and Procedures

    A furnisher's policies and procedures should address the 
following:
    A. Establishing and implementing a system for furnishing 
information about consumers to consumer reporting agencies that is 
appropriate to the nature, size, complexity, and scope of the 
furnisher's business operations.
    B. Using standard data reporting formats and standard procedures 
for compiling and furnishing data, where feasible, such as the 
electronic transmission of information about consumers to consumer 
reporting agencies.
    C. Ensuring that the furnisher maintains its own records for a 
reasonable period of time, not less than any applicable 
recordkeeping requirement, in order to substantiate the accuracy of 
any information about consumers it furnishes that is subject to a 
direct dispute.
    D. Establishing and implementing appropriate internal controls 
regarding the accuracy and integrity of information about consumers 
furnished to consumer reporting agencies, such as by implementing 
standard procedures, verifying random samples, and conducting 
regular reviews of information provided to consumer reporting 
agencies.
    E. Training staff that participates in activities related to the 
furnishing of information about consumers to consumer reporting 
agencies to implement the policies and procedures.
    F. Providing for appropriate and effective oversight of relevant 
service providers whose activities may affect the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies to ensure compliance with the policies and 
procedures.
    G. Furnishing information about consumers to consumer reporting 
agencies following mergers, portfolio acquisitions or sales, or 
other acquisitions or transfers of accounts or other debts in a 
manner that prevents re-aging of information, duplicative reporting, 
or other problems affecting the accuracy or integrity of the 
information furnished.
    H. Attempting to obtain the information listed in Sec.  
717.43(d) from a consumer before determining that the consumer's 
dispute is frivolous or irrelevant.
    I. Ensuring that deletions, updates, and corrections furnished 
to consumer reporting agencies are reflected in business systems to 
avoid furnishing erroneous information.
    J. Conducting investigations of direct disputes in a manner that 
promotes the efficient resolution of such disputes.
    K. Ensuring that technological and other means of communication 
with consumer reporting agencies are designed to prevent duplicative 
reporting of accounts, erroneous association of information with the 
wrong consumer(s), and other occurrences that may compromise the 
accuracy and integrity of information contained in consumer reports.
    L. Providing consumer reporting agencies with sufficient 
identifying information in the furnisher's possession about each 
consumer about whom information is furnished to enable the consumer 
reporting agency properly to identify the consumer.
    M. Conducting a periodic evaluation of its own practices, 
consumer reporting agency practices of which the furnisher is aware, 
investigations of disputed information, corrections of inaccurate 
information, means of communication, and other factors that may 
affect the accuracy and integrity of information furnished to 
consumer reporting agencies.

[[Page 70983]]

Federal Trade Commission

16 CFR Chapter I

Authority and Issuance

    For the reasons discussed in the joint preamble, the Federal Trade 
Commission proposes to add part 660 to title 16 of the Code of Federal 
Regulations as follows:

PART 660--DUTIES OF FURNISHERS OF INFORMATION TO CONSUMER REPORTING 
AGENCIES

Sec.
660.1 Scope.
660.2 Definitions.
660.3 Reasonable policies and procedures concerning the accuracy and 
integrity of furnisher information.
660.4 Direct disputes.
Appendix A to Part 660--Interagency Guidelines Concerning the 
Accuracy and Integrity of Information Furnished to Consumer 
Reporting Agencies

    Authority: 15 U.S.C. 1681s-2(a)(8) and 1681s-2(e); Sec. 312, 
Pub. L. 108-159, 117 Stat. 1989.


Sec.  660.1  Scope.

    This part applies to furnishers of information to consumer 
reporting agencies that are subject to administrative enforcement of 
the FCRA by the Federal Trade Commission pursuant to 15 U.S.C. 
1681s(a)(1)(referred to as ``furnishers'').


Sec.  660.2  Definitions.

    For purposes of this part and Appendix A of this part, the 
following definitions apply: Regulatory Definition Approach for 
Defining ``Accuracy'' and ``Integrity'' Follows:
    (a) Accuracy means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer reflects without error the terms of and liability for 
the account or other relationship and the consumer's performance and 
other conduct with respect to the account or other relationship.
    (b) Integrity means that any information that a furnisher provides 
to a consumer reporting agency about an account or other relationship 
with the consumer does not omit any term, such as a credit limit or 
opening date, of that account or other relationship, the absence of 
which can reasonably be expected to contribute to an incorrect 
evaluation by a user of a consumer report of a consumer's 
creditworthiness, credit standing, credit capacity, character, general 
reputation, personal characteristics, or mode of living.
    (c) Furnisher means an entity other than an individual consumer 
that furnishes information relating to consumers to one or more 
consumer reporting agencies. An entity is not a furnisher when it 
provides information to a consumer reporting agency solely to obtain a 
consumer report in accordance with sections 604(a) and (f) of the FCRA.
    (d) Identity theft has the same meaning as in 16 CFR 603.2(a).
    (e) Direct dispute means a dispute submitted directly to a 
furnisher by a consumer concerning the accuracy of any information 
contained in a consumer report relating to the consumer.


Sec.  660.3  Reasonable policies and procedures concerning the accuracy 
and integrity of furnished information.

    (a) Policies and procedures. Each furnisher must establish and 
implement reasonable written policies and procedures regarding the 
accuracy and integrity of the information relating to consumers that it 
furnishes to a consumer reporting agency. The policies and procedures 
must be appropriate to the nature, size, complexity, and scope of each 
furnisher's activities.
    (b) Guidelines. Each furnisher must consider the guidelines in 
Appendix A of this part in developing its policies and procedures 
required by this section, and incorporate those guidelines that are 
appropriate.
    (c) Reviewing and updating policies and procedures. Each furnisher 
must review its policies and procedures required by this section 
periodically and update them as necessary to ensure their continued 
effectiveness.


Sec.  660.4  Direct disputes.

    (a) General rule. Except as otherwise provided in this section, a 
furnisher must investigate a direct dispute if it relates to:
    (1) The consumer's liability for a credit account or other debt 
with the furnisher, such as direct disputes relating to whether there 
is or has been identity theft or fraud against the consumer, whether 
there is individual or joint liability on an account, or whether the 
consumer is an authorized user of a credit account;
    (2) The terms of a credit account or other debt with the furnisher, 
such as direct disputes relating to the credit limit on an open-end 
account, type of account, principal balance, scheduled payment amount 
on an account, or the amount of the reported credit limit on an open-
end account;
    (3) The consumer's performance or other conduct concerning an 
account or other relationship with the furnisher, such as direct 
disputes relating to the current payment status, high balance, date a 
payment was made, the amount of a payment made, or the date an account 
was opened or closed; or
    (4) Any other information contained in a consumer report regarding 
an account or other relationship with the furnisher that bears on the 
consumer's creditworthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode of 
living.
    (b) Exceptions. The requirements of paragraph (a) of this section 
do not apply to a furnisher if:
    (1) The direct dispute relates to:
    (i) The consumer's identifying information (other than a direct 
dispute relating to a consumer's liability for a credit account or 
other debt with the furnisher, as provided in paragraph (a)(1) of this 
section) such as name(s), date of birth, Social Security number, 
telephone number(s), or address(es);
    (ii) The identity of past or present employers;
    (iii) Inquiries or requests for a consumer report;
    (iv) Information derived from public records, such as judgments, 
bankruptcies, liens, and other legal matters (unless provided by a 
furnisher with an account or other relationship with the consumer); or
    (v) Information related to fraud alerts or active duty alerts; or
    (2) The direct 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 15 U.S.C. 1679a(3), or an 
entity that would be a credit repair organization, but for 15 U.S.C. 
1679a(3)(B)(i).
    (c) Direct dispute address. A furnisher is required to investigate 
a direct dispute only if a consumer submits a dispute notice to the 
furnisher at:
    (1) The address of a furnisher provided by a furnisher and set 
forth on a consumer report relating to the consumer;
    (2) An address clearly and conspicuously specified by the furnisher 
for submitting direct disputes that is provided to the consumer in 
writing or electronically (if the consumer has agreed to the electronic 
delivery of information from the furnisher); or
    (3) Any business address of the furnisher if the furnisher has not 
so specified and provided an address for submitting direct disputes 
under paragraph (c)(2) of this section.
    (d) Direct dispute notice contents. A dispute notice must include:
    (1) The name, address, and telephone number of the consumer;

[[Page 70984]]

    (2) Sufficient information to identify the account or other 
relationship that is in dispute, such as an account number;
    (3) The specific information that the consumer is disputing and an 
explanation of the basis for the dispute; and
    (4) All supporting documentation or other information reasonably 
required by the furnisher to substantiate the basis of the dispute. 
This documentation may include, for example: a copy of the consumer 
report that contains the allegedly inaccurate information; a police 
report; a fraud or identity theft affidavit; a court order; or account 
statements.
    (e) Frivolous or irrelevant disputes. (1) A furnisher is not 
required to investigate a direct dispute if the furnisher has 
reasonably determined that the dispute is frivolous or irrelevant. A 
dispute may be frivolous or irrelevant if:
    (i) The consumer did not provide sufficient information to 
investigate the disputed information as required by paragraph (d) of 
this section;
    (ii) The direct dispute is substantially the same as a dispute 
previously submitted by or on behalf of the consumer, either directly 
to the furnisher or through a consumer reporting agency, with respect 
to which the furnisher has already satisfied the applicable 
requirements of the Act or this section; provided, however, that a 
direct dispute is not substantially the same as a dispute previously 
submitted if the dispute includes information listed in paragraph (d) 
of this section that had not previously been provided to the furnisher; 
or
    (iii) The furnisher is not required to investigate the direct 
dispute under this section.
    (2) Notice of determination. Upon making a determination that a 
dispute is frivolous or irrelevant, the furnisher must notify the 
consumer of the determination not later than five business days after 
making the determination, by mail or, if authorized by the consumer for 
that purpose, by any other means available to the furnisher.
    (3) Contents of notice of determination that a dispute is frivolous 
or irrelevant. A notice of determination that a dispute is frivolous or 
irrelevant must include the reasons for such determination and identify 
any information required to investigate the disputed information, which 
may consist of a standardized form describing the general nature of 
such information.

Appendix A to Part 660--Interagency Guidelines Concerning the Accuracy 
and Integrity of Information Furnished to Consumer Reporting Agencies

    The Commission encourages voluntary furnishing of information to 
consumer reporting agencies. Section 660.3 of this part requires 
each furnisher to establish and implement reasonable written 
policies and procedures concerning the accuracy and integrity of the 
information it furnishes to consumer reporting agencies. Under Sec.  
660.3(b) of this part, the furnisher must consider the guidelines 
set forth below in developing these policies and procedures. In 
establishing these policies and procedures, a furnisher may include 
any of its existing policies and procedures that are relevant and 
appropriate.

I. Nature, Scope, and Objectives of Policies and Procedures

    A. Nature and Scope. Section 660.3(a) of this part requires that 
a furnisher's policies and procedures be appropriate to the nature, 
size, complexity, and scope of the furnisher's activities. The 
furnisher's policies and procedures should reflect, for example:
    1. The types of business activities in which the furnisher 
engages;
    2. The nature and frequency of the information the furnisher 
provides to consumer reporting agencies; and
    3. The technology used by the furnisher to furnish information 
to consumer reporting agencies.
    Regulatory Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer:
    (a) Accurately identifies the appropriate consumer;
    (b) Accurately reports the terms of those accounts or other 
relationships; and
    (c) Accurately reports the consumer's performance and other 
conduct with respect to the account or other relationship with the 
consumer;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer avoids misleading a consumer 
report user as to the consumer's creditworthiness, credit standing, 
credit capacity, character, general reputation, personal 
characteristics, or mode of living;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations;
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship;
    5. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is reported in a form and manner 
that is designed to minimize the likelihood that the information, 
although accurate, may be erroneously reflected in a consumer 
report, for example, by ensuring that the information is reported 
with appropriate identifying information about the consumer to whom 
it pertains, in a standardized and clearly understandable form and 
manner, and with a date specifying the time period to which the 
information pertains; and
    6. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is substantiated by the 
furnisher's own records.
    Guidelines Definition Approach for Paragraph B Follows:
    B. Objectives. A furnisher should have written policies and 
procedures reasonably designed to accomplish the following 
objectives:
    1. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is accurate. Accuracy means that 
any information that a furnisher provides to a consumer reporting 
agency about an account or other relationship with the consumer 
reflects without error the terms of and liability for the account or 
other relationship and the consumer's performance and other conduct 
with respect to the account or other relationship;
    2. Ensure that the information it furnishes about accounts or 
other relationships with a consumer is furnished with integrity. 
Integrity means that any information that a furnisher provides to a 
consumer reporting agency about an account or other relationship 
with the consumer is:
    (i) Reported in a form and manner that is designed to minimize 
the likelihood that the information, although accurate, may be 
erroneously reflected in a consumer report, for example, by ensuring 
that the information is:
    (A) Reported with appropriate identifying information about the 
consumer to whom it pertains;
    (B) Reported in a standardized and clearly understandable form 
and manner; and
    (C) Reported with a date specifying the time period to which the 
information pertains; and
    (ii) Substantiated by the furnisher's own records;
    3. Ensure that it conducts reasonable investigations of consumer 
disputes about the accuracy or integrity of information in consumer 
reports and takes appropriate actions based on the outcome of such 
investigations; and
    4. Ensure that it updates information it furnishes as necessary 
to reflect the current status of the consumer's account or other 
relationship, including:
    (a) Any transfer of an account (e.g., by sale or assignment for 
collection) to a third party; and
    (b) Any cure of the consumer's failure to abide by the terms of 
the account or other relationship.

[[Page 70985]]

II. Accuracy and Integrity Duties of Furnishers Under the FCRA

    A furnisher's policies and procedures should address compliance 
with all applicable requirements imposed on the furnisher under the 
FCRA, including the duties to: \1\
---------------------------------------------------------------------------

    \1\ This is not a complete listing of furnisher duties relating 
to accuracy and integrity. Furnishers should consult the FCRA to 
determine what additional duties may apply.
---------------------------------------------------------------------------

    A. Promptly notify the consumer reporting agency of the 
furnisher's determination that furnished information is not complete 
or accurate, for a furnisher that regularly and in the ordinary 
course of business furnishes information; provide any corrections, 
or any additional information, that is necessary to make the 
furnished information complete and accurate; and not thereafter 
furnish information that remains incomplete or inaccurate. 15 U.S.C. 
1681s-2(a)(2).
    B. Provide notice of a dispute by a consumer about the accuracy 
or completeness of information furnished to a consumer reporting 
agency. 15 U.S.C. 1681s-2(a)(3).
    C. Report voluntary closure of a credit account by the consumer 
in information regularly furnished for the period in which the 
credit account is closed, for a furnisher that regularly and in the 
ordinary course of business furnishes information about consumer 
credit accounts. 15 U.S.C. 1681s-2(a)(4).
    D. Notify the consumer reporting agency of the date of 
delinquency on an account not later than 90 days after the furnisher 
furnishes information to the consumer reporting agency regarding 
action taken on the delinquent account (including placement for 
collection, charge to profit or loss, or any similar action). Date 
of delinquency means the month and year of the commencement of the 
delinquency on the account that immediately preceded the action. 15 
U.S.C. 1681s-2(a)(5).
    E. Have in place reasonable procedures to respond to any 
notification that the furnisher receives from a consumer reporting 
agency under section 605B of the FCRA, relating to the blocking of 
information resulting from identity theft and to prevent the 
refurnishing of such blocked information. 15 U.S.C. 1681s-
2(a)(6)(A).
    F. Not furnish to a consumer reporting agency information that 
purports to relate to the consumer if the consumer submits an 
identity theft report to the furnisher (at the address specified by 
that furnisher for receiving such reports) stating that such 
information maintained by that furnisher resulted from identity 
theft. (This restriction does not apply if the furnisher 
subsequently knows or is informed by the consumer that the 
information is correct.) 15 U.S.C. 1681s-2(a)(6)(B).
    G. After receiving a notice of dispute from a consumer reporting 
agency, in a timely manner: Conduct an investigation; review all 
relevant information the consumer reporting agency provides; report 
the results of the investigation to the consumer reporting agency; 
report incomplete or inaccurate information to all nationwide 
consumer reporting agencies to which it reported the information; 
and modify, delete, or permanently block incomplete or inaccurate 
information or information that cannot be verified. 15 U.S.C. 1681s-
2(b).
    H. Investigate direct disputes as required by section 660.4 of 
this part and 15 U.S.C. 1681s-2(a)(8).

III. Establishing and Implementing Policies and Procedures

    In establishing and implementing its policies and procedures, a 
furnisher should:
    A. Identify practices or activities of the furnisher that can 
compromise the accuracy and integrity of information furnished to 
consumer reporting agencies, such as by:
    1. Reviewing its existing practices and activities, including 
the technological means and other methods it uses to furnish 
information to consumer reporting agencies and the frequency and 
timing of its furnishing of information, such as through an audit;
    2. Reviewing historical records relating to accuracy or 
integrity or to disputes, or other information relating to the 
accuracy and integrity of information provided by the furnisher to 
consumer reporting agencies and the types of errors, omissions, or 
other problems that may have affected the accuracy and integrity of 
information it has furnished about consumers to consumer reporting 
agencies; and
    3. Obtaining feedback from consumer reporting agencies, 
consumers, the furnisher's staff, or other appropriate parties.
    B. Evaluate the effectiveness of existing policies and 
procedures of the furnisher regarding the accuracy and integrity of 
information furnished to consumer reporting agencies; consider 
whether new, additional, or different policies and procedures are 
necessary; and consider whether implementation of existing policies 
and procedures should be modified to enhance the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies.
    C. Evaluate the effectiveness of specific methods (including 
technological means) the furnisher uses to provide information to 
consumer reporting agencies; how those methods may affect the 
accuracy and integrity of the information it provides to consumer 
reporting agencies; and whether new, additional, or different 
methods (including technological means) should be used to provide 
information to consumer reporting agencies to enhance the accuracy 
and integrity of that information.

IV. Specific Components of Policies and Procedures

    A furnisher's policies and procedures should address the 
following:
    A. Establishing and implementing a system for furnishing 
information about consumers to consumer reporting agencies that is 
appropriate to the nature, size, complexity, and scope of the 
furnisher's business operations.
    B. Using standard data reporting formats and standard procedures 
for compiling and furnishing data, where feasible, such as the 
electronic transmission of information about consumers to consumer 
reporting agencies.
    C. Ensuring that the furnisher maintains its own records for a 
reasonable period of time, not less than any applicable 
recordkeeping requirement, in order to substantiate the accuracy of 
any information about consumers it furnishes that is subject to a 
direct dispute.
    D. Establishing and implementing appropriate internal controls 
regarding the accuracy and integrity of information about consumers 
furnished to consumer reporting agencies, such as by implementing 
standard procedures, verifying random samples, and conducting 
regular reviews of information provided to consumer reporting 
agencies.
    E. Training staff that participates in activities related to the 
furnishing of information about consumers to consumer reporting 
agencies to implement the policies and procedures.
    F. Providing for appropriate and effective oversight of relevant 
service providers whose activities may affect the accuracy and 
integrity of information about consumers furnished to consumer 
reporting agencies to ensure compliance with the policies and 
procedures.
    G. Furnishing information about consumers to consumer reporting 
agencies following mergers, portfolio acquisitions or sales, or 
other acquisitions or transfers of accounts or other debts in a 
manner that prevents re-aging of information, duplicative reporting, 
or other problems affecting the accuracy or integrity of the 
information furnished.
    H. Attempting to obtain the information listed in Sec.  660.4(d) 
of this part from a consumer before determining that the consumer's 
dispute is frivolous or irrelevant.
    I. Ensuring that deletions, updates, and corrections furnished 
to consumer reporting agencies are reflected in business systems to 
avoid furnishing erroneous information.
    J. Conducting investigations of direct disputes in a manner that 
promotes the efficient resolution of such disputes.
    K. Ensuring that technological and other means of communication 
with consumer reporting agencies are designed to prevent duplicative 
reporting of accounts, erroneous association of information with the 
wrong consumer(s), and other occurrences that may compromise the 
accuracy and integrity of information contained in consumer reports.
    L. Providing consumer reporting agencies with sufficient 
identifying information in the furnisher's possession about each 
consumer about whom information is furnished to enable the consumer 
reporting agency properly to identify the consumer.
    M. Conducting a periodic evaluation of its own practices, 
consumer reporting agency practices of which the furnisher is aware, 
investigations of disputed information, corrections of inaccurate 
information, means of communication, and other factors that may 
affect the accuracy and integrity of information furnished to 
consumer reporting agencies.


[[Page 70986]]


    Dated: November 2, 2007.
John C. Dugan,
Comptroller of the Currency.

    By order of the Board of Governors of the Federal Reserve 
System, November 28th, 2007.
Jennifer J. Johnson,
Secretary of the Board.

    By order of the Board of Directors.

    Dated at Washington, DC, the 5th day of November, 2007.

Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
    Dated: November 2, 2007.

    By the Office of Thrift Supervision.
John M. Reich,
Director.

    By the National Credit Union Administration Board on November 5, 
2007.
Mary Rupp,
Secretary of the Board.

    By Direction of the Commission.
Donald S. Clark,
Secretary.

[FR Doc. E7-23549 Filed 12-12-07; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-10-P; 6720-01-P; 7535-01-P; 
6750-01-P