Federal Register /Vol. 62, No. 40/Friday, February 28, … · 2013-07-05 · 9124 Federal Register/Vol. 62, No. 40/Friday, February 28, 1997/Proposed Rules 1 The CRA must also provide

9123Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Proposed Rules

13. Alex S. Konigsberg, QC (‘‘Konigsberg’’),Lapoint Rosenstein

14. Andrew P. Loewinger (‘‘Loewinger’’),Abraham Pressman & Bauer

15. H. Bret Lowell (‘‘Lowell’’), BrownsteinZeidman & Lore

16. John Melle (‘‘Melle’’), Office of U.S. TradeRepresentative

17. Raymond L. Miolla (‘‘Miolla’’), BurgerKing Corp.

18. Alec Papadakis (‘‘Papadakis’’), HurtSinisi Papadakis

19. Matthew R. Shay (‘‘Shay’’), InternationalFranchise Association (‘‘IFA’’)

20. Neil A. Simon (‘‘Simon’’), Hogan &Hartson

21. Leonard Swartz (‘‘Swartz’’), ArthurAndersen & Co.

22. Greg L. Walther (‘‘Walther’’), OutbackSteakhouse International

23. Dennis E. Wieczorek (‘‘Wieczorek’’),Rudnick & Wolfe

24. Erik B. Wulff (‘‘Wulff’’), Hogan & Hartson25. Philip F. Zeidman (‘‘Zeidman’’),

Brownstein Zeidman & Lore26. Carl Zwisler (‘‘Zwisler’’), Keck, Mahin &

Cate

Public Participants1. Jeff Brams (‘‘Brams’’), Sign-A-Rama and

Shipping Connection2. Pamella Mills (‘‘Mills’’), Baker & McKenzie

Attachment 3—Table of CommentersComment 1. Robert E. Mulloy, Jr. (‘‘Mulloy’’)Comment 2. Stanley M. Dub (‘‘Dub’’),

Dworken & BernsteinComment 3. Marvin J. Migdol (‘‘Migdol’’),

Nationwide Franchise MarketingServices

Comment 4. SCPromotions, Inc.(‘‘SCPromotions’’)

Comment 5. R. Dana Pennell (‘‘Pennell’’)Comment 6. Robin Day Glenn (‘‘Glenn’’)Comment 7. Jack McBirney (‘‘McBirney’’),

McGrow ConsultingComment 8. SRA International (‘‘SRA

International’’)Comment 9. Harold Brown (‘‘Brown’’),

Brown & StadfeldComment 10. Ronald N. Rosenwasser

(‘‘Rosenwasser’’)Comment 11. Louis F. Sokol (‘‘Sokol’’)Comment 12. J. Howard Beales III (‘‘Beales’’),

Professor, George Washington UniversityComment 13. Peter Lagarias (‘‘Lagarias’’)Comment 14. Harold L. Kestenbaum

(‘‘Kestenbaum’’)Comment 15. Walter D. Wilson (‘‘Wilson’’),

Better Business Bureau of CentralGeorgia, Inc.

Comment 16. Connie B. D’Imperio(‘‘D’Imperio’’), Color Your Carpet, Inc.

Comment 17. Q.M. Marketing, Inc. (‘‘Q.M.Marketing’’)

Comment 18. David Gurnick (‘‘Gurnick’’),Kindel & Anderson

Comment 19. U-Save Auto Rental (‘‘U-SaveAuto Rental’’)

Comment 20. The Longaberger Co.(‘‘Longaberger’’)

Comment 21. Direct Selling Association(‘‘DSA’’)

Comment 22. American Bar Association,Section of Antitrust Law (‘‘ABA AT’’)

Comment 23. Dennis E. Wieczorek(‘‘Wieczorek’’), Rudnick & Wolfe

Comment 24. Real Estate National Network(‘‘RENN’’) (representing Better Homesand Gardens Real Estate Service; Century21 Real Estate Corp.; Coldwell BankersResidential Group; Electronic RealtyAssociates (‘‘ERA’’); Realty World Corp.;Re/Max International; and ThePrudential Real Estate Affiliates)

Comment 25. Attorney General Jim Ryan(‘‘General Ryan), State of Illinois

Comment 26. Alan S. Nopar (‘‘Nopar’’),Bosco, Blau, Ward & Nopar

Comment 27. Snap-On, Inc. (‘‘Snap-On’’)Comment 28. Steven Rabenberg

(‘‘Rabenberg’’), Explore St. LouisComment 29. Douglas M. Brooks (‘‘Brooks’’),

Martland & BrooksComment 30. Robert N. McDonald

(‘‘Commissioner McDonald’’), SecuritiesCommissioner, State of Maryland

Comment 31. Little Caesars (‘‘Little Caesars’’)Comment 32. International Franchise

Association (‘‘IFA’’)Comment 33. Brownstein Zeidman & Lore

(‘‘Brownstein Zeidman’’)Comment 34. Jere W. Glover (‘‘Glover’’),

Counsel for Advocacy, U.S. SmallBusiness Administration (‘‘SBAAdvocacy’’)

Comment 35. Jan Meyers (‘‘RepresentativeMeyers’’), Chair, House Committee onSmall Business

Comment 36. Neil A. Simon (‘‘Simon’’),Hogan & Hartson

Comment 37. Deborah Bortner (‘‘Bortner’’),Washington State Department ofFinancial Institutes, Securities Division

Comment 38. American FranchiseeAssociation (‘‘AFA’’)

Comment 39. American Association ofFranchisees & Dealers (‘‘AAFD’’)

Comment 40. Warren Lewis (‘‘Lewis’’), Lewis& Trattner

Comment 41. Century 21 Real Estate Corp.(‘‘Century 21’’)

Comment 42. John Hayden (‘‘Hayden’’)Comment 43. North American Securities

Administrators Association, Inc.(‘‘NASAA’’)

Comment 44. Robert L. Perry (‘‘Perry’’)Comment 45. The State Bar of California,

Business Law Section (‘‘CA BLS’’)Comment 46. Mike Gaston (‘‘Gaston’’),

Barkley & EvergreenComment 47. The Southland Corporation

(‘‘Southland’’)Comment 48. Medicap Pharmacies, Inc.

(‘‘Medicap’’)Comment 49. Rochelle B. Spandorf

(‘‘Spandorf’’), ABA Forum onFranchising, Andrew C. Selden(‘‘Selden’’), David J. Kaufmann(‘‘Kaufmann’’)

Comment 50. Joyce G. Mazero (‘‘Mazero’’),Locke Purnell Rain Harrell

Comment 51. Mark B. Forseth (‘‘Forseth’’),Locke Purnell Rain Harrell

Comment 52. Forte Hotels (‘‘Forte Hotels’’)Comment 53. R.A. Politte (‘‘Politte’’)Comment 54. Politte (see supra, Comment

53)Comment 55. Brown (see supra, Comment 9)Comment 56. Wieczorek (see supra,

Comment 23)

Comment 57. Scott Shane (‘‘Shane’’), GeorgiaInstitute of Technology

Comment 58. Friday’sComment 59. Carl E. Zwisler (‘‘Zwisler’’),

Keck, Mahin & CateComment 60. Wieczorek (see supra,

Comment 23)Comment 61. Enrique A. Gonzalez

(‘‘Gonzalez’’), Gonzalez Calvillo YForastierei

Comment 62. Pepsico RestaurantsInternational (‘‘Pepsico’’)

Comment 63. IFA (see supra, Comment 32)Comment 64. Atlantic Richfield Company

(‘‘ARCO’’)Comment 65. David Clanton (‘‘Clanton’’)Comment 66. Leonard Swartz (‘‘Swartz’’),

Arthur Andersen & Co.Comment 67. John R.F. Baer (‘‘Baer’’), Keck,

Mahin & CateComment 68. Lynn Scott (‘‘Scott’’)Comment 69. Eversheds (‘‘Eversheds’’)Comment 70. Brownstein Zeidman (see

supra, Comment 33)Comment 71. Penny Ward (‘‘Ward’’), Baker &

McKenzieComment 72. Matthias Stein (‘‘Stein’’)Comment 73. Byron Fox (‘‘Fox’’), Hunton &

WilliamsComment 74. Papa Johns Pizza (‘‘Papa

Johns’’)Comment 75. Harold L. Kestenbaum (see

supra, Comment 14)

[FR Doc. 97–4988 Filed 2–27–97; 8:45 am]BILLING CODE 6750–01–P

16 CFR Part 601

Proposed Notices of Rights and DutiesUnder the Fair Credit Reporting Act

AGENCY: Federal Trade Commission.ACTION: Publication of proposedguidance for forms, and request forpublic comment.

SUMMARY: The Federal TradeCommission is publishing for publiccomment three notices that it is requiredto prescribe under recent amendmentsto the Fair Credit Reporting Act. Underthose amendments, which becomeeffective September 30, 1997, consumerreporting agencies will be required toprovide: A summary of rights under thelaw to consumers; a notice ofresponsibilities under the law to partieswho regularly furnish such agencieswith consumer information, and anotice of responsibilities under the lawto parties who obtain consumer reportsfrom the agency. Under the statute, aconsumer reporting agency will be incompliance with these requirements if itprovides notice forms substantiallysimilar to those prescribed by theCommission.DATES: Comments must be received onor before March 31, 1997.ADDRESSES: Comments should beaddressed to: Office of the Secretary,

9124 Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Proposed Rules

1 The CRA must also provide the consumersummary to any party to whom it provides aconsumer report for employment purposes (CCRRASection 2403(b), FCRA Section 604(o)(1)(B)), andthe employer must in turn provide the report andthe summary to the consumer before taking adverseaction against him or her (FCRA Section 604(o)(3)).

Federal Trade Commission, Room H–159, Sixth Street and PennsylvaniaAvenue NW, Washington, DC 20580.Submissions should be marked‘‘Proposed Notices of Rights and Dutiesunder the Fair Credit Reporting Act, 16CFR Part 601—Comment.’’FOR FURTHER INFORMATION CONTACT:Clarke Brinckerhoff or William Haynes,Attorneys, Division of Credit Practices,Federal Trade Commission,Washington, DC 20580, 202–326–3224.

SUPPLEMENTARY INFORMATION:

I. Background

A major revision of the Fair CreditReporting Act (‘‘FCRA’’) was includedin the Omnibus ConsolidatedAppropriations Act for Fiscal Year 1997(Pub. L. 104–208), signed by thePresident on September 30, 1996. Therevisions of the FCRA are set forth in aportion of the omnibus bill (Title II,Subtitle D, Chapter 1), the ‘‘ConsumerCredit Reporting Reform Act of 1996’’(CCRRA). The provisions discussed inthis publication become effective onSeptember 30, 1997.

The amended FCRA requires eachconsumer reporting agency (‘‘CRA,’’usually a credit bureau) to providecertain notices, and mandates that theFederal Trade Commission(‘‘Commission’’ or ‘‘FTC’’) prescribe thecontent of all three notices and the formof one notice.

The FCRA amendments require eachCRA to provide as part of its filedisclosure to consumers a writtensummary of consumer rights(‘‘summary’’ or ‘‘consumer summary’’)under the FCRA ((CCRRA Section2408(d), FCRA Section 609(c)).1 Section2408(d)(1) of the CCRRA adds a newSection 609(c) to the FCRA thatdescribes the required summary ofconsumer rights and the FTC’s mandatewith respect to it. The new sectionspecifies certain items that must be inthe summary, requires the Commissionto prescribe the form and content of thedisclosure, and states that the provisionwill not take effect until theCommission has prescribed thesummary.

Each CRA must also provide a noticeof responsibilities under the FCRA topersons who buy consumer informationfrom the CRA (‘‘user notice’’), and anotice of responsibilities under theFCRA to persons who regularly furnish

consumer information to the CRA(‘‘furnisher notice’’) (CCRRA Section2407(b), FCRA Section 607(d)(1)). Theamended law states that the‘‘Commission shall prescribe thecontent of the notices’’ to be provided(FCRA Section 607(d)(2)).

For each of the three requireddisclosures, a CRA complies with thelaw if it provides the applicable personwith a notice that is substantiallysimilar to that prescribed by theCommission (FCRA Sections 607(d)(2)and 609(c)(3)).

II. Opportunity for Public Comment

The Commission welcomes commentsrelated in any way to the proposedconsumer summary, user notice, orfurnisher notice. The Commission isparticularly interested in comments inthe following areas.

A. Consumer Summary

1. Balancing brevity and completeness

The statute gives conflicting guidanceas to whether the summary should bebrief or comprehensive. It is describedas a ‘‘summary of all the rights theconsumer has under’’ the FCRA (Section609(c)(1)(A)) that includes ‘‘a briefdescription of * * * all rights ofconsumers’’ provided by that law(Section 609(c)(2)(A)). Arguably, nodocument that is actually a‘‘summary’’—or that constitutes a ‘‘briefdescription’’ of FCRA consumer rights—could literally include ‘‘all’’ of them.The proposal seeks to meet thesevarious statutory goals by prescribing asummary that is both reasonablycomprehensive and user friendly forconsumers. Is the proposed notice toolong in any way to be effective as asummary, and if so, how should it beabbreviated? Conversely, are thereimportant consumer rights that are notincluded in the proposed form or arediscussed too briefly? Please identifyany specific sections of the proposedsummary that are viewed as too lengthyor incomplete.

2. Statutorily-required items

Section 609(c)(2) mandates that thesummary include an explanation of howthe consumer may assert his or herrights, list all federal agencies withadministrative authority under theFCRA in a form that will helpconsumers find the appropriate agency,and include specific statementsconcerning (1) state laws and authoritiesthat may assist consumers, and (2) thefact that verifiable accurate informationthat is not outdated under Section 605need not be removed. Are thestatutorily-required items accurately

and understandably presented? In whatway, if any, could they be improved?Specifically, the Commission hasdrafted the table of federal agencies atthe end of the summary to complyliterally with Section 609(c)(2)(C) byincluding all agencies grantedenforcement authority by Section621(b)(1). Is what way, if any, could thistable be shortened or made moreunderstandable?

3. TerminologyBecause the summary is a document

intended to inform consumers, theproposal is written in non-technicallanguage, to the extent it is possible todo so and also include in sufficientdetail the large number of importantconsumer rights conferred by the FCRA.Are there sections which can beimproved by simplifying thepresentation to make it easier forconsumers to understand? Are theresections where the language does notaccurately convey the substance of theprovision? How could such sections beimproved?

4. Form issuesThe Commission is required to

‘‘prescribe the form and content of’’ theconsumer summary (Section 609(c)(3))(emphasis added). The goal is to createa notice that sets forth all statutorilyrequired items in a form that is readable,understandable, and attractive. TheCommission proposes to prescribe thatthe text be provided on paper no smallerthan 81⁄2x11 inches in size, in type sizeno smaller than 12-point type (8-pointfor the chart of federal agencies), in adocument separate from the consumerreport. Generally, is there a format thatwould better convey the sameinformation to consumers? If so, what isit and what costs would it entail? Isthere a format that would convey thesame information to consumers in a lessexpensive manner? If so, what is it andwhat cost saving would it achieve?

5. Numeric changesThe Commission realizes that some of

the numbers in the notice may changeover time. For example, the permissiblecharges for file disclosures or telephonenumbers of agencies may change. Suchchanges will be incorporated in anyrevisions to the summary theCommission may prescribe from time totime. In addition, the Commissionproposes that all notices issued prior tosuch revisions that contain accurate andupdated information concerningnumeric changes will be considered‘‘substantially similar’’ to the prescribednotice as to those items. Is there a betterway to accommodate such changes?


B. Furnisher Notice

1. Content of noticeThe proposed notice summarizes the

responsibilities imposed uponfurnishers of information to CRAs bySection 623 of the FCRA. Are allstatutory obligations of furnishersincluded? Is the presentation accurateand understandable? In what way can itbe improved? Is it sufficient for thenotice to refer furnishers to thecomplete text of the FCRA at theInternet web site maintained by theCommission, or would the notice beimproved if it was expanded to add thecomplete text of Section 623?

2. Scope of noticeThe FCRA directs the Commission to

prescribe a notice setting forth theresponsibilities of any party ‘‘whoregularly and in the ordinary course ofbusiness furnishes (consumer)information to the agency’’ and requireseach CRA to provide the notice to allsuch parties (CCRRA Section 2407(b),FCRA Section 607(d)). Two of the listedduties apply only to parties who furnishinformation to CRAs regularly, and thusby inference, not to occasionalinformation providers. Would someCRAs send these notices to occasionalas well as regular furnishers? If so,would addition of a reference to theduties of occasional, as well as regular,providers be helpful?

3. TerminologyThe Commission’s proposed notice

summarizes the duties of furnishers.This summary is written in non-technical language, but with theexpectation that regular providers ofinformation to CRAs will be relativelysophisticated and will be able tounderstand both the language of thestatute and the description of duties. Isthe description of duties accurate andunderstandable for this audience? Whatimprovements can be made?

C. User Notice

1. Number of NoticesThe ‘‘users’’ of consumer reports fall

into a number of categories, and theduties imposed by the FCRA vary byuser category. Accordingly, CRAs couldsend out one notice to all users settingforth all of the user requirements of theFCRA or they could send out noticesthat contain only those responsibilitiesthat pertain to the particular user. TheCommission is proposing a singlenotice, which first specifies the generalresponsibilities that apply to all users ofconsumer reports from a CRA (Part I).The proposed notice then lists theresponsibilities that are specific to

certain categories of users: users ofconsumer reports for employmentpurposes (Part II); users of investigativeconsumer reports (Part III); users ofmedical information (Part IV); users of‘‘prescreened’’ lists (Part V); and userswho are resellers (Part VI). Should therebe a single notice or multiple notices?If multiple notices are appropriate,which types of users should receiveparticularized notices? Can CRAs easilydetermine through the certificationsthey receive from users which portionsof the proposed notice are applicable towhich users?

2. Content of noticeThe proposed notice discusses the

principal portions of the FCRA thatimpose specific obligations upon allthose who receive consumer reports andhas included these in the six parts of theproposed notice. Are there otherstatutory requirements that should beincluded? Should additionalinformation be included in the notice?Will the length of the notice imposesubstantial burdens upon CRAs? Arethere ways to modify the notice toreduce this burden?

3. TerminologyThe Commission expects that user

notices will be sent to a wide range ofusers and that these persons will havevarying degrees of legal sophistication.Are the duties set forth in the proposednotice clear and understandable? Canthey be improved upon?

D. Timing of Distribution of NoticesWith respect to the consumer

summary, Section 609(c) makes clearthat it must be provided every time aCRA makes a written file disclosureunder the section. With respect to thefurnisher and user notices, however,Section 607(d) provides no specificguidance. Is there a need for advice fromthe Commission about the timing of thedistribution of furnisher and usernotices to ensure that the documents aredistributed in such a way that they aremeaningful and effective? If so, whenshould the notices be distributed?Should the distribution of the usernotice vary based on the recipient’sstatus (e.g., regular and occasionalusers)?

E. Impact on Small BusinessesThe Commission is seeking comments

on the impact that its prescription ofthese notices will have on small entitiesand for suggestions as to any ways inwhich the Commission can both meetits obligations under the FCRA and, ifpossible, lessen any burden imposed onsmall businesses.

The FCRA itself requires three typesof notices containing specified types ofinformation, and also specifies how onetype (the consumer notices) must bedistributed. Accordingly, thisdiscussion does not cover the necessityfor any of the notices or the distributionrequirements for the consumer notices.

The Commission is prescribing thesenotices at the direction of Congress. Thepurpose of these notices is described insection I above. There is no requirementthat the notices used be exactly asprescribed by the Commission. Rather,there is a presumption of compliancewith the FCRA if notices are used thatare substantially similar to thoseprescribed by the Commission. (FCRASections 607 and 609).

A search of proprietary data bases hasrevealed approximately 500 consumerreporting agencies that have sales of $5million or less per year—the thresholdfor ‘‘small’’ credit reporting businessesas defined by the Small BusinessAdministration. However, because theconsumer reporting industry isdominated by a number of largecompanies who provide most of theinformation sold by smaller entities inthe industry, the Commission believesthat most of these 500 companies eitherare affiliated, or have contractualarrangements, with one of the largeconsumer reporting agencies in theindustry. These large agencies, as wellas industry trade associations, maymake information about the noticerequirements and the Commission’sprescribed forms available to the smallerentities. The Commission’s staff plans tomake information about complying withthe new FCRA requirements availablethrough various means, includingplacing the prescribed forms on theCommission’s Internet home page.

The FCRA imposes no specific recordkeeping or reporting requirementsdirectly tied to the use of the noticesprescribed by the Commission. Inaddition, there are no federal rules orregulations that conflict with orduplicate the notices prescribed by theCommission.

In these circumstances, theCommission does not believe that theprescription of the notices will have asignificant economic impact upon smallbusiness. In fact, the Commission’s‘‘prescription’’ of these notices maylessen the burden on small businesses,since these entities can—but need not—adopt the Commission’s forms andthereby avoid the risk and expense ofdeveloping their notices independently.To ensure that no significant economicimpact is overlooked, however, theCommission seeks comments on thisissue. The Commission also seeks


comments on possible alternatives tothe language of the proposed notices toaccomplish the stated objectives withinthe statutory framework. Specifically,what benefits and costs to consumersand businesses would result from theproposed notices? Would the proposednotices have a significant economicimpact on a substantial number of smallbusiness entities? If so, explain thenature of any such impact.

F. Firm Timetable for CommentsThe FTC intends to move promptly in

order to allow time for (1) the staff toreview and consider comments on theproposed summary and notices, (2) theagency to prescribe them in final form,and (3) the industry to prepare and usethe final versions of the documentswhen the amendments take effect onSeptember 30, 1997. The public shouldtherefore anticipate no extension of the30-day comment period.

III. Review under the PaperworkReduction Act

The FTC has reviewed the threenotices that the FCRA amendmentsrequire it to prescribe—the Summary ofFCRA Rights, the Notice of UserObligations, and the Notice of FurnisherObligations—for the purpose ofdetermining whether the agency will‘‘conduct or sponsor’’ any ‘‘collection(s)of information’’ as these terms aredefined in the OMB regulation thatimplements the Paperwork ReductionAct (44 U.S.C. Chapter 35) (‘‘PRA’’), 5C.F.R. Part 1320.

A. Conduct or SponsorThe purpose of the PRA is to

minimize the Federal paperwork burdenthat agencies impose on individuals,businesses, State and local governments,and others by collecting unnecessary orduplicative information. 44 U.S.C.Section 3501; 5 C.F.R. § 1320. Thus, anagency must seek and obtain clearancefrom OMB before it ‘‘conducts orsponsors’’ a ‘‘collection of information’’from ten or more persons during a 12month period. 44 U.S.C. Section 3507;5 C.F.R. 1320.5.

The FCRA amendments require thecredit reporting agencies to providerelevant parties with a Notice of UserObligations and a Notice of FurnisherObligations that describe certaininvestigation, disclosure, andrecordkeeping requirements. Theamendments further require the FTC toprescribe the ‘‘content’’ of the notices.So doing will not trigger the applicationof the PRA. The PRA is triggered whenan agency ‘‘conduct[s) or sponsor[s)’’ acollection of information. Theinvestigation, disclosure, and

recordkeeping requirements describedin the User and Furnisher Notices areimposed by the statute and the noticesmerely describe the requirements of thenew FCRA. Further, the requirementscontained in the notices becomeeffective on October 31, 1997, regardlessof whether the FTC has provided thelanguage for these forms by that time.

The FCRA amendments also requirethe Commission to prescribe the contentand form of a new Summary ofConsumer Rights that must be providedto consumers. Because the amendedFCRA further provides that: ‘‘[n)odisclosures shall be required under thissubsection [discussing the Summary ofConsumer Rights) until the date onwhich the Federal Trade Commissionprescribes the form and content of suchdisclosures * * *,’’ it could be arguedthat the Commission’s actions inprescribing the manner and content ofthe Summary of Consumer Rights maybe considered to ‘‘require’’ or ‘‘cause’’the disclosures to occur. Nevertheless,as discussed below, we have determinedthat none of these notices constitute a‘‘collection of information.’’

B. Collection of InformationBecause the three notices to be

prescribed by the Commission containinformation that must be distributed tothird parties, these documents involvepublic disclosures that would otherwiseconstitute ‘‘collections of information’’under the PRA. However, OMB hasrecognized that some disclosures do notentail the ‘‘collection of information’’and are thus outside the Act’spaperwork control provisions.Specifically relevant here is OMB’sdetermination that a disclosurerequirement is not a ‘‘collection ofinformation’’ when the information tobe disclosed is supplied by thegovernment. 5 C.F.R. 1320.3(c)(2). Insuch a situation, a mandate to disclosedoes not impose any requirement tocollect the information to be disclosed.

The information in the proposedFCRA notices will be supplied by thegovernment. The proposed noticessupply all the information that subjectfirms will be required to disclose. TheFCRA requires credit reporting agenciesto provide these (or substantiallysimilar) notices. FCRA Sections607(d)(2) and 609(c)(3). The latitudeprovided by the statute to use languageother than the precise languageprescribed by the FTC does notundercut this concept because theconsumer reporting agencies can simplyadopt these notices for distributionwithout any change to the language. Wehave concluded therefore that thesenotices do not fall within the definition

of ‘‘collection of information’’ becausethey are ‘‘[t)he public disclosure ofinformation originally supplied by theFederal government to the recipient forthe purpose of disclosure to the public* * *’’ 5 C.F.R. § 1320.3(c)(2). Thus, thePRA does not apply.

List of Subjects in 16 CFR Part 601Credit, Trade practices.Pursuant to 15 U.S.C. 1681g and

1681s, the FTC hereby proposes to addto Subchapter F of Chapter I of 16 CFRa new Part 601 to read as follows:

PART 601—SUMMARY OF CONSUMERRIGHTS, NOTICE OF USERRESPONSIBILITIES, AND NOTICE OFFURNISHER RESPONSIBILITIESUNDER THE FAIR CREDIT REPORTINGACT

Sec.601.1 Authority and purpose.601.2 Legal effect.Appendix A to Part 601—Prescribed

Summary of Consumer RightsAppendix B to Part 601—Prescribed Notice

of Furnisher ResponsibilitiesAppendix C to Part 601—Prescribed Notice

of User Responsibilities

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

§ 601.1 Authority and purpose.(a) Authority. This part is issued by

the Commission pursuant to theprovisions of the Fair Credit ReportingAct (15 U.S.C. 1681 et seq.), as mostrecently amended by the ConsumerCredit Reporting Reform Act of 1996(Title II, Subtitle D, Chapter 1, of theOmnibus Consolidated AppropriationsAct for Fiscal Year 1997), Public Law104–208, 110 Stat. 3009–426 (Sept. 30,1996).

(b) Purpose. The purpose of this partis to comply with sections 607(c) and609(c) of the Fair Credit Reporting Act,as amended. Section 609(c)(3) directsthe FTC to prescribe the form andcontent of a summary of consumers’legal rights under the FCRA that theamended law requires each consumerreporting agency to provide whendisclosing the information in its file toconsumers, and section 609(c)(4)provides that the summary need not beprovided until the FTC has in factprescribed its form and content. Section607(d)(2) directs the FTC to prescribethe content of notices that consumerreporting agencies are required toprovide to parties that supplyinformation to, or purchase consumerreports from, the agency. These noticeswill set forth the responsibilities underthe FCRA of all persons who furnishinformation to consumer reportingagencies or use information subject tothe FCRA.


§ 601.2 Legal effect.

The forms prescribed by the FTC donot constitute a trade regulation rule.They carry out the directive in thestatute that the FTC prescribe thesummary and notices. A consumerreporting agency that provides noticessubstantially similar to those prescribedby the FTC will be in compliance with

Section 607(d) or 609(c) of the FCRA, asapplicable.

Appendix A to Part 601—PrescribedSummary of Consumer Rights

The prescribed form for this summary is asa separate document, on paper no smallerthan 81⁄2x11 inches in size, with text no lessthan 12-point type (8-point for the chart offederal agencies), in bold or capital letters asindicated. The form in this appendix

prescribes both the content and the sequenceof items in the required summary. Aconsumer reporting agency that is notrequired by law to have a toll-free numbermay omit the sentence inviting consumers tocall that number. A summary may accuratelyreflect changes in numerical items thatchange over time (e.g., dollar amounts, orphone numbers and addresses of federalagencies), and remain in compliance.

BILLING CODE 6750–01–P











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

[FR Doc. 97–4987 Filed 2–27–97; 8:45 am]BILLING CODE 6750–01–C

Documents

Federal Register /Vol. 62, No. 40/Friday, February 28, … · 2013-07-05 · 9124 Federal Register/Vol. 62, No. 40/Friday, February 28, 1997/Proposed Rules 1 The CRA must also provide