UNITED STATES CODE TITLE 15. COMMERCE AND ... Credit Reporting...the credit worthiness, credit standing, credit capacity, character, and general reputation of consumers. (3) Consumer

Fair Credit Reporting Act (FCRA); Regulation V; Official Staff Interpretations 8/3/2011 9:54:23 AM

© WKFS CompliSource — September 2011 Page: 1

Fair Credit Reporting Act

UNITED STATES CODETITLE 15. COMMERCE AND TRADECHAPTER 41--CONSUMER CREDIT PROTECTIONSUBCHAPTER III--CREDIT REPORTING AGENCIES

History: Pub.L. 90-321, title VI, Sec. 603, as added Pub.L. 91-508, title VI, Sec. 601,Oct. 26, 1970, 84 Stat. 1128; amended Pub.L. 102-537, Sec. 2(b), Oct. 27, 1992, 106Stat. 3531; Pub.L. 104-208, div. A, title II, Sec. 2402, Sept. 30, 1996, 110 Stat.3009-426; Pub.L. 105-347, Sec. 6(1)-(3), Nov. 2, 1998, 112 Stat. 3211; Pub.L. 108-159,title I, Sec. 111, title II, Sec. 214(c)(1), title IV, Sec. 411(b), (c), title VI, Sec. 611,Dec. 4, 2003, 117 Stat. 1954, 1983, 2001, 2010; Pub.L. 111-203, July 21, 2010.



FCRA 15 USC § 1681 Congressional findings and statement of purpose

Reference

(a) Accuracy and fairness of credit reporting

The Congress makes the following findings:

(1) The banking system is dependent upon fair and accurate credit reporting.Inaccurate credit reports directly impair the efficiency of the banking system, andunfair credit reporting methods undermine the public confidence which is essential tothe continued functioning of the banking system.

(2) An elaborate mechanism has been developed for investigating and evaluatingthe credit worthiness, credit standing, credit capacity, character, and generalreputation of consumers.

(3) Consumer reporting agencies have assumed a vital role in assembling andevaluating consumer credit and other information on consumers.

(4) There is a need to insure that consumer reporting agencies exercise their graveresponsibilities with fairness, impartiality, and a respect for the consumer's right toprivacy.

(b) Reasonable procedures

It is the purpose of this subchapter to require that consumer reporting agencies adoptreasonable procedures for meeting the needs of commerce for consumer credit,personnel, insurance, and other information in a manner which is fair and equitable tothe consumer, with regard to the confidentiality, accuracy, relevancy, and properutilization of such information in accordance with the requirements of thissubchapter.



FCRA 15 USC § 1681a Definitions; rules of construction

Reference

[Changes effective July 21, 2011]

(a) Definitions and rules of construction set forth in this section are applicable forthe purposes of this subchapter.

(b) The term "person" means any individual, partnership, corporation, trust,estate, cooperative, association, government or governmental subdivision or agency,or other entity.

(c) The term "consumer" means an individual.

(d) "Consumer report"

(1) In general. The term means any written, oral, or other communication of anyinformation by a consumer reporting agency bearing on a consumer's creditworthiness, credit standing, credit capacity, character, general reputation, personalcharacteristics, or mode of living which is used or expected to be used or collected inwhole or in part for the purpose of serving as a factor in establishing the consumer'seligibility for

(A) credit or insurance to be used primarily for personal, family, or householdpurposes.

(B) employment purposes; or

(C) any other purpose authorized under section 1681b of this title.

(2) Exclusions -- Except as provided in paragraph (3), the term "consumer report"does not include --

(A) subject to section 624, any --

(i) report containing information solely as to transactions or experiences betweenthe consumer and the person making the report;

(ii) communication of that information among persons related by commonownership or affiliated by corporate control; or

(iii) communication of other information among persons related by commonownership or affiliated by corporate control, if it is clearly and conspicuouslydisclosed to the consumer that the information may be communicated among suchpersons and the consumer is given the opportunity, before the time that the



information is initially communicated, to direct that such information not becommunicated among such persons;

(B) any authorization or approval of a specific extension of credit directly orindirectly by the issuer of a credit card or similar device;

(C) any report in which a person who has been requested by a third party to makea specific extension of credit directly or indirectly to a consumer conveys his or herdecision with respect to such request, if the third party advises the consumer of thename and address of the person to whom the request was made and such personmakes the disclosures to the consumer required under section 1681m of this title; or

(D) a communication described in subsection (o) or (x) of this section.

(3) RESTRICTION ON SHARING OF MEDICAL INFORMATION- Except for information orany communication of information disclosed as provided in section 604(g)(3), theexclusions in paragraph (2) shall not apply with respect to information disclosed toany person related by common ownership or affiliated by corporate control, if theinformation is --

(A) medical information;

(B) an individualized list or description based on the payment transactions of theconsumer for medical products or services; or

(C) an aggregate list of identified consumers based on payment transactions formedical products or services.

(e) The term "investigative consumer report" means a consumer report or portionthereof in which information on a consumer's character, general reputation, personalcharacteristics, or mode of living is obtained through personal interviews withneighbors, friends, or associates of the consumer reported on or with others withwhom he is acquainted or who may have knowledge concerning any such items ofinformation. However, such information shall not include specific factual informationon a consumer's credit record obtained directly from a creditor of the consumer orfrom a consumer reporting agency when such information was obtained directly froma creditor of the consumer or from the consumer.

(f) The term "consumer reporting agency" means any person which, for monetaryfees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in partin the practice of assembling or evaluating consumer credit information or otherinformation on consumers for the purpose of furnishing consumer reports to thirdparties, and which uses any means or facility of interstate commerce for the purposeof preparing or furnishing consumer reports.



(g) The term "file", when used in connection with information on any consumer,means all of the information on that consumer recorded and retained by a consumerreporting agency regardless of how the information is stored.

(h) The term "employment purposes" when used in connection with a consumerreport means a report used for the purpose of evaluating a consumer for employment,promotion, reassignment or retention as an employee.

(i) MEDICAL INFORMATION- The term "medical information" --

(1) means information or data, whether oral or recorded, in any form or medium,created by or derived from a health care provider or the consumer, that relates to --

(A) the past, present, or future physical, mental, or behavioral health or conditionof an individual;

(B) the provision of health care to an individual; or

(C) the payment for the provision of health care to an individual.

(2) does not include the age or gender of a consumer, demographic informationabout the consumer, including a consumer's residence address or e-mail address, orany other information about a consumer that does not relate to the physical, mental,or behavioral health or condition of a consumer, including the existence or value ofany insurance policy.

(j) Definitions relating to child support obligations

(1) Overdue support

The term "overdue support" has the meaning given to such term in section 666(e) ofTitle 42.

(2) State or local child support enforcement agency

The term "State or local child support enforcement agency" means a State or localagency which administers a State or local program for establishing and enforcing childsupport obligations.

(k) Adverse action

(1) Actions included. The term "adverse action"

(A) has the same meaning as in section 1691(d)(6) of this title; and

(B) means



(i) a denial or cancellation of, an increase in any charge for, or a reduction orother adverse or unfavorable change in the terms of coverage or amount of, anyinsurance, existing or applied for, in connection with the underwriting of insurance;

(ii) a denial of employment or any other decision for employment purposes thatadversely affects any current or prospective employee;

(iii) a denial or cancellation of, an increase in any charge for, or any other adverseor unfavorable change in the terms of, any license or benefit described in section1681b(a)(3)(D) of this title; and

(iv) an action taken or determination that is

(I) made in connection with an application that was made by, or a transaction thatwas initiated by, any consumer, or in connection with a review of an account undersection 1681b(a)(3)(F)(ii) of this title; and

(II) adverse to the interests of the consumer.

(2) Applicable findings, decisions, commentary, and orders. For purposes of anydetermination of whether an action is an adverse action under paragraph (1)(A), allappropriate final findings, decisions, commentary, and orders issued under section1691(d)(6) of this title by the Bureau Board of Governors of the Federal ReserveSystem or any court shall apply.

(l) Firm offer of credit or insurance. The term "firm offer of credit or insurance"means any offer of credit or insurance to a consumer that will be honored if theconsumer is determined, based on information in a consumer report on the consumer,to meet the specific criteria used to select the consumer for the offer, except thatthe offer may be further conditioned on one or more of the following:

(1) The consumer being determined, based on information in the consumer'sapplication for the credit or insurance, to meet specific criteria bearing on creditworthiness or insurability, as applicable, that are established

(A) before selection of the consumer for the offer; and

(B) for the purpose of determining whether to extend credit or insurance pursuantto the offer.

(2) Verification

(A) that the consumer continues to meet the specific criteria used to select theconsumer for the offer, by using information in a consumer report on the consumer,information in the consumer's application for the credit or insurance, or other



information bearing on the credit worthiness or insurability of the consumer; or

(B) of the information in the consumer's application for the credit or insurance, todetermine that the consumer meets the specific criteria bearing on credit worthinessor insurability.

(3) The consumer furnishing any collateral that is a requirement for the extensionof the credit or insurance that was

(A) established before selection of the consumer for the offer of credit orinsurance; and

(B) disclosed to the consumer in the offer of credit or insurance.

(m) Credit or insurance transaction that is not initiated by the consumer. The term"credit or insurance transaction that is not initiated by the consumer" does not includethe use of a consumer report by a person with which the consumer has an account orinsurance policy, for purposes of

(1) reviewing the account or insurance policy; or

(2) collecting the account.

(n) State. The term "State" means any State, the Commonwealth of Puerto Rico,the District of Columbia, and any territory or possession of the United States.

(o) Excluded communications. A communication is described in this subsection if itis a communication

(1) that, but for subsection (d)(2)(D) of this section, would be an investigativeconsumer report;

(2) that is made to a prospective employer for the purpose of

(A) procuring an employee for the employer; or

(B) procuring an opportunity for a natural person to work for the employer;

(3) that is made by a person who regularly performs such procurement;

(4) that is not used by any person for any purpose other than a purpose describedin subparagraph (A) or (B) of paragraph (2); and

(5) with respect to which

(A) the consumer who is the subject of the communication

(i) consents orally or in writing to the nature and scope of the communication,



before the collection of any information for the purpose of making thecommunication;

(ii) consents orally or in writing to the making of the communication to aprospective employer, before the making of the communication; and

(iii) in the case of consent under clause (i) or (ii) given orally, is provided writtenconfirmation of that consent by the person making the communication, not later than3 business days after the receipt of the consent by that person;

(B) the person who makes the communication does not, for the purpose of makingthe communication, make any inquiry that if made by a prospective employer of theconsumer who is the subject of the communication would violate any applicableFederal or State equal employment opportunity law or regulation; and

(C) the person who makes the communication

(i) discloses in writing to the consumer who is the subject of the communication,not later than 5 business days after receiving any request from the consumer for suchdisclosure, the nature and substance of all information in the consumer's file at thetime of the request, except that the sources of any information that is acquired solelyfor use in making the communication and is actually used for no other purpose, neednot be disclosed other than under appropriate discovery procedures in any court ofcompetent jurisdiction in which an action is brought; and

(ii) notifies the consumer who is the subject of the communication, in writing, ofthe consumer's right to request the information described in clause (i).

(p) Consumer reporting agency that compiles and maintains files on consumers on anationwide basis. The term "consumer reporting agency that compiles and maintainsfiles on a consumers on a nationwide basis" means a consumer reporting agency thatregularly engages in the practice of assembling or evaluating, and maintaining, for thepurpose of furnishing consumer reports to third parties bearing on a consumer's creditworthiness, credit standing, or credit capacity, each of the following regardingconsumers residing nationwide:

(1) Public record information.

(2) Credit account information from persons who furnish that information regularlyand in the ordinary course of business.

(q) DEFINITIONS RELATING TO FRAUD ALERTS-

(1) ACTIVE DUTY MILITARY CONSUMER- The term "active duty military consumer"means a consumer in military service who --



(A) is on active duty (as defined in section 101(d)(1) of title 10, United StatesCode) or is a reservist performing duty under a call or order to active duty under aprovision of law referred to in section 101(a)(13) of title 10, United States Code; and

(B) is assigned to service away from the usual duty station of the consumer.

(2) FRAUD ALERT; ACTIVE DUTY ALERT- The terms "fraud alert" and "active dutyalert" mean a statement in the file of a consumer that-

(A) notifies all prospective users of a consumer report relating to the consumerthat the consumer may be a victim of fraud, including identity theft, or is an activeduty military consumer, as applicable; and

(B) is presented in a manner that facilitates a clear and conspicuous view of thestatement described in subparagraph (A) by any person requesting such consumerreport.

(3) IDENTITY THEFT- The term "identity theft" means a fraud committed using theidentifying information of another person, subject to such further definition as theCommission may prescribe, by regulation.

(4) IDENTITY THEFT REPORT- The term "identity theft report" has the meaninggiven that term by rule of the Commission, and means, at a minimum, a report-

(A) that alleges an identity theft;

(B) that is a copy of an official, valid report filed by a consumer with anappropriate Federal, State, or local law enforcement agency, including the UnitedStates Postal Inspection Service, or such other government agency deemedappropriate by the Commission; and

(C) the filing of which subjects the person filing the report to criminal penaltiesrelating to the filing of false information if, in fact, the information in the report isfalse.

(5) NEW CREDIT PLAN- The term "new credit plan" means a new account under anopen end credit plan (as defined in section 103(i) of the Truth in Lending Act) or anew credit transaction not under an open end credit plan.

(r) CREDIT AND DEBIT RELATED TERMS-

(1) CARD ISSUER- The term "card issuer" means-

(A) a credit card issuer, in the case of a credit card; and

(B) a debit card issuer, in the case of a debit card.



(2) CREDIT CARD- The term "credit card" has the same meaning as in section 103 ofthe Truth in Lending Act.

(3) DEBIT CARD- The term "debit card" means any card issued by a financialinstitution to a consumer for use in initiating an electronic fund transfer from theaccount of the consumer at such financial institution, for the purpose of transferringmoney between accounts or obtaining money, property, labor, or services.

(4) ACCOUNT AND ELECTRONIC FUND TRANSFER- The terms "account" and"electronic fund transfer" have the same meanings as in section 903 of the ElectronicFund Transfer Act.

(5) CREDIT AND CREDITOR.-The terms "credit" and "creditor" have the samemeanings as in section 702 of the Equal Credit Opportunity Act.

(s) FEDERAL BANKING AGENCY- The term "Federal banking agency" has the samemeaning as in section 3 of the Federal Deposit Insurance Act.

(t) FINANCIAL INSTITUTION- The term "financial institution" means a State orNational bank, a State or Federal savings and loan association, a mutual savings bank,a State or Federal credit union, or any other person that, directly or indirectly, holdsa transaction account (as defined in section 19(b) of the Federal Reserve Act)belonging to a consumer.

(u) RESELLER- The term "reseller" means a consumer reporting agency that-

(1) assembles and merges information contained in the database of anotherconsumer reporting agency or multiple consumer reporting agencies concerning anyconsumer for purposes of furnishing such information to any third party, to the extentof such activities; and

(2) does not maintain a database of the assembled or merged information fromwhich new consumer reports are produced.

(v) COMMISSION- The term "Commission" means the Bureau Federal TradeCommission.

(w) The term "Bureau" means the Bureau of Consumer Financial Protection.

(x w) NATIONWIDE SPECIALTY CONSUMER REPORTING AGENCY- The term "nationwidespecialty consumer reporting agency" means a consumer reporting agency thatcompiles and maintains files on consumers on a nationwide basis relating to-

(1) medical records or payments;



(2) residential or tenant history;

(3) check writing history;

(4) employment history; or

(5) insurance claims.

(y x) EXCLUSION OF CERTAIN COMMUNICATIONS FOR EMPLOYEE INVESTIGATIONS -

(1) COMMUNICATIONS DESCRIBED IN THIS SUBSECTION- A communication isdescribed in this subsection if-

(A) but for subsection (d)(2)(D), the communication would be a consumer report;

(B) the communication is made to an employer in connection with an investigationof-

(i) suspected misconduct relating to employment; or

(ii) compliance with Federal, State, or local laws and regulations, the rules of aself-regulatory organization, or any preexisting written policies of the employer;

(C) the communication is not made for the purpose of investigating a consumer'scredit worthiness, credit standing, or credit capacity; and

(D) the communication is not provided to any person except-

(i) to the employer or an agent of the employer;

(ii) to any Federal or State officer, agency, or department, or any officer, agency,or department of a unit of general local government;

(iii) to any self-regulatory organization with regulatory authority over the activitiesof the employer or employee;

(iv) as otherwise required by law; or

(v) pursuant to section 608.

(2) SUBSEQUENT DISCLOSURE- After taking any adverse action based in whole or inpart on a communication described in paragraph (1), the employer shall disclose tothe consumer a summary containing the nature and substance of the communicationupon which the adverse action is based, except that the sources of informationacquired solely for use in preparing what would be but for subsection (d)(2)(D) aninvestigative consumer report need not be disclosed.

(3) SELF-REGULATORY ORGANIZATION DEFINED- For purposes of this subsection,



the term "self-regulatory organization" includes any self-regulatory organization (asdefined in section 3(a)(26) of the Securities Exchange Act of 1934), any entityestablished under title I of the Sarbanes-Oxley Act of 2002, any board of tradedesignated by the Commodity Futures Trading Commission, and any futuresassociation registered with such Commission.



FCRA 15 USC § 1681b Permissible Purposes of Consumer Reports

Reference


(a) In general. Subject to subsections (c) of this section any consumer reportingagency may furnish a consumer report under the following circumstances and noother:

(1) In response to the order of a court having jurisdiction to issue such an order, ora subpoena issued in connection with proceedings before a Federal grand jury.

(2) In accordance with the written instructions of the consumer to whom it relates.

(3) To a person which it has reason to believe --

(A) intends to use the information in connection with a credit transaction involvingthe consumer on whom the information is to be furnished and involving the extensionof credit to, or review or collection of an account of, the consumer; or

(B) intends to use the information for employment purposes; or

(C) intends to use the information in connection with the underwriting of insuranceinvolving the consumer; or

(D) intends to use the information in connection with a determination of theconsumer's eligibility for a license or other benefit granted by a governmentalinstrumentality required by law to consider an applicant's financial responsibility orstatus; or

(E) intends to use the information, as a potential investor or servicer, or currentinsurer, in connection with a valuation of, or an assessment of the credit orprepayment risks associated with, an existing credit obligation; or

(F) otherwise has a legitimate business need for the information

(i) in connection with a business transaction that is initiated by the consumer; or

(ii) to review an account to determine whether the consumer continues to meetthe terms of the account.

(4) In response to a request by the head of a State or local child supportenforcement agency (or a State or local government official authorized by the head ofsuch an agency), if the person making the request certifies to the consumer reportingagency that



(A) the consumer report is needed for the purpose of establishing an individual'scapacity to make child support payments or determining the appropriate level of suchpayments;

(B) the paternity of the consumer for the child to which the obligation relates hasbeen established or acknowledged by the consumer in accordance with State lawsunder which the obligation arises (if required by those laws);

(C) the person has provided at least 10 days' prior notice to the consumer whosereport is requested, by certified or registered mail to the last known address of theconsumer, that the report will be requested; and

(D) the consumer report will be kept confidential, will be used solely for a purposedescribed in subparagraph (A), and will not be used in connection with any other civil,administrative, or criminal proceeding, or for any other purpose.

(5) To an agency administering a State plan under section 654 of Title 42 for use toset an initial or modified child support award.

(6) To the Federal Deposit Insurance Corporation or the National Credit UnionAdministration as part of its preparation for its appointment or as part of its exerciseof powers, as conservator, receiver, or liquidating agent for an insured depositoryinstitution or insured credit union under the Federal Deposit Insurance Act or theFederal Credit Union Act, or other applicable Federal or State law, or in connectionwith the resolution or liquidation of a failed or failing insured depository institution orinsured credit union, as applicable.

(b) Conditions for furnishing and using consumer reports for employment purposes.

(1) Certification from user. A consumer reporting agency may furnish a consumerreport for employment purposes only if

(A) the person who obtains such report from the agency certifies to the agencythat

(i) the person has complied with paragraph (2) with respect to the consumerreport, and the person will comply with paragraph (3) with respect to the consumerreport if paragraph (3) becomes applicable; and

(ii) information from the consumer report will not be used in violation of anyapplicable Federal or State equal employment opportunity law or regulation; and

(B) the consumer reporting agency provides with the report, or has previouslyprovided, a summary of the consumer's rights under this subchapter, as prescribed by



the Bureau Federal Trade Commission under section 1681g(c)(3) of this title.

(2) Disclosure to consumer. A person may not procure a consumer report, or causea consumer report to be procured, for employment purposes with respect to anyconsumer, unless

(A) In general. -- Except as provided in subparagraph (B), a person may not procurea consumer report, or cause a consumer report to be procured, for employmentpurposes with respect to any consumer, unless --

(i) a clear and conspicuous disclosure has been made in writing to the consumer atany time before the report is procured or caused to be procured, in a document thatconsists solely of the disclosure, that a consumer report may be obtained foremployment purposes; and

(ii) the consumer has authorized in writing (which authorization may be made onthe document referred to in clause (i)) the procurement of the report by that person.

(B) Application by mail, telephone, computer, or other similar means. -- If aconsumer described in subparagraph (C) applies for employment by mail, telephone,computer, or other similar means, at any time before a consumer report is procuredor caused to be procured in connection with that application --

(i) the person who procures the consumer report on the consumer for employmentpurposes shall provide to the consumer, by oral, written, or electronic means, noticethat a consumer report may be obtained for employment purposes, and a summary ofthe consumer's rights under section 615(a)(3); and

(ii) the consumer shall have consented, orally, in writing, or electronically to theprocurement of the report by that person.

(C) Scope. -- Subparagraph (B) shall apply to a person procuring a consumer reporton a consumer in connection with the consumer's application for employment only if --

(i) the consumer is applying for a position over which the Secretary ofTransportation has the power to establish qualifications and maximum hours ofservice pursuant to the provisions of section 31502 of title 49, or a position subject tosafety regulation by a State transportation agency; and

(ii) as of the time at which the person procures the report or causes the report tobe procured the only interaction between the consumer and the person in connectionwith that employment application has been by mail, telephone, computer, or othersimilar means.

(3) Conditions on use for adverse actions. --



(A) In general. -- Except as provided in subparagraph (B), in using a consumerreport for employment purposes, before taking any adverse action based in whole orin part on the report, the person intending to take such adverse action shall provideto the consumer to whom the report relates --

(i) a copy of the report; and

(ii) a description in writing of the rights of the consumer under this title, asprescribed by the Bureau Federal Trade Commission under section 609(c)(3).

(B) Application by mail, telephone, computer, or other similar means. --

(i) If a consumer described in subparagraph (C) applies for employment by mail,telephone, computer, or other similar means, and if a person who has procured aconsumer report on the consumer for employment purposes takes adverse action onthe employment application based in whole or in part on the report, then the personmust provide to the consumer to whom the report relates, in lieu of the noticesrequired under subparagraph (A) of this section and under section 615(a), within 3business days of taking such action, an oral, written or electronic notification --

(I) that adverse action has been taken based in whole or in part on a consumerreport received from a consumer reporting agency;

(II) of the name, address and telephone number of the consumer reporting agencythat furnished the consumer report (including a toll-free telephone numberestablished by the agency if the agency compiles and maintains files on consumers ona nationwide basis);

(III) that the consumer reporting agency did not make the decision to take theadverse action and is unable to provide to the consumer the specific reasons why theadverse action was taken; and

(IV) that the consumer may, upon providing proper identification, request a freecopy of a report and may dispute with the consumer reporting agency the accuracy orcompleteness of any information in a report.

(ii) If, under clause (B)(i)(IV), the consumer requests a copy of a consumer reportfrom the person who procured the report, then, within 3 business days of receivingthe consumer's request, together with proper identification, the person must send orprovide to the consumer a copy of a report and a copy of the consumer's rights asprescribed by the Bureau Federal Trade Commission under section 609(c)(3).

(C) Scope. -- Subparagraph (B) shall apply to a person procuring a consumer reporton a consumer in connection with the consumer's application for employment only if --



(i) the consumer is applying for a position over which the Secretary ofTransportation has the power to establish qualifications and maximum hours ofservice pursuant to the provisions of section 31502 of title 49, or a position subject tosafety regulation by a State transportation agency; and

(ii) as of the time at which the person procures the report or causes the report tobe procured the only interaction between the consumer and the person in connectionwith that employment application has been by mail, telephone, computer, or othersimilar means.".

(4) Exception for national security investigations. --

(A) In general. -- In the case of an agency or department of the United StatesGovernment which seeks to obtain and use a consumer report for employmentpurposes, paragraph (3) shall not apply to any adverse action by such agency ordepartment which is based in part on such consumer report, if the head of suchagency or department makes a written finding that --

(i) the consumer report is relevant to a national security investigation of suchagency or department;

(ii) the investigation is within the jurisdiction of such agency or department;

(iii) there is reason to believe that compliance with paragraph (3) will --

(I) endanger the life or physical safety of any person;

(II) result in flight from prosecution;

(III) result in the destruction of, or tampering with, evidence relevant to theinvestigation;

(IV) result in the intimidation of a potential witness relevant to the investigation;

(V) result in the compromise of classified information; or

(VI) otherwise seriously jeopardize or unduly delay the investigation or anotherofficial proceeding.

(B) Notification of consumer upon conclusion of investigation. -- Upon theconclusion of a national security investigation described in subparagraph (A), or uponthe determination that the exception under subparagraph (A) is no longer required forthe reasons set forth in such subparagraph, the official exercising the authority insuch subparagraph shall provide to the consumer who is the subject of the consumerreport with regard to which such finding was made --



(i) a copy of such consumer report with any classified information redacted asnecessary;

(ii) notice of any adverse action which is based, in part, on the consumer report;and

(iii) the identification with reasonable specificity of the nature of the investigationfor which the consumer report was sought.

(C) Delegation by head of agency or department. -- For purposes of subparagraphs(A) and (B), the head of any agency or department of the United States Governmentmay delegate his or her authorities under this paragraph to an official of such agencyor department who has personnel security responsibilities and is a member of theSenior Executive Service or equivalent civilian or military rank.

(D) Report to the congress. -- Not later than January 31 of each year, the head ofeach agency and department of the United States Government that exercisedauthority under this paragraph during the preceding year shall submit a report to theCongress on the number of times the department or agency exercised such authorityduring the year.

(E) Definitions. -- For purposes of this paragraph, the following definitions shallapply:

(i) Classified information. -- The term 'classified information' means informationthat is protected from unauthorized disclosure under Executive Order No. 12958 orsuccessor orders.

(ii) National security investigation. -- The term 'national security investigation'means any official inquiry by an agency or department of the United StatesGovernment to determine the eligibility of a consumer to receive access or continuedaccess to classified information or to determine whether classified information hasbeen lost or compromised.

(c) Furnishing reports in connection with credit or insurance transactions that arenot initiated by the consumer.

(1) In general. A consumer reporting agency may furnish a consumer report relatingto any consumer pursuant to subparagraph (A) or (C) of subsection (a)(3) of thissection in connection with any credit or insurance transaction that is not initiated bythe consumer only if

(A) the consumer authorizes the agency to provide such report to such person; or



(B) (i) the transaction consists of a firm offer of credit or insurance;

(ii) the consumer reporting agency has complied with subsection (e) of this section;and

(iii) there is not in effect an election by the consumer, made in accordance withsubsection (e) of this section, to have the consumer's name and address excluded fromlists of names provided by the agency pursuant to this paragraph.

(2) Limits on information received under paragraph (1)(B). A person may receivepursuant to paragraph (1)(B) only

(A) the name and address of a consumer;

(B) an identifier that is not unique to the consumer and that is used by the personsolely for the purpose of verifying the identity of the consumer; and

(C) other information pertaining to a consumer that does not identify therelationship or experience of the consumer with respect to a particular creditor orother entity.

(3) Information regarding inquiries. Except as provided in section 1681g(a)(5) ofthis title, a consumer reporting agency shall not furnish to any person a record ofinquiries in connection with a credit or insurance transaction that is not initiated by aconsumer.

(d) Reserved.

(e) Election of consumer to be excluded from lists.

(1) In general. A consumer may elect to have the consumer's name and addressexcluded from any list provided by a consumer reporting agency under subsection(c)(1)(B) of this section in connection with a credit or insurance transaction that is notinitiated by the consumer, by notifying the agency in accordance with paragraph (2)that the consumer does not consent to any use of a consumer report relating to theconsumer in connection with any credit or insurance transaction that is not initiatedby the consumer.

(2) Manner of notification. A consumer shall notify a consumer reporting agencyunder paragraph (1)

(A) through the notification system maintained by the agency under paragraph (5);or

(B) by submitting to the agency a signed notice of election form issued by the



agency for purposes of this subparagraph.

(3) Response of agency after notification through system. Upon receipt ofnotification of the election of a consumer under paragraph (1) through thenotification system maintained by the agency under paragraph (5), a consumerreporting agency shall

(A) inform the consumer that the election is effective only for the 5-year periodfollowing the election if the consumer does not submit to the agency a signed noticeof election form issued by the agency for purposes of paragraph (2)(B); and

(B) provide to the consumer a notice of election form, if requested by theconsumer, not later than 5 business days after receipt of the notification of theelection through the system established under paragraph (5), in the case of a requestmade at the time the consumer provides notification through the system.

(4) Effectiveness of election. An election of a consumer under paragraph (1)

(A) shall be effective with respect to a consumer reporting agency beginning 5business days after the date on which the consumer notifies the agency in accordancewith paragraph (2);

(B) shall be effective with respect to a consumer reporting agency

(i) subject to subparagraph (C), during the 5-year period beginning 5 business daysafter the date on which the consumer notifies the agency of the election, in the caseof an election for which a consumer notifies the agency only in accordance withparagraph (2)(A); or

(ii) until the consumer notifies the agency under subparagraph (C), in the case ofan election for which a consumer notifies the agency in accordance with paragraph(2)(B);

(C) shall not be effective after the date on which the consumer notifies theagency, through the notification system established by the agency under paragraph(5), that the election is no longer effective; and

(D) shall be effective with respect to each affiliate of the agency.

(5) Notification system.

(A) In general. Each consumer reporting agency that, under subsection (c)(1)(B) ofthis section, furnishes a consumer report in connection with a credit or insurancetransaction that is not initiated by a consumer, shall

(i) establish and maintain a notification system, including a toll-free telephone



number, which permits any consumer whose consumer report is maintained by theagency to notify the agency, with appropriate identification, of the consumer'selection to have the consumer's name and address excluded from any such list ofnames and addresses provided by the agency for such a transaction; and

(ii) publish by not later than 365 days after September 30, 1996, and not less thanannually thereafter, in a publication of general circulation in the area served by theagency

(I) a notification that information in consumer files maintained by the agency maybe used in connection with such transactions; and

(II) the address and toll-free telephone number for consumers to use to notify theagency of the consumer's election under clause (i).

(B) Establishment and maintenance as compliance. Establishment and maintenanceof a notification system (including a toll-free telephone number) and publication by aconsumer reporting agency on the agency's own behalf and on behalf of any of itsaffiliates in accordance with this paragraph is deemed to be compliance with thisparagraph by each of those affiliates.

(6) Notification system by agencies that operate nationwide. Each consumerreporting agency that compiles and maintains files on consumers on a nationwidebasis shall establish and maintain a notification system for purposes of paragraph (5)jointly with other such consumer reporting agencies.

(f) Certain use or obtaining of information prohibited. A person shall not use orobtain a consumer report for any purpose unless

(1) the consumer report is obtained for a purpose for which the consumer report isauthorized to be furnished under this section; and

(2) the purpose is certified in accordance with section 1681e of this title by aprospective user of the report through a general or specific certification.

(g) [Note: Effective on the later of -- (1) the end of the 90-day period beginning onthe date on which the regulations required under paragraph (5)(B) of such section604(g)(15 U.S.C. 1681b(g)) are issued in final form; or (2) the date specified in theregulations referred to in paragraph (1) of H.R. 2622]. Furnishing reports containingmedical information. A consumer reporting agency shall not furnish foremployment purposes, or in connection with a credit or insurance transaction, aconsumer report that contains medical information about a consumer, unless theconsumer consents to the furnishing of the report. PROTECTION OF MEDICALINFORMATION-



(1) LIMITATION ON CONSUMER REPORTING AGENCIES- A consumer reportingagency shall not furnish for employment purposes, or in connection with a creditor insurance transaction, a consumer report that contains medical information(other than medical contact information treated in the manner required undersection 605(a)(6)) about a consumer, unless-

(A) if furnished in connection with an insurance transaction, the consumeraffirmatively consents to the furnishing of the report;

(B) if furnished for employment purposes or in connection with a credittransaction-

(i) the information to be furnished is relevant to process or effect theemployment or credit transaction; and

(ii) the consumer provides specific written consent for the furnishing of thereport that describes in clear and conspicuous language the use for which theinformation will be furnished; or

(C) the information to be furnished pertains solely to transactions, accounts,or balances relating to debts arising from the receipt of medical services,products, or devises, where such information, other than account status oramounts, is restricted or reported using codes that do not identify, or do notprovide information sufficient to infer, the specific provider or the nature ofsuch services, products, or devices, as provided in section 605(a)(6).

(2) LIMITATION ON CREDITORS- Except as permitted pursuant to paragraph(3)(C) or regulations prescribed under paragraph (5)(A), a creditor shall notobtain or use medical information (other than medical information treated in themanner required under section 605(a)(6)) pertaining to a consumer in connectionwith any determination of the consumer's eligibility, or continued eligibility, forcredit.

(3) ACTIONS AUTHORIZED BY FEDERAL LAW, INSURANCE ACTIVITIES ANDREGULATORY DETERMINATIONS - Section603(d)(3) shall not be construed so as totreat information or any communication of information as a consumer report ifthe information or communication is disclosed-

(A) in connection with the business of insurance or annuities, including theactivities described in section 18B of the model Privacy of Consumer Financialand Health Information Regulation issued by the National Association ofInsurance Commissioners (as in effect on January 1, 2003);



(B) for any purpose permitted without authorization under the Standards forIndividually Identifiable Health Information promulgated by the Department ofHealth and Human Services pursuant to the Health Insurance Portability andAccountability Act of 1996, or referred to under section 1179 of such Act, ordescribed in section 502(e) of Public Law 106-102; or

(C) as otherwise determined to be necessary and appropriate, by regulation ororder, by the Bureau or the applicable State insurance authority (with respect toany person engaged in providing insurance or annuities).

(4) LIMITATION ON REDISCLOSURE OF MEDICAL INFORMATION- Any person thatreceives medical information pursuant to paragraph (1) or (3) shall not disclosesuch information to any other person, except as necessary to carry out thepurpose for which the information was initially disclosed, or as otherwisepermitted by statute, regulation, or order.

(5) REGULATIONS AND EFFECTIVE DATE FOR PARAGRAPH (2)

(A) REGULATIONS REQUIRED The Bureau may, after notice and opportunity forcomment, prescribe regulations that permit transactions under paragraph (2)that are determined to be necessary and appropriate to protect legitimateoperational, transactional, risk, consumer, and other needs (and which shallinclude permitting actions necessary for administrative verification purposes),consistent with the intent of paragraph (2) to restrict the use of medicalinformation for inappropriate purposes.

(B) FINAL REGULATIONS REQUIRED- The Federal banking agencies and theNational Credit Union Administration shall issue the regulations required undersubparagraph (A) in final form before the end of the 6-month period beginning onthe date of enactment of the Fair and Accurate Credit Transactions Act of 2003.

(6) COORDINATION WITH OTHER LAWS- No provision of this subsection shall beconstrued as altering, affecting, or superseding the applicability of any otherprovision of Federal law relating to medical confidentiality.



FCRA 15 USC § 1681c Requirements relating to information contained inconsumer reports

Reference


(a) Information excluded from consumer reports. Prohibited items.

Except as authorized under subsection (b) of this section, no consumer reportingagency may make any consumer report containing any of the following items ofinformation:

(1) Cases under Title 11 or under the Bankruptcy Act that, from the date of entryof the order for relief or the date of adjudication, as the case may be, antedate thereport by more than 10 years.

(2) Civil suits, civil judgments, and records of arrest that from date of entry,antedate the report by more than seven years or until the governing statute oflimitations has expired, whichever is the longer period.

(3) Paid tax liens which, from date of payment, antedate the report by more thanseven years.

(4) Accounts placed for collection or charged to profit and loss which antedate thereport by more than seven years.

(5) Any other adverse item of information, other than records of convictions ofcrimes which antedates the report by more than seven years.

(6) The name, address, and telephone number of any medical informationfurnisher that has notified the agency of its status, unless-

(A) such name, address, and telephone number are restricted or reported usingcodes that do not identify, or provide information sufficient to infer, the specificprovider or the nature of such services, products, or devices to a person other thanthe consumer; or

(B) the report is being provided to an insurance company for a purpose relating toengaging in the business of insurance other than property and casualty insurance.

(b) Exempted cases.

The provisions of paragraph (1) through (5) of subsection (a) of this section are notapplicable in the case of any consumer credit report to be used in connection with --



(1) a credit transaction involving, or which may reasonably be expected to involve,a principal amount of $150,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably beexpected to involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or whichmay reasonably be expected to equal $75,000, or more.

(c) Running of reporting period.

(1) In general. The 7-year period referred to in paragraphs (4) and (6) of subsection(a) of this section shall begin, with respect to any delinquent account that is placedfor collection (internally or by referral to a third party, whichever is earlier), chargedto profit and loss, or subjected to any similar action, upon the expiration of the180-day period beginning on the date of the commencement of the delinquency whichimmediately preceded the collection activity, charge to profit and loss, or similaraction.

(2) Effective date. Paragraph (1) shall apply only to items of information added tothe file of a consumer on or after the date that is 455 days after September 30, 1996.

(d) Information required to be disclosed. Any consumer reporting agencyDISCLOSED

(1) TITLE 11 INFORMATION- Any consumer reporting agency that furnishes aconsumer report that contains information regarding any case involving the consumerthat arises under Title 11, shall include in the report an identification of the chapterof such Title 11 under which such case arises if provided by the source of theinformation. If any case arising or filed under Title 11, is withdrawn by the consumerbefore a final judgment, the consumer reporting agency shall include in the reportthat such case or filing was withdrawn upon receipt of documentation certifying suchwithdrawal.

(2) KEY FACTOR IN CREDIT SCORE INFORMATION- Any consumer reporting agencythat furnishes a consumer report that contains any credit score or any other risk scoreor predictor on any consumer shall include in the report a clear and conspicuousstatement that a key factor (as defined in section 609(f)(2)(B)) that adverselyaffected such score or predictor was the number of enquiries, if such a predictor wasin fact a key factor that adversely affected such score. This paragraph shall not applyto a check services company, acting as such, which issues authorizations for thepurpose of approving or processing negotiable instruments, electronic fund transfers,or similar methods of payments, but only to the extent that such company is engaged



in such activities.

(e) Indication of closure of account by consumer. If a consumer reporting agency isnotified pursuant to section 1681s-2(a)(4) of this title that a credit account of aconsumer was voluntarily closed by the consumer, the agency shall indicate that factin any consumer report that includes information related to the account.

(f) Indication of dispute by consumer. If a consumer reporting agency is notifiedpursuant to section 1681s-2(a)(3) of this title that information regarding a consumerwho was furnished to the agency is disputed by the consumer, the agency shallindicate that fact in each consumer report that includes the disputed information.

(g) TRUNCATION OF CREDIT CARD AND DEBIT CARD NUMBERS-

(1) IN GENERAL- Except as otherwise provided in this subsection, no person thataccepts credit cards or debit cards for the transaction of business shall print morethan the last 5 digits of the card number or the expiration date upon any receiptprovided to the cardholder at the point of the sale or transaction.

(2) LIMITATION- This subsection shall apply only to receipts that are electronicallyprinted, and shall not apply to transactions in which the sole means of recording acredit card or debit card account number is by handwriting or by an imprint or copy ofthe card.

(3) EFFECTIVE DATE- This subsection shall become effective-

(A) 3 years after the date of enactment of this subsection, with respect to any cashregister or other machine or device that electronically prints receipts for credit cardor debit card transactions that is in use before January 1, 2005; and

(B) 1 year after the date of enactment of this subsection, with respect to any cashregister or other machine H. R. 2622-9 or device that electronically prints receipts forcredit card or debit card transactions that is first put into use on or after January 1,2005.

(h) NOTICE OF DISCREPANCY IN ADDRESS-

(1) IN GENERAL- If a person has requested a consumer report relating to aconsumer from a consumer reporting agency described in section 603(p), the requestincludes an address for the consumer that substantially differs from the addresses inthe file of the consumer, and the agency provides a consumer report in response tothe request, the consumer reporting agency shall notify the requester of the existenceof the discrepancy.

(2) REGULATIONS -



(A) REGULATIONS REQUIRED- The Federal banking agencies, the National CreditUnion Administration, and the Commission shall jointly, in consultation with theFederal banking agencies, the National Credit Union Administration, and theFederal Trade Commission, with respect to the entities that are subject to theirrespective enforcement authority under section 621, prescribe regulationsproviding guidance regarding reasonable policies and procedures that a user of aconsumer report should employ when such user has received a notice of discrepancyunder paragraph (1).

(B) POLICIES AND PROCEDURES TO BE INCLUDED- The regulations prescribed undersubparagraph (A) shall describe reasonable policies and procedures for use by a userof a consumer report-

(i) to form a reasonable belief that the user knows the identity of the person towhom the consumer report pertains; and

(ii) if the user establishes a continuing relationship with the consumer, and theuser regularly and in the ordinary course of business furnishes information to theconsumer reporting agency from which the notice of discrepancy pertaining to theconsumer was obtained, to reconcile the address of the consumer with the consumerreporting agency by furnishing such address to such consumer reporting agency as partof information regularly furnished by the user for the period in which the relationshipis established.



FCRA 15 USC § 1681c-1 Identity theft prevention; fraud alerts and active dutyalerts

Reference

(a) ONE-CALL FRAUD ALERTS-

(1) INITIAL ALERTS- Upon the direct request of a consumer, or an individual actingon behalf of or as a personal representative of a consumer, who asserts in good faith asuspicion that the consumer has been or is about to become a victim of fraud orrelated crime, including identity theft, a consumer reporting agency described insection 603(p) that maintains a file on the consumer and has received appropriateproof of the identity of the requester shall-

(A) include a fraud alert in the file of that consumer, and also provide that alertalong with any credit score generated in using that file, for a period of not less than90 days, beginning on the date of such request, unless the consumer or suchrepresentative requests that such fraud alert be removed before the end of suchperiod, and the agency has received appropriate proof of the identity of the requesterfor such purpose; and

(B) refer the information regarding the fraud alert under this paragraph to each ofthe other consumer reporting agencies described in section 603(p), in accordance withprocedures developed under section 621(f).

(2) ACCESS TO FREE REPORTS- In any case in which a consumer reporting agencyincludes a fraud alert in the file of a consumer pursuant to this subsection, theconsumer reporting agency shall-

(A) disclose to the consumer that the consumer may request a free copy of the fileof the consumer pursuant to section 612(d); and

(B) provide to the consumer all disclosures required to be made under section 609,without charge to the consumer, not later than 3 business days after any requestdescribed in subparagraph (A).

(b) EXTENDED ALERTS-

(1) IN GENERAL- Upon the direct request of a consumer, or an individual acting onbehalf of or as a personal representative of a consumer, who submits an identity theftreport to a consumer reporting agency described in section 603(p) that maintains afile on the consumer, if the agency has received appropriate proof of the identity ofthe requester, the agency shall-



(A) include a fraud alert in the file of that consumer, and also provide that alertalong with any credit score generated in using that file, during the 7-year periodbeginning on the date of such request, unless the consumer or such representativerequests that such fraud alert be removed before the end of such period and theagency has received appropriate proof of the identity of the requester for suchpurpose;

(B) during the 5-year period beginning on the date of such request, exclude theconsumer from any list of consumers prepared by the consumer reporting agency andprovided to any third party to offer credit or insurance to the consumer as part of atransaction that was not initiated by the consumer, unless the consumer or suchrepresentative requests that such exclusion be rescinded before the end of suchperiod; and

(C) refer the information regarding the extended fraud alert under this paragraphto each of the other consumer reporting agencies described in section 603(p), inaccordance with procedures developed under section 621(f).

(2) ACCESS TO FREE REPORTS- In any case in which a consumer reporting agencyincludes a fraud alert in the file of a consumer pursuant to this subsection, theconsumer reporting agency shall-

(A) disclose to the consumer that the consumer may request 2 free copies of thefile of the consumer pursuant to section 612(d) during the 12-month period beginningon the date on which the fraud alert was included in the file; and

(B) provide to the consumer all disclosures required to be made under section 609,without charge to the consumer, not later than 3 business days after any requestdescribed in subparagraph (A).

(c) ACTIVE DUTY ALERTS- Upon the direct request of an active duty militaryconsumer, or an individual acting on behalf of or as a personal representative of anactive duty military consumer, a consumer reporting agency described in section603(p) that maintains a file on the active duty military consumer and has receivedappropriate proof of the identity of the requester shall-

(1) include an active duty alert in the file of that active duty military consumer,and also provide that alert along with any credit score generated in using that file,during a period of not less than 12 months, or such longer period as the Commissionshall determine, by regulation, beginning on the date of the request, unless the activeduty military consumer or such representative requests that such fraud alert beremoved before the end of such period, and the agency has received appropriate



proof of the identity of the requester for such purpose;

(2) during the 2-year period beginning on the date of such request, exclude theactive duty military consumer from any list of consumers prepared by the consumerreporting agency and provided to any third party to offer credit or insurance to theconsumer as part of a transaction that was not initiated by the consumer, unless theconsumer requests that such exclusion be rescinded before the end of such period;and

(3) refer the information regarding the active duty alert to each of the otherconsumer reporting agencies described in section 603(p), in accordance withprocedures developed under section 621(f).

(d) PROCEDURES- Each consumer reporting agency described in section 603(p) shallestablish policies and procedures to comply with this section, including proceduresthat inform consumers of the availability of initial, extended, and active duty alertsand procedures that allow consumers and active duty military consumers to requestinitial, extended, or active duty alerts (as applicable) in a simple and easy manner,including by telephone.

(e) REFERRALS OF ALERTS- Each consumer reporting agency described in section603(p) that receives a referral of a fraud alert or active duty alert from anotherconsumer reporting agency pursuant to this section shall, as though the agencyreceived the request from the consumer directly, follow the procedures requiredunder-

(1) paragraphs (1)(A) and (2) of subsection (a), in the case of a referral undersubsection (a)(1)(B);

(2) paragraphs (1)(A), (1)(B), and (2) of subsection (b), in the case of a referralunder subsection (b)(1)(C); and

(3) paragraphs (1) and (2) of subsection (c), in the case of a referral undersubsection (c)(3).

(f) DUTY OF RESELLER TO RECONVEY ALERT- A reseller shall include in its reportany fraud alert or active duty alert placed in the file of a consumer pursuant to thissection by another consumer reporting agency.

(g) DUTY OF OTHER CONSUMER REPORTING AGENCIES TO PROVIDE CONTACTINFORMATION- If a consumer contacts any consumer reporting agency that is notdescribed in section 603(p) to communicate a suspicion that the consumer has been oris about to become a victim of fraud or related crime, including identity theft, theagency shall provide information to the consumer on how to contact the Commission



and the consumer reporting agencies described in section 603(p) to obtain moredetailed information and request alerts under this section.

(h) LIMITATIONS ON USE OF INFORMATION FOR CREDIT EXTENSIONS-

(1) REQUIREMENTS FOR INITIAL AND ACTIVE DUTY ALERTS-

(A) NOTIFICATION- Each initial fraud alert and active duty alert under this sectionshall include information that notifies all prospective users of a consumer report onthe consumer to which the alert relates that the consumer does not authorize theestablishment of any new credit plan or extension of credit, other than under anopen-end credit plan (as defined in section 103(i)), in the name of the consumer, orissuance of an additional card on an existing credit account requested by a consumer,or any increase in credit limit on an existing credit account requested by a consumer,except in accordance with subparagraph (B).

(B) LIMITATION ON USERS-

(i) IN GENERAL- No prospective user of a consumer report that includes an initialfraud alert or an active duty alert in accordance with this section may establish a newcredit plan or extension of credit, other than under an open-end credit plan (asdefined in section 103(i)), in the name of the consumer, or issue an additional card onan existing credit account requested by a consumer, or grant any increase in creditlimit on an existing credit account requested by a consumer, unless the user utilizesreasonable policies and procedures to form a reasonable belief that the user knowsthe identity of the person making the request.

(ii) VERIFICATION- If a consumer requesting the alert has specified a telephonenumber to be used for identity verification purposes, before authorizing any newcredit plan or extension described in clause (i) in the name of such consumer, a userof such consumer report shall contact the consumer using that telephone number ortake reasonable steps to verify the consumer's identity and confirm that theapplication for a new credit plan is not the result of identity theft.

(2) REQUIREMENTS FOR EXTENDED ALERTS-

(A) NOTIFICATION- Each extended alert under this section shall include informationthat provides all prospective users of a consumer report relating to a consumer with-

(i) notification that the consumer does not authorize the establishment of any newcredit plan or extension of credit described in clause (i), other than under anopen-end credit plan (as defined in section 103(i)), in the name of the consumer, orissuance of an additional card on an existing credit account requested by a consumer,or any increase in credit limit on an existing credit account requested by a consumer,



except in accordance with subparagraph (B); and

(ii) a telephone number or other reasonable contact method designated by theconsumer.

(B) LIMITATION ON USERS- No prospective user of a consumer report or of a creditscore generated using the information in the file of a consumer that includes anextended fraud alert in accordance with this section may establish a new credit planor extension of credit, other than under an open-end credit plan (as defined in section103(i)), in the name of the consumer, or issue an additional card on an existing creditaccount requested by a consumer, or any increase in credit limit on an existing creditaccount requested by a consumer, unless the user contacts the consumer in person orusing the contact method described in subparagraph (A)(ii) to confirm that theapplication for a new credit plan or increase in credit limit, or request for anadditional card is not the result of identity theft.



FCRA 15 USC § 1681c-2 Block of information resulting from identity theft

Reference

(a) BLOCK- Except as otherwise provided in this section, a consumer reportingagency shall block the reporting of any information in the file of a consumer that theconsumer identifies as information that resulted from an alleged identity theft, notlater than 4 business days after the date of receipt by such agency of-

(1) appropriate proof of the identity of the consumer;

(2) a copy of an identity theft report;

(3) the identification of such information by the consumer; and

(4) a statement by the consumer that the information is not information relating toany transaction by the consumer.

(b) NOTIFICATION- A consumer reporting agency shall promptly notify the furnisherof information identified by the consumer under subsection (a)-

(1) that the information may be a result of identity theft;

(2) that an identity theft report has been filed;

(3) that a block has been requested under this section; and

(4) of the effective dates of the block.

(c) AUTHORITY TO DECLINE OR RESCIND-

(1) IN GENERAL- A consumer reporting agency may decline to block, or may rescindany block, of information relating to a consumer under this section, if the consumerreporting agency reasonably determines that-

(A) the information was blocked in error or a block was requested by the consumerin error;

(B) the information was blocked, or a block was requested by the consumer, on thebasis of a material misrepresentation of fact by the consumer relevant to the requestto block; or

(C) the consumer obtained possession of goods, services, or money as a result ofthe blocked transaction or transactions.

(2) NOTIFICATION TO CONSUMER- If a block of information is declined or rescindedunder this subsection, the affected consumer shall be notified promptly, in the same



manner as consumers are notified of the reinsertion of information under section611(a)(5)(B).

(3) SIGNIFICANCE OF BLOCK- For purposes of this subsection, if a consumerreporting agency rescinds a block, the presence of information in the file of aconsumer prior to the blocking of such information is not evidence of whether theconsumer knew or should have known that the consumer obtained possession of anygoods, services, or money as a result of the block.

(d) EXCEPTION FOR RESELLERS-

(1) NO RESELLER FILE- This section shall not apply to a consumer reporting agency,if the consumer reporting agency-

(A) is a reseller;

(B) is not, at the time of the request of the consumer under subsection (a),otherwise furnishing or reselling a consumer report concerning the informationidentified by the consumer; and

(C) informs the consumer, by any means, that the consumer may report theidentity theft to the Commission to obtain consumer information regarding identitytheft.

(2) RESELLER WITH FILE- The sole obligation of the consumer reporting agencyunder this section, with regard to any request of a consumer under this section, shallbe to block the consumer report maintained by the consumer reporting agency fromany subsequent use, if-

(A) the consumer, in accordance with the provisions of subsection (a), identifies,to a consumer reporting agency, information in the file of the consumer that resultedfrom identity theft; and

(B) the consumer reporting agency is a reseller of the identified information.

(3) NOTICE- In carrying out its obligation under paragraph (2), the reseller shallpromptly provide a notice to the consumer of the decision to block the file. Suchnotice shall contain the name, address, and telephone number of each consumerreporting agency from which the consumer information was obtained for resale.

(e) EXCEPTION FOR VERIFICATION COMPANIES- The provisions of this section do notapply to a check services company, acting as such, which issues authorizations for thepurpose of approving or processing negotiable instruments, electronic fund transfers,or similar methods of payments, except that, beginning 4 business days after receiptof information described in paragraphs (1) through (3) of subsection (a), a check



services company shall not report to a national consumer reporting agency describedin section 603(p), any information identified in the subject identity theft report asresulting from identity theft.

(f) ACCESS TO BLOCKED INFORMATION BY LAW ENFORCEMENT AGENCIES- Noprovision of this section shall be construed as requiring a consumer reporting agencyto prevent a Federal, State, or local law enforcement agency from accessing blockedinformation in a consumer file to which the agency could otherwise obtain accessunder this title.



FCRA 15 USC § 1681d Disclosure of investigative consumer reports

Reference

(a) Disclosure of fact of preparation

A person may not procure or cause to be prepared an investigative consumer reporton any consumer unless

(1) it is clearly and accurately disclosed to the consumer that an investigativeconsumer report including information as to his character, general reputation,personal characteristics, and mode of living, whichever are applicable, may be made,and such disclosure (A) is made in a writing mailed, or otherwise delivered, to theconsumer, not later than three days after the date on which the report was firstrequested, and (B) includes a statement informing the consumer of his right torequest the additional disclosures provided for under subsection (b) of this section andthe written summary of the rights of the consumer prepared pursuant to section1681g(c) of this title; and

(2) the person certifies or has certified to the consumer reporting agency that

(A) the person has made the disclosures to the consumer required by paragraph(1); and

(B) the person will comply with subsection (b) of this section.

(b) Disclosure on request of nature and scope of investigation

Any person who procures or causes to be prepared an investigative consumer reporton any consumer shall, upon written request made by the consumer within areasonable period of time after the receipt by him of the disclosure required bysubsection (a)(1) of this section, make a complete and accurate disclosure of thenature and scope of the investigation requested. This disclosure shall be made in awriting mailed, or otherwise delivered, to the consumer not later than five days afterthe date on which the request for such disclosure was received from the consumer orsuch report was first requested, whichever is the later.

(c) Limitation on liability upon showing of reasonable procedures for compliancewith provisions

No person may be held liable for any violation of subsection (a) or (b) of this section ifhe shows by a preponderance of the evidence that at the time of the violation hemaintained reasonable procedures to assure compliance with subsection (a) or (b) ofthis section.



(d) Prohibitions

(1) Certification. A consumer reporting agency shall not prepare or furnish aninvestigative consumer report unless the agency has received a certification undersubsection (a)(2) of this section from the person who requested the report.

(2) Inquiries. A consumer reporting agency shall not make an inquiry for thepurpose of preparing an investigative consumer report on a consumer for employmentpurposes if the making of the inquiry by an employer or prospective employer of theconsumer would violate any applicable Federal or State equal employmentopportunity law or regulation.

(3) Certain public record information. Except as otherwise provided in section1681k of this title, a consumer reporting agency shall not furnish an investigativeconsumer report that includes information that is a matter of public record and thatrelates to an arrest, indictment, conviction, civil judicial action, tax lien, oroutstanding judgment, unless the agency has verified the accuracy of the informationduring the 30-day period ending on the date on which the report is furnished.

(4) Certain adverse information. A consumer reporting agency shall not prepare orfurnish an investigative consumer report on a consumer that contains information thatis adverse to the interest of the consumer and that is obtained through a personalinterview with a neighbor, friend, or associate of the consumer or with anotherperson with whom the consumer is acquainted or who has knowledge of such item ofinformation, unless

(A) the agency has followed reasonable procedures to obtain confirmation of theinformation, from an additional source that has independent and direct knowledge ofthe information; or

(B) the person interviewed is the best possible source of the information.



FCRA 15 USC § 1681e Compliance procedures

Reference


(a) Identity and purposes of credit users. Every consumer reporting agency shallmaintain reasonable procedures designed to avoid violations of section 1681c of thistitle and to limit the furnishing of consumer reports to the purposes listed undersection 1681b of this title. These procedures shall require that prospective users ofthe information identify themselves, certify the purposes for which the information issought, and certify that the information will be used for no other purpose. Everyconsumer reporting agency shall make a reasonable effort to verify the identity of anew prospective user and the uses certified by such prospective user prior tofurnishing such user a consumer report. No consumer reporting agency may furnish aconsumer report to any person if it has reasonable grounds for believing that theconsumer report will not be used for a purpose listed in section 1681b of this title.

(b) Accuracy of report. Whenever a consumer reporting agency prepares aconsumer report it shall follow reasonable procedures to assure maximum possibleaccuracy of the information concerning the individual about whom the report relates.

(c) Disclosure of consumer reports by users allowed. A consumer reporting agencymay not prohibit a user of a consumer report furnished by the agency on a consumerfrom disclosing the contents of the report to the consumer, if adverse action againstthe consumer has been taken by the user based in whole or in part on the report.

(d) Notice to users and furnishers of information.

(1) Notice requirement. A consumer reporting agency shall provide to any person

(A) who regularly and in the ordinary course of business furnishes information tothe agency with respect to any consumer; or

(B) to whom a consumer report is provided by the agency;

a notice of such person's responsibilities under this subchapter.

(2) Content of notice. The Bureau Federal Trade Commission shall prescribe thecontent of notices under paragraph (1), and a consumer reporting agency shall be incompliance with this subsection if it provides a notice under paragraph (1) that issubstantially similar to the Bureau Federal Trade Commission prescription under thisparagraph.



(e) Procurement of consumer report for resale

(1) Disclosure. A person may not procure a consumer report for purposes ofreselling the report (or any information in the report) unless the person discloses tothe consumer reporting agency that originally furnishes the report

(A) the identity of the end-user of the report (or information); and

(B) each permissible purpose under section 1681b of this title for which the reportis furnished to the end-user of the report (or information).

(2) Responsibilities of procurers for resale. A person who procures a consumerreport for purposes of reselling the report (or any information in the report) shall

(A) establish and comply with reasonable procedures designed to ensure that thereport (or information) is resold by the person only for a purpose for which the reportmay be furnished under section 1681b of this title, including by requiring that eachperson to which the report (or information) is resold and that resells or provides thereport (or information) to any other person

(i) identifies each end user of the resold report (or information);

(ii) certifies each purpose for which the report (or information) will be used; and

(iii) certifies that the report (or information) will be used for no other purpose; and

(B) before reselling the report, make reasonable efforts to verify theidentifications and certifications made under subparagraph (A).

(3) RESALE OF CONSUMER REPORT TO A FEDERAL AGENCY OR DEPARTMENT. --Notwithstanding paragraph (1) or (2), a person who procures a consumer report forpurposes of reselling the report (or any information in the report) shall not disclosethe identity of the end-user of the report under paragraph (1) or (2) if --

(A) the end user is an agency or department of the United States Governmentwhich procures the report from the person for purposes of determining the eligibilityof the consumer concerned to receive access or continued access to classifiedinformation (as defined in section 604(b)(4)(E)(i)); and

(B) the agency or department certifies in writing to the person reselling the reportthat nondisclosure is necessary to protect classified information or the safety ofpersons employed by or contracting with, or undergoing investigation for work orcontracting with the agency or department.



FCRA 15 USC § 1681f Disclosures to governmental agencies

Reference

Notwithstanding the provisions of section 1681b of this title, a consumer reportingagency may furnish identifying information respecting any consumer, limited to hisname, address, former addresses, places of employment, or former places ofemployment, to a governmental agency.



FCRA 15 USC § 1681g Disclosures to consumers

Reference

(a) Information on file; sources; report recipients.

Every consumer reporting agency shall, upon request and subject to section1681h(a)(1) of this title, clearly and accurately disclose to the consumer:

(1) All information in the consumer's file at the time of the request, except that-

(A) if the consumer to whom the file relates requests that the first 5 digits of thesocial security number (or similar identification number) of the consumer not beincluded in the disclosure and the consumer reporting agency has receivedappropriate proof of the identity of the requester, the consumer reporting agencyshall so truncate such number in such disclosure; and

(B) nothing in this paragraph shall be construed to require a consumer reportingagency to disclose to a consumer any information concerning credit scores or anyother risk scores or predictors relating to the consumer.

(2) The sources of the information; except that the sources of informationacquired solely for use in preparing an investigative consumer report and actuallyused for no other purpose need not be disclosed: Provided, That in the event anaction is brought under this subchapter, such sources shall be available to the plaintiffunder appropriate discovery procedures in the court in which the action is brought.

(A) Identification of each person (including each end-user identified under section1681e(e)(1) of this title) that procured a consumer report

(i) for employment purposes, during the 2-year period preceding the date onwhich the request is made; or

(ii) for any other purpose, during the 1-year period preceding the date on whichthe request is made.

(B) An identification of a person under subparagraph (A) shall include

(i) the name of the person or, if applicable, the trade name (written in full) underwhich such person conducts business; and

(ii) upon request of the consumer, the address and telephone number of theperson.

(3) (A) Identification of each person (including each end-user identified undersection 1681(e)(1) of this title) that procured a consumer report --



(i) for employment purposes, during the 2-year period preceding the date onwhich the request is made; or

(ii) for any other purpose, during the 1-year period preceding the date on whichthe request is made.

(B) An identification of a person under subparagraph (A) shall include --

(i) the name of the person or, if applicable, the trade name (written in full) underwhich such person conducts business; and

(ii) upon request of the consumer, the address and telephone number of the person

(C) Subparagraph (A) does not apply if --

(i) the end user is an agency or department of the United States Government thatprocures the report from the person for purposes of determining the eligibility of theconsumer to whom the report relates to receive access or continued access toclassified information (as defined in section 604(b)(4)(E)(i)); and

(ii) the head of the agency or department makes a written finding as prescribedunder section 604(b)(4)(A).

(4) The dates, original payees, and amounts of any checks upon which is based anyadverse characterization of the consumer, included in the file at the time of thedisclosure.

(5) A record of all inquiries received by the agency during the 1-year periodpreceding the request that identified the consumer in connection with a credit orinsurance transaction that was not initiated by the consumer.

(6) If the consumer requests the credit file and not the credit score, a statementthat the consumer may request and obtain a credit score.

(b) Exempt information.

The requirements of subsection (a) of this section respecting the disclosure of sourcesof information and the recipients of consumer reports do not apply to informationreceived or consumer reports furnished prior to the effective date of this subchapterexcept to the extent that the matter involved is contained in the files of theconsumer reporting agency on that date.

(c) SUMMARY OF RIGHTS TO OBTAIN AND DISPUTE INFORMATION IN CONSUMERREPORTS AND TO OBTAIN CREDIT SCORES.

(1) COMMISSION SUMMARY OF RIGHTS REQUIRED.



(A) IN GENERAL- The Commission shall prepare a model summary of the rights ofconsumers under this title.

(B) CONTENT OF SUMMARY- The summary of rights prepared under subparagraph(A) shall include a description of-

(i) the right of a consumer to obtain a copy of a consumer report under subsection(a) from each consumer reporting agency;

(ii) the frequency and circumstances under which a consumer is entitled to receivea consumer report without charge under section 612;

(iii) the right of a consumer to dispute information in the file of the consumerunder section 611;

(iv) the right of a consumer to obtain a credit score from a consumer reportingagency, and a description of how to obtain a credit score;

(v) the method by which a consumer can contact, and obtain a consumer reportfrom, a consumer reporting agency without charge, as provided in the regulations ofthe Commission prescribed under section 211(c) of the Fair and Accurate CreditTransactions Act of 2003; and

(vi) the method by which a consumer can contact, and obtain a consumer reportfrom, a consumer reporting agency described in section 603(w), as provided in theregulations of the Commission prescribed under section 612(a)(1)(C).

(C) AVAILABILITY OF SUMMARY OF RIGHTS- The Commission shall-

(i) actively publicize the availability of the summary of rights prepared under thisparagraph;

(ii) conspicuously post on its Internet website the availability of such summary ofrights; and

(iii) promptly make such summary of rights available to consumers, on request.

(2) SUMMARY OF RIGHTS REQUIRED TO BE INCLUDED WITH AGENCY DISCLOSURES- Aconsumer reporting agency shall provide to a consumer, with each written disclosureby the agency to the consumer under this section-

(A) the summary of rights prepared by the Commission under paragraph (1);

(B) in the case of a consumer reporting agency described in section 603(p), atoll-free telephone number established by the agency, at which personnel areaccessible to consumers during normal business hours;



(C) a list of all Federal agencies responsible for enforcing any provision of thistitle, and the address and any appropriate phone number of each such agency, in aform that will assist the consumer in selecting the appropriate agency;

(D) a statement that the consumer may have additional rights under State law, andthat the consumer may wish to contact a State or local consumer protection agency ora State attorney general (or the equivalent thereof) to learn of those rights; and

(E) a statement that a consumer reporting agency is not required to removeaccurate derogatory information from the file of a consumer, unless the information isoutdated under section 605 or cannot be verified.".

(d) SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS-

(1) IN GENERAL- The Commission, in consultation with the Federal bankingagencies and the National Credit Union Administration, shall prepare a modelsummary of the rights of consumers under this title with respect to the procedures forremedying the effects of fraud or identity theft involving credit, an electronic fundtransfer, or an account or transaction at or with a financial institution or othercreditor.

(2) SUMMARY OF RIGHTS AND CONTACT INFORMATION- Beginning 60 days after thedate on which the model summary of rights is prescribed in final form by theCommission pursuant to paragraph (1), if any consumer contacts a consumer reportingagency and expresses a belief that the consumer is a victim of fraud or identity theftinvolving credit, an electronic fund transfer, or an account or transaction at or with afinancial institution or other creditor, the consumer reporting agency shall, inaddition to any other action that the agency may take, provide the consumer with asummary of rights that contains all of the information required by the Commissionunder paragraph (1), and information on how to contact the Commission to obtainmore detailed information.

(e) INFORMATION AVAILABLE TO VICTIMS-

(1) IN GENERAL- For the purpose of documenting fraudulent transactions resultingfrom identity theft, not later than 30 days after the date of receipt of a request froma victim in accordance with paragraph (3), and subject to verification of the identityof the victim and the claim of identity theft in accordance with paragraph (2), abusiness entity that has provided credit to, provided for consideration products,goods, or services to, accepted payment from, or otherwise entered into acommercial transaction for consideration with, a person who has allegedly madeunauthorized use of the means of identification of the victim, shall provide a copy of



application and business transaction records in the control of the business entity,whether maintained by the business entity or by another person on behalf of thebusiness entity, evidencing any transaction alleged to be a result of identity theft to-

(A) the victim;

(B) any Federal, State, or local government law enforcement agency or officerspecified by the victim in such a request; or

(C) any law enforcement agency investigating the identity theft and authorized bythe victim to take receipt of records provided under this subsection.

(2) VERIFICATION OF IDENTITY AND CLAIM- Before a business entity provides anyinformation under paragraph (1), unless the business entity, at its discretion,otherwise has a high degree of confidence that it knows the identity of the victimmaking a request under paragraph (1), the victim shall provide to the business entity-

(A) as proof of positive identification of the victim, at the election of the businessentity-

(i) the presentation of a government-issued identification card;

(ii) personally identifying information of the same type as was provided to thebusiness entity by the unauthorized person; or

(iii) personally identifying information that the business entity typically requestsfrom new applicants or for new transactions, at the time of the victim's request forinformation, including any documentation described in clauses (i) and (ii); and

(B) as proof of a claim of identity theft, at the election of the business entity-

(i) a copy of a police report evidencing the claim of the victim of identity theft;and

(ii) a properly completed-

(I) copy of a standardized affidavit of identity theft developed and made availableby the Commission; or

(II) an affidavit of fact that is acceptable to the business entity for that purpose.

(3) PROCEDURES- The request of a victim under paragraph (1) shall-

(A) be in writing;

(B) be mailed to an address specified by the business entity, if any; and

(C) if asked by the business entity, include relevant information about any



transaction alleged to be a result of identity theft to facilitate compliance with thissection including-

(i) if known by the victim (or if readily obtainable by the victim), the date of theapplication or transaction; and

(ii) if known by the victim (or if readily obtainable by the victim), any otheridentifying information such as an account or transaction number.

(4) NO CHARGE TO VICTIM- Information required to be provided under paragraph(1) shall be so provided without charge.

(5) AUTHORITY TO DECLINE TO PROVIDE INFORMATION- A business entity maydecline to provide information under paragraph (1) if, in the exercise of good faith,the business entity determines that-

(A) this subsection does not require disclosure of the information;

(B) after reviewing the information provided pursuant to paragraph (2), thebusiness entity does not have a high degree of confidence in knowing the true identityof the individual requesting the information;

(C) the request for the information is based on a misrepresentation of fact by theindividual requesting the information relevant to the request for information; or

(D) the information requested is Internet navigational data or similar informationabout a person's visit to a website or online service.

(6) LIMITATION ON LIABILITY- Except as provided in section 621, sections 616 and617 do not apply to any violation of this subsection.

(7) LIMITATION ON CIVIL LIABILITY- No business entity may be held civilly liableunder any provision of Federal, State, or other law for disclosure, made in good faithpursuant to this subsection.

(8) NO NEW RECORDKEEPING OBLIGATION- Nothing in this subsection creates anobligation on the part of a business entity to obtain, retain, or maintain informationor records that are not otherwise required to be obtained, retained, or maintained inthe ordinary course of its business or under other applicable law.

(9) RULE OF CONSTRUCTION-

(A) IN GENERAL- No provision of subtitle A of title V of Public Law 106-102,prohibiting the disclosure of financial information by a business entity to third partiesshall be used to deny disclosure of information to the victim under this subsection.



(B) LIMITATION- Except as provided in subparagraph (A), nothing in this subsectionpermits a business entity to disclose information, including information to lawenforcement under subparagraphs (B) and (C) of paragraph (1), that the businessentity is otherwise prohibited from disclosing under any other applicable provision ofFederal or State law.

(10) AFFIRMATIVE DEFENSE- In any civil action brought to enforce this subsection, itis an affirmative defense (which the defendant must establish by a preponderance ofthe evidence) for a business entity to file an affidavit or answer stating that-

(A) the business entity has made a reasonably diligent search of its availablebusiness records; and

(B) the records requested under this subsection do not exist or are not reasonablyavailable.

(11) DEFINITION OF VICTIM- For purposes of this subsection, the term 'victim' meansa consumer whose means of identification or financial information has been used ortransferred (or has been alleged to have been used or transferred) without theauthority of that consumer, with the intent to commit, or to aid or abet, an identitytheft or a similar crime.

(12) EFFECTIVE DATE- This subsection shall become effective 180 days after thedate of enactment of this subsection.

(13) EFFECTIVENESS STUDY- Not later than 18 months after the date of enactmentof this subsection, the Comptroller General of the United States shall submit a reportto Congress assessing the effectiveness of this provision.

(f) DISCLOSURE OF CREDIT SCORES-

(1) IN GENERAL- Upon the request of a consumer for a credit score, a consumerreporting agency shall supply to the consumer a statement indicating that theinformation and credit scoring model may be different than the credit score that maybe used by the lender, and a notice which shall include-

(A) the current credit score of the consumer or the most recent credit score of theconsumer that was previously calculated by the credit reporting agency for a purposerelated to the extension of credit;

(B) the range of possible credit scores under the model used;

(C) all of the key factors that adversely affected the credit score of the consumerin the model used, the total number of which shall not exceed 4, subject to paragraph



(9);

(D) the date on which the credit score was created; and

(E) the name of the person or entity that provided the credit score or credit fileupon which the credit score was created.

(2) DEFINITIONS- For purposes of this subsection, the following definitions shallapply:

(A) CREDIT SCORE- The term 'credit score'-

(i) means a numerical value or a categorization derived from a statistical tool ormodeling system used by a person who makes or arranges a loan to predict thelikelihood of certain credit behaviors, including default (and the numerical value orthe categorization derived from such analysis may also be referred to as a 'riskpredictor' or 'risk score'); and

(ii) does not include-

(I) any mortgage score or rating of an automated underwriting system thatconsiders one or more factors in addition to credit information, including the loan tovalue ratio, the amount of down payment, or the financial assets of a consumer; or

(II) any other elements of the underwriting process or underwriting decision.

(B) KEY FACTORS- The term 'key factors' means all relevant elements or reasonsadversely affecting the credit score for the particular individual, listed in the order oftheir importance based on their effect on the credit score.

(3) TIMEFRAME AND MANNER OF DISCLOSURE- The information required by thissubsection shall be provided in the same timeframe and manner as the informationdescribed in subsection (a).

(4) APPLICABILITY TO CERTAIN USES- This subsection shall not be construed so asto compel a consumer reporting agency to develop or disclose a score if the agencydoes not-

(A) distribute scores that are used in connection with residential real propertyloans; or

(B) develop scores that assist credit providers in understanding the general creditbehavior of a consumer and predicting the future credit behavior of the consumer.

(5) APPLICABILITY TO CREDIT SCORES DEVELOPED BY ANOTHER PERSON-

(A) IN GENERAL- This subsection shall not be construed to require a consumer



reporting agency that distributes credit scores developed by another person or entityto provide a further explanation of them, or to process a dispute arising pursuant tosection 611, except that the consumer reporting agency shall provide the consumerwith the name and address and website for contacting the person or entity whodeveloped the score or developed the methodology of the score.

(B) EXCEPTION- This paragraph shall not apply to a consumer reporting agency thatdevelops or modifies scores that are developed by another person or entity.

(6) MAINTENANCE OF CREDIT SCORES NOT REQUIRED- This subsection shall not beconstrued to require a consumer reporting agency to maintain credit scores in itsfiles.

(7) COMPLIANCE IN CERTAIN CASES- In complying with this subsection, a consumerreporting agency shall-

(A) supply the consumer with a credit score that is derived from a credit scoringmodel that is widely distributed to users by that consumer reporting agency inconnection with residential real property loans or with a credit score that assists theconsumer in understanding the credit scoring assessment of the credit behavior of theconsumer and predictions about the future credit behavior of the consumer; and

(B) a statement indicating that the information and credit scoring model may bedifferent than that used by the lender.

(8) FAIR AND REASONABLE FEE- A consumer reporting agency may charge a fair andreasonable fee, as determined by the Commission, for providing the informationrequired under this subsection.

(9) USE OF ENQUIRIES AS A KEY FACTOR- If a key factor that adversely affects thecredit score of a consumer consists of the number of enquiries made with respect to aconsumer report, that factor shall be included in the disclosure pursuant to paragraph(1)(C) without regard to the numerical limitation in such paragraph.

(g) DISCLOSURE OF CREDIT SCORES BY CERTAIN MORTGAGE LENDERS-

(1) IN GENERAL- Any person who makes or arranges loans and who uses a consumercredit score, as defined in subsection (f), in connection with an application initiatedor sought by a consumer for a closed end loan or the establishment of an open endloan for a consumer purpose that is secured by 1 to 4 units of residential real property(hereafter in this subsection referred to as the 'lender') shall provide the following tothe consumer as soon as reasonably practicable:

(A) INFORMATION REQUIRED UNDER SUBSECTION (f )-



(i) IN GENERAL- A copy of the information identified in subsection (f) that wasobtained from a consumer reporting agency or was developed and used by the user ofthe information.

(ii) NOTICE UNDER SUBPARAGRAPH (D)- In addition to the information provided toit by a third party that provided the credit score or scores, a lender is only required toprovide the notice contained in subparagraph (D).

(B) DISCLOSURES IN CASE OF AUTOMATED UNDERWRITING SYSTEM-

(i) IN GENERAL- If a person that is subject to this subsection uses an automatedunderwriting system to underwrite a loan, that person may satisfy the obligation toprovide a credit score by disclosing a credit score and associated key factors suppliedby a consumer reporting agency.

(ii) NUMERICAL CREDIT SCORE- However, if a numerical credit score is generatedby an automated underwriting system used by an enterprise, and that score isdisclosed to the person, the score shall be disclosed to the consumer consistent withsubparagraph (C).

(iii) ENTERPRISE DEFINED- For purposes of this subparagraph, the term 'enterprise'has the same meaning as in paragraph (6) of section 1303 of the Federal HousingEnterprises Financial Safety and Soundness Act of 1992.

(C) DISCLOSURES OF CREDIT SCORES NOT OBTAINED FROM A CONSUMER REPORTINGAGENCY- A person that is subject to the provisions of this subsection and that uses acredit score, other than a credit score provided by a consumer reporting agency, maysatisfy the obligation to provide a credit score by disclosing a credit score andassociated key factors supplied by a consumer reporting agency.

(D) NOTICE TO HOME LOAN APPLICANTS- A copy of the following notice, which shallinclude the name, address, and telephone number of each consumer reporting agencyproviding a credit score that was used:

NOTICE TO THE HOME LOAN APPLICANT

In connection with your application for a home loan, the lender must disclose to youthe score that a consumer reporting agency distributed to users and the lender used inconnection with your home loan, and the key factors affecting your credit scores. Thecredit score is a computer generated summary calculated at the time of the requestand based on information that a consumer reporting agency or lender has on file. Thescores are based on data about your credit history and payment patterns. Creditscores are important because they are used to assist the lender in determining



whether you will obtain a loan. They may also be used to determine what interestrate you may be offered on the mortgage. Credit scores can change over time,depending on your conduct, how your credit history and payment patterns change,and how credit scoring technologies change. Because the score is based oninformation in your credit history, it is very important that you review thecredit-related information that is being furnished to make sure it is accurate. Creditrecords may vary from one company to another. If you have questions about yourcredit score or the credit information that is furnished to you, contact the consumerreporting agency at the address and telephone number provided with this notice, orcontact the lender, if the lender developed or generated the credit score. Theconsumer reporting agency plays no part in the decision to take any action on the loanapplication and is unable to provide you with specific reasons for the decision on aloan application. If you have questions concerning the terms of the loan, contact thelender.

(E) ACTIONS NOT REQUIRED UNDER THIS SUBSECTION- This subsection shall notrequire any person to-

(i) explain the information provided pursuant to subsection (f);

(ii) disclose any information other than a credit score or key factors, as defined insubsection (f);

(iii) disclose any credit score or related information obtained by the user after aloan has closed;(iv) provide more than 1 disclosure per loan transaction; or

(v) provide the disclosure required by this subsection when another person hasmade the disclosure to the consumer for that loan transaction.

(F) NO OBLIGATION FOR CONTENT-

(i) IN GENERAL- The obligation of any person pursuant to this subsection shall belimited solely to providing a copy of the information that was received from theconsumer reporting agency.

(ii) LIMIT ON LIABILITY- No person has liability under this subsection for the contentof that information or for the omission of any information within the report providedby the consumer reporting agency.

(G) PERSON DEFINED AS EXCLUDING ENTERPRISE- As used in this subsection, theterm 'person' does not include an enterprise (as defined in paragraph (6) of section1303 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992).



(2) PROHIBITION ON DISCLOSURE CLAUSES NULL AND VOID-

(A) IN GENERAL- Any provision in a contract that prohibits the disclosure of a creditscore by a person who makes or arranges loans or a consumer reporting agency isvoid.

(B) NO LIABILITY FOR DISCLOSURE UNDER THIS SUBSECTION- A lender shall not haveliability under any contractual provision for disclosure of a credit score pursuant tothis subsection.



FCRA 15 USC § 1681h Conditions and form of disclosure to consumers

Reference

(a) In general.

(1) Proper identification. A consumer reporting agency shall require, as a conditionof making the disclosures required under section 1681g of this title, that the consumerfurnish proper identification.

(2) Disclosure in writing. Except as provided in subsection (b) of this section, thedisclosures required to be made under section 1681(g) of this title shall be providedunder that section in writing.

(b) Other forms of disclosure.

(1) In general. If authorized by a consumer, a consumer reporting agency maymake the disclosures required under 1681g of this title

(A) other than in writing; and

(B) in such form as may be

(i) specified by the consumer in accordance with paragraph (2); and

(ii) available from the agency.

(2) Form. A consumer may specify pursuant to paragraph (1) that disclosures undersection 1681g of this title shall be made

(A) in person, upon the appearance of the consumer at the place of business of theconsumer reporting agency where disclosures are regularly provided, during normalbusiness hours, and on reasonable notice;

(B) by telephone, if the consumer has made a written request for disclosure bytelephone;

(C) by electronic means, if available from the agency; or

(D) by any other reasonable means that is available from the agency.

(c) Trained personnel.

Any consumer reporting agency shall provide trained personnel to explain to theconsumer any information furnished to him pursuant to section 1681g of this title.

(d) Persons accompanying consumer.



The consumer shall be permitted to be accompanied by one other person of hischoosing, who shall furnish reasonable identification. A consumer reporting agencymay require the consumer to furnish a written statement granting permission to theconsumer reporting agency to discuss the consumer's file in such person's presence.

(e) Limitation of liability.

Except as provided in sections 1681n and 1681o of this title, no consumer may bringany action or proceeding in the nature of defamation, invasion of privacy, ornegligence with respect to the reporting of information against any consumerreporting agency, any user of information, or any person who furnishes information toa consumer reporting agency, based on information disclosed pursuant to section1681g, 1681h, or 1681m of this title, or based on information disclosed by a user of aconsumer report to or for a consumer against whom the user has taken adverseaction, based in whole or in part on the report except as to false informationfurnished with malice or willful intent to injure such consumer.



FCRA 15 USC § 1681i Procedure in case of disputed accuracy

Reference


(a) Reinvestigations of disputed information

(1) Reinvestigation required.

(A) In general. Subject to subsection (f), if the completeness or accuracy of anyitem of information contained in a consumer's file at a consumer reporting agency isdisputed by the consumer and the consumer notifies the agency directly, or indirectlythrough a reseller, of such dispute, the agency shall, free of charge, conduct areasonable reinvestigation to determine whether the disputed information isinaccurate and record the current status of the disputed information, or delete theitem from the file in accordance with paragraph (5), before the end of the 30-dayperiod beginning on the date on which the agency receives the notice of the disputefrom the consumer or reseller.

(B) Extension of period to reinvestigate. Except as provided in subparagraph (C),the 30-day period described in subparagraph (A) may be extended for not more than15 additional days if the consumer reporting agency receives information from theconsumer during that 30-day period that is relevant to the reinvestigation.

(C) Limitations on extension of period to reinvestigate. Subparagraph (B) shall notapply to any reinvestigation in which, during the 30-day period described insubparagraph (A), the information that is the subject of the reinvestigation is found tobe inaccurate or incomplete or the consumer reporting agency determines that theinformation cannot be verified.

(2) Prompt notice of dispute to furnisher of information.

(A) In general. Before the expiration of the 5-business-day period beginning on thedate on which a consumer reporting agency receives notice of a dispute from anyconsumer or a reseller in accordance with paragraph (1), the agency shall providenotification of the dispute to any person who provided any item of information indispute, at the address and in the manner established with the person. The noticeshall include all relevant information regarding the dispute that the agency hasreceived from the consumer or reseller.

(B) Provision of other information. The consumer reporting agency shall promptlyprovide to the person who provided the information in dispute all relevant



information regarding the dispute that is received by the agency from the consumeror the reseller after the period referred to in subparagraph (A) and before the end ofthe period referred to in paragraph (1)(A).

(3) Determination that dispute is frivolous or irrelevant.

(A) In general. Notwithstanding paragraph (1), a consumer reporting agency mayterminate a reinvestigation of information disputed by a consumer under thatparagraph if the agency reasonably determines that the dispute by the consumer isfrivolous or irrelevant, including by reason of a failure by a consumer to providesufficient information to investigate the disputed information.

(B) Notice of determination. Upon making any determination in accordance withsubparagraph (A) that a dispute is frivolous or irrelevant, a consumer reporting agencyshall notify the consumer of such determination not later than 5 business days aftermaking such determination, by mail or, if authorized by the consumer for thatpurpose, by any other means available to the agency.

(C) Contents of notice. A notice under subparagraph (B) shall include

(i) the reasons for the determination under subparagraph (A); and

(ii) identification of any information required to investigate the disputedinformation, which may consist of a standardized form describing the general natureof such information.

(4) Consideration of consumer information. In conducting any reinvestigation underparagraph (1) with respect to disputed information in the file of any consumer, theconsumer reporting agency shall review and consider all relevant informationsubmitted by the consumer in the period described in paragraph (1)(A) with respect tosuch disputed information.

(5) Treatment of inaccurate or unverifiable information.

(A) In general. If, after any reinvestigation under paragraph (1) of any informationdisputed by a consumer, an item of the information is found to be inaccurate orincomplete or cannot be verified, the consumer reporting agency shall

(i) promptly delete that item of information from the file of the consumer, ormodify that item of information, as appropriate, based on the results of thereinvestigation; and

(ii) promptly notify the furnisher of that information that the information has beenmodified or deleted from the file of the consumer.



(B) Requirements relating to reinsertion of previously deleted material.

(i) Certification of accuracy of information. If any information is deleted from aconsumer's file pursuant to subparagraph (A), the information may not be reinsertedin the file by the consumer reporting agency unless the person who furnishes theinformation certifies that the information is complete and accurate.

(ii) Notice to consumer. If any information that has been deleted from a consumer'sfile pursuant to subparagraph (A) is reinserted in the file, the consumer reportingagency shall notify the consumer of the reinsertion in writing not later than 5 businessdays after the reinsertion or, if authorized by the consumer for that purpose, by anyother means available to the agency.

(iii) Additional information. As part of, or in addition to, the notice under clause(ii), a consumer reporting agency shall provide to a consumer in writing not later than5 business days after the date of the reinsertion

(I) a statement that the disputed information has been reinserted;

(II) the business name and address of any furnisher of information contacted andthe telephone number of such furnisher, if reasonably available, or of any furnisher ofinformation that contacted the consumer reporting agency, in connection with thereinsertion of such information; and

(III) a notice that the consumer has the right to add a statement to the consumer'sfile disputing the accuracy or completeness of the disputed information.

(C) Procedures to prevent reappearance. A consumer reporting agency shallmaintain reasonable procedures designed to prevent the reappearance in a consumer'sfile, and in consumer reports on the consumer, of information that is deleted pursuantto this paragraph (other than information that is reinserted in accordance withsubparagraph (B)(i)).

(D) Automated reinvestigation system. Any consumer reporting agency thatcompiles and maintains files on consumers on a nationwide basis shall implement anautomated system through which furnishers of information to that consumer reportingagency may report the results of a reinvestigation that finds incomplete or inaccurateinformation in a consumer's file to other such consumer reporting agencies.

(6) Notice of results of reinvestigation.

(A) In general. A consumer reporting agency shall provide written notice to aconsumer of the results of a reinvestigation under this subsection not later than 5business days after the completion of the reinvestigation, by mail or, if authorized by



the consumer for that purpose, by other means available to the agency.

(B) Contents. As part of, or in addition to, the notice under subparagraph (A), aconsumer reporting agency shall provide to a consumer in writing before theexpiration of the 5-day period referred to in subparagraph (A)

(i) a statement that the reinvestigation is completed;

(ii) a consumer report that is based upon the consumer's file as that file is revisedas a result of the reinvestigation;

(iii) a notice that, if requested by the consumer, a description of the procedureused to determine the accuracy and completeness of the information shall beprovided to the consumer by the agency, including the business name and address ofany furnisher of information contacted in connection with such information and thetelephone number of such furnisher, if reasonably available;

(iv) a notice that the consumer has the right to add a statement to the consumer'sfile disputing the accuracy or completeness of the information; and

(v) a notice that the consumer has the right to request under subsection (d) of thissection that the consumer reporting agency furnish notifications under thatsubsection.

(7) Description of reinvestigation procedure. A consumer reporting agency shallprovide to a consumer a description referred to in paragraph (6)(B)(iii) by not laterthan 15 days after receiving a request from the consumer for that description.

(8) Expedited dispute resolution. If a dispute regarding an item of information in aconsumer's file at a consumer reporting agency is resolved in accordance withparagraph (5)(A) by the deletion of the disputed information by not later than 3business days after the date on which the agency receives notice of the dispute fromthe consumer in accordance with paragraph (1)(A), then the agency shall not berequired to comply with paragraphs (2), (6), and (7) with respect to that dispute if theagency

(A) provides prompt notice of the deletion to the consumer by telephone;

(B) includes in that notice, or in a written notice that accompanies a confirmationand consumer report provided in accordance with subparagraph (C), a statement ofthe consumer's right to request under subsection (d) of this section that the agencyfurnish notifications under that subsection; and

(C) provides written confirmation of the deletion and a copy of a consumer reporton the consumer that is based on the consumer's file after the deletion, not later than



5 business days after making the deletion.

(b) Statement of dispute

If the reinvestigation does not resolve the dispute, the consumer may file a briefstatement setting forth the nature of the dispute. The consumer reporting agencymay limit such statements to not more than one hundred words if it provides theconsumer with assistance in writing a clear summary of the dispute.

(c) Notification of consumer dispute in subsequent consumer reports

Whenever a statement of a dispute is filed, unless there is reasonable grounds tobelieve that it is frivolous or irrelevant, the consumer reporting agency shall, in anysubsequent consumer report containing the information in question, clearly note thatit is disputed by the consumer and provide either the consumer's statement or a clearand accurate codification or summary thereof.

(d) Notification of deletion of disputed information

Following any deletion of information which is found to be inaccurate or whoseaccuracy can no longer be verified or any notation as to disputed information, theconsumer reporting agency shall, at the request of the consumer, furnish notificationthat the item has been deleted or the statement, codification or summary pursuant tosubsection (b) or (c) of this section to any person specifically designated by theconsumer who has within two years prior thereto received a consumer report foremployment purposes, or within six months prior thereto received a consumer reportfor any other purpose, which contained the deleted or disputed information.

(e) TREATMENT OF COMPLAINTS AND REPORT TO CONGRESS.

(1) IN GENERAL- The Commission shall-

(A) compile all complaints that it receives that a file of a consumer that ismaintained by a consumer reporting agency described in section 603(p) containsincomplete or inaccurate information, with respect to which, the consumer appearsto have disputed the completeness or accuracy with the consumer reporting agency orotherwise utilized the procedures provided by subsection (a); and

(B) transmit each such complaint to each consumer reporting agency involved.

(2) EXCLUSION Complaints received or obtained by the Bureau pursuant to itsinvestigative authority under the Consumer Financial Protection Act of 2010shall not be subject to paragraph (1).

(2) EXCLUSION- Complaints received or obtained by the Commission pursuant to



its investigative authority under the Federal Trade Commission Act shall not besubject to paragraph (1).

(3) AGENCY RESPONSIBILITIES- Each consumer reporting agency described insection 603(p) that receives a complaint transmitted by the Commission pursuant toparagraph (1) shall-

(A) review each such complaint to determine whether all legal obligations imposedon the consumer reporting agency under this title (including any obligation imposedby an applicable court or administrative order) have been met with respect to thesubject matter of the complaint;

(B) provide reports on a regular basis to the Commission regarding thedeterminations of and actions taken by the consumer reporting agency, if any, inconnection with its review of such complaints; and

(C) maintain, for a reasonable time period, records regarding the disposition ofeach such complaint that is sufficient to demonstrate compliance with thissubsection.

(4) RULEMAKING AUTHORITY- The Commission may prescribe regulations, asappropriate to implement this subsection.

(5) ANNUAL REPORT- The Commission shall submit to the Committee on Banking,Housing, and Urban Affairs of the Senate and the Committee on Financial Services ofthe House of Representatives an annual report regarding information gathered by theCommission under this subsection.

(f) REINVESTIGATION REQUIREMENT APPLICABLE TO RESELLERS-

(1) EXEMPTION FROM GENERAL REINVESTIGATION REQUIREMENT- Except asprovided in paragraph (2), a reseller shall be exempt from the requirements of thissection.

(2) ACTION REQUIRED UPON RECEIVING NOTICE OF A DISPUTE- If a reseller receivesa notice from a consumer of a dispute concerning the completeness or accuracy of anyitem of information contained in a consumer report on such consumer produced bythe reseller, the reseller shall, within 5 business days of receiving the notice, and freeof charge-

(A) determine whether the item of information is incomplete or inaccurate as aresult of an act or omission of the reseller; and

(B) if-



(i) the reseller determines that the item of information is incomplete orinaccurate as a result of an act or omission of the reseller, not later than 20 daysafter receiving the notice, correct the information in the consumer report or deleteit; or

(ii) if the reseller determines that the item of information is not incomplete orinaccurate as a result of an act or omission of the reseller, convey the notice of thedispute, together with all relevant information provided by the consumer, to eachconsumer reporting agency that provided the reseller with the information that is thesubject of the dispute, using an address or a notification mechanism specified by theconsumer reporting agency for such notices.

(3) RESPONSIBILITY OF CONSUMER REPORTING AGENCY TO NOTIFY CONSUMERTHROUGH RESELLER- Upon the completion of a reinvestigation under this section of adispute concerning the completeness or accuracy of any information in the file of aconsumer by a consumer reporting agency that received notice of the dispute from areseller under paragraph (2)-

(A) the notice by the consumer reporting agency under paragraph (6), (7), or (8) ofsubsection (a) shall be provided to the reseller in lieu of the consumer; and

(B) the reseller shall immediately reconvey such notice to the consumer, includingany notice of a deletion by telephone in the manner required under paragraph (8)(A).

(4) RESELLER REINVESTIGATIONS- No provision of this subsection shall be construedas prohibiting a reseller from conducting a reinvestigation of a consumer disputedirectly.



FCRA 15 USC § 1681j Charges for certain disclosures

Reference


(a) FREE ANNUAL DISCLOSURE-

(1) NATIONWIDE CONSUMER REPORTING AGENCIES-

(A) IN GENERAL- All consumer reporting agencies described in subsections (p) and(w) of section 603 shall make all disclosures pursuant to section 609 once during any12-month period upon request of the consumer and without charge to the consumer.

(B) CENTRALIZED SOURCE- Subparagraph (A) shall apply with respect to a consumerreporting agency described in section 603(p) only if the request from the consumer ismade using the centralized source established for such purpose in accordance withsection 211(c) of the Fair and Accurate Credit Transactions Act of 2003.

(C) NATIONWIDE SPECIALTY CONSUMER REPORTING AGENCY-

(i) IN GENERAL- The Commission shall prescribe regulations applicable to eachconsumer reporting agency described in section 603(w) to require the establishmentof a streamlined process for consumers to request consumer reports undersubparagraph (A), which shall include, at a minimum, the establishment by each suchagency of a toll-free telephone number for such requests.

(ii) CONSIDERATIONS- In prescribing regulations under clause (i), the Commissionshall consider-

(I) the significant demands that may be placed on consumer reporting agencies inproviding such consumer reports;

(II) appropriate means to ensure that consumer reporting agencies cansatisfactorily meet those demands, including the efficacy of a system of staggeringthe availability to consumers of such consumer reports; and

(III) the ease by which consumers should be able to contact consumer reportingagencies with respect to access to such consumer reports.

(iii) DATE OF ISSUANCE- The Commission shall issue the regulations required by thissubparagraph in final form not later than 6 months after the date of enactment of theFair and Accurate Credit Transactions Act of 2003.

(iv) CONSIDERATION OF ABILITY TO COMPLY- The regulations of the Commissionunder this subparagraph shall establish an effective date by which each nationwide



specialty consumer reporting agency (as defined in section 603(w)) shall be requiredto comply with subsection (a), which effective date-

(I) shall be established after consideration of the ability of each nationwidespecialty consumer reporting agency to comply with subsection (a); and

(II) shall be not later than 6 months after the date on which such regulations areissued in final form (or such additional period not to exceed 3 months, as theCommission determines appropriate).

(2) TIMING- A consumer reporting agency shall provide a consumer report underparagraph (1) not later than 15 days after the date on which the request is receivedunder paragraph (1).

(3) REINVESTIGATIONS- Notwithstanding the time periods specified in section611(a)(1), a reinvestigation under that section by a consumer reporting agency upon arequest of a consumer that is made after receiving a consumer report under thissubsection shall be completed not later than 45 days after the date on which therequest is received.

(4) EXCEPTION FOR FIRST 12 MONTHS OF OPERATION- This subsection shall notapply to a consumer reporting agency that has not been furnishing consumer reportsto third parties on a continuing basis during the 12-month period preceding a requestunder paragraph (1), with respect to consumers residing nationwide.

(b) Free disclosure after adverse notice to consumer. Each consumer reportingagency that maintains a file on a consumer shall make all disclosures pursuant tosection 1681g of this title without charge to the consumer if, not later than 60 daysafter receipt by such consumer of a notification pursuant to section 1681m of thistitle, or of a notification from a debt collection agency affiliated with that consumerreporting agency stating that the consumer's credit rating may be or has beenadversely affected, the consumer makes a request under section 1681g of this title.

(c) Free disclosure under certain other circumstances. Upon the request of theconsumer, a consumer reporting agency shall make all disclosures pursuant to section1681g of this title once during any 12-month period without charge to that consumerif the consumer certifies in writing that the consumer

(1) is unemployed and intends to apply for employment in the 60-day periodbeginning on the date on which the certification is made;

(2) is a recipient of public welfare assistance; or

(3) has reason to believe that the file on the consumer at the agency contains



inaccurate information due to fraud.

(d) FREE DISCLOSURES IN CONNECTION WITH FRAUD ALERTS- Upon the request of aconsumer, a consumer reporting agency described in section 603(p) shall make alldisclosures pursuant to section 609 without charge to the consumer, as provided insubsections (a)(2) and (b)(2) of section 605A, as applicable.

(e) Other charges prohibited. A consumer reporting agency shall not impose anycharge on a consumer for providing any notification required by this subchapter ormaking any disclosure required by this subchapter, except as authorized by subsection(f) of this section.

(f) Reasonable charges allowed for certain disclosures.

(1) In general. In the case of a request from a consumer other than a request thatis covered by any of subsections (a) through (d), of this section, a consumer reportingagency may impose a reasonable charge on a consumer

(A) for making a disclosure to the consumer pursuant to section 1681g of this title,which charge

(i) shall not exceed $8.00 [currently $10.50 - next adjustment January 1, 2009];and

(ii) shall be indicated to the consumer before making the disclosure; and

(B) for furnishing, pursuant to section 1681i(d) of this title, following areinvestigation under section 1681i(a) of this title, a statement, codification, orsummary to a person designated by the consumer under that section after the 30-dayperiod beginning on the date of notification of the consumer under paragraph (6) or(8) of section 1681i(a) of this title with respect to the reinvestigation, which charge

(i) shall not exceed the charge that the agency would impose on each designatedrecipient for a consumer report; and

(ii) shall be indicated to the consumer before furnishing such information.

(2) Modification of amount. The Bureau Federal Trade Commission shall increasethe amount referred to in paragraph (1)(A)(i) on January 1 of each year, basedproportionally on changes in the Consumer Price Index, with fractional changesrounded to the nearest fifty cents.



FCRA 15 USC § 1681k Public record information for employment purposes

Reference

(a) In general. -- A consumer reporting agency which furnishes a consumer reportfor employment purposes and which for that purpose compiles and reports items ofinformation on consumers which are matters of public record and are likely to have anadverse effect upon a consumer's ability to obtain employment shall

(1) at the time such public record information is reported to the user of suchconsumer report, notify the consumer of the fact that public record information isbeing reported by the consumer reporting agency, together with the name andaddress of the person to whom such information is being reported; or

(2) maintain strict procedures designed to insure that whenever public recordinformation which is likely to have an adverse effect on a consumer's ability to obtainemployment is reported it is complete and up to date. For purposes of this paragraph,items of public record relating to arrests, indictments, convictions, suits, tax liens,and outstanding judgments shall be considered up to date if the current public recordstatus of the item at the time of the report is reported.

(b) Exemption for national security investigations. -- Subsection (a) does not applyin the case of an agency or department of the United States Government that seeks toobtain and use a consumer report for employment purposes, if the head of the agencyor department makes a written finding as prescribed under section 604(b)(4)(A).



FCRA 15 USC § 1681l Restrictions on investigative consumer reports

Reference

Whenever a consumer reporting agency prepares an investigative consumer report, noadverse information in the consumer report (other than information which is a matterof public record) may be included in a subsequent consumer report unless suchadverse information has been verified in the process of making such subsequentconsumer report, or the adverse information was received within the three-monthperiod preceding the date the subsequent report is furnished.



FCRA 15 USC § 1681m Requirements on users of consumer reports

Reference


(a) DUTIES OF USERS TAKING ADVERSE ACTIONS ON THE BASIS OF INFORMATIONCONTAINED IN CONSUMER REPORTS. If any person takes any adverse action withrespect to any consumer that is based in whole or in part on any informationcontained in a consumer report, the person shall

(1) provide oral, written, or electronic notice of the adverse action to the consumer;

(2) provide to the consumer written or electronic disclosure --

(A) of a numerical credit score as defined in section 609(f)(2)(A) used by suchperson in taking any adverse action based in whole or in part on any informationin a consumer report; and

(B) of the information set forth in subparagraphs (B) through (E) of section609(f)(1);

(3 2) provide to the consumer orally, in writing, or electronically

(A) the name, address, and telephone number of the consumer reporting agency(including a toll-free telephone number established by the agency if the agencycompiles and maintains files on consumers on a nationwide basis) that furnished thereport to the person; and

(B) a statement that the consumer reporting agency did not make the decision to takethe adverse action and is unable to provide the consumer the specific reasons why theadverse action was taken; and

(4 3) provide to the consumer an oral, written, or electronic notice of the consumer'sright

(A) to obtain, under section 1681j of this title, a free copy of a consumer report onthe consumer from the consumer reporting agency referred to in paragraph (3 2),which notice shall include an indication of the 60-day period under that section forobtaining such a copy; and

(B) to dispute, under section 1681i of this title, with a consumer reporting agency theaccuracy or completeness of any information in a consumer report furnished by theagency.

(b) ADVERSE ACTION BASED ON REPORTS OF PERSONS OTHER THAN CONSUMER



REPORTING AGENCIES.

(1) IN GENERAL. Whenever credit for personal, family, or household purposes involvinga consumer is denied or the charge for such credit is increased either wholly or partlybecause of information obtained from a person other than a consumer reportingagency bearing upon the consumer's credit worthiness, credit standing, creditcapacity, character, general reputation, personal characteristics, or mode of living,the user of such information shall, within a reasonable period of time, upon theconsumer's written request for the reasons for such adverse action received withinsixty days after learning of such adverse action, disclose the nature of the informationto the consumer. The user of such information shall clearly and accurately disclose tothe consumer his right to make such written request at the time such adverse actionis communicated to the consumer.

(2) DUTIES OF PERSON TAKING CERTAIN ACTIONS BASED ON INFORMATION PROVIDEDBY AFFILIATE.

(A) DUTIES, GENERALLY. If a person takes an action described in subparagraph (B)with respect to a consumer, based in whole or in part on information described insubparagraph (C), the person shall

(i) notify the consumer of the action, including a statement that the consumer mayobtain the information in accordance with clause (ii); and

(ii) upon a written request from the consumer received within 60 days aftertransmittal of the notice required by clause (i), disclose to the consumer the nature ofthe information upon which the action is based by not later than 30 days after receiptof the request.

(B) ACTION DESCRIBED. An action referred to in subparagraph (A) is an adverse actiondescribed in section 1681a(k)(1)(A) of this title, taken in connection with atransaction initiated by the consumer, or any adverse action described in clause (i) or(ii) of section 1681(k)(1)(B) of this title.

(C) INFORMATION DESCRIBED. Information referred to in subparagraph (A)

(i) except as provided in clause (ii), is information that

(I) is furnished to the person taking the action by a person related by commonownership or affiliated by common corporate control to the person taking the action;and

(II) bears on the credit worthiness, credit standing, credit capacity, character, generalreputation, personal characteristics, or mode of living of the consumer; and



(ii) does not include

(I) information solely as to transactions or experiences between the consumer and theperson furnishing the information; or

(II) information in a consumer report.

(c) REASONABLE PROCEDURES TO ASSURE COMPLIANCE. No person shall be held liablefor any violation of this section if he shows by a preponderance of the evidence thatat the time of the alleged violation he maintained reasonable procedures to assurecompliance with the provisions of this section.

(d) DUTIES OF USERS MAKING WRITTEN CREDIT OR INSURANCE SOLICITATIONS ON THEBASIS OF INFORMATION CONTAINED IN CONSUMER FILES.

(1) IN GENERAL. Any person who uses a consumer report on any consumer inconnection with any credit or insurance transaction that is not initiated by theconsumer, that is provided to that person under section 1681b(c)(1)(B) of this title,shall provide with each written solicitation made to the consumer regarding thetransaction a clear and conspicuous statement that

(A) information contained in the consumer's consumer report was used in connectionwith the transaction;

(B) the consumer received the offer of credit or insurance because the consumersatisfied the criteria for credit worthiness or insurability under which the consumerwas selected for the offer;

(C) if applicable, the credit or insurance may not be extended if, after the consumerresponds to the offer, the consumer does not meet the criteria used to select theconsumer for the offer or any applicable criteria bearing on credit worthiness orinsurability or does not furnish any required collateral;

(D) the consumer has a right to prohibit information contained in the consumer's filewith any consumer reporting agency from being used in connection with any credit orinsurance transaction that is not initiated by the consumer; and

(E) the consumer may exercise the right referred to in subparagraph (D) by notifying anotification system established under section 1681b(e) of this title.

(2) DISCLOSURE OF ADDRESS AND TELEPHONE NUMBER; FORMAT. A statement underparagraph (1) shall --

(A) include the address and toll-free telephone number of the appropriate notificationsystem established under section 604(e); and



(B) be presented in such format and in such type size and manner as to be simple andeasy to understand, as established by the Commission, by rule, in consultation withthe Federal Trade Commission, the Federal banking agencies, the Federalbanking agencies and the National Credit Union Administration.

(3) MAINTAINING CRITERIA ON FILE. A person who makes an offer of credit orinsurance to a consumer under a credit or insurance transaction described inparagraph (1) shall maintain on file the criteria used to select the consumer to receivethe offer, all criteria bearing on credit worthiness or insurability, as applicable, thatare the basis for determining whether or not to extend credit or insurance pursuant tothe offer, and any requirement for the furnishing of collateral as a condition of theextension of credit or insurance, until the expiration of the 3-year period beginning onthe date on which the offer is made to the consumer.

(4) AUTHORITY OF FEDERAL AGENCIES REGARDING UNFAIR OR DECEPTIVE ACTS OFPRACTICES NOT AFFECTED. This section is not intended to affect the authority of anyFederal or State agency to enforce a prohibition against unfair or deceptive acts orpractices, including the making of false or misleading statements in connection with acredit or insurance transaction that is not initiated by the consumer.

(e) RED FLAG GUIDELINES AND REGULATIONS REQUIRED.

(1) GUIDELINES. The Federal banking agencies, the National Credit UnionAdministration, and the Commission The Bureau, the Federal Trade Commission,the Commodity Futures Trading Commission, and the Securities and ExchangeCommissionshall jointly, with respect to the entities that are subject to theirrespective enforcement authority under section 621 --

(A) establish and maintain guidelines for use by each financial institution and eachcreditor regarding identity theft with respect to account holders at, or customers of,such entities, and update such guidelines as often as necessary;

(B) prescribe regulations requiring each financial institution and each creditor toestablish reasonable policies and procedures for implementing the guidelinesestablished pursuant to subparagraph (A), to identify possible risks to account holdersor customers or to the safety and soundness of the institution or customers; and

(C) prescribe regulations applicable to card issuers to ensure that, if a card issuerreceives notification of a change of address for an existing account, and within a shortperiod of time (during at least the first 30 days after such notification is received)receives a request for an additional or replacement card for the same account, thecard issuer may not issue the additional or replacement card, unless the card issuer,



in accordance with reasonable policies and procedures --

(i) notifies the cardholder of the request at the former address of the cardholder andprovides to the cardholder a means of promptly reporting incorrect address changes;

(ii) notifies the cardholder of the request by such other means of communication asthe cardholder and the card issuer previously agreed to; or

(iii) uses other means of assessing the validity of the change of address, in accordancewith reasonable policies and procedures established by the card issuer in accordancewith the regulations prescribed under subparagraph (B).

(2) CRITERIA.

(A) IN GENERAL. In developing the guidelines required by paragraph (1)(A), theagencies described in paragraph (1) shall identify patterns, practices, and specificforms of activity that indicate the possible existence of identity theft.

(B) INACTIVE ACCOUNTS. In developing the guidelines required by paragraph (1)(A),the agencies described in paragraph (1) shall consider including reasonable guidelinesproviding that when a transaction occurs with respect to a credit or deposit accountthat has been inactive for more than 2 years, the creditor or financial institution shallfollow reasonable policies and procedures that provide for notice to be given to aconsumer in a manner reasonably designed to reduce the likelihood of identity theftwith respect to such account.

(3) CONSISTENCY WITH VERIFICATION REQUIREMENTS. Guidelines established pursuantto paragraph (1) shall not be inconsistent with the policies and procedures requiredunder section 5318(l) of title 31, United States Code.

(4) DEFINITIONS. As used in this subsection, the term "creditor" --

(A) means a creditor, as defined in section 702 of the Equal Credit Opportunity Act (15U.S.C. 1691a), that regularly and in the ordinary course of business --

(i) obtains or uses consumer reports, directly or indirectly, in connection with a credittransaction;

(ii) furnishes information to consumer reporting agencies, as described in section 623,in connection with a credit transaction; or

(iii) advances funds to or on behalf of a person, based on an obligation of the personto repay the funds or repayable from specific property pledged by or on behalf of theperson;

(B) does not include a creditor described in subparagraph (A)(iii) that advances funds



on behalf of a person for expenses incidental to a service provided by the creditor tothat person; and

(C) includes any other type of creditor, as defined in that section 702, as the agencydescribed in paragraph (1) having authority over that creditor may determineappropriate by rule promulgated by that agency, based on a determination that suchcreditor offers or maintains accounts that are subject to a reasonably foreseeable riskof identity theft.

(f) PROHIBITION ON SALE OR TRANSFER OF DEBT CAUSED BY IDENTITY THEFT.

(1) IN GENERAL. No person shall sell, transfer for consideration, or place for collectiona debt that such person has been notified under section 605B has resulted fromidentity theft.

(2) APPLICABILITY. The prohibitions of this subsection shall apply to all personscollecting a debt described in paragraph (1) after the date of a notification underparagraph (1).

(3) RULE OF CONSTRUCTION. Nothing in this subsection shall be construed to prohibit-

(A) the repurchase of a debt in any case in which the assignee of the debt requiressuch repurchase because the debt has resulted from identity theft;

(B) the securitization of a debt or the pledging of a portfolio of debt as collateral inconnection with a borrowing; or

(C) the transfer of debt as a result of a merger, acquisition, purchase and assumptiontransaction, or transfer of substantially all of the assets of an entity.

(g) DEBT COLLECTOR COMMUNICATIONS CONCERNING IDENTITY THEFT. If a personacting as a debt collector (as that term is defined in title VIII) on behalf of a thirdparty that is a creditor or other user of a consumer report is notified that anyinformation relating to a debt that the person is attempting to collect may befraudulent or may be the result of identity theft, that person shall --

(1) notify the third party that the information may be fraudulent or may be the resultof identity theft; and

(2) upon request of the consumer to whom the debt purportedly relates, provide tothe consumer all information to which the consumer would otherwise be entitled ifthe consumer were not a victim of identity theft, but wished to dispute the debtunder provisions of law applicable to that person.

(h) DUTIES OF USERS IN CERTAIN CREDIT TRANSACTIONS.



(1) IN GENERAL. Subject to rules prescribed as provided in paragraph (6), if anyperson uses a consumer report in connection with an application for, or a grant,extension, or other provision of, credit on material terms that are materially lessfavorable than the most favorable terms available to a substantial proportion ofconsumers from or through that person, based in whole or in part on a consumerreport, the person shall provide an oral, written, or electronic notice to the consumerin the form and manner required by regulations prescribed in accordance with thissubsection.

(2) TIMING. The notice required under paragraph (1) may be provided at the time ofan application for, or a grant, extension, or other provision of, credit or the time ofcommunication of an approval of an application for, or grant, extension, or otherprovision of, credit, except as provided in the regulations prescribed under paragraph(6).

(3) EXCEPTIONS. No notice shall be required from a person under this subsection if-

(A) the consumer applied for specific material terms and was granted those terms,unless those terms were initially specified by the person after the transaction wasinitiated by the consumer and after the person obtained a consumer report; or

(B) the person has provided or will provide a notice to the consumer under subsection(a) in connection with the transaction.

(4) OTHER NOTICE NOT SUFFICIENT. A person that is required to provide a noticeunder subsection (a) cannot meet that requirement by providing a notice under thissubsection.

(5) CONTENT AND DELIVERY OF NOTICE. A notice under this subsection shall, at aminimum --

(A) include a statement informing the consumer that the terms offered to theconsumer are set based on information from a consumer report;

(B) identify the consumer reporting agency furnishing the report;

(C) include a statement informing the consumer that the consumer may obtain a copyof a consumer report from that consumer reporting agency without charge; and

(D) include the contact information specified by that consumer reporting agency forobtaining such consumer reports (including a toll-free telephone number establishedby the agency in the case of a consumer reporting agency described in section603(p)); and .



(E) include a statement informing the consumer of --

(i) a numerical credit score as defined in section 609(f)(2)(A), used by suchperson in making the credit decision described in paragraph (1) based in whole orin part on any information in a consumer report; and

(ii) the information set forth in subparagraphs (B) through (E) of section609(f)(1).

(6) RULEMAKING.

(A) RULES REQUIRED. The Bureau shall prescribe rules to carry out thissubsection.

(A) RULES REQUIRED- The Commission and the Board shall jointly prescribe rules.

(B) CONTENT. Rules required by subparagraph (A) shall address, but are not limited to--

(i) the form, content, time, and manner of delivery of any notice under thissubsection;

(ii) clarification of the meaning of terms used in this subsection, including what creditterms are material, and when credit terms are materially less favorable;

(iii) exceptions to the notice requirement under this subsection for classes of personsor transactions regarding which the agencies determine that notice would notsignificantly benefit consumers;

(iv) a model notice that may be used to comply with this subsection; and

(v) the timing of the notice required under paragraph (1), including the circumstancesunder which the notice must be provided after the terms offered to the consumerwere set based on information from a consumer report.

(7) COMPLIANCE. A person shall not be liable for failure to perform the dutiesrequired by this section if, at the time of the failure, the person maintainedreasonable policies and procedures to comply with this section.

(8) ENFORCEMENT.

(A) NO CIVIL ACTIONS. Sections 616 and 617 shall not apply to any failure by anyperson to comply with this section.

(B) ADMINISTRATIVE ENFORCEMENT. This section shall be enforced exclusively undersection 621 by the Federal agencies and officials identified in that section.



FCRA 15 USC § 1681n Civil liability for willful noncompliance

Reference

(a) In general. Any person who willfully fails to comply with any requirementimposed under this subchapter with respect to any consumer is liable to thatconsumer in an amount equal to the sum of

(1) (A) any actual damages sustained by the consumer as a result of the failureor damages of not less than $100 and not more than $1,000; or

(B) in the case of liability of a natural person for obtaining a consumer reportunder false pretenses or knowingly without a permissible purpose, actual damagessustained by the consumer as a result of the failure or $1,000, whichever is greater;and

(2) such amount of punitive damages as the court may allow; and

(3) in the case of any successful action to enforce any liability under this section,the costs of the action together with reasonable attorney's fees as determined by thecourt.

(b) Civil liability for knowing noncompliance. Any person who obtains a consumerreport from a consumer reporting agency under false pretenses or knowingly without apermissible purpose shall be liable to the consumer reporting agency for actualdamages sustained by the consumer reporting agency or $1,000, whichever is greater.

(c) Attorney's fees. Upon a finding by the court that an unsuccessful pleading,motion, or other paper filed in connection with an action under this section was filedin bad faith or for purposes of harassment, the court shall award to the prevailingparty attorney's fees reasonable in relation to the work expended in responding to thepleading, motion, or other paper.



FCRA 15 USC § 1681o Civil liability for negligent noncompliance

Reference

(a) In general. Any person who is negligent in failing to comply with anyrequirement imposed under this subchapter with respect to any consumer is liable tothat consumer in an amount equal to the sum of

(1) any actual damages sustained by the consumer as a result of the failure; and

(2) in the case of any successful action to enforce any liability under this section,the costs of the action together with reasonable attorney's fees as determined by thecourt.

(b) Attorney's fees. On a finding by the court that an unsuccessful pleading,motion, or other paper filed in connection with an action under this section was filedin bad faith or for purposes of harassment, the court shall award to the prevailingparty attorney's fees reasonable in relation to the work expended in responding to thepleading, motion, or other paper.



FCRA 15 USC § 1681p Jurisdiction of courts; limitation of actions

Reference

An action to enforce any liability created under this title may be brought in anyappropriate United States district court, without regard to the amount in controversy,or in any other court of competent jurisdiction, not later than the earlier of --

(1) 2 years after the date of discovery by the plaintiff of the violation that is thebasis for such liability; or

(2) 5 years after the date on which the violation that is the basis for such liabilityoccurs.



FCRA 15 USC § 1681q Obtaining information under false pretenses

Reference

Any person who knowingly and willfully obtains information on a consumer from aconsumer reporting agency under false pretenses shall be fined under Title 18,imprisoned for not more than 2 years, or both.



FCRA 15 USC § 1681r Unauthorized disclosures by officers or employees

Reference

Any officer or employee of a consumer reporting agency who knowingly and willfullyprovides information concerning an individual from the agency's files to a person notauthorized to receive that information shall be fined under Title 18, imprisoned fornot more than 2 years, or both.



FCRA 15 USC § 1681s Administrative enforcement

Reference


(a) ENFORCEMENT BY FEDERAL TRADE COMMISSION

(1) IN GENERAL The Federal Trade Commission shall be authorized to enforcecompliance with the requirements imposed by this title under the Federal TradeCommission Act (15 U.S.C. 41 et seq.), with respect to consumer reportingagencies and all other persons subject thereto, except to the extent thatenforcement of the requirements imposed under this title is specificallycommitted to some other Government agency under any of subparagraphs (A)through (G) of subsection (b)(1), and subject to subtitle B of the ConsumerFinancial Protection Act of 2010, subsection (b). For the purpose of the exerciseby the Federal Trade Commission of its functions and powers under the FederalTrade Commission Act, a violation of any requirement or prohibition imposedunder this title shall constitute an unfair or deceptive act or practice incommerce, in violation of section 5(a) of the Federal Trade Commission Act (15U.S.C. 45(a)), and shall be subject to enforcement by the Federal TradeCommission under section 5(b) of that Act with respect to any consumerreporting agency or person that is subject to enforcement by the Federal TradeCommission pursuant to this subsection, irrespective of whether that person isengaged in commerce or meets any other jurisdictional tests under the FederalTrade Commission Act. The Federal Trade Commission shall have suchprocedural, investigative, and enforcement powers, including the power to issueprocedural rules in enforcing compliance with the requirements imposed underthis title and to require the filing of reports, the production of documents, andthe appearance of witnesses, as though the applicable terms and conditions ofthe Federal Trade Commission Act were part of this title. Any person violatingany of the provisions of this title shall be subject to the penalties and entitled tothe privileges and immunities provided in the Federal Trade Commission Act asthough the applicable terms and provisions of such Act are part of this title.

(2) PENALTIES

(A) KNOWING VIOLATIONS Except as otherwise provided by subtitle B of theConsumer Financial Protection Act of 2010, in the event of a knowing violation,which constitutes a pattern or practice of violations of this title, the FederalTrade Commission may commence a civil action to recover a civil penalty in a



district court of the United States against any person that violates this title. Insuch action, such person shall be liable for a civil penalty of not more than$2,500 per violation.

(B) DETERMINING PENALTY AMOUNT In determining the amount of a civil penaltyunder subparagraph (A), the court shall take into account the degree ofculpability, any history of such prior conduct, ability to pay, effect on ability tocontinue to do business, and such other matters as justice may require.

(C) LIMITATION Notwithstanding paragraph (2), a court may not impose any civilpenalty on a person for a violation of section 623(a)(1), unless the person hasbeen enjoined from committing the violation, or ordered not to commit theviolation, in an action or proceeding brought by or on behalf of the FederalTrade Commission, and has violated the injunction or order, and the court maynot impose any civil penalty for any violation occurring before the date of theviolation of the injunction or order.

(a) (1) BureauFederal Trade Commission; powers

Enforcement by BureauFederal Trade Commission. Compliance with therequirements imposed under this subchapter shall be enforced under the FederalTrade Commission Act by the BureauFederal Trade Commission with respect toconsumer reporting agencies and all other persons subject thereto, except to theextent that enforcement of the requirements imposed under this subchapter isspecifically committed to some other government agency under subsection (b)hereof. For the purpose of the exercise by the Federal Trade Commission of itsfunctions and powers under the Federal Trade Commission Act, a violation of anyrequirement or prohibition imposed under this subchapter shall constitute anunfair or deceptive act or practice in commerce in violation of section 5(a) of theFederal Trade Commission Act and shall be subject to enforcement by theBureauFederal Trade Commission under section 5(b) thereof with respect to anyconsumer reporting agency or person subject to enforcement by theBureauFederal Trade Commission pursuant to this subsection, irrespective ofwhether that person is engaged in commerce or meets any other jurisdictionaltests in the Federal Trade Commission Act. The BureauFederal Trade Commissionshall have such procedural, investigative, and enforcement powers, including thepower to issue procedural rules in enforcing compliance with the requirementsimposed under this subchapter and to require the filing of reports, the productionof documents, and the appearance of witnesses as though the applicable termsand conditions of the Federal Trade Commission Act were part of this subchapter.Any person violating any of the provisions of this subchapter shall be subject to



the penalties and entitled to the privileges and immunities provided in the FederalTrade Commission Act as though the applicable terms and provisions thereof werepart of this subchapter.

(2) (A) In the event of a knowing violation, which constitutes a pattern orpractice of violations of this subchapter, the Commission may commence a civilaction to recover a civil penalty in a district court of the United States against anyperson that violates this subchapter. In such action, such person shall be liable fora civil penalty of not more than $2,500 per violation.

(B) In determining the amount of a civil penalty under subparagraph (A), thecourt shall take into account the degree of culpability, any history of prior suchconduct, ability to pay, effect on ability to continue to do business, and such othermatters as justice may require.

(3) Notwithstanding paragraph (2), a court may not impose any civil penalty ona person for a violation of section 1681s-2(a)(1) of this title unless the person hasbeen enjoined from committing the violation, or ordered not to commit theviolation, in an action or proceeding brought by or on behalf of the BureauFederalTrade Commission, and has violated the injunction or order, and the court maynot impose any civil penalty for any violation occurring before the date of theviolation of the injunction or order.

(b) ENFORCEMENT BY OTHER AGENCIES

(1) IN GENERAL Subject to subtitle B of the Consumer Financial Protection Act of2010, compliance with the requirements imposed under this title with respect toconsumer reporting agencies, persons who use consumer reports from suchagencies, persons who furnish information to such agencies, and users ofinformation that are subject to section 615(d) shall be enforced under --

(A) section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), by theappropriate Federal banking agency, as defined in section 3(q) of the FederalDeposit Insurance Act (12 U.S.C. 1813(q)), with respect to --

(i) any national bank or State savings association, and any Federal branch orFederal agency of a foreign bank;

(ii) any member bank of the Federal Reserve System (other than a national bank),a branch or agency of a foreign bank (other than a Federal branch, Federalagency, or insured State branch of a foreign bank), a commercial lendingcompany owned or controlled by a foreign bank, and any organization operatingunder section 25 or 25A of the Federal Reserve Act; and



(iii) any bank or Federal savings association insured by the Federal DepositInsurance Corporation (other than a member of the Federal Reserve System) andany insured State branch of a foreign bank;

(B) the Federal Credit Union Act (12 U.S.C. 1751 et seq.), by the Administrator ofthe National Credit Union Administration with respect to any Federal creditunion;

(C) subtitle IV of title 49, United States Code, by the Secretary ofTransportation, with respect to all carriers subject to the jurisdiction of theSurface Transportation Board;

(D) the Federal Aviation Act of 1958 (49 U.S.C. App. 1301 et seq.), by theSecretary of Transportation, with respect to any air carrier or foreign air carriersubject to that Act;

(E) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.) (except asprovided in section 406 of that Act), by the Secretary of Agriculture, withrespect to any activities subject to that Act;

(F) the Commodity Exchange Act, with respect to a person subject to thejurisdiction of the Commodity Futures Trading Commission;

(G) the Federal securities laws, and any other laws that are subject to thejurisdiction of the Securities and Exchange Commission, with respect to a personthat is subject to the jurisdiction of the Securities and Exchange Commission; and

(H) subtitle E of the Consumer Financial Protection Act of 2010, by the Bureau,with respect to any person subject to this title.

(2) INCORPORATED DEFINITIONS The terms used in paragraph (1) that are notdefined in this title or otherwise defined in section 3(s) of the Federal DepositInsurance Act (12 U.S.C. 1813(s)) have the same meanings as in section 1(b) of theInternational Banking Act of 1978 (12 U.S.C. 3101).

(b) Enforcement by other agencies

Compliance with the requirements imposed under this subchapter with respect toconsumer reporting agencies, persons who use consumer reports from suchagencies, persons who furnish information to such agencies, and users ofinformation that are subject to subsection (d) of section 1681m of this title shallbe enforced under

(1) section 8 of the Federal Deposit Insurance Act [12 U.S.C.A. § 1818], in the



case of

(A) national banks, and Federal branches and Federal agencies of foreign banks,by the Office of the Comptroller of the Currency;

(B) member banks of the Federal Reserve System (other than national banks),branches and agencies of foreign banks (other than Federal branches, Federalagencies, and insured State branches of foreign banks), commercial lendingcompanies owned or controlled by foreign banks, and organizations operatingunder section 25 or 25A of the Federal Reserve Act [12 U.S.C.A. §§ 601 et seq.,611 et seq.], by the Board of Governors of the Federal Reserve System; and

(C) banks insured by the Federal Deposit Insurance Corporation (other thanmembers of the Federal Reserve System) and insured State branches of foreignbanks, by the Board of Directors of the Federal Deposit Insurance Corporation;

(2) Section 8 of the Federal Deposit Insurance Act [12 U.S.C.A. § 1818], by theDirector of the Office of Thrift Supervision, in the case of a savings association thedeposits of which are insured by the Federal Deposit Insurance Corporation.

(3) the Federal Credit Union Act, by the Administrator of the National CreditUnion Administration with respect to any Federal credit union;

(4) subtitle IV of Title 49, by the Secretary of Transportation, with respect toall carriers subject to the jurisdiction of the Surface Transportation Board;

(5) the Federal Aviation Act of 1958, by the Secretary of Transportation withrespect to any air carrier or foreign air carrier subject to that Act; and

(6) the Packers and Stockyards Act, 1921 (except as provided in section 406 ofthat Act), by the Secretary of Agriculture with respect to any activities subject tothat Act.

The terms used in paragraph (1) that are not defined in this subchapter orotherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C.1813(s)) shall have the meaning given to them in section 1(b) of the InternationalBanking Act of 1978 (12 U.S.C. 3101).

(c) State action for violations

(1) Authority of States. In addition to such other remedies as are provided underState law, if the chief law enforcement officer of a State, or an official or agencydesignated by a State, has reason to believe that any person has violated or isviolating this subchapter, the State



(A) may bring an action to enjoin such violation in any appropriate United Statesdistrict court or in any other court of competent jurisdiction;

(B) subject to paragraph (5), may bring an action on behalf of the residents of theState to recover

(i) damages for which the person is liable to such residents under sections 1681nand 1681o of this title as a result of the violation;

(ii) in the case of a violation described in any of paragraphs (1) through (3) ofsection 623(c) of this title, damages for which the person would, but for section1681s-2(c) of this title, be liable to such residents as a result of the violation; or

(iii) damages of not more than $1,000 for each willful or negligent violation; and

(C) in the case of any successful action under subparagraph (A) or (B), shall beawarded the costs of the action and reasonable attorney fees as determined by thecourt.

(2) Rights of Federal regulators. The State shall serve prior written notice of anyaction under paragraph (1) upon the Bureau Federal Trade Commission and theFederal Trade Commissionor the appropriate Federal regulator determined undersubsection (b) of this section and provide the Commission or appropriate Federalregulator with a copy of its complaint, except in any case in which such prior notice isnot feasible, in which case the State shall serve such notice immediately uponinstituting such action. The Bureau Federal Trade Commission and the FederalTrade Commissionor appropriate Federal regulator shall have the right

(A) to intervene in the action;

(B) upon so intervening, to be heard on all matters arising therein;

(C) to remove the action to the appropriate United States district court; and

(D) to file petitions for appeal.

(3) Investigatory powers. For purposes of bringing any action under this subsection,nothing in this subsection shall prevent the chief law enforcement officer, or anofficial or agency designated by a State, from exercising the powers conferred on thechief law enforcement officer or such official by the laws of such State to conductinvestigations or to administer oaths or affirmations or to compel the attendance ofwitnesses or the production of documentary and other evidence.

(4) Limitation on State action while Federal action pending. If the Bureau FederalTrade Commission and the Federal Trade Commissionor the appropriate Federal



regulator has instituted a civil action or an administrative action under section 1818of Title 12 for a violation of this subchapter, no State may, during the pendency ofsuch action, bring an action under this section against any defendant named in thecomplaint of the Bureau Commission and the Federal Trade Commissionor theappropriate Federal regulator for any violation of this subchapter that is alleged inthat complaint.

(5) Limitations on State actions for certain violations-

(A) Violation of injunction required

A State may not bring an action against a person under paragraph (1)(B) for a violationdescribed in any of paragraph (1) through (3) of section 623(c) of this title, unless

(i) the person has been enjoined from committing the violation, in an actionbrought by the State under paragraph (1)(A); and

(ii) the person has violated the injunction.

(B) Limitation on damages recoverable

In an action against a person under paragraph (1)(B) for a violation described in any ofparagraph (1) through (3) of section 623(c) of this title, a State may not recover anydamages incurred before the date of the violation of an injunction on which theaction is based; and

(d) Enforcement under other authority

For the purpose of the exercise by any agency referred to in subsection (b) of thissection of its powers under any Act referred to in that subsection, a violation of anyrequirement imposed under this subchapter shall be deemed to be a violation of arequirement imposed under that Act. In addition to its powers under any provision oflaw specifically referred to in subsection (b) of this section, each of the agenciesreferred to in that subsection may exercise, for the purpose of enforcing compliancewith any requirement imposed under this subchapter any other authority conferred onit by law.

(e) REGULATORY AUTHORITY

(1) IN GENERAL The Bureau shall prescribe such regulations as are necessary tocarry out the purposes of this title, except with respect to sections 615(e) and628. The Bureau may prescribe regulations as may be necessary or appropriateto administer and carry out the purposes and objectives of this title, and toprevent evasions thereof or to facilitate compliance therewith. Except asprovided in section 1029(a) of the Consumer Financial Protection Act of 2010,



the regulations prescribed by the Bureau under this title shall apply to anyperson that is subject to this title, notwithstanding the enforcement authoritiesgranted to other agencies under this section.

(2) DEFERENCE Notwithstanding any power granted to any Federal agency underthis title, the deference that a court affords to a Federal agency with respect toa determination made by such agency relating to the meaning or interpretationof any provision of this title that is subject to the jurisdiction of such agencyshall be applied as if that agency were the only agency authorized to apply,enforce, interpret, or administer the provisions of this title The regulationsprescribed by the Bureau under this title shall apply to any person that is subjectto this title, notwithstanding the enforcement authorities granted to otheragencies under this section.

(e) Regulatory authority

(1) The Federal banking agencies referred to in paragraphs (1) and (2) ofsubsection (b) shall jointly prescribe such regulations as necessary to carry out thepurposes of this Act with respect to any persons identified under paragraphs (1)and (2) of subsection (b), and the Board of Governors of the Federal ReserveSystem shall have authority to prescribe regulations consistent with such jointregulations with respect to bank holding companies and affiliates (other thandepository institutions and consumer reporting agencies) of such holdingcompanies.

(2) The Board of the National Credit Union Administration shall prescribe suchregulations as necessary to carry out the purposes of this Act with respect to anypersons identified under paragraph (3) of subsection (b).

(f) COORDINATION OF CONSUMER COMPLAINT INVESTIGATIONS-

(1) IN GENERAL- Each consumer reporting agency described in section 603(p) shalldevelop and maintain procedures for the referral to each other such agency of anyconsumer complaint received by the agency alleging identity theft, or requesting afraud alert under section 605A or a block under section 605B.

(2) MODEL FORM AND PROCEDURE FOR REPORTING IDENTITY THEFT- TheCommission, in consultation with the Federal Trade Commission, the Federalbanking agencies, the Federal banking agencies and the National Credit UnionAdministration, shall develop a model form and model procedures to be used byconsumers who are victims of identity theft for contacting and informing creditors andconsumer reporting agencies of the fraud.



(3) ANNUAL SUMMARY REPORTS- Each consumer reporting agency described insection 603(p) shall submit an annual summary report to the Commission on consumercomplaints received by the agency on identity theft or fraud alerts.

(g) BUREAU FTC REGULATION OF CODING OF TRADE NAMES- If the Commissiondetermines that a person described in paragraph (9) of section 623(a) has not met therequirements of such paragraph, the Commission shall take action to ensure theperson's compliance with such paragraph, which may include issuing model guidanceor prescribing reasonable policies and procedures, as necessary to ensure that suchperson complies with such paragraph.



FCRA 15 USC § 1681s-1 Information on overdue child support obligations

Reference

Notwithstanding any other provision of this subchapter, a consumer reporting agencyshall include in any consumer report furnished by the agency in accordance withsection 1681b of this title, any information on the failure of the consumer to payoverdue support which --

(1) is provided --

(A) to the consumer reporting agency by a State or local child support enforcementagency; or

(B) to the consumer reporting agency and verified by any local, State, or FederalGovernment agency; and

(2) antedates the report by 7 years or less.



FCRA 15 USC § 1681s-2 Responsibilities of furnishers of information toconsumer reporting agencies

Reference


(a) Duty of furnishers of information to provide accurate information

(1) Prohibition

(A) Reporting information with actual knowledge of errors

A person shall not furnish any information relating to a consumer to any consumerreporting agency if the person knows or has reasonable cause to believe that theinformation is inaccurate.

(B) Reporting information after notice and confirmation of errors

A person shall not furnish information relating to a consumer to any consumerreporting agency if --

(i) the person has been notified by the consumer, at the address specified by theperson for such notices, that specific information is inaccurate; and

(ii) the information is, in fact, inaccurate.

(C) No address requirement

A person who clearly and conspicuously specifies to the consumer an address fornotices referred to in subparagraph (B) shall not be subject to subparagraph (A);however, nothing in subparagraph (B) shall require a person to specify such anaddress.

(D) DEFINITION- For purposes of subparagraph (A), the term 'reasonable cause tobelieve that the information is inaccurate' means having specific knowledge, otherthan solely allegations by the consumer, that would cause a reasonable person to havesubstantial doubts about the accuracy of the information.

(2) Duty to correct and update information

A person who --

(A) regularly and in the ordinary course of business furnishes information to one ormore consumer reporting agencies about the person's transactions or experiences withany consumer; and



(B) has furnished to a consumer reporting agency information that the persondetermines is not complete or accurate, shall promptly notify the consumer reportingagency of that determination and provide to the agency any corrections to thatinformation, or any additional information, that is necessary to make the informationprovided by the person to the agency complete and accurate, and shall not thereafterfurnish to the agency any of the information that remains not complete or accurate.

(3) Duty to provide notice of dispute

If the completeness or accuracy of any information furnished by any person to anyconsumer reporting agency is disputed to such person by a consumer, the person maynot furnish the information to any consumer reporting agency without notice thatsuch information is disputed by the consumer.

(4) Duty to provide notice of closed accounts

A person who regularly and in the ordinary course of business furnishes information toa consumer reporting agency regarding a consumer who has a credit account with thatperson shall notify the agency of the voluntary closure of the account by theconsumer, in information regularly furnished for the period in which the account isclosed.

(5) Duty to provide notice of delinquency of accounts

(A) IN GENERAL- A person who furnishes information to a consumer reportingagency regarding a delinquent account being placed for collection, charged to profitor loss, or subjected to any similar action shall, not later than 90 days after furnishingthe information, notify the agency of the date of delinquency on the account, whichshall be the month and year of the commencement of the delinquency on the accountthat immediately preceded the action.

(B) RULE OF CONSTRUCTION- For purposes of this paragraph only, and providedthat the consumer does not dispute the information, a person that furnishesinformation on a delinquent account that is placed for collection, charged for profit orloss, or subjected to any similar action, complies with this paragraph, if-

(i) the person reports the same date of delinquency as that provided by thecreditor to which the account was owed at the time at which the commencement ofthe delinquency occurred, if the creditor previously reported that date of delinquencyto a consumer reporting agency;

(ii) the creditor did not previously report the date of delinquency to a consumerreporting agency, and the person establishes and follows reasonable procedures to



obtain the date of delinquency from the creditor or another reliable source andreports that date to a consumer reporting agency as the date of delinquency; or

(iii) the creditor did not previously report the date of delinquency to a consumerreporting agency and the date of delinquency cannot be reasonably obtained asprovided in clause (ii), the person establishes and follows reasonable procedures toensure the date reported as the date of delinquency precedes the date on which theaccount is placed for collection, charged to profit or loss, or subjected to any similaraction, and reports such date to the credit reporting agency.

(6) DUTIES OF FURNISHERS UPON NOTICE OF IDENTITY THEFT-RELATEDINFORMATION-

(A) REASONABLE PROCEDURES- A person that furnishes information to anyconsumer reporting agency shall have in place reasonable procedures to respond toany notification that it receives from a consumer reporting agency under section 605Brelating to information resulting from identity theft, to prevent that person fromrefurnishing such blocked information.

(B) INFORMATION ALLEGED TO RESULT FROM IDENTITY THEFT- If a consumersubmits an identity theft report to a person who furnishes information to a consumerreporting agency at the address specified by that person for receiving such reportsstating that information maintained by such person that purports to relate to theconsumer resulted from identity theft, the person may not furnish such informationthat purports to relate to the consumer to any consumer reporting agency, unless theperson subsequently knows or is informed by the consumer that the information iscorrect.

(7) NEGATIVE INFORMATION-

(A) NOTICE TO CONSUMER REQUIRED-

(i) IN GENERAL- If any financial institution that extends credit and regularly and inthe ordinary course of business furnishes information to a consumer reporting agencydescribed in section 603(p) furnishes negative information to such an agency regardingcredit extended to a customer, the financial institution shall provide a notice of suchfurnishing of negative information, in writing, to the customer.

(ii) NOTICE EFFECTIVE FOR SUBSEQUENT SUBMISSIONS- After providing such notice,the financial institution may submit additional negative information to a consumerreporting agency described in section 603(p) with respect to the same transaction,extension of credit, account, or customer without providing additional notice to thecustomer.



(B) TIME OF NOTICE-

(i) IN GENERAL- The notice required under subparagraph (A) shall be provided tothe customer prior to, or no later than 30 days after, furnishing the negativeinformation to a consumer reporting agency described in section 603(p).

(ii) COORDINATION WITH NEW ACCOUNT DISCLOSURES- If the notice is provided tothe customer prior to furnishing the negative information to a consumer reportingagency, the notice may not be included in the initial disclosures provided undersection 127(a) of the Truth in Lending Act.

(C) COORDINATION WITH OTHER DISCLOSURES- The notice required undersubparagraph (A)-

(i) may be included on or with any notice of default, any billing statement, or anyother materials provided to the customer; and

(ii) must be clear and conspicuous.

(D) MODEL DISCLOSURE

(i) DUTY OF BUREAU The Bureau shall prescribe a brief model disclosure that afinancial institution may use to comply with subparagraph (A), which shall notexceed 30 words.

(ii) USE OF MODEL NOT REQUIRED No provision of this paragraph may beconstrued to require a financial institution to use any such model formprescribed by the Bureau.

(iii) COMPLIANCE USING MODEL A financial institution shall be deemed to be incompliance with subparagraph (A) if the financial institution uses any model formprescribed by the Bureau under this subparagraph, or the financial institutionuses any such model form and rearranges its format.

(D) MODEL DISCLOSURE-

(i) DUTY OF BOARD TO PREPARE- The Board shall prescribe a brief modeldisclosure a financial institution may use to comply with subparagraph (A), whichshall not exceed 30 words.

(ii) USE OF MODEL NOT REQUIRED- No provision of this paragraph shall beconstrued as requiring a financial institution to use any such model formprescribed by the Board.

(iii) COMPLIANCE USING MODEL- A financial institution shall be deemed to be in



compliance with subparagraph (A) if the financial institution uses any such modelform prescribed by the Board, or the financial institution uses any such modelform and rearranges its format.

(E) USE OF NOTICE WITHOUT SUBMITTING NEGATIVE INFORMATION- No provision ofthis paragraph shall be construed as requiring a financial institution that has provideda customer with a notice described in subparagraph (A) to furnish negativeinformation about the customer to a consumer reporting agency.

(F) SAFE HARBOR- A financial institution shall not be liable for failure to performthe duties required by this paragraph if, at the time of the failure, the financialinstitution maintained reasonable policies and procedures to comply with thisparagraph or the financial institution reasonably believed that the institution isprohibited, by law, from contacting the consumer.

(G) DEFINITIONS- For purposes of this paragraph, the following definitions shallapply:

(i) NEGATIVE INFORMATION- The term 'negative information' means informationconcerning a customer's delinquencies, late payments, insolvency, or any form ofdefault.

(ii) CUSTOMER; FINANCIAL INSTITUTION- The terms 'customer' and 'financialinstitution' have the same meanings as in section 509 Public Law 106-102.

(8) ABILITY OF CONSUMER TO DISPUTE INFORMATION DIRECTLY WITH FURNISHER-

(A) IN GENERAL- The Federal banking agencies, the National Credit UnionAdministration, and the Commission, in consultation with the Federal TradeCommission, the Federal banking agencies, and the National Credit UnionAdministration,shall jointly prescribe regulations that shall identify thecircumstances under which a furnisher shall be required to reinvestigate a disputeconcerning the accuracy of information contained in a consumer report on theconsumer, based on a direct request of a consumer.

(B) CONSIDERATIONS- In prescribing regulations under subparagraph (A), theagencies shall weigh-

(i) the benefits to consumers with the costs on furnishers and the credit reportingsystem;

(ii) the impact on the overall accuracy and integrity of consumer reports of anysuch requirements;

(iii) whether direct contact by the consumer with the furnisher would likely result



in the most expeditious resolution of any such dispute; and

(iv) the potential impact on the credit reporting process if credit repairorganizations, as defined in section 403(3), including entities that would be a creditrepair organization, but for section 403(3)(B)(i), are able to circumvent theprohibition in subparagraph (G).

(C) APPLICABILITY- Subparagraphs (D) through (G) shall apply in any circumstanceidentified under the regulations promulgated under subparagraph (A).

(D) SUBMITTING A NOTICE OF DISPUTE- A consumer who seeks to dispute theaccuracy of information shall provide a dispute notice directly to such person at theaddress specified by the person for such notices that-

(i) identifies the specific information that is being disputed;

(ii) explains the basis for the dispute; and

(iii) includes all supporting documentation required by the furnisher to substantiatethe basis of the dispute.

(E) DUTY OF PERSON AFTER RECEIVING NOTICE OF DISPUTE- After receiving anotice of dispute from a consumer pursuant to subparagraph (D), the person thatprovided the information in dispute to a consumer reporting agency shall-

(i) conduct an investigation with respect to the disputed information;

(ii) review all relevant information provided by the consumer with the notice;

(iii) complete such person's investigation of the dispute and report the results ofthe investigation to the consumer before the expiration of the period under section611(a)(1) within which a consumer reporting agency would be required to complete itsaction if the consumer had elected to dispute the information under that section; and

(iv) if the investigation finds that the information reported was inaccurate,promptly notify each consumer reporting agency to which the person furnished theinaccurate information of that determination and provide to the agency anycorrection to that information that is necessary to make the information provided bythe person accurate.

(F) FRIVOLOUS OR IRRELEVANT DISPUTE-

(i) IN GENERAL- This paragraph shall not apply if the person receiving a notice of adispute from a consumer reasonably determines that the dispute is frivolous orirrelevant, including-



(I) by reason of the failure of a consumer to provide sufficient information toinvestigate the disputed information; or

(II) the submission by a consumer of a dispute that is substantially the same as adispute previously submitted by or for the consumer, either directly to the person orthrough a consumer reporting agency under subsection (b), with respect to which theperson has already performed the person's duties under this paragraph or subsection(b), as applicable.

(ii) NOTICE OF DETERMINATION- Upon making any determination under clause (i)that a dispute is frivolous or irrelevant, the person shall notify the consumer of suchdetermination not later than 5 business days after making such determination, by mailor, if authorized by the consumer for that purpose, by any other means available tothe person.

(iii) CONTENTS OF NOTICE- A notice under clause (ii) shall include-

(I) the reasons for the determination under clause (i); and

(II) identification of any information required to investigate the disputedinformation, which may consist of a standardized form describing the general natureof such information.

(G) EXCLUSION OF CREDIT REPAIR ORGANIZATIONS- This paragraph shall not apply ifthe notice of the dispute is submitted by, is prepared on behalf of the consumer by,or is submitted on a form supplied to the consumer by, a credit repair organization, asdefined in section 403(3), or an entity that would be a credit repair organization, butfor section 403(3)(B)(i).

(9) DUTY TO PROVIDE NOTICE OF STATUS AS MEDICAL INFORMATION FURNISHER- Aperson whose primary business is providing medical services, products, or devices, orthe person's agent or assignee, who furnishes information to a consumer reportingagency on a consumer shall be considered a medical information furnisher forpurposes of ths title, and shall notify the agency of such status.

(b) Duties of furnishers of information upon notice of dispute

(1) In general

After receiving notice pursuant to section 1681i(a)(2) of this title of a dispute withregard to the completeness or accuracy of any information provided by a person to aconsumer reporting agency, the person shall --

(A) conduct an investigation with respect to the disputed information;



(B) review all relevant information provided by the consumer reporting agencypursuant to section 1681i(a)(2) of this title;

(C) report the results of the investigation to the consumer reporting agency;

(D) if the investigation finds that the information is incomplete or inaccurate,report those results to all other consumer reporting agencies to which the personfurnished the information and that compile and maintain files on consumers on anationwide basis; and

(E) if an item of information disputed by a consumer is found to be inaccurate orincomplete or cannot be verified after any reinvestigation under paragraph (1), forpurposes of reporting to a consumer reporting agency only, as appropriate, based onthe results of the reinvestigation promptly --

(i) modify that item of information;

(ii) delete that item of information; or

(iii) permanently block the reporting of that item of information.

(2) Deadline

A person shall complete all investigations, reviews, and reports required underparagraph (1) regarding information provided by the person to a consumer reportingagency, before the expiration of the period under section 1681i(a)(1) of this titlewithin which the consumer reporting agency is required to complete actions requiredby that section regarding that information.

(c) LIMITATION ON LIABILITY- Except as provided in section 621(c)(1)(B), sections616 and 617 do not apply to any violation of-

(1) subsection (a) of this section, including any regulations issued thereunder;

(2) subsection (e) of this section, except that nothing in this paragraph shall limit,expand, or otherwise affect liability under section 616 or 617, as applicable, forviolations of subsection (b) of this section; or

(3) subsection (e) of section 615.

(d) LIMITATION ON ENFORCEMENT- The provisions of law described in paragraphs(1) through (3) of subsection (c) (other than with respect to the exception describedin paragraph (2) of subsection (c)) shall be enforced exclusively as provided undersection 621 by the Federal agencies and officials and the State officials identified insection 621.



(e) ACCURACY GUIDELINES AND REGULATIONS REQUIRED

(1) GUIDELINES The Bureau shall, with respect to persons or entities that aresubject to the enforcement authority of the Bureau under section 621 --

(A) establish and maintain guidelines for use by each person that furnishesinformation to a consumer reporting agency regarding the accuracy and integrityof the information relating to consumers that such entities furnish to consumerreporting agencies, and update such guidelines as often as necessary; and

(B) prescribe regulations requiring each person that furnishes information to aconsumer reporting agency to establish reasonable policies and procedures forimplementing the guidelines established pursuant to subparagraph (A).

(2) CRITERIA In developing the guidelines required by paragraph (1)(A), theBureau shall --

(A) identify patterns, practices, and specific forms of activity that cancompromise the accuracy and integrity of information furnished to consumerreporting agencies;

(B) review the methods (including technological means) used to furnishinformation relating to consumers to consumer reporting agencies;

(C) determine whether persons that furnish information to consumer reportingagencies maintain and enforce policies to ensure the accuracy and integrity ofinformation furnished to consumer reporting agencies; and

(D) examine the policies and processes that persons that furnish information toconsumer reporting agencies employ to conduct reinvestigations and correctinaccurate information relating to consumers that has been furnished toconsumer reporting agencies.

(e) ACCURACY GUIDELINES AND REGULATIONS REQUIRED-

(1) GUIDELINES- The Federal banking agencies, the National Credit UnionAdministration, and the Commission shall, with respect to the entities that aresubject to their respective enforcement authority under section 621, and incoordination as described in paragraph (2)-

(A) establish and maintain guidelines for use by each person that furnishesinformation to a consumer reporting agency regarding the accuracy and integrityof the information relating to consumers that such entities furnish to consumerreporting agencies, and update such guidelines as often as necessary; and



(B) prescribe regulations requiring each person that furnishes information to aconsumer reporting agency to establish reasonable policies and procedures forimplementing the guidelines established pursuant to subparagraph (A).

(2) COORDINATION- Each agency required to prescribe regulations underparagraph (1) shall consult and coordinate with each other such agency so that, tothe extent possible, the regulations prescribed by each such entity are consistentand comparable with the regulations prescribed by each other such agency.

(3) CRITERIA- In developing the guidelines required by paragraph (1)(A), theagencies described in paragraph (1) shall-

(A) identify patterns, practices, and specific forms of activity that cancompromise the accuracy and integrity of information furnished to consumerreporting agencies;

(B) review the methods (including technological means) used to furnishinformation relating to consumers to consumer reporting agencies;

(C) determine whether persons that furnish information to consumer reportingagencies maintain and enforce policies to assure the accuracy and integrity ofinformation furnished to consumer reporting agencies; and

(D) examine the policies and processes that persons that furnish information toconsumer reporting agencies employ to conduct reinvestigations and correctinaccurate information relating to consumers that has been furnished to consumerreporting agencies.



FCRA 15 USC § 1681s-3 Affiliate sharing [Effective date is based uponundetermined implementing rule effective date]

Reference

(a) SPECIAL RULE FOR SOLICITATION FOR PURPOSES OF MARKETING-

(1) NOTICE- Any person that receives from another person related to it by commonownership or affiliated by corporate control a communication of information thatwould be a consumer report, but for clauses (i), (ii), and (iii) of section 603(d)(2)(A),may not use the information to make a solicitation for marketing purposes to aconsumer about its products or services, unless-

(A) it is clearly and conspicuously disclosed to the consumer that the informationmay be communicated among such persons for purposes of making such solicitationsto the consumer; and

(B) the consumer is provided an opportunity and a simple method to prohibit themaking of such solicitations to the consumer by such person.

(2) CONSUMER CHOICE-

(A) IN GENERAL- The notice required under paragraph (1) shall allow the consumerthe opportunity to prohibit all solicitations referred to in such paragraph, and mayallow the consumer to choose from different options when electing to prohibit thesending of such solicitations, including options regarding the types of entities andinformation covered, and which methods of delivering solicitations the consumerelects to prohibit.

(B) FORMAT- Notwithstanding subparagraph (A), the notice required underparagraph (1) shall be clear, conspicuous, and concise, and any method providedunder paragraph (1)(B) shall be simple. The regulations prescribed to implement thissection shall provide specific guidance regarding how to comply with such standards.

(3) DURATION-

(A) IN GENERAL- The election of a consumer pursuant to paragraph (1)(B) toprohibit the making of solicitations shall be effective for at least 5 years, beginning onthe date on which the person receives the election of the consumer, unless theconsumer requests that such election be revoked.

(B) NOTICE UPON EXPIRATION OF EFFECTIVE PERIOD- At such time as the electionof a consumer pursuant to paragraph (1)(B) is no longer effective, a person may notuse information that the person receives in the manner described in paragraph (1) to



make any solicitation for marketing purposes to the consumer, unless the consumerreceives a notice and an opportunity, using a simple method, to extend the opt-outfor another period of at least 5 years, pursuant to the procedures described inparagraph (1).

(4) SCOPE- This section shall not apply to a person-

(A) using information to make a solicitation for marketing purposes to a consumerwith whom the person has a pre-existing business relationship;

(B) using information to facilitate communications to an individual for whosebenefit the person provides employee benefit or other services pursuant to a contractwith an employer related to and arising out of the current employment relationship orstatus of the individual as a participant or beneficiary of an employee benefit plan;

(C) using information to perform services on behalf of another person related bycommon ownership or affiliated by corporate control, except that this subparagraphshall not be construed as permitting a person to send solicitations on behalf ofanother person, if such other person would not be permitted to send the solicitationon its own behalf as a result of the election of the consumer to prohibit solicitationsunder paragraph (1)(B);

(D) using information in response to a communication initiated by the consumer;

(E) using information in response to solicitations authorized or requested by theconsumer; or

(F) if compliance with this section by that person would prevent compliance bythat person with any provision of State insurance laws pertaining to unfairdiscrimination in any State in which the person is lawfully doing business.

(5) NO RETROACTIVITY- This subsection shall not prohibit the use of information tosend a solicitation to a consumer if such information was received prior to the date onwhich persons are required to comply with regulations implementing this subsection.

(b) NOTICE FOR OTHER PURPOSES PERMISSIBLE- A notice or other disclosure underthis section may be coordinated and consolidated with any other notice required to beissued under any other provision of law by a person that is subject to this section, anda notice or other disclosure that is equivalent to the notice required by subsection (a),and that is provided by a person described in subsection (a) to a consumer togetherwith disclosures required by any other provision of law, shall satisfy the requirementsof subsection (a).

(c) USER REQUIREMENTS- Requirements with respect to the use by a person of



information received from another person related to it by common ownership oraffiliated by corporate control, such as the requirements of this section, constituterequirements with respect to the exchange of information among persons affiliated bycommon ownership or common corporate control, within the meaning of section625(b)(2).

(d) DEFINITIONS- For purposes of this section, the following definitions shall apply:

(1) PRE-EXISTING BUSINESS RELATIONSHIP- The term 'preexisting businessrelationship' means a relationship between a person, or a person's licensed agent, anda consumer, based on-

(A) a financial contract between a person and a consumer which is in force;

(B) the purchase, rental, or lease by the consumer of that person's goods orservices, or a financial transaction (including holding an active account or a policy inforce or having another continuing relationship) between the consumer and thatperson during the 18-month period immediately preceding the date on which theconsumer is sent a solicitation covered by this section;

(C) an inquiry or application by the consumer regarding a product or serviceoffered by that person, during the 3-month period immediately preceding the date onwhich the consumer is sent a solicitation covered by this section; or

(D) any other pre-existing customer relationship defined in the regulationsimplementing this section.

(2) SOLICITATION- The term 'solicitation' means the marketing of a product orservice initiated by a person to a particular consumer that is based on an exchange ofinformation described in subsection (a), and is intended to encourage the consumer topurchase such product or service, but does not include communications that aredirected at the general public or determined not to be a solicitation by theregulations prescribed under this section.



FCRA 15 USC § 1681t Relation to State laws

Reference

(a) In general

Except as provided in subsections (b) and (c) of this section, this subchapter does notannul, alter, affect, or exempt any person subject to the provisions of this subchapterfrom complying with the laws of any State with respect to the collection, distribution,or use of any information on consumers, or for the prevention or mitigation or identitytheft, except to the extent that those laws are inconsistent with any provision of thissubchapter, and then only to the extent of the inconsistency.

(b) General exceptions

No requirement or prohibition may be imposed under the laws of any State

(1) with respect to any subject matter regulated under

(A) subsection (c) or (e) of section 1681b of this title, relating to the prescreeningof consumer reports;

(B) section 1681i of this title, relating to the time by which a consumer reportingagency must take any action, including the provision of notification to a consumer orother person, in any procedure related to the disputed accuracy of information in aconsumer's file, except that this subparagraph shall not apply to any State law ineffect on September 30, 1996;

(C) subsections (a) and (b) of section 1681m of this title, relating to the duties of aperson who takes any adverse action with respect to a consumer;

(D) section 1681m(d) of this title, relating to the duties of persons who use aconsumer report of a consumer in connection with any credit or insurance transactionthat is not initiated by the consumer and that consists of a firm offer of credit orinsurance;

(E) section 1681c of this title, relating to information contained in consumerreports, except that this subparagraph shall not apply to any State law in effect onSeptember 30, 1996;

(F) section 1681s-2 of this title, relating to the responsibilities of persons whofurnish information to consumer reporting agencies, except that this paragraph shallnot apply

(i) with respect to section 54A(a) of chapter 93 of the Massachusetts Annotated



Laws (as in effect on September 30, 1996); or

(ii) with respect to section 1785.25(a) of the California Civil Code (as in effect onSeptember 30, 1996);

(G) Section 609(e), relating to information available to victims under section609(e);

(H) Section 624, relating to the exchange and use of information to make asolicitation for marketing purposes; or

(I) Section 615(h), relating to the duties of users of consumer reports to providenotice with respect to terms in certain credit transactions;

(2) with respect to the exchange of information among persons affiliated bycommon ownership or common corporate control, except that this paragraph shall notapply with respect to subsection (a) or (c)(1) of section 2480e of title 9, VermontStatutes Annotated (as in effect on September 30, 1996);

(3) with respect to the disclosures required to be made under subsection (c), (d),(e), or (g) of section 609, or subsection (f) of section 609 relating to the disclosure ofcredit scores for credit granting purposes, except that this paragraph-

(A) shall not apply with respect to sections 1785.10, 1785.16, and 1785.20.2 of theCalifornia Civil Code (as in effect on the date of enactment of the Fair and AccurateCredit Transactions Act of 2003) and section 1785.15 through section 1785.15.2 ofsuch Code (as in effect on such date);

(B) shall not apply with respect to sections 5-3-106(2) and 212-14.3-104.3 of theColorado Revised Statutes (as in effect on the date of enactment of the Fair andAccurate Credit Transactions Act of 2003); and

(C) shall not be construed as limiting, annulling, affecting, or superseding anyprovision of the laws of any State regulating the use in an insurance activity, orregulating disclosures concerning such use, of a credit-based insurance score of aconsumer by any person engaged in the business of insurance;

(4) with respect to the frequency of any disclosure under section 612(a), exceptthat this paragraph shall not apply-

(A) with respect to section 12-14.3-105(1)(d) of the Colorado Revised Statutes (asin effect on the date of enactment of the Fair and Accurate Credit Transactions Act of2003);

(B) with respect to section 10-1-393(29)(C) of the Georgia Code (as in effect on the



date of enactment of the Fair and Accurate Credit Transactions Act of 2003);

(C) with respect to section 1316.2 of title 10 of the Maine Revised Statutes (as ineffect on the date of enactment of the Fair and Accurate Credit Transactions Act of2003);

(D) with respect to sections 14-1209(a)(1) and 14-1209(b)(1)(i) of the CommercialLaw Article of the Code of Maryland (as in effect on the date of enactment of the Fairand Accurate Credit Transactions Act of 2003);

(E) with respect to section 59(d) and section 59(e) of chapter 93 of the GeneralLaws of Massachusetts (as in effect on the date of enactment of the Fair and AccurateCredit Transactions Act of 2003);

(F) with respect to section 56:11-37.10(a)(1) of the New Jersey Revised Statutes(as in effect on the date of enactment of the Fair and Accurate Credit TransactionsAct of 2003); or

(G) with respect to section 2480c(a)(1) of title 9 of the Vermont StatutesAnnotated (as in effect on the date of enactment of the Fair and Accurate CreditTransactions Act of 2003); or

(5) with respect to the conduct required by the specific provisions of --

(A) section 605(g);

(B) section 605A;

(C) section 605B;

(D) section 609(a)(1)(A);

(E) section 612(a);

(F) subsections (e), (f), and (g) of section 615;

(G) section 621(f);

(H) section 623(a)(6); or

(I) section 628; and

(c) Definition of firm offer of credit or insurance

Notwithstanding any definition of the term "firm offer of credit or insurance" (or anyequivalent term) under the laws of any State, the definition of that term contained insection 1681a(l) of this title shall be construed to apply in the enforcement andinterpretation of the laws of any State governing consumer reports.



(d) Limitations

Subsections (b) and (c) do not affect any settlement, agreement, or consent judgmentbetween any State Attorney General and any consumer reporting agency in effect onSeptember 30, 1996.



FCRA 15 USC § 1681u Disclosures to FBI for counterintelligence purposes

Reference

(a) Identity of financial institutions

Notwithstanding section 1681b of this title or any other provision of this subchapter, aconsumer reporting agency shall furnish to the Federal Bureau of Investigation thenames and addresses of all financial institutions (as that term is defined in section3401 of Title 12) at which a consumer maintains or has maintained an account, to theextent that information is in the files of the agency, when presented with a writtenrequest for that information, signed by the Director of the Federal Bureau ofInvestigation, or the Director's designee, which certifies compliance with this section.The Director or the Director's designee may make such a certification only if theDirector or the Director's designee has determined in writing that

(1) such information is necessary for the conduct of an authorized foreigncounterintelligence investigation; and

(2) there are specific and articulable facts giving reason to believe that theconsumer

(A) is a foreign power (as defined in section 1801 of Title 50) or a person who is nota United States person (as defined in such section 1801) and is an official of a foreignpower; or

(B) is an agent of a foreign power and is engaging or has engaged in an act ofinternational terrorism (as that term is defined in section 1801(c) of Title 50) orclandestine intelligence activities that involve or may involve a violation of criminalstatutes of the United States.

(b) Identifying information

Notwithstanding the provisions of section 1681b of this title or any other provision ofthis subchapter, a consumer reporting agency shall furnish identifying informationrespecting a consumer, limited to name, address, former addresses, places ofemployment, or former places of employment, to the Federal Bureau of Investigationwhen presented with a written request, signed by the Director or the Director'sdesignee, which certifies compliance with this subsection. The Director or theDirector's designee may make such a certification only if the Director or the Director'sdesignee has determined in writing that

(1) such information is necessary to the conduct of an authorized



counterintelligence investigation; and

(2) there is information giving reason to believe that the consumer has been, or isabout to be, in contact with a foreign power or an agent of a foreign power (asdefined in section 1801 of Title 50).

(c) Court order for disclosure of consumer reports

Notwithstanding section 1681b of this title or any other provision of this subchapter, ifrequested in writing by the Director of the Federal Bureau of Investigation, or adesignee of the Director, a court may issue an order ex parte directing a consumerreporting agency to furnish a consumer report to the Federal Bureau of Investigation,upon a showing in camera that

(1) the consumer report is necessary for the conduct of an authorized foreigncounterintelligence investigation; and

(2) there are specific and articulable facts giving reason to believe that theconsumer whose consumer report is sought

(A) is an agent of a foreign power, and

(B) is engaging or has engaged in an act of international terrorism (as that term isdefined in section 1801(c) of Title 50) or clandestine intelligence activities thatinvolve or may involve a violation of criminal statutes of the United States.

The terms of an order issued under this subsection shall not disclose that the order isissued for purposes of a counterintelligence investigation.

(d) Confidentiality

(1) If the Director of the Federal Bureau of Investigation, or his designee in aposition not lower than Deputy Assistant Director at Bureau headquarters or a SpecialAgent in Charge in a Bureau field office designated by the Director, certifies thatotherwise there may result a danger to the national security of the United States,interference with a criminal, counterterrorism, or counterintelligence investigation,interference with diplomatic relations, or danger to the life or physical safety of anyperson, no consumer reporting agency or officer, employee, or agent of a consumerreporting agency shall disclose to any person (other than those to whom suchdisclosure is necessary to comply with the request or an attorney to obtain legaladvice or legal assistance with respect to the request) that the Federal Bureau ofInvestigation has sought or obtained the identity of financial institutions or aconsumer report respecting any consumer under subsection (a), (b), or (c), and noconsumer reporting agency or officer, employee, or agent of a consumer reporting



agency shall include in any consumer report any information that would indicate thatthe Federal Bureau of Investigation has sought or obtained such information on aconsumer report.

(2) The request shall notify the person or entity to whom the request is directed ofthe nondisclosure requirement under paragraph (1).

(3) Any recipient disclosing to those persons necessary to comply with the requestor to an attorney to obtain legal advice or legal assistance with respect to the requestshall inform such persons of any applicable nondisclosure requirement. Any personwho receives a disclosure under this subsection shall be subject to the sameprohibitions on disclosure under paragraph (1).

(4) At the request of the Director of the Federal Bureau of Investigation or thedesignee of the Director, any person making or intending to make a disclosure underthis section shall identify to the Director or such designee the person to whom suchdisclosure will be made or to whom such disclosure was made prior to the request,except that nothing in this section shall require a person to inform the Director orsuch designee of the identity of an attorney to whom disclosure was made or will bemade to obtain legal advice or legal assistance with respect to the request for theidentity of financial institutions or a consumer report respecting any consumer underthis section.

(e) Payment of fees

The Federal Bureau of Investigation shall, subject to the availability of appropriations,pay to the consumer reporting agency assembling or providing report or information inaccordance with procedures established under this section a fee for reimbursementfor such costs as are reasonably necessary and which have been directly incurred insearching, reproducing, or transporting books, papers, records, or other data requiredor requested to be produced under this section.

(f) Limit on dissemination

The Federal Bureau of Investigation may not disseminate information obtainedpursuant to this section outside of the Federal Bureau of Investigation, except toother Federal agencies as may be necessary for the approval or conduct of a foreigncounterintelligence investigation, or, where the information concerns a personsubject to the Uniform Code of Military Justice, to appropriate investigativeauthorities within the military department concerned as may be necessary for theconduct of a joint foreign counterintelligence investigation.

(g) Rules of construction



Nothing in this section shall be construed to prohibit information from being furnishedby the Federal Bureau of Investigation pursuant to a subpoena or court order, inconnection with a judicial or administrative proceeding to enforce the provisions ofthis subchapter. Nothing in this section shall be construed to authorize or permit thewithholding of information from the Congress.

(h) Reports to Congress

On a semiannual basis, the Attorney General shall fully inform the Permanent SelectCommittee on Intelligence and the Committee on Banking, Finance and Urban Affairsof the House of Representatives, and the Select Committee on Intelligence and theCommittee on Banking, Housing, and Urban Affairs of the Senate concerning allrequests made pursuant to subsections (a), (b), and (c) of this section.

(i) Damages

Any agency or department of the United States obtaining or disclosing any consumerreports, records, or information contained therein in violation of this section is liableto the consumer to whom such consumer reports, records, or information relate in anamount equal to the sum of

(1) $100, without regard to the volume of consumer reports, records, orinformation involved;

(2) any actual damages sustained by the consumer as a result of the disclosure;

(3) if the violation is found to have been willful or intentional, such punitivedamages as a court may allow; and

(4) in the case of any successful action to enforce liability under this subsection,the costs of the action, together with reasonable attorney fees, as determined by thecourt.

(j) Disciplinary actions for violations

If a court determines that any agency or department of the United States has violatedany provision of this section and the court finds that the circumstances surroundingthe violation raise questions of whether or not an officer or employee of the agencyor department acted willfully or intentionally with respect to the violation, theagency or department shall promptly initiate a proceeding to determine whether ornot disciplinary action is warranted against the officer or employee who wasresponsible for the violation.

(k) Good-faith exception



Notwithstanding any other provision of this subchapter, any consumer reportingagency or agent or employee thereof making disclosure of consumer reports oridentifying information pursuant to this subsection in good-faith reliance upon acertification of the Federal Bureau of Investigation pursuant to provisions of thissection shall not be liable to any person for such disclosure under this subchapter, theconstitution of any State, or any law or regulation of any State or any politicalsubdivision of any State.

(l) Limitation of remedies

Notwithstanding any other provision of this subchapter, the remedies and sanctionsset forth in this section shall be the only judicial remedies and sanctions for violationof this section.

(m) Injunctive relief

In addition to any other remedy contained in this section, injunctive relief shall beavailable to require compliance with the procedures of this section. In the event ofany successful action under this subsection, costs together with reasonable attorneyfees, as determined by the court, may be recovered.



FCRA 15 USC § 1681v Disclosures to governmental agencies for counterterrorismpurposes

Reference

(a) DISCLOSURE. -- Notwithstanding section 604 or any other provision of this title,a consumer reporting agency shall furnish a consumer report of a consumer and allother information in a consumer's file to a government agency authorized to conductinvestigations of, or intelligence or counterintelligence activities or analysis relatedto, international terrorism when presented with a written certification by suchgovernment agency that such information is necessary for the agency's conduct orsuch investigation, activity or analysis.

(b) FORM OF CERTIFICATION. -- The certification described in subsection (a) shallbe signed by a supervisory official designated by the head of a Federal agency or anofficer of a Federal agency whose appointment to office is required to be made by thePresident, by and with the advice and consent of the Senate.

(c) CONFIDENTIALITY.

(1) If the head of a government agency authorized to conduct investigations ofintelligence or counterintelligence activities or analysis related to internationalterrorism, or his designee, certifies that otherwise there may result a danger to thenational security of the United States, interference with a criminal, counterterrorism,or counterintelligence investigation, interference with diplomatic relations, or dangerto the life or physical safety of any person, no consumer reporting agency or officer,employee, or agent of such consumer reporting agency, shall disclose to any person(other than those to whom such disclosure is necessary to comply with the request oran attorney to obtain legal advice or legal assistance with respect to the request), orspecify in any consumer report, that a government agency has sought or obtainedaccess to information under subsection (a).

(2) The request shall notify the person or entity to whom the request is directed ofthe nondisclosure requirement under paragraph (1).

(3) Any recipient disclosing to those persons necessary to comply with the requestor to any attorney to obtain legal advice or legal assistance with respect to therequest shall inform such persons of any applicable nondisclosure requirement. Anyperson who receives a disclosure under this subsection shall be subject to the sameprohibitions on disclosure under paragraph (1).

(4) At the request of the authorized government agency, any person making or



intending to make a disclosure under this section shall identify to the requestingofficial of the authorized government agency the person to whom such disclosure willbe made or to whom such disclosure was made prior to the request, except thatnothing in this section shall require a person to inform the requesting official of theidentity of an attorney to whom disclosure was made or will be made to obtain legaladvice or legal assistance with respect to the request for information undersubsection (a).

(d) RULE OF CONSTRUCTION. -- Nothing in section 626 shall be construed to limitthe authority of the Director of the Federal Bureau of Investigation under this section.

(e) SAFE HARBOR. -- Notwithstanding any other provision of this title, anyconsumer reporting agency or agent or employee thereof making disclosure ofconsumer reports or other information pursuant to this section in good-faith relianceupon a certification of a governmental agency pursuant to the provisions of thissection shall not be liable to any person for such disclosure under this subchapter, theconstitution of any State, or any law or regulation of any State or any politicalsubdivision of any State.

(f) Reports to Congress.

(1) On a semi-annual basis, the Attorney General shall fully inform the Committeeon the Judiciary, the Committee on Financial Services, and the Permanent SelectCommittee on Intelligence of the House of Representatives and the Committee on theJudiciary, the Committee on Banking, Housing, and Urban Affairs, and the SelectCommittee on Intelligence of the Senate concerning all requests made pursuant tosubsection (a).

(2) In the case of the semiannual reports required to be submitted under paragraph(1) to the Permanent Select Committee on Intelligence of the House ofRepresentatives and the Select Committee on Intelligence of the Senate, thesubmittal dates for such reports shall be as provided in section 507 of the NationalSecurity Act of 1947 (50 U.S.C. 415b).



FCRA 15 USC § 1681w Disposal of records

Reference


(a) REGULATIONS-

(1) IN GENERAL- The Federal Trade Commission, the Securities and ExchangeCommission, the Commodity Futures Trading Commission, the Federal bankingagencies, and the National Credit Union Administration, with respect to theentities that are subject to their respective enforcement authority under section621, Not later than 1 year after the date of enactment of this section, the Federalbanking agencies, the National Credit Union Administration, and theBureauCommission with respect to the entities that are subject to their respectiveenforcement authority under section 621, and the Securities and ExchangeCommission, and in coordination as described in paragraph (2), shall issue finalregulations requiring any person that maintains or otherwise possesses consumerinformation, or any compilation of consumer information, derived from consumerreports for a business purpose to properly dispose of any such information orcompilation.

(2) COORDINATION- Each agency required to prescribe regulations under paragraph(1) shall-

(A) consult and coordinate with each other such agency so that, to the extentpossible, the regulations prescribed by each such agency are consistent andcomparable with the regulations by each such other agency; and

(B) ensure that such regulations are consistent with the requirements andregulations issued pursuant to Public Law 106-102 and other provisions of Federal law.

(3) EXEMPTION AUTHORITY- In issuing regulations under this section, the agenciesidentified in paragraph (1) the Federal banking agencies, the National CreditUnion Administration, the Commission, and the Securities and ExchangeCommission may exempt any person or class of persons from application of thoseregulations, as such agency deems appropriate to carry out the purpose of thissection.

(b) RULE OF CONSTRUCTION- Nothing in this section shall be construed-

(1) to require a person to maintain or destroy any record pertaining to a consumerthat is not imposed under other law; or



(2) to alter or affect any requirement imposed under any other provision of law tomaintain or destroy such a record.



FCRA 15 USC § 1681x Corporate and technological circumvention prohibited

Reference

The Commission shall prescribe regulations, to become effective not later than 90days after the date of enactment of this section, to prevent a consumer reportingagency from circumventing or evading treatment as a consumer reporting agencydescribed in section 603(p) for purposes of this title, including-

(1) by means of a corporate reorganization or restructuring, including a merger,acquisition, dissolution, divestiture, or asset sale of a consumer reporting agency; or

(2) by maintaining or merging public record and credit account information in amanner that is substantially equivalent to that described in paragraphs (1) and (2) ofsection 603(p), in the manner described in section 603(p).



CODE OF FEDERAL REGULATIONSTITLE 12 C.F.R. BANKS AND BANKINGCHAPTER II. FEDERAL RESERVE SYSTEMSUBCHAPTER A. BOARD OF GOVERNORS OF THE FEDERALRESERVE SYSTERMPART 222. FAIR CREDIT REPORTING (REGULATION V)SUBPART A. GENERAL PROVISIONS

History: 68 FR 74467, Dec. 24, 2003, eff Dec. 31, 2003; 69 FR 6526, Feb.11, 2004, effMarch 12, 2004; 69 FR 33281, June 15, 2004, eff July 16, 2004; 69 FR 77618, Dec. 28,2004, eff July 1, 2005.



Reg V 12 CFR § 222.1 Purposes, Scope, and Effective Dates

Reference

(a) [Reserved]

(b) Scope.

(1) [Reserved]

(2) Institutions covered.

(i) Except as otherwise provided in this Part, the regulations in this part apply tobanks that are members of the Federal Reserve System (other than national banks),branches and Agencies of foreign banks (other than Federal branches, FederalAgencies, and insured State branches of foreign banks), commercial lendingcompanies owned or controlled by foreign banks, organizations operating undersection 25 or 25A of the Federal Reserve Act (12 U.S.C. § 601 et seq., and 611 etseq.), and bank holding companies and affiliates of such holding companies (otherthan depository institutions and consumer reporting agencies).

(ii) For purposes of Appendix B to this part, financial institutions as defined insection 509 of the Gramm-Leach-Bliley Act (12 U.S.C. § 6809), may use the modelnotices in Appendix B to this part to comply with the notice requirement in section623(a)(7) of the Fair Credit Reporting Act (15 U.S.C. § 1681s-2(a)(7)).

(c) Effective dates. The applicable provisions of the Fair and Accurate CreditTransactions Act of 2003 (FACT Act), Pub. L. 108-159, 117 Stat. 1952, shall beeffective in accordance with the following schedule:

(1) Provisions effective December 31, 2003.

(i) Sections 151(a)(2), 212(e), 214(c), 311(b), and 711, concerning the relation tostate laws; and

(ii) Each of the provisions of the FACT Act that authorizes an agency to issue aregulation or to take other action to implement the applicable provision of the FACTAct or the applicable provision of the Fair Credit Reporting Act, as amended by theFACT Act, but only with respect to that agency's authority to propose and adopt theimplementing regulation or to take such other action.

(2) [Reserved]



Reg V 12 CFR § 222.2 Examples

Reference

The examples in this part are not exclusive. Compliance with an example, to theextent applicable, constitutes compliance with this part. Examples in a paragraphillustrate only the issue described in the paragraph and do not illustrate any otherissue that may arise in this part.



Reg V 12 CFR § 222.3 Definitions

Reference

[Changes effective January 1, 2008 -- Mandatory Compliance November 1, 2008]

For purposes of this part, unless explicitly stated otherwise As used in this part,unless the context requires otherwise:

(a) Act means the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.).

(b) Affiliate means any company that is related by common ownership or commoncorporate control with another company.

(c) [Reserved]

(d) Company means any corporation, limited liability company, business trust,general or limited partnership, association, or similar organization.

(e) Consumer means an individual.

(f) [Reserved]

(g) [Reserved]

(h) [Reserved]

(i) Common ownership or common corporate control means a relationship betweentwo companies under which:

(1) One company has, with respect to the other company:

(i) Ownership, control, or power to vote 25 percent or more of the outstandingshares of any class of voting security of a company, directly or indirectly, or actingthrough one or more other persons;

(ii) Control in any manner over the election of a majority of the directors,trustees, or general partners (or individuals exercising similar functions) of acompany; or

(iii) The power to exercise, directly or indirectly, a controlling influence over themanagement or policies of a company, as the Board determines; or

(2) Any other person has, with respect to both companies, a relationship describedin paragraphs (i)(1)(i) through (i)(1)(iii) of this section.

(j) [Reserved]



(k) Medical information means:

(1) Information or data, whether oral or recorded, in any form or medium, createdby or derived from a health care provider or the consumer, that relates to:

(i) The past, present, or future physical, mental, or behavioral health or conditionof an individual;

(ii) The provision of health care to an individual; or

(iii) The payment for the provision of health care to an individual.

(2) The term does not include:

(i) The age or gender of a consumer;

(ii) Demographic information about the consumer, including a consumer's residenceaddress or e-mail address;

(iii) Any other information about a consumer that does not relate to the physical,mental, or behavioral health or condition of a consumer, including the existence orvalue of any insurance policy; or

(iv) Information that does not identify a specific consumer.

(l) Person means any individual, partnership, corporation, trust, estatecooperative, association, government or governmental subdivision or agency, or otherentity.



CODE OF FEDERAL REGULATIONSTITLE 12 C.F.R. BANKS AND BANKINGCHAPTER II. FEDERAL RESERVE SYSTEMSUBCHAPTER A. BOARD OF GOVERNORS OF THE FEDERALRESERVE SYSTERMPART 222. FAIR CREDIT REPORTING (REGULATION V)SUBPART D. MEDICAL INFORMATION

History: 68 FR 74467, Dec. 24, 2003, eff Dec. 31, 2003; 69 FR 6526, Feb.11, 2004, effMarch 12, 2004; 69 FR 33281, June 15, 2004, eff July 16, 2004; 69 FR 77618, Dec. 28,2004, eff July 1, 2005.



Reg V 12 CFR § 222.30 Obtaining or Using Medical Information inConnection with a Determination of Eligibility for Credit

Reference

(a) Scope. This section applies to

(1) Any of the following that participates as a creditor in a transaction --

(i) A bank that is a member of the Federal Reserve System (other than nationalbanks) and its subsidiaries;

(ii) A branch or Agency of a foreign bank (other than Federal branches, FederalAgencies, and insured State branches of foreign banks) and its subsidiaries;

(iii) A commercial lending company owned or controlled by foreign banks;

(iv) An organization operating under section 25 or 25A of the Federal Reserve Act(12 U.S.C. 601 et seq., and 611 et seq.);

(v) A bank holding company and an affiliate of such holding company (other thandepository institutions and consumer reporting agencies); or

(2) Any other person that participates as a creditor in a transaction involving aperson described in paragraph (a)(1) of this section.

(b) General prohibition on obtaining or using medical information.

(1) In general. A creditor may not obtain or use medical information pertaining to aconsumer in connection with any determination of the consumer's eligibility, orcontinued eligibility, for credit, except as provided in this section.

(2) Definitions.

(i) Credit has the same meaning as in section 702 of the Equal Credit OpportunityAct, 15 U.S.C. 1691a.

(ii) Creditor has the same meaning as in section 702 of the Equal CreditOpportunity Act, 15 U.S.C. 1691a.

(iii) Eligibility, or continued eligibility, for credit means the consumer'squalification or fitness to receive, or continue to receive, credit, including the termson which credit is offered. The term does not include:

(A) Any determination of the consumer's qualification or fitness for employment,insurance (other than a credit insurance product), or other noncredit products orservices;



(B) Authorizing, processing, or documenting a payment or transaction on behalf ofthe consumer in a manner that does not involve a determination of the consumer'seligibility, or continued eligibility, for credit; or

(C) Maintaining or servicing the consumer's account in a manner that does notinvolve a determination of the consumer's eligibility, or continued eligibility, forcredit.

(c) Rule of construction for obtaining and using unsolicited medical information.

(1) In general. A creditor does not obtain medical information in violation of theprohibition if it receives medical information pertaining to a consumer in connectionwith any determination of the consumer's eligibility, or continued eligibility, for creditwithout specifically requesting medical information.

(2) Use of unsolicited medical information. A creditor that receives unsolicitedmedical information in the manner described in paragraph (c)(1) of this section mayuse that information in connection with any determination of the consumer'seligibility, or continued eligibility, for credit to the extent the creditor can rely on atleast one of the exceptions in § 222.30(d) or (e).

(3) Examples. A creditor does not obtain medical information in violation of theprohibition if, for example:

(i) In response to a general question regarding a consumer's debts or expenses, thecreditor receives information that the consumer owes a debt to a hospital.

(ii) In a conversation with the creditor's loan officer, the consumer informs thecreditor that the consumer has a particular medical condition.

(iii) In connection with a consumer's application for an extension of credit, thecreditor requests a consumer report from a consumer reporting agency and receivesmedical information in the consumer report furnished by the agency even though thecreditor did not specifically request medical information from the consumer reportingagency.

(d) Financial information exception for obtaining and using medical information.

(1) In general. A creditor may obtain and use medical information pertaining to aconsumer in connection with any determination of the consumer's eligibility, orcontinued eligibility, for credit so long as:

(i) The information is the type of information routinely used in making crediteligibility determinations, such as information relating to debts, expenses, income,



benefits, assets, collateral, or the purpose of the loan, including the use of proceeds;

(ii) The creditor uses the medical information in a manner and to an extent that isno less favorable than it would use comparable information that is not medicalinformation in a credit transaction; and

(iii) The creditor does not take the consumer's physical, mental, or behavioralhealth, condition or history, type of treatment, or prognosis into account as part ofany such determination.

(2) Examples.

(i) Examples of the types of information routinely used in making credit eligibilitydeterminations. Paragraph (d)(1)(i) of this section permits a creditor, for example, toobtain and use information about:

(A) The dollar amount, repayment terms, repayment history, and similarinformation regarding medical debts to calculate, measure, or verify the repaymentability of the consumer, the use of proceeds, or the terms for granting credit;

(B) The value, condition, and lien status of a medical device that may serve ascollateral to secure a loan;

(C) The dollar amount and continued eligibility for disability income, workers'compensation income, or other benefits related to health or a medical condition thatis relied on as a source of repayment; or

(D) The identity of creditors to whom outstanding medical debts are owed inconnection with an application for credit, including but not limited to, a transactioninvolving the consolidation of medical debts.

(ii) Examples of uses of medical information consistent with the exception.

(A) A consumer includes on an application for credit information about two $20,000debts. One debt is to a hospital; the other debt is to a retailer. The creditor contactsthe hospital and the retailer to verify the amount and payment status of the debts.The creditor learns that both debts are more than 90 days past due. Any two debts ofthis size that are more than 90 days past due would disqualify the consumer under thecreditor's established underwriting criteria. The creditor denies the application on thebasis that the consumer has a poor repayment history on outstanding debts. Thecreditor has used medical information in a manner and to an extent no less favorablethan it would use comparable non-medical information.

(B) A consumer indicates on an application for a $200,000 mortgage loan that shereceives $15,000 in longterm disability income each year from her former employer



and has no other income. Annual income of $15,000, regardless of source, would notbe sufficient to support the requested amount of credit. The creditor denies theapplication on the basis that the projected debt-to-income ratio of the consumer doesnot meet the creditor's underwriting criteria. The creditor has used medicalinformation in a manner and to an extent that is no less favorable than it would usecomparable nonmedical information.

(C) A consumer includes on an application for a $10,000 home equity loan that hehas a $50,000 debt to a medical facility that specializes in treating a potentiallyterminal disease. The creditor contacts the medical facility to verify the debt andobtain the repayment history and current status of the loan. The creditor learns thatthe debt is current. The applicant meets the income and other requirements of thecreditor's underwriting guidelines. The creditor grants the application. The creditorhas used medical information in accordance with the exception.

(iii) Examples of uses of medical information inconsistent with the exception.

(A) A consumer applies for $25,000 of credit and includes on the applicationinformation about a $50,000 debt to a hospital. The creditor contacts the hospital toverify the amount and payment status of the debt, and learns that the debt is currentand that the consumer has no delinquencies in her repayment history. If the existingdebt were instead owed to a retail department store, the creditor would approve theapplication and extend credit based on the amount and repayment history of theoutstanding debt. The creditor, however, denies the application because theconsumer is indebted to a hospital. The creditor has used medical information, herethe identity of the medical creditor, in a manner and to an extent that is lessfavorable than it would use comparable non-medical information.

(B) A consumer meets with a loan officer of a creditor to apply for a mortgageloan. While filling out the loan application, the consumer informs the loan officerorally that she has a potentially terminal disease. The consumer meets the creditor'sestablished requirements for the requested mortgage loan. The loan officerrecommends to the credit committee that the consumer be denied credit because theconsumer has that disease. The credit committee follows the loan officer'srecommendation and denies the application because the consumer has a potentiallyterminal disease. The creditor has used medical information in a manner inconsistentwith the exception by taking into account the consumer's physical, mental, orbehavioral health, condition, or history, type of treatment, or prognosis as part of adetermination of eligibility or continued eligibility for credit.

(C) A consumer who has an apparent medical condition, such as a consumer whouses a wheelchair or an oxygen tank, meets with a loan officer to apply for a home



equity loan. The consumer meets the creditor's established requirements for therequested home equity loan and the creditor typically does not require consumers toobtain a debt cancellation contract, debt suspension agreement, or credit insuranceproduct in connection with such loans. However, based on the consumer's apparentmedical condition, the loan officer recommends to the credit committee that creditbe extended to the consumer only if the consumer obtains a debt cancellationcontract, debt suspension agreement, or credit insurance product from a nonaffiliatedthird party. The credit committee agrees with the loan officer's recommendation. Theloan officer informs the consumer that the consumer must obtain a debt cancellationcontract, debt suspension agreement, or credit insurance product from a nonaffiliatedthird party to qualify for the loan. The consumer obtains one of these products andthe creditor approves the loan. The creditor has used medical information in amanner inconsistent with the exception by taking into account the consumer'sphysical, mental, or behavioral health, condition, or history, type of treatment, orprognosis in setting conditions on the consumer's eligibility for credit.

(e) Specific exceptions for obtaining and using medical information.

(1) In general. A creditor may obtain and use medical information pertaining to aconsumer in connection with any determination of the consumer's eligibility, orcontinued eligibility, for credit --

(i) To determine whether the use of a power of attorney or legal representativethat is triggered by a medical condition or event is necessary and appropriate orwhether the consumer has the legal capacity to contract when a person seeks toexercise a power of attorney or act as legal representative for a consumer based onan asserted medical condition or event;

(ii) To comply with applicable requirements of local, state, or Federal laws;

(iii) To determine, at the consumer's request, whether the consumer qualifies for alegally permissible special credit program or credit-related assistance program that is--

(A) Designed to meet the special needs of consumers with medical conditions; and

(B) Established and administered pursuant to a written plan that --

(1) Identifies the class of persons that the program is designed to benefit; and

(2) Sets forth the procedures and standards for extending credit or providing othercredit-related assistance under the program;

(iv) To the extent necessary for purposes of fraud prevention or detection;



(v) In the case of credit for the purpose of financing medical products or services,to determine and verify the medical purpose of a loan and the use of proceeds;

(vi) Consistent with safe and sound practices, if the consumer or the consumer'slegal representative specifically requests that the creditor use medical information indetermining the consumer's eligibility, or continued eligibility, for credit, toaccommodate the consumer's particular circumstances, and such request isdocumented by the creditor;

(vii) Consistent with safe and sound practices, to determine whether the provisionsof a forbearance practice or program that is triggered by a medical condition or eventapply to a consumer;

(viii) To determine the consumer's eligibility for, the triggering of, or thereactivation of a debt cancellation contract or debt suspension agreement if amedical condition or event is a triggering event for the provision of benefits under thecontract or agreement; or

(ix) To determine the consumer's eligibility for, the triggering of, or thereactivation of a credit insurance product if a medical condition or event is atriggering event for the provision of benefits under the product.

(2) Example of determining eligibility for a special credit program or creditassistance program. A not-for-profit organization establishes a credit assistanceprogram pursuant to a written plan that is designed to assist disabled veterans inpurchasing homes by subsidizing the down payment for the home purchase mortgageloans of qualifying veterans. The organization works through mortgage lenders andrequires mortgage lenders to obtain medical information about the disability of anyconsumer that seeks to qualify for the program, use that information to verify theconsumer's eligibility for the program, and forward that information to theorganization. A consumer who is a veteran applies to a creditor for a home purchasemortgage loan. The creditor informs the consumer about the credit assistanceprogram for disabled veterans and the consumer seeks to qualify for the program.Assuming that the program complies with all applicable law, including applicable fairlending laws, the creditor may obtain and use medical information about the medicalcondition and disability, if any, of the consumer to determine whether the consumerqualifies for the credit assistance program.

(3) Examples of verifying the medical purpose of the loan or the use of proceeds.

(i) If a consumer applies for $10,000 of credit for the purpose of financing visioncorrection surgery, the creditor may verify with the surgeon that the procedure will



be performed. If the surgeon reports that surgery will not be performed on theconsumer, the creditor may use that medical information to deny the consumer'sapplication for credit, because the loan would not be used for the stated purpose.

(ii) If a consumer applies for $10,000 of credit for the purpose of financingcosmetic surgery, the creditor may confirm the cost of the procedure with thesurgeon. If the surgeon reports that the cost of the procedure is $5,000, the creditormay use that medical information to offer the consumer only $5,000 of credit.

(iii) A creditor has an established medical loan program for financing particularelective surgical procedures. The creditor receives a loan application from a consumerrequesting $10,000 of credit under the established loan program for an electivesurgical procedure. The consumer indicates on the application that the purpose of theloan is to finance an elective surgical procedure not eligible for funding under theguidelines of the established loan program. The creditor may deny the consumer'sapplication because the purpose of the loan is not for a particular procedure fundedby the established loan program.

(4) Examples of obtaining and using medical information at the request of theconsumer.

(i) If a consumer applies for a loan and specifically requests that the creditorconsider the consumer's medical disability at the relevant time as an explanation foradverse payment history information in his credit report, the creditor may considersuch medical information in evaluating the consumer's willingness and ability to repaythe requested loan to accommodate the consumer's particular circumstances,consistent with safe and sound practices. The creditor may also decline to considersuch medical information to accommodate the consumer, but may evaluate theconsumer's application in accordance with its otherwise applicable underwritingcriteria. The creditor may not deny the consumer's application or otherwise treat theconsumer less favorably because the consumer specifically requested a medicalaccommodation, if the creditor would have extended the credit or treated theconsumer more favorably under the creditor's otherwise applicable underwritingcriteria.

(ii) If a consumer applies for a loan by telephone and explains that his income hasbeen and will continue to be interrupted on account of a medical condition and thathe expects to repay the loan by liquidating assets, the creditor may, but is notrequired to, evaluate the application using the sale of assets as the primary source ofrepayment, consistent with safe and sound practices, provided that the creditordocuments the consumer's request by recording the oral conversation or making anotation of the request in the consumer's file.



(iii) If a consumer applies for a loan and the application form provides a spacewhere the consumer may provide any other information or special circumstances,whether medical or nonmedical, that the consumer would like the creditor to considerin evaluating the consumer's application, the creditor may use medical informationprovided by the consumer in that space on that application to accommodate theconsumer's application for credit, consistent with safe and sound practices, or maydisregard that information.

(iv) If a consumer specifically requests that the creditor use medical information indetermining the consumer's eligibility, or continued eligibility, for credit and providesthe creditor with medical information for that purpose, and the creditor determinesthat it needs additional information regarding the consumer's circumstances, thecreditor may request, obtain, and use additional medical information about theconsumer as necessary to verify the information provided by the consumer or todetermine whether to make an accommodation for the consumer. The consumer maydecline to provide additional information, withdraw the request for anaccommodation, and have the application considered under the creditor's otherwiseapplicable underwriting criteria.

(v) If a consumer completes and signs a credit application that is not for medicalpurpose credit and the application contains boilerplate language that routinelyrequests medical information from the consumer or that indicates that by applying forcredit the consumer authorizes or consents to the creditor obtaining and usingmedical information in connection with a determination of the consumer's eligibility,or continued eligibility, for credit, the consumer has not specifically requested thatthe creditor obtain and use medical information to accommodate the consumer'sparticular circumstances.

(5) Example of a forbearance practice or program. After an appropriate safety andsoundness review, a creditor institutes a program that allows consumers who are orwill be hospitalized to defer payments as needed for up to three months, withoutpenalty, if the credit account has been open for more than one year and has notpreviously been in default, and the consumer provides confirming documentation atan appropriate time. A consumer is hospitalized and does not pay her bill for aparticular month. This consumer has had a credit account with the creditor for morethan one year and has not previously been in default. The creditor attempts tocontact the consumer and speaks with the consumer's adult child, who is not theconsumer's legal representative. The adult child informs the creditor that theconsumer is hospitalized and is unable to pay the bill at that time. The creditor deferspayments for up to three months, without penalty, for the hospitalized consumer and



sends the consumer a letter confirming this practice and the date on which the nextpayment will be due. The creditor has obtained and used medical information todetermine whether the provisions of a medically triggered forbearance practice orprogram apply to a consumer.



Reg V 12 CFR § 222.31 Limits on Redisclosure of Information

Reference

(a) Scope. This section applies to banks that are members of the Federal ReserveSystem (other than national banks) and their respective operating subsidiaries,branches and agencies of foreign banks (other than Federal branches, FederalAgencies, and insured State branches of foreign banks), commercial lendingcompanies owned or controlled by foreign banks, organizations operating undersection 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq., and 611 et seq.),and bank holding companies and affiliates of such holding companies (other thandepository institutions and consumer reporting agencies).

(b) Limits on redisclosure. If a person described in paragraph (a) of this sectionreceives medical information about a consumer from a consumer reporting agency orits affiliate, the person must not disclose that information to any other person, exceptas necessary to carry out the purpose for which the information was initiallydisclosed, or as otherwise permitted by statute, regulation, or order.



Reg V 12 CFR § 222.32 Sharing Medical Information with Affiliates

Reference

(a) Scope. This section applies to banks that are members of the Federal ReserveSystem (other than national banks) and their respective operating subsidiaries,branches and agencies of foreign banks (other than Federal branches, FederalAgencies, and insured State branches of foreign banks), commercial lendingcompanies owned or controlled by foreign banks, organizations operating undersection 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq., and 611 et seq.).

(b) In general. The exclusions from the term ‘‘consumer report" in section603(d)(2) of the Act that allow the sharing of information with affiliates do not applyto a person described in paragraph (a) of this section if that person communicates toan affiliate:

(1) Medical information;

(2) An individualized list or description based on the payment transactions of theconsumer for medical products or services; or

(3) An aggregate list of identified consumers based on payment transactions formedical products or services.

(c) Exceptions. A person described in paragraph (a) of this section may rely on theexclusions from the term ‘‘consumer report" in section 603(d)(2) of the Act tocommunicate the information in paragraph (b) of this section to an affiliate:

(1) In connection with the business of insurance or annuities (including theactivities described in section 18B of the model Privacy of Consumer Financial andHealth Information Regulation issued by the National Association of InsuranceCommissioners, as in effect on January 1, 2003);

(2) For any purpose permitted without authorization under the regulationspromulgated by the Department of Health and Human Services pursuant to the HealthInsurance Portability and Accountability Act of 1996 (HIPAA);

(3) For any purpose referred to in section 1179 of HIPAA;

(4) For any purpose described in section 502(e) of the Gramm-Leach-Bliley Act;

(5) In connection with a determination of the consumer's eligibility, or continuedeligibility, for credit consistent with § 222.30 of this part; or

(6) As otherwise permitted by order of the Board.



CODE OF FEDERAL REGULATIONSTITLE 12 C.F.R. BANKS AND BANKINGCHAPTER II. FEDERAL RESERVE SYSTEMSUBCHAPTER A. BOARD OF GOVERNORS OF THE FEDERALRESERVE SYSTERMPART 222. FAIR CREDIT REPORTING (REGULATION V)SUBPART E. DUTIES OF FURNISHERS OF INFORMATION

History: 74 FR 31512, July 1, 2009, eff July 1, 2010.



Reg V 12 CFR § 222.40 Scope

Reference

[Effective July 1, 2010]

Subpart E of this part applies to member banks of the Federal Reserve System(other than national banks) and their respective operating subsidiaries that arenot functionally regulated within the meaning of section 5(c)(5) of the BankHolding Company Act, as amended (12 U.S.C. 1844(c)(5)), branches and Agenciesof foreign banks (other than Federal branches, Federal Agencies, and insuredState branches of foreign banks), commercial lending companies owned orcontrolled by foreign banks, and organizations operating under section 25 or 25Aof the Federal Reserve Act (12 U.S.C. 601 et seq., and 611 et seq.).




Reference


For purposes of this subpart and Appendix E of this part, the followingdefinitions apply:

(a) Accuracy means that information that a furnisher provides to a consumerreporting agency about an account or other relationship with the consumercorrectly:

(1) Reflects the terms of and liability for the account or other relationship;

(2) Reflects the consumer's performance and other conduct with respect to theaccount or other relationship; and

(3) Identifies the appropriate consumer.

(b) Direct dispute means a dispute submitted directly to a furnisher (including afurnisher that is a debt collector) by a consumer concerning the accuracy of anyinformation contained in a consumer report and pertaining to an account orother relationship that the furnisher has or had with the consumer.

(c) Furnisher means an entity that furnishes information relating to consumersto one or more consumer reporting agencies for inclusion in a consumer report.An entity is not a furnisher when it:

(1) Provides information to a consumer reporting agency solely to obtain aconsumer report in accordance with sections 604(a) and (f) of the Fair CreditReporting Act;

(2) Is acting as a "consumer reporting agency" as defined in section 603(f) of theFair Credit Reporting Act;

(3) Is a consumer to whom the furnished information pertains; or

(4) Is a neighbor, friend, or associate of the consumer, or another individualwith whom the consumer is acquainted or who may have knowledge about theconsumer, and who provides information about the consumer's character, generalreputation, personal characteristics, or mode of living in response to a specificrequest from a consumer reporting agency.

(d) Identity theft has the same meaning as in 16 CFR 603.2(a).



(e) Integrity means that information that a furnisher provides to a consumerreporting agency about an account or other relationship with the consumer:

(1) Is substantiated by the furnisher's records at the time it is furnished;

(2) Is furnished in a form and manner that is designed to minimize the likelihoodthat the information may be incorrectly reflected in a consumer report; and

(3) Includes the information in the furnisher's possession about the account orother relationship that the Board has:

(i) Determined that the absence of which would likely be materially misleadingin evaluating a consumer's creditworthiness, credit standing, credit capacity,character, general reputation, personal characteristics, or mode of living; and

(ii) Listed in section I.(b)(2)(iii) of Appendix E of this part.



Reg V 12 CFR § 222.42 Reasonable policies and procedures concerning theaccuracy and integrity of furnished information

Reference


(a) Policies and procedures. Each furnisher must establish and implementreasonable written policies and procedures regarding the accuracy and integrityof the information relating to consumers that it furnishes to a consumerreporting agency. The policies and procedures must be appropriate to thenature, size, complexity, and scope of each furnisher's activities.

(b) Guidelines. Each furnisher must consider the guidelines in Appendix E of thispart in developing its policies and procedures required by this section, andincorporate those guidelines that are appropriate.

(c) Reviewing and updating policies and procedures. Each furnisher must reviewits policies and procedures required by this section periodically and update themas necessary to ensure their continued effectiveness.



Reg V 12 CFR § 222.43 Direct disputes

Reference


(a) General rule. Except as otherwise provided in this section, a furnisher mustconduct a reasonable investigation of a direct dispute if it relates to:

(1) The consumer's liability for a credit account or other debt with thefurnisher, such as direct disputes relating to whether there is or has beenidentity theft or fraud against the consumer, whether there is individual or jointliability on an account, or whether the consumer is an authorized user of a creditaccount;

(2) The terms of a credit account or other debt with the furnisher, such as directdisputes relating to the type of account, principal balance, scheduled paymentamount on an account, or the amount of the credit limit on an open-end account;

(3) The consumer's performance or other conduct concerning an account or otherrelationship with the furnisher, such as direct disputes relating to the currentpayment status, high balance, date a payment was made, the amount of apayment made, or the date an account was opened or closed; or

(4) Any other information contained in a consumer report regarding an accountor other relationship with the furnisher that bears on the consumer'screditworthiness, credit standing, credit capacity, character, generalreputation, personal characteristics, or mode of living.

(b) Exceptions. The requirements of paragraph (a) of this section do not applyto a furnisher if:

(1) The direct dispute relates to:

(i) The consumer's identifying information (other than a direct dispute relatingto a consumer's liability for a credit account or other debt with the furnisher, asprovided 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);

(v) Information related to fraud alerts or active duty alerts; or

(vi) Information provided to a consumer reporting agency by another furnisher;or

(2) The furnisher has a reasonable belief that the direct dispute is submitted by,is prepared on behalf of the consumer by, or is submitted on a form supplied tothe 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 disputeonly 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 aconsumer report relating to the consumer;

(2) An address clearly and conspicuously specified by the furnisher forsubmitting direct disputes that is provided to the consumer in writing orelectronically (if the consumer has agreed to the electronic delivery ofinformation from the furnisher); or

(3) Any business address of the furnisher if the furnisher has not so specified andprovided an address for submitting direct disputes under paragraphs (c)(1) or (2)of this section.

(d) Direct dispute notice contents. A dispute notice must include:

(1) Sufficient information to identify the account or other relationship that is indispute, such as an account number and the name, address, and telephonenumber of the consumer, if applicable;

(2) The specific information that the consumer is disputing and an explanationof the basis for the dispute; and

(3) All supporting documentation or other information reasonably required bythe furnisher to substantiate the basis of the dispute. This documentation mayinclude, for example: a copy of the relevant portion of the consumer report thatcontains the allegedly inaccurate information; a police report; a fraud oridentity theft affidavit; a court order; or account statements.

(e) Duty of furnisher after receiving a direct dispute notice. After receiving adispute notice from a consumer pursuant to paragraphs (c) and (d) of this



section, the furnisher must:

(1) Conduct a reasonable investigation with respect to the disputed information;

(2) Review all relevant information provided by the consumer with the disputenotice;

(3) Complete its investigation of the dispute and report the results of theinvestigation to the consumer before the expiration of the period under section611(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681i(a)(1)) within which aconsumer reporting agency would be required to complete its action if theconsumer had elected to dispute the information under that section; and

(4) If the investigation finds that the information reported was inaccurate,promptly notify each consumer reporting agency to which the furnisher providedinaccurate information of that determination and provide to the consumerreporting agency any correction to that information that is necessary to makethe information provided by the furnisher accurate.

(f) Frivolous or irrelevant disputes. (1) A furnisher is not required to investigatea direct dispute if the furnisher has reasonably determined that the dispute isfrivolous or irrelevant. A dispute qualifies as frivolous or irrelevant if:

(i) The consumer did not provide sufficient information to investigate thedisputed information as required by paragraph (d) of this section;

(ii) The direct dispute is substantially the same as a dispute previouslysubmitted by or on behalf of the consumer, either directly to the furnisher orthrough a consumer reporting agency, with respect to which the furnisher hasalready satisfied the applicable requirements of the Act or this section;provided, however, that a direct dispute is not substantially the same as adispute previously submitted if the dispute includes information listed inparagraph (d) of this section that had not previously been provided to thefurnisher; or

(iii) The furnisher is not required to investigate the direct dispute because oneor more of the exceptions listed in paragraph (b) of this section applies.

(2) Notice of determination. Upon making a determination that a dispute isfrivolous or irrelevant, the furnisher must notify the consumer of thedetermination not later than five business days after making the determination,by mail or, if authorized by the consumer for that purpose, by any other meansavailable 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 includethe reasons for such determination and identify any information required toinvestigate the disputed information, which notice may consist of a standardizedform describing the general nature of such information.



CODE OF FEDERAL REGULATIONSTITLE 12 C.F.R. BANKS AND BANKINGCHAPTER II. FEDERAL RESERVE SYSTEMSUBCHAPTER A. BOARD OF GOVERNORS OF THE FEDERALRESERVE SYSTEMPART 222. FAIR CREDIT REPORTING (REGULATION V)SUBPART H. DUTIES OF USERS REGARDING RISK-BASED PRICING

History: 75 FR 2724, January 15, 2010, eff January 1, 2011.



Reg V 12 CFR § 222.70 Scope

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[Effective January 1, 2011]

(a) Coverage --(1) In general. This subpart applies to any person that both--

(i) Uses a consumer report in connection with an application for, or a grant, extension, or otherprovision of, credit to a consumer that is primarily for personal, family, or household purposes;and

(ii) Based in whole or in part on the consumer report, grants, extends, or otherwise providescredit to the consumer on material terms that are materially less favorable than the mostfavorable material terms available to a substantial pro-portion of consumers from or through thatperson.

(2) Business credit excluded. This subpart does not apply to an application for, or a grant,extension, or other provision of, credit to a consumer or to any other applicant primarily for abusiness purpose.

(b) Relation to Federal Trade Commission rules. These rules are substantively identical to theFederal Trade Com-mission's (Commission's) risk-based pricing rules in 16 CFR 640. Both rulesapply to the covered person described in paragraph (a) of this section. Compliance with eitherthe Board's rules or the Commission's rules satisfies the requirements of the statute (15 U.S.C.1681m(h)).

(c) Enforcement. The provisions of this subpart will be enforced in accordance with theenforcement authority set forth in sections 621(a) and (b) of the FCRA.




Reference


For purposes of this subpart, the following definitions apply:

(a) Adverse action has the same meaning as in 15 U.S.C. 1681a(k)(1)(A).

(b) Annual percentage rate has the same meaning as in 12 CFR 226.14(b) with respect to anopen-end credit plan and as in 12 CFR 226.22 with respect to closed-end credit.

(c) Closed-end credit has the same meaning as in 12 CFR 226.2(a)(10).

(d) Consumer has the same meaning as in 15 U.S.C. 1681a(c).

(e) Consummation has the same meaning as in 12 CFR 226.2(a)(13).

(f) Consumer report has the same meaning as in 15 U.S.C. 1681a(d).

(g) Consumer reporting agency has the same meaning as in 15 U.S.C. 1681a(f).

(h) Credit has the same meaning as in 15 U.S.C. 1681a(r)(5).

(i) Creditor has the same meaning as in 15 U.S.C. 1681a(r)(5).

(j) Credit card has the same meaning as in 15 U.S.C. 1681a(r)(2).

(k) Credit card issuer has the same meaning as in 15 U.S.C. 1681a(r)(1)(A).

(l) Credit score has the same meaning as in 15 U.S.C. 1681g(f)(2)(A).

(m) Firm offer of credit has the same meaning as in 15 U.S.C. 1681a(l).

(n) Material terms means--

(1) (i) Except as otherwise provided in paragraphs (n)(1)(ii) and (n)(3) of this section, in the caseof credit extended under an open-end credit plan, the annual percentage rate required to bedisclosed under 12 CFR 226.6(a)(1)(ii) or 12 CFR 226.6(b)(2)(i), excluding any temporaryinitial rate that is lower than the rate that will apply after the temporary rate expires, any penaltyrate that will apply upon the occurrence of one or more specific events, such as a late payment oran extension of credit that exceeds the credit limit, and any fixed annual percentage rate optionfor a home equity line of credit;

(ii) In the case of a credit card (other than a credit card that is used to access a home equity lineof credit or a charge card), the annual percentage rate required to be disclosed under 12 CFR226.6(b)(2)(i) that applies to purchases ("purchase annual percentage rate") and no other annualpercentage rate, or in the case of a credit card that has no purchase annual percentage rate, the



annual percentage rate that varies based on information in a consumer report and that has themost significant financial impact on consumers;

(2) In the case of closed-end credit, the annual percentage rate required to be disclosed under 12CFR 226.17(c) and 226.18(e); and

(3) In the case of credit for which there is no annual percentage rate, the financial term thatvaries based on information in a consumer report and that has the most significant financialimpact on consumers, such as a deposit required in connection with credit extended by atelephone company or utility or an annual membership fee for a charge card.

(o) Materially less favorable means, when applied to material terms, that the terms granted,extended, or otherwise provided to a consumer differ from the terms granted, extended, orotherwise provided to another consumer from or through the same person such that the cost ofcredit to the first consumer would be significantly greater than the cost of credit granted,extended, or otherwise provided to the other consumer. For purposes of this definition, factorsrelevant to determining the significance of a difference in cost include the type of credit product,the term of the credit extension, if any, and the extent of the difference between the materialterms granted, extended, or otherwise provided to the two consumers.

(p) Open-end credit plan has the same meaning as in 15 U.S.C. 1602(i), as interpreted by theBoard of Governors of the Federal Reserve System in Regulation Z (12 CFR part 226) and theOfficial Staff Commentary to Regulation Z (Supplement I to 12 CFR Part 226).

(q) Person has the same meaning as in 15 U.S.C. 1681a(b).



Reg V 12 CFR § 222.72 General requirements for risk-based pricing notices

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(a) In general. Except as otherwise provided in this subpart, a person must provide to a consumera notice ("risk-based pricing notice") in the form and manner required by this subpart if theperson both--

(1) Uses a consumer report in connection with an application for, or a grant, extension, or otherprovision of, credit to that consumer that is primarily for personal, family, or householdpurposes; and

(2) Based in whole or in part on the consumer report, grants, extends, or otherwise providescredit to that consumer on material terms that are materially less favorable than the mostfavorable material terms available to a substantial pro-portion of consumers from or through thatperson.

(b) Determining which consumers must receive a notice. A person may determine whetherparagraph (a) of this section applies by directly comparing the material terms offered to eachconsumer and the material terms offered to other consumers for a specific type of credit product.For purposes of this section, a "specific type of credit product" means one or more creditproducts with similar features that are designed for similar purposes. Examples of a specific typeof credit product include student loans, unsecured credit cards, secured credit cards, newautomobile loans, used automobile loans, fixed-rate mortgage loans, and variable-rate mortgageloans. As an alternative to making this direct comparison, a person may make the determinationby using one of the following methods:

(1) Credit score proxy method --(i) In general. A person that sets the material terms of creditgranted, extended, or otherwise provided to a consumer, based in whole or in part on a creditscore, may comply with the requirements of paragraph (a) of this section by--

(A) Determining the credit score (hereafter referred to as the "cutoff score") that represents thepoint at which approximately 40 percent of the consumers to whom it grants, extends, orprovides credit have higher credit scores and approximately 60 percent of the consumers towhom it grants, extends, or provides credit have lower credit scores; and

(B) Providing a risk-based pricing notice to each consumer to whom it grants, extends, orprovides credit whose credit score is lower than the cutoff score.

(ii) Alternative to the 40/60 cutoff score determination. In the case of credit that has beengranted, extended, or provided on the most favorable material terms to more than 40 percent ofconsumers, a person may, at its option, set its cutoff score at a point at which the approximate



percentage of consumers who historically have been granted, extended, or provided credit onmaterial terms other than the most favorable terms would receive risk-based pricing noticesunder this section.

(iii) Determining the cutoff score --

(A) Sampling approach. A person that currently uses risk-based pricing with respect to the creditproducts it offers must calculate the cutoff score by considering the credit scores of all or arepresentative sample of the consumers to whom it has granted, extended, or provided credit fora specific type of credit product.

(B) Secondary source approach in limited circumstances. A person that is a new entrant into thecredit business, introduces new credit products, or starts to use risk-based pricing with respect tothe credit products it currently offers may initially determine the cutoff score based oninformation derived from appropriate market research or relevant third-party sources for aspecific type of credit product, such as research or data from companies that develop creditscores. A person that acquires a credit portfolio as a result of a merger or acquisition maydetermine the cutoff score based on information from the party which it acquired, with which itmerged, or from which it acquired the portfolio.

(C) Recalculation of cutoff scores. A person using the credit score proxy method mustrecalculate its cutoff score(s) no less than every two years in the manner described in paragraph(b)(1)(iii)(A) of this section. A person using the credit score proxy method using marketresearch, third-party data, or information from a party which it acquired, with which it merged,or from which it acquired the portfolio as permitted by paragraph (b)(1)(iii)(B) of this sectiongenerally must calculate a cutoff score(s) based on the scores of its own consumers in themanner described in paragraph (b)(1)(iii)(A) of this section within one year after it begins usinga cutoff score derived from market research, third-party data, or information from a party whichit acquired, with which it merged, or from which it acquired the portfolio. If such a person doesnot grant, extend, or provide credit to new consumers during that one-year period such that itlacks sufficient data with which to recalculate a cutoff score based on the credit scores of its ownconsumers, the person may continue to use a cutoff score derived from market research,third-party data, or information from a party which it acquired, with which it merged, or fromwhich it acquired the portfolio as provided in paragraph (b)(1)(iii)(B) until it obtains sufficientdata on which to base the recalculation. However, the person must recalculate its cutoff score(s)in the manner described in paragraph (b)(1)(iii)(A) of this section within two years, if it hasgranted, extended, or provided credit to some new consumers during that two-year period.

(D) Use of two or more credit scores. A person that generally uses two or more credit scores insetting the material terms of credit granted, extended, or provided to a consumer must determinethe cutoff score using the same method the person uses to evaluate multiple scores when makingcredit decisions. These evaluation methods may include, but are not limited to, selecting the low,median, high, most recent, or average credit score of each consumer to whom it grants, extends,



or provides credit. If a person that uses two or more credit scores does not consistently use thesame method for evaluating multiple credit scores (e.g., if the person sometimes chooses themedian score and other times calculates the average score), the person must determine the cutoffscore using a reasonable means. In such cases, use of any one of the methods that the personregularly uses or the average credit score of each consumer to whom it grants, extends, orprovides credit is deemed to be a reasonable means of calculating the cutoff score.

(iv) Credit score not available. For purposes of this section, a person using the credit score proxymethod who grants, extends, or provides credit to a consumer for whom a credit score is notavailable must assume that the consumer receives credit on material terms that are materially lessfavorable than the most favorable credit terms offered to a substantial proportion of consumersfrom or through that person and must provide a risk-based pricing notice to the consumer.

(v) Examples. (A) A credit card issuer engages in risk-based pricing and the annual percentagerates it offers to consumers are based in whole or in part on a credit score. The credit card issuertakes a representative sample of the credit scores of consumers to whom it issued credit cardswithin the preceding three months. The credit card issuer determines that approximately 40percent of the sampled consumers have a credit score at or above 720 (on a scale of 350 to 850)and approximately 60 percent of the sampled consumers have a credit score below 720. Thus, thecard issuer selects 720 as its cutoff score. A consumer applies to the credit card issuer for a creditcard. The card issuer obtains a credit score for the consumer. The consumer's credit score is 700.Since the consumer's 700 credit score falls below the 720 cutoff score, the credit card issuer mustprovide a risk-based pricing notice to the consumer.

(B) A credit card issuer engages in risk-based pricing, and the annual percentage rates it offers toconsumers are based in whole or in part on a credit score. The credit card issuer takes arepresentative sample of the consumers to whom it issued credit cards over the preceding sixmonths. The credit card issuer determines that approximately 80 per-cent of the sampledconsumers received credit at its lowest annual percentage rate, and 20 percent received credit ata higher annual percentage rate. Approximately 80 percent of the sampled consumers have acredit score at or above 750 (on a scale of 350 to 850), and 20 percent have a credit score below750. Thus, the card issuer selects 750 as its cutoff score. A consumer applies to the credit cardissuer for a credit card. The card issuer obtains a credit score for the consumer. The consumer'scredit score is 740. Since the consumer's 740 credit score falls below the 750 cutoff score, thecredit card issuer must provide a risk-based pricing notice to the consumer.

(C) An auto lender engages in risk-based pricing, obtains credit scores from one of thenationwide consumer report-ing agencies, and uses the credit score proxy method to determinewhich consumers must receive a risk-based pricing notice. A consumer applies to the auto lenderfor credit to finance the purchase of an automobile. A credit score about that consumer is notavailable from the consumer reporting agency from which the lender obtains credit scores. Thelender nevertheless grants, extends, or provides credit to the consumer. The lender must provide



a risk-based pricing notice to the consumer.

(2) Tiered pricing method --

(i) In general. A person that sets the material terms of credit granted, extended, or provided to aconsumer by placing the consumer within one of a discrete number of pricing tiers for a specifictype of credit product, based in whole or in part on a consumer report, may comply with therequirements of paragraph (a) of this section by providing a risk-based pricing notice to eachconsumer who is not placed within the top pricing tier or tiers, as described below.

(ii) Four or fewer pricing tiers. If a person using the tiered pricing method has four or fewerpricing tiers, the per-son complies with the requirements of paragraph (a) of this section byproviding a risk-based pricing notice to each consumer to whom it grants, extends, or providescredit who does not qualify for the top tier (that is, the lowest-priced tier). For example, a personthat uses a tiered pricing structure with annual percentage rates of 8, 10, 12, and 14 percentwould provide the risk-based pricing notice to each consumer to whom it grants, extends, orprovides credit at annual percentage rates of 10, 12, and 14 percent.

(iii) Five or more pricing tiers. If a person using the tiered pricing method has five or morepricing tiers, the person complies with the requirements of paragraph (a) of this section byproviding a risk-based pricing notice to each consumer to whom it grants, extends, or providescredit who does not qualify for the top two tiers (that is, the two lowest-priced tiers) and anyother tier that, together with the top tiers, comprise no less than the top 30 percent but no morethan the top 40 percent of the total number of tiers. Each consumer placed within the remainingtiers must receive a risk- based pricing notice. For example, if a person has nine pricing tiers, thetop three tiers (that is, the three lowest-priced tiers) comprise no less than the top 30 percent butno more than the top 40 percent of the tiers. Therefore, a person using this method would providea risk-based pricing notice to each consumer to whom it grants, extends, or provides credit whois placed within the bottom six tiers.

(c) Application to credit card issuers --

(1) In general. A credit card issuer subject to the requirements of paragraph (a) of this sectionmay use one of the methods set forth in paragraph (b) of this section to identify consumers towhom it must provide a risk-based pricing notice. Alternatively, a credit card issuer may satisfyits obligations under paragraph (a) of this section by providing a risk-based pricing notice to aconsumer when--

(i) A consumer applies for a credit card either in connection with an application program, such asa direct-mail offer or a take-one application, or in response to a solicitation under 12 CFR226.5a, and more than a single possible purchase annual percentage rate may apply under theprogram or solicitation; and

(ii) Based in whole or in part on a consumer report, the credit card issuer provides a credit card



to the consumer with an annual percentage rate referenced in § 222.71(n)(1)(ii) that is greaterthan the lowest annual percentage rate referenced in § 222.71(n)(1)(ii) available in connectionwith the application or solicitation.

(2) No requirement to compare different offers. A credit card issuer is not subject to therequirements of paragraph (a) of this section and is not required to provide a risk-based pricingnotice to a consumer if--

(i) The consumer applies for a credit card for which the card issuer provides a single annualpercentage rate referenced in § 222.71(n)(1)(ii), excluding a temporary initial rate that is lowerthan the rate that will apply after the temporary rate expires and a penalty rate that will applyupon the occurrence of one or more specific events, such as a late payment or an extension ofcredit that exceeds the credit limit; or

(ii) The credit card issuer offers the consumer the lowest annual percentage rate referenced in §222.71(n)(1)(ii) available under the credit card offer for which the consumer applied, even if alower annual percentage rate referenced in § 222.71(n)(1)(ii) is available under a different creditcard offer issued by the card issuer.

(3) Examples. (i) A credit card issuer sends a solicitation to the consumer that discloses severalpossible purchase annual percentage rates that may apply, such as 10, 12, or 14 percent, or arange of purchase annual percentage rates from 10 to 14 percent. The consumer applies for acredit card in response to the solicitation. The card issuer provides a credit card to the consumerwith a purchase annual percentage rate of 12 percent based in whole or in part on a consumerreport. Unless an exception applies under § 222.74, the card issuer may satisfy its obligationsunder paragraph (a) of this section by providing a risk-based pricing notice to the consumerbecause the consumer received credit at a purchase annual percentage rate greater than thelowest purchase annual percentage rate available under that solicitation.

(ii) The same facts as in the example in paragraph (c)(3)(i) of this section, except that the cardissuer provides a credit card to the consumer at a purchase annual percentage rate of 10 percent.The card issuer is not required to provide a risk-based pricing notice to the consumer even if,under a different credit card solicitation, that consumer or other consumers might qualify for apurchase annual percentage rate of 8 percent.

(d) Account review --

(1) In general. Except as otherwise provided in this subpart, a person is subject to therequirements of paragraph (a) of this section and must provide a risk-based pricing notice to aconsumer in the form and manner required by this subpart if the person--

(i) Uses a consumer report in connection with a review of credit that has been extended to theconsumer; and

(ii) Based in whole or in part on the consumer report, increases the annual percentage rate (the



annual percentage rate referenced in § 222.71(n)(1)(ii) in the case of a credit card).

(2) Example. A credit card issuer periodically obtains consumer reports for the purpose ofreviewing the terms of credit it has extended to consumers in connection with credit cards. As aresult of this review, the credit card issuer in-creases the purchase annual percentage rateapplicable to a consumer's credit card based in whole or in part on information in a consumerreport. The credit card issuer is subject to the requirements of paragraph (a) of this section andmust provide a risk-based pricing notice to the consumer.



Reg V 12 CFR § 222.73 Content, form, and timing of risk-based pricingnotices

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(a) Content of the notice --

(1) In general. The risk-based pricing notice required by § 222.72(a) or (c) must include:

(i) A statement that a consumer report (or credit report) includes information about theconsumer's credit history and the type of information included in that history;

(ii) A statement that the terms offered, such as the annual percentage rate, have been set based oninformation from a consumer report;

(iii) A statement that the terms offered may be less favorable than the terms offered to consumerswith better credit histories;

(iv) A statement that the consumer is encouraged to verify the accuracy of the informationcontained in the consumer report and has the right to dispute any inaccurate information in thereport;

(v) The identity of each consumer reporting agency that furnished a consumer report used in thecredit decision;

(vi) A statement that federal law gives the consumer the right to obtain a copy of a consumerreport from the consumer reporting agency or agencies identified in the notice without charge for60 days after receipt of the notice;

(vii) A statement informing the consumer how to obtain a consumer report from the consumerreporting agency or agencies identified in the notice and providing contact information(including a toll-free telephone number, where applicable) specified by the consumer reportingagency or agencies; and

(viii) A statement directing consumers to the Web sites of the Federal Reserve Board andFederal Trade Commission to obtain more information about consumer reports.

(2) Account review. The risk-based pricing notice required by § 222.72(d) must include:

(i) A statement that a consumer report (or credit report) includes information about theconsumer's credit history and the type of information included in that credit history;

(ii) A statement that the person has conducted a review of the account using information from aconsumer report;

debbie.capretta

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(iii) A statement that as a result of the review, the annual percentage rate on the account has beenincreased based on information from a consumer report;

(iv) A statement that the consumer is encouraged to verify the accuracy of the informationcontained in the consumer report and has the right to dispute any inaccurate information in thereport;

(v) The identity of each consumer reporting agency that furnished a consumer report used in theaccount review;

(vi) A statement that federal law gives the consumer the right to obtain a copy of a consumerreport from the consumer reporting agency or agencies identified in the notice without charge for60 days after receipt of the notice;

(vii) A statement informing the consumer how to obtain a consumer report from the consumerreporting agency or agencies identified in the notice and providing contact information(including a toll-free telephone number, where applicable) specified by the consumer reportingagency or agencies; and

(viii) A statement directing consumers to the Web sites of the Federal Reserve Board andFederal Trade Commission to obtain more information about consumer reports.

(b) Form of the notice --(1) In general. The risk-based pricing notice required by § 222.72(a), (c),or (d) must be:

(i) Clear and conspicuous; and

(ii) Provided to the consumer in oral, written, or electronic form.

(2) Model forms. A model form of the risk-based pricing notice required by § 222.72(a) and (c)is contained in Appendix H-1 of this part. Appropriate use of Model Form H-1 is deemed tocomply with the content and form requirements of paragraphs (a)(1) and (b) of this section. Amodel form of the risk-based pricing notice required by § 222.72(d) is contained in AppendixH-2 of this part. Appropriate use of Model Form H-2 is deemed to comply with the content andform requirements of paragraphs (a)(2) and (b) of this section. Use of the model forms isoptional.

(c) Timing --

(1) General. Except as provided in paragraph (c)(3) of this section, a risk-based pricing noticemust be provided to the consumer--

(i) In the case of a grant, extension, or other provision of closed-end credit, before consummationof the transaction, but not earlier than the time the decision to approve an application for, or agrant, extension, or other provision of, credit, is communicated to the consumer by the person



required to provide the notice;

(ii) In the case of credit granted, extended, or provided under an open-end credit plan, before thefirst transaction is made under the plan, but not earlier than the time the decision to approve anapplication for, or a grant, extension, or other provision of, credit is communicated to theconsumer by the person required to provide the notice; or

(iii) In the case of a review of credit that has been extended to the consumer, at the time thedecision to increase the annual percentage rate (annual percentage rate referenced in §222.71(n)(1)(ii) in the case of a credit card) based on a consumer report is communicated to theconsumer by the person required to provide the notice, or if no notice of the increase in theannual percentage rate is provided to the consumer prior to the effective date of the change in theannual percentage rate (to the extent permitted by law), no later than five days after the effectivedate of the change in the annual percentage rate.

(2) Application to certain automobile lending transactions. When a person to whom a creditobligation is initially payable grants, extends, or provides credit to a consumer for the purpose offinancing the purchase of an automobile from an auto dealer or other party that is not affiliatedwith the person, any requirement to provide a risk-based pricing notice pursuant to this subpart issatisfied if the person:

(i) Provides a notice described in §§ 222.72(a), 222.74(e), or 222.74(f) to the consumer withinthe time periods set forth in paragraph (c)(1)(i) of this section, § 222.74(e)(3), or § 222.74(f)(4),as applicable; or

(ii) Arranges to have the auto dealer or other party provide a notice described in §§ 222.72(a),222.74(e), or 222.74(f) to the consumer on its behalf within the time periods set forth inparagraph (c)(1)(i) of this section, § 222.74(e)(3), or § 222.74(f)(4), as applicable, and maintainsreasonable policies and procedures to verify that the auto dealer or other party provides suchnotice to the consumer within the applicable time periods. If the person arranges to have the autodealer or other party provide a notice described in § 222.74(e), the person's obligation is satisfiedif the consumer receives a notice containing a credit score obtained by the dealer or other party,even if a different credit score is obtained and used by the person on whose behalf the notice isprovided.

(3) Timing requirements for contemporaneous purchase credit. When credit under an open-endcredit plan is granted, extended, or provided to a consumer in person or by telephone for thepurpose of financing the contemporaneous purchase of goods or services, any risk-based pricingnotice required to be provided pursuant to this subpart (or the disclosures permitted under §222.74(e) or (f)) may be provided at the earlier of:

(i) The time of the first mailing by the person to the consumer after the decision is made toapprove the grant, ex-tension, or other provision of open-end credit, such as in a mailingcontaining the account agreement or a credit card; or



(ii) Within 30 days after the decision to approve the grant, extension, or other provision of credit.



Reg V 12 CFR § 222.74 Exceptions

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(a) Application for specific terms --

(1) In general. A person is not required to provide a risk-based pricing notice to the consumerunder § 222.72(a) or (c) if the consumer applies for specific material terms and is granted thoseterms, unless those terms were specified by the person using a consumer report after theconsumer applied for or requested credit and after the person obtained the consumer report. Forpurposes of this section, "specific material terms" means a single material term, or set of materialterms, such as an annual percentage rate of 10 percent, and not a range of alternatives, such as anannual percentage rate that may be 8, 10, or 12 percent, or between 8 and 12 percent.

(2) Example. A consumer receives a firm offer of credit from a credit card issuer. The terms ofthe firm offer are based in whole or in part on information from a consumer report that the creditcard issuer obtained under the FCRA's firm offer of credit provisions. The solicitation offers theconsumer a credit card with a single purchase annual percentage rate of 12 percent. Theconsumer applies for and receives a credit card with an annual percentage rate of 12 percent.Other customers with the same credit card have a purchase annual percentage rate of 10 percent.The exception applies because the consumer applied for specific material terms and was grantedthose terms. Although the credit card issuer specified the annual percentage rate in the firm offerof credit based in whole or in part on a consumer report, the credit card issuer specified thatmaterial term before, not after, the consumer applied for or requested credit.

(b) Adverse action notice. A person is not required to provide a risk-based pricing notice to theconsumer under § 222.72(a), (c), or (d) if the person provides an adverse action notice to theconsumer under section 615(a) of the FCRA.

(c) Prescreened solicitations --

(1) In general. A person is not required to provide a risk-based pricing notice to the consumerunder § 222.72(a) or (c) if the person:

(i) Obtains a consumer report that is a prescreened list as described in section 604(c)(2) of theFCRA; and

(ii) Uses the consumer report for the purpose of making a firm offer of credit to the consumer.

(2) More favorable material terms. This exception applies to any firm offer of credit offered by aperson to a consumer, even if the person makes other firm offers of credit to other consumers onmore favorable material terms.



(3) Example. A credit card issuer obtains two prescreened lists from a consumer reportingagency. One list includes consumers with high credit scores. The other list includes consumerswith low credit scores. The issuer mails a firm offer of credit to the high credit score consumerswith a single purchase annual percentage rate of 10 percent. The issuer also mails a firm offer ofcredit to the low credit score consumers with a single purchase annual percentage rate of 14percent. The credit card issuer is not required to provide a risk-based pricing notice to the lowcredit score consumers who receive the 14 percent offer because use of a consumer report tomake a firm offer of credit does not trigger the risk-based pricing notice requirement.

(d) Loans secured by residential real property--credit score disclosure. (1) In general. A person isnot required to provide a risk-based pricing notice to a consumer under § 222.72(a) or (c) if:

(i) The consumer requests from the person an extension of credit that is or will be secured by oneto four units of residential real property; and

(ii) The person provides to each consumer described in paragraph (d)(1)(i) of this section anotice that contains the following--

(A) A statement that a consumer report (or credit report) is a record of the consumer's credithistory and includes information about whether the consumer pays his or her obligations on timeand how much the consumer owes to creditors;

(B) A statement that a credit score is a number that takes into account information in a consumerreport and that a credit score can change over time to reflect changes in the consumer's credithistory;

(C) A statement that the consumer's credit score can affect whether the consumer can obtaincredit and what the cost of that credit will be;

(D) The information required to be disclosed to the consumer pursuant to section 609(g) of theFCRA;

(E) The distribution of credit scores among consumers who are scored under the same scoringmodel that is used to generate the consumer's credit score using the same scale as that of thecredit score that is provided to the consumer, presented in the form of a bar graph containing aminimum of six bars that illustrates the percentage of consumers with credit scores within therange of scores reflected in each bar or by other clear and readily understandable graphicalmeans, or a clear and readily understandable statement informing the consumer how his or hercredit score compares to the scores of other consumers. Use of a graph or statement obtainedfrom the person providing the credit score that meets the requirements of this paragraph(d)(1)(ii)(E) is deemed to comply with this requirement;

(F) A statement that the consumer is encouraged to verify the accuracy of the informationcontained in the consumer report and has the right to dispute any inaccurate information in the



report;

(G) A statement that federal law gives the consumer the right to obtain copies of his or herconsumer reports directly from the consumer reporting agencies, including a free report fromeach of the nationwide consumer reporting agencies once during any 12-month period;

(H) Contact information for the centralized source from which consumers may obtain their freeannual consumer reports; and

(I) A statement directing consumers to the Web sites of the Federal Reserve Board and FederalTrade Commission to obtain more information about consumer reports.

(2) Form of the notice. The notice described in paragraph (d)(1)(ii) of this section must be:

(i) Clear and conspicuous;

(ii) Provided on or with the notice required by section 609(g) of the FCRA;

(iii) Segregated from other information provided to the consumer, except for the notice requiredby section 609(g) of the FCRA; and

(iv) Provided to the consumer in writing and in a form that the consumer may keep.

(3) Timing. The notice described in paragraph (d)(1)(ii) of this section must be provided to theconsumer at the time the disclosure required by section 609(g) of the FCRA is provided to theconsumer, but in any event at or before consummation in the case of closed-end credit or beforethe first transaction is made under an open-end credit plan.

(4) Multiple credit scores --

(i) In General. When a person obtains two or more credit scores from consumer report-ingagencies and uses one of those credit scores in setting the material terms of credit granted,extended, or otherwise provided to a consumer, for example, by using the low, middle, high, ormost recent score, the notice described in paragraph (d)(1)(ii) of this section must include thatcredit score and the other information required by that paragraph. When a person obtains two ormore credit scores from consumer reporting agencies and uses multiple credit scores in settingthe material terms of credit granted, extended, or otherwise provided to a consumer, for example,by computing the average of all the credit scores obtained, the notice described in paragraph(d)(1)(ii) of this section must include one of those credit scores and the other informationrequired by that paragraph. The notice may, at the person's option, include more than one creditscore, along with the additional information specified in paragraph (d)(1)(ii) of this section foreach credit score disclosed.

(ii) Examples. (A) A person that uses consumer reports to set the material terms of mortgagecredit granted, ex-tended, or provided to consumers regularly requests credit scores from severalconsumer reporting agencies and uses the low score when determining the material terms it will



offer to the consumer. That person must disclose the low score in the notice described inparagraph (d)(1)(ii) of this section.

(B) A person that uses consumer reports to set the material terms of mortgage credit granted,extended, or provided to consumers regularly requests credit scores from several consumerreporting agencies, each of which it uses in an underwriting program in order to determine thematerial terms it will offer to the consumer. That person may choose one of these scores toinclude in the notice described in paragraph (d)(1)(ii) of this section.

(5) Model form. A model form of the notice described in paragraph (d)(1)(ii) of this sectionconsolidated with the notice required by section 609(g) of the FCRA is contained in AppendixH-3 of this part. Appropriate use of Model Form H-3 is deemed to comply with the requirementsof § 222.74(d). Use of the model form is optional.

(e) Other extensions of credit--credit score disclosure --

(1) In general. A person is not required to provide a risk-based pricing notice to a consumerunder § 222.72(a) or (c) if:

(i) The consumer requests from the person an extension of credit other than credit that is or willbe secured by one to four units of residential real property; and

(ii) The person provides to each consumer described in paragraph (e)(1)(i) of this section anotice that contains the following--

(A) A statement that a consumer report (or credit report) is a record of the consumer's credithistory and includes information about whether the consumer pays his or her obligations on timeand how much the consumer owes to creditors;

(B) A statement that a credit score is a number that takes into account information in a consumerreport and that a credit score can change over time to reflect changes in the consumer's credithistory;

(C) A statement that the consumer's credit score can affect whether the consumer can obtaincredit and what the cost of that credit will be;

(D) The current credit score of the consumer or the most recent credit score of the consumer thatwas previously calculated by the consumer reporting agency for a purpose related to theextension of credit;

(E) The range of possible credit scores under the model used to generate the credit score;

(F) The distribution of credit scores among consumers who are scored under the same scoringmodel that is used to generate the consumer's credit score using the same scale as that of thecredit score that is provided to the consumer, presented in the form of a bar graph containing aminimum of six bars that illustrates the percentage of consumers with credit scores within the



range of scores reflected in each bar, or by other clear and readily understandable graphicalmeans, or a clear and readily understandable statement informing the consumer how his or hercredit score compares to the scores of other consumers. Use of a graph or statement obtainedfrom the person providing the credit score that meets the requirements of this paragraph(e)(1)(ii)(F) is deemed to comply with this requirement;

(G) The date on which the credit score was created;

(H) The name of the consumer reporting agency or other person that provided the credit score;

(I) A statement that the consumer is encouraged to verify the accuracy of the informationcontained in the consumer report and has the right to dispute any inaccurate information in thereport;

(J) A statement that federal law gives the consumer the right to obtain copies of his or herconsumer reports directly from the consumer reporting agencies, including a free report fromeach of the nationwide consumer reporting agencies once during any 12-month period;

(K) Contact information for the centralized source from which consumers may obtain their freeannual consumer reports; and

(L) A statement directing consumers to the web sites of the Federal Reserve Board and FederalTrade Commission to obtain more information about consumer reports.

(2) Form of the notice. The notice described in paragraph (e)(1)(ii) of this section must be:


(ii) Segregated from other information provided to the consumer; and

(iii) Provided to the consumer in writing and in a form that the consumer may keep.

(3) Timing. The notice described in paragraph (e)(1)(ii) of this section must be provided to theconsumer as soon as reasonably practicable after the credit score has been obtained, but in anyevent at or before consummation in the case of closed-end credit or before the first transaction ismade under an open-end credit plan.

(4) Multiple credit scores --

(i) In General. When a person obtains two or more credit scores from consumer report-ingagencies and uses one of those credit scores in setting the material terms of credit granted,extended, or otherwise provided to a consumer, for example, by using the low, middle, high, ormost recent score, the notice described in paragraph (e)(1)(ii) of this section must include thatcredit score and the other information required by that paragraph. When a person obtains two ormore credit scores from consumer reporting agencies and uses multiple credit scores in settingthe material terms of credit granted, extended, or otherwise provided to a consumer, for example,



by computing the average of all the credit scores obtained, the notice described in paragraph(e)(1)(ii) of this section must include one of those credit scores and the other informationrequired by that paragraph. The notice may, at the person's option, include more than one creditscore, along with the additional information specified in paragraph (e)(1)(ii) of this section foreach credit score disclosed.

(ii) Examples. The manner in which multiple credit scores are to be disclosed under this sectionare substantially identical to the manner set forth in the examples contained in paragraph(d)(4)(ii) of this section.

(5) Model form. A model form of the notice described in paragraph (e)(1)(ii) of this section iscontained in Appendix H-4 of this part. Appropriate use of Model Form H-4 is deemed tocomply with the requirements of § 222.74(e). Use of the model form is optional.

(f) Credit score not available --

(1) In general. A person is not required to provide a risk-based pricing notice to a consumerunder § 222.72(a) or (c) if the person:

(i) Regularly obtains credit scores from a consumer reporting agency and provides credit scoredisclosures to consumers in accordance with paragraphs (d) or (e) of this section, but a creditscore is not available from the consumer reporting agency from which the person regularlyobtains credit scores for a consumer to whom the person grants, extends, or provides credit;

(ii) Does not obtain a credit score from another consumer reporting agency in connection withgranting, extending, or providing credit to the consumer; and

(iii) Provides to the consumer a notice that contains the following--

(A) A statement that a consumer report (or credit report) includes information about theconsumer's credit history and the type of information included in that history;

(B) A statement that a credit score is a number that takes into account information in a consumerreport and that a credit score can change over time in response to changes in the consumer'scredit history;

(C) A statement that credit scores are important because consumers with higher credit scoresgenerally obtain more favorable credit terms;

(D) A statement that not having a credit score can affect whether the consumer can obtain creditand what the cost of that credit will be;

(E) A statement that a credit score about the consumer was not available from a consumerreporting agency, which must be identified by name, generally due to insufficient informationregarding the consumer's credit history;



(F) A statement that the consumer is encouraged to verify the accuracy of the informationcontained in the consumer report and has the right to dispute any inaccurate information in theconsumer report;

(G) A statement that federal law gives the consumer the right to obtain copies of his or herconsumer reports directly from the consumer reporting agencies, including a free consumerreport from each of the nationwide consumer reporting agencies once during any 12-monthperiod;

(H) The contact information for the centralized source from which consumers may obtain theirfree annual consumer reports; and

(I) A statement directing consumers to the web sites of the Federal Reserve Board and FederalTrade Commission to obtain more information about consumer reports.

(2) Example. A person that uses consumer reports to set the material terms of non-mortgagecredit granted, extended, or provided to consumers regularly requests credit scores from aparticular consumer reporting agency and provides those credit scores and additional informationto consumers to satisfy the requirements of paragraph (e) of this section. That consumerreporting agency provides to the person a consumer report on a particular consumer that containsone trade line, but does not provide the person with a credit score on that consumer. If the persondoes not obtain a credit score from another consumer reporting agency and, based in whole or inpart on information in a consumer report, grants, extends, or provides credit to the consumer, theperson may provide the notice described in paragraph (f)(1)(iii) of this section. If, however, theperson obtains a credit score from another consumer reporting agency, the person may not relyupon the exception in paragraph (f) of this section, but may satisfy the requirements of paragraph(e) of this section.

(3) Form of the notice. The notice described in paragraph (f)(1)(iii) of this section must be:


(ii) Segregated from other information provided to the consumer; and

(iii) Provided to the consumer in writing and in a form that the consumer may keep.

(4) Timing. The notice described in paragraph (f)(1)(iii) of this section must be provided to theconsumer as soon as reasonably practicable after the person has requested the credit score, but inany event not later than consummation of a transaction in the case of closed-end credit or whenthe first transaction is made under an open-end credit plan.

(5) Model form. A model form of the notice described in paragraph (f)(1)(iii) of this section iscontained in Appendix H-5 of this part. Appropriate use of Model Form H-5 is deemed tocomply with the requirements of § 222.74(f). Use of the model form is optional.



Reg V 12 CFR § 222.75 Rules of construction

Reference


For purposes of this subpart, the following rules of construction apply:

(a) One notice per credit extension. A consumer is entitled to no more than one risk-basedpricing notice under § 222.72(a) or (c), or one notice under § 222.74(d), (e), or (f), for eachgrant, extension, or other provision of credit. Not-withstanding the foregoing, even if a consumerhas previously received a risk-based pricing notice in connection with a grant, extension, orother provision of credit, another risk-based pricing notice is required if the conditions set forthin § 222.72(d) have been met.

(b) Multi-party transactions --

(1) Initial creditor. The person to whom a credit obligation is initially payable must provide therisk-based pricing notice described in § 222.72(a) or (c), or satisfy the requirements for andprovide the notice required under one of the exceptions in § 222.74(d), (e), or (f), even if thatperson immediately assigns the credit agreement to a third party and is not the source of fundingfor the credit.

(2) Purchasers or assignees. A purchaser or assignee of a credit contract with a consumer is notsubject to the requirements of this subpart and is not required to provide the risk-based pricingnotice described in § 222.72(a) or (c), or satisfy the requirements for and provide the noticerequired under one of the exceptions in § 222.74(d), (e), or (f).

(3) Examples.

(i) A consumer obtains credit to finance the purchase of an automobile. If the auto dealer is theper-son to whom the loan obligation is initially payable, such as where the auto dealer is theoriginal creditor under a retail installment sales contract, the auto dealer must provide therisk-based pricing notice to the consumer (or satisfy the requirements for and provide the noticerequired under one of the exceptions noted above), even if the auto dealer immediately assignsthe loan to a bank or finance company. The bank or finance company, which is an assignee, hasno duty to provide a risk-based pricing notice to the consumer.

(ii) A consumer obtains credit to finance the purchase of an automobile. If a bank or financecompany is the person to whom the loan obligation is initially payable, the bank or financecompany must provide the risk-based pricing notice to the consumer (or satisfy the requirementsfor and provide the notice required under one of the exceptions noted above) based on the termsoffered by that bank or finance company only. The auto dealer has no duty to provide arisk-based pricing notice to the consumer. However, the bank or finance company may comply

debbie.capretta

Reg V



with this rule if the auto dealer has agreed to provide notices to consumers before consummationpursuant to an arrangement with the bank or finance company, as permitted under § 222.73(c).

(c) Multiple consumers --

(1) Risk-based pricing notices. In a transaction involving two or more consumers who aregranted, extended, or otherwise provided credit, a person must provide a notice to each consumerto satisfy the requirements of § 222.72(a) or (c). If the consumers have the same address, aperson may satisfy the requirements by providing a single notice addressed to both consumers. Ifthe consumers do not have the same address, a person must provide a notice to each consumer.

(2) Credit score disclosure notices. In a transaction involving two or more consumers who aregranted, extended, or otherwise provided credit, a person must provide a separate notice to eachconsumer to satisfy the exceptions in § 222.74(d), (e), or (f). Whether the consumers have thesame address or not, the person must provide a separate notice to each consumer. Each separatenotice must contain only the credit score(s) of the consumer to whom the notice is provided, andnot the credit score(s) of the other consumer.

(3) Examples.

(i) Two consumers jointly apply for credit with a creditor. The creditor grants credit to theconsumers on material terms that are materially less favorable than the most favorable termsavailable to other consumers from the creditor. The two consumers reside at different addresses.The creditor provides risk-based pricing notices to satisfy its obligations under this subpart. Thecreditor must provide a risk-based pricing notice to each consumer at the address where eachconsumer resides.

(ii) Two consumers jointly apply for credit with a creditor. The two consumers reside at the sameaddress. The creditor obtains credit scores on each of the two consumer applicants. The creditorgrants credit to the consumers. The creditor provides credit score disclosure notices to satisfy itsobligations under this subpart. Even though the two consumers reside at the same address, thecreditor must provide a separate credit score disclosure notice to each of the consumers. Eachnotice must contain only the credit score of the consumer to whom the notice is provided.



CODE OF FEDERAL REGULATIONSTITLE 12 C.F.R. BANKS AND BANKINGCHAPTER II. FEDERAL RESERVE SYSTEMSUBCHAPTER A. BOARD OF GOVERNORS OF THE FEDERALRESERVE SYSTERMPART 222. FAIR CREDIT REPORTING (REGULATION V)SUBPART I. DUTIES OF USERS OF CONSUMER REPORTSREGARDING IDENTITY THEFT

History: 69 FR 77618, Dec. 28, 2004, eff July 1, 2005.



Reg V 12 CFR § 222.80 Reserved

Reference



Reg V 12 CFR § 222.81 Reserved

Reference



Reg V 12 CFR § 222.82 Duties of Users Regarding Address Discrepancies

Reference

(a) Scope. This section applies to a user of consumer reports (user) that receives anotice of address discrepancy from a consumer reporting agency described in 15U.S.C. 1681a(p), and that is a member bank of the Federal Reserve System (otherthan a national bank) and its respective operating subsidiaries, a branch or agency ofa foreign bank (other than a Federal branch, Federal agency, or insured State branchof a foreign bank), commercial by a foreign bank, and an organization operating undersection 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq., and 611 et seq.).

(b) Definition. For purposes of this section, a notice of address discrepancy means anotice sent to a user by a consumer reporting agency described in 15 U.S.C. 1681a(p)pursuant to 15 U.S.C. 1681c(h)(1), that informs the user of a substantial differencebetween the address for the consumer that the user provided to request the consumerreport and the address(es) in the agency's file for the consumer.

(c) Reasonable belief.

(1) Requirement to form a reasonable belief. A user must develop and implementreasonable policies and procedures designed to enable the user to form a reasonablebelief that a consumer report relates to the consumer about whom it has requestedthe report, when the user receives a notice of address discrepancy.

(2) Examples of reasonable policies and procedures.

(i) Comparing the information in the consumer report provided by the consumerreporting agency with information the user:

(A) Obtains and uses to verify the consumer's identity in accordance with therequirements of the Customer Identification Program (CIP) rules implementing 31U.S.C. 5318(l) (31 CFR 103.121);

(B) Maintains in its own records, such as applications, change of address notifications,other customer account records, or retained CIP documentation; or

(C) Obtains from third-party sources; or

(ii) Verifying the information in the consumer report provided by the consumerreporting agency with the consumer.

(d) Consumer's address.

(1) Requirement to furnish consumer's address to a consumer reporting agency. A user



must develop and implement reasonable policies and procedures for furnishing anaddress for the consumer that the user has reasonably confirmed is accurate to theconsumer reporting agency described in 15 U.S.C. 1681a(p) from whom it received thenotice of address discrepancy when the user:

(i) Can form a reasonable belief that the consumer report relates to the consumerabout whom the user requested the report;

(ii) Establishes a continuing relationship with the consumer; and

(iii) Regularly and in the ordinary course of business furnishes information to theconsumer reporting agency from which the notice of address discrepancy relating tothe consumer was obtained.

(2) Examples of confirmation methods. The user may reasonably confirm an address isaccurate by:

(i) Verifying the address with the consumer about whom it has requested the report;

(ii) Reviewing its own records to verify the address of the consumer;

(iii) Verifying the address through third-party sources; or

(iv) Using other reasonable means.

(3) Timing. The policies and procedures developed in accordance with paragraph(d)(1) of this section must provide that the user will furnish the consumer's addressthat the user has reasonably confirmed is accurate to the consumer reporting agencydescribed in 15 U.S.C. 1681a(p) as part of the information it regularly furnishes forthe reporting period in which it establishes a relationship with the consumer.



Reg V 12 CFR § 222.83 Disposal of Consumer Information

Reference

(a) Definitions as used in this section.

(1) You means member banks of the Federal Reserve System (other than nationalbanks) and their respective operating subsidiaries, branches and agencies of foreignbanks (other than Federal branches, Federal agencies and insured State branches offoreign banks), commercial lending companies owned or controlled by foreign banks,and organizations operating under section 25 or 25A of the Federal Reserve Act (12U.S.C. 601 et seq., 611 et seq.).

(b) In general. You must properly dispose of any consumer information that youmaintain or otherwise possess in accordance with the Interagency GuidelinesEstablishing Information Security Standards, as required under sections 208.3(d)(Regulation H), 211.5(l) and 211.24(i) (Regulation K) of this chapter, to the extentthat you are covered by the scope of the Guidelines.

(c) Rule of construction. Nothing in this section shall be construed to:

(1) Require you to maintain or destroy any record pertaining to a consumer that isnot imposed under any other law; or

(2) Alter or affect any requirement imposed under any other provision of law tomaintain or destroy such a record.



Reg V 12 CFR § 222.90 Duties Regarding the Detection, Prevention, andMitigation of Identity Theft

Reference

(a) Scope. This section applies to financial institutions and creditors that are memberbanks of the Federal Reserve System (other than national banks) and their respectiveoperating subsidiaries that are not functionally regulated within the meaning ofsection 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, Federalagencies, and insured State branches of foreign banks),commercial lending companiesowned or controlled by foreign banks, and organizations operating under section25 or25A of the Federal Reserve Act (12U.S.C. 601 et seq., and 611 et seq. ).

(b) Definitions. For purposes of this section and Appendix J, the following definitionsapply:

(1) Account means a continuing relationship established by a person with a financialinstitution or creditor to obtain a product or service for personal ,family, household orbusiness purposes. Account includes:

(i) An extension of credit, such as the purchase of property or services involving adeferred payment; and

(ii) A deposit account.

(2) The term board of directors includes:

(i) In the case of a branch or agency of a foreign bank, the managing official in chargeof the branch or agency; and

(ii) In the case of any other creditor that does not have a board of directors ,adesignated employee at the level of senior management.

(3) Covered account means:

(i) An account that a financial institution or creditor offers or maintains, primarily forpersonal, family, or household purposes, that involves or is designed to permitmultiple payments or transactions, such as a credit card account, mortgage loan,automobile loan, margin account, cell phone account, utility account, checkingaccount, or savings account; and

(ii) Any other account that the financial institution or creditor offers or maintains forwhich there is a reasonably foreseeable risk to customers or to the safety andsoundness of the financial institution or creditor from identity theft, including



financial, operational, compliance, reputation, or litigation risks.

(4) Credit has the same meaning as in15 U.S.C. 1681a(r)(5).

(5) Creditor has the same meaning as in 15 U.S.C. 1681a(r)(5), and includes lenderssuch as banks, finance companies, automobile dealers, mortgage brokers, utilitycompanies, and telecommunications companies.

(6) Customer means a person that has a covered account with a financial institution orcreditor.

(7) Financial institution has the same meaning as in 15 U.S.C. 1681a(t).

(8) Identity theft has the same meaning as in 16 CFR 603.2(a).

(9) Red Flag means a pattern, practice, or specific activity that indicates the possibleexistence of identity theft.

(10) Service provider means a person that provides a service directly to the financialinstitution or creditor.

(c) Periodic Identification of Covered Accounts. Each financial institution or creditormust periodically determine whether it offers or maintains covered accounts. As apart of this determination, a financial institution or creditor must conduct a riskassessment to determine whether it offers or maintains covered accounts described inparagraph (b)(3)(ii) of this section, taking into consideration:

(1) The methods it provides to open its accounts;

(2) The methods it provides to access its accounts; and

(3) Its previous experiences with identity theft.

(d) Establishment of an Identity Theft Prevention Program.

(1) Program requirement. Each financial institution or creditor that offers ormaintains one or more covered accounts must develop and implement a writtenIdentity Theft Prevention Program (Program) that is designed to detect, prevent, andmitigate identity theft in connection with the opening of a covered account or anyexisting covered account. The Program must be appropriate to the size andcomplexity of the financial institution or creditor and the nature and scope of itsactivities.

(2) Elements of the Program. The Program must include reasonable policies andprocedures to:

(i) Identify relevant Red Flags for the covered accounts that the financial institution



or creditor offers or maintains, and incorporate those Red Flags into its Program;

(ii) Detect Red Flags that have been incorporated into the Program of the financialinstitution or creditor;

(iii) Respond appropriately to any Red Flags that are detected pursuant to paragraph(d)(2)(ii) of this section to prevent and mitigate identity theft; and

(iv) Ensure the Program (including the Red Flags determined to be relevant) isupdated periodically, to reflect changes in risks to customers and to the safety andsoundness of the financial institution or creditor from identity theft.

(e) Administration of the Program. Each financial institution or creditor that isrequired to implement a Program must provide for the continued administration ofthe Program and must:

(1) Obtain approval of the initial written Program from either its board of directors oran appropriate committee of the board of directors;

(2) Involve the board of directors, an appropriate committee thereof, or a designatedemployee at the level of senior management in the oversight, development,implementation and administration of the Program;

(3) Train staff, as necessary, to effectively implement the Program; and

(4) Exercise appropriate and effective oversight of service provider arrangements.

(f) Guidelines. Each financial institution or creditor that is required to implement aProgram must consider the guidelines in Appendix J of this part and include in itsProgram those guidelines that are appropriate.



Reg V 12 CFR § 222.91 Duties of Card Issuers Regarding Changes ofAddress [Effective January 1, 2008 -- Mandatory Compliance November 1,2008]

Reference

(a) Scope. This section applies to a person described in § 222.90(a) that issues adebit or credit card (card issuer).

(b) Definitions. For purposes of this section:

(1) Cardholder means a consumer who has been issued a credit or debit card.

(2) Clear and conspicuous means reasonably understandable and designed to callattention to the nature and significance of the information presented.

(c) Address validation requirements. A card issuer must establish and implementreasonable policies and procedures to assess the validity of a change of address if itreceives notification of a change of address for a consumer's debit or credit cardaccount and, within a short period of time afterwards (during at least the first 30 daysafter it receives such notification), the card issuer receives a request for an additionalor replacement card for the same account. Under these circumstances, the cardissuer may not issue an additional or replacement card, until, in accordance with itsreasonable policies and procedures and for the purpose of assessing the validity of thechange of address, the card issuer:

(1) (i) Notifies the cardholder of the request:

(A) At the cardholder's former address; or

(B) By any other means of communication that the card issuer and the cardholderhave previously agreed to use; and

(ii) Provides to the cardholder a reasonable means of promptly reporting incorrectaddress changes; or

(2) Otherwise assesses the validity of the change of address in accordance with thepolicies and procedures the card issuer has established pursuant to § 222.90 of thispart.

(d) Alternative timing of address validation. A card issuer may satisfy therequirements of paragraph (c) of this section if it validates an address pursuant to themethods in paragraph (c)(1) or (c)(2) of this section when it receives an addresschange notification, before it receives a request for an additional or replacementcard.



(e) Form of notice. Any written or electronic notice that the card issuer providesunder this paragraph must be clear and conspicuous and provided separately from itsregular correspondence with the cardholder.



Reg V Appendix A to Part 222 [Reserved]

Reference

[Reserved]



Reg V Appendix B to Part 222 Model Notices of Furnishing Negative Information

Reference

a. Although use of the model notices is not required, a financial institution that issubject to section 623(a)(7) of the FCRA shall be deemed to be in compliance with thenotice requirement in section 623(a)(7) of the FCRA if the institution properly uses themodel notices in this appendix (as applicable).

b. A financial institution may use Model Notice B-1 if the institution provides thenotice prior to furnishing negative information to a nationwide consumer reportingagency.

c. A financial institution may use Model Notice B-2 if the institution provides thenotice after furnishing negative information to a nationwide consumer reportingagency.

d. Financial institutions may make certain changes to the language or format ofthe model notices without losing the safe harbor from liability provided by the modelnotices. The changes to the model notices may not be so extensive as to affect thesubstance, clarity, or meaningful sequence of the language in the model notices.Financial institutions making such extensive revisions will lose the safe harbor fromliability that this appendix provides. Acceptable changes include, for example,

1. Rearranging the order of the references to "late payment(s)," or "missedpayment(s)"

2. Pluralizing the terms "credit bureau," "credit report," and "account"

3. Specifying the particular type of account on which information may befurnished, such as "credit card account"

4. Rearranging in Model Notice B-1 the phrases "information about your account"and "to credit bureaus" such that it would read "We may report to credit bureausinformation about your account."

Model Notice B-1

We may report information about your account to credit bureaus. Late payments,missed payments, or other defaults on your account may be reflected in your creditreport.

Model Notice B-2

We have told a credit bureau about a late payment, missed payment or other default



on your account. This information may be reflected in your credit report.



Reg V Appendix C to Part 222 Model Forms for Opt-Out Notices

Reference

a. Although use of the model forms is not required, use of the model forms in thisAppendix (as applicable) complies with the requirement in section 624 of the Act forclear, conspicuous, and concise notices.

b. Certain changes may be made to the language or format of the model formswithout losing the protection from liability afforded by use of the model forms. Thesechanges may not be so extensive as to affect the substance, clarity, or meaningfulsequence of the language in the model forms. Persons making such extensive revisionswill lose the safe harbor that this Appendix provides. Acceptable changes include, forexample:

1. Rearranging the order of the references to "your income," "your account history,"and "your credit score."

2. Substituting other types of information for "income," "account history," or "creditscore" for accuracy, such as "payment history," "credit history," "payoff status," or"claims history."

3. Substituting a clearer and more accurate description of the affiliates providing orcovered by the notice for phrases such as "the [ABC] group of companies," includingwithout limitation a statement that the entity providing the notice recently purchasedthe consumer's account.

4. Substituting other types of affiliates covered by the notice for "credit card,""insurance," or "securities" affiliates.

5. Omitting items that are not accurate or applicable. For example, if a person doesnot limit the duration of the opt-out period, the notice may omit information aboutthe renewal notice.

6. Adding a statement informing consumers how much time they have to opt outbefore shared eligibility information may be used to make solicitations to them.

7. Adding a statement that the consumer may exercise the right to opt out at anytime.

8. Adding the following statement, if accurate: "If you previously opted out, you donot need to do so again."

9. Providing a place on the form for the consumer to fill in identifying information,



such as his or her name and address.

10. Adding disclosures regarding the treatment of opt-outs by joint consumers tocomply with Sec. 222.23(a)(2) of this part.

C-1 Model Form for Initial Opt-out Notice (Single-Affiliate Notice)C-2 Model Form for Initial Opt-out Notice (Joint Notice)C-3 Model Form for Renewal Notice (Single-Affiliate Notice)C-4 Model Form for Renewal Notice (Joint Notice)C-5 Model Form for Voluntary "No Marketing" Notice [Repealed effective January 1, 2010] C-6 Model Form for Voluntary "No Marketing"Notice

C-1 Model Form for Initial Opt-out Notice (Single-Affiliate Notice) - [Your Choice ToLimit Marketing]/[Marketing Opt-out]

[Name of Affiliate] is providing this notice.

[Optional: Federal law gives you the right to limit some but not all marketing from ouraffiliates. Federal law also requires us to give you this notice to tell you about yourchoice to limit marketing from our affiliates.]

You may limit our affiliates in the [ABC] group of companies, such as our [credit card,insurance, and securities] affiliates, from marketing their products or services to youbased on your personal information that we collect and share with them. Thisinformation includes your [income], your [account history with us], and your [creditscore].

Your choice to limit marketing offers from our affiliates will apply [until you tell us tochange your choice]/[for x years from when you tell us your choice]/[for at least 5years from when you tell us your choice]. [Include if the opt-out period expires.] Oncethat period expires, you will receive a renewal notice that will allow you to continueto limit marketing offers from our affiliates for [another x years]/[at least another 5years].

[Include, if applicable, in a subsequent notice, including an annual notice, forconsumers who may have previously opted out.] If you have already made a choice tolimit marketing offers from our affiliates, you do not need to act again until youreceive the renewal notice.

To limit marketing offers, contact us [include all that apply]:

By telephone: 1-877 — On the Web: http://www._-.com



By mail: Check the box and complete the form below, and send the form to:

[Company name][Company address]

__ Do not allow your affiliates to use my personal information to market to me.

C-2 Model Form for Initial Opt-out Notice (Joint Notice) - [Your Choice To LimitMarketing]/[Marketing Opt-out]

The [ABC group of companies] is providing this notice.

[Optional: Federal law gives you the right to limit some but not all marketing from the[ABC] companies. Federal law also requires us to give you this notice to tell you aboutyour choice to limit marketing from the [ABC] companies.]

You may limit the [ABC] companies, such as the [ABC credit card, insurance, andsecurities] affiliates, from marketing their products or services to you based on yourpersonal information that they receive from other [ABC] companies. This informationincludes your [income], your [account history], and your [credit score].

Your choice to limit marketing offers from the [ABC] companies will apply [until youtell us to change your choice]/[for x years from when you tell us your choice]/[for atleast 5 years from when you tell us your choice]. [Include if the opt-out periodexpires.] Once that period expires, you will receive a renewal notice that will allowyou to continue to limit marketing offers from the [ABC] companies for [another xyears]/[at least another 5 years].

[Include, if applicable, in a subsequent notice, including an annual notice, forconsumers who may have previously opted out.] If you have already made a choice tolimit marketing offers from the [ABC] companies, you do not need to act again untilyou receive the renewal notice.

To limit marketing offers, contact us [include all that apply]:

By telephone: 1-877 — On the Web: http://www._-.comBy mail: Check the box and complete the form below, and send the form to:


__ Do not allow any company [in the ABC group of companies] to use my personalinformation to market to me.

C-3 Model Form for Renewal Notice (Single-Affiliate Notice) - [Renewing Your Choice



To Limit Marketing]/[Renewing Your Marketing Opt-Out]


[Optional: Federal law gives you the right to limit some but not all marketing from ouraffiliates. Federal law also requires us to give you this notice to tell you about yourchoice to limit marketing from our affiliates.]

You previously chose to limit our affiliates in the [ABC] group of companies, such asour [credit card, insurance, and securities] affiliates, from marketing their productsor services to you based on your personal information that we share with them. Thisinformation includes your [income], your [account history with us], and your [creditscore].

Your choice has expired or is about to expire.

To renew your choice to limit marketing for [x] more years, contact us [include allthat apply]:



__ Renew my choice to limit marketing for [x] more years.

C-4 Model Form for Renewal Notice (Joint Notice) - [Renewing Your Choice To LimitMarketing]/[Renewing Your Marketing Opt-Out]

The [ABC group of companies] is providing this notice.

[Optional: Federal law gives you the right to limit some but not all marketing from the[ABC] companies. Federal law also requires us to give you this notice to tell you aboutyour choice to limit marketing from the [ABC] companies.]

You previously chose to limit the [ABC] companies, such as the [ABC credit card,insurance, and securities] affiliates, from marketing their products or services to youbased on your personal information that they receive from other ABC companies. Thisinformation includes your [income], your [account history], and your [credit score].

Your choice has expired or is about to expire.

To renew your choice to limit marketing for [x] more years, contact us [include allthat apply]:





__ Renew my choice to limit marketing for [x] more years.

C-5 Model Form for Voluntary "No Marketing" Notice

Your Choice To Stop Marketing


You may choose to stop all marketing from us and our affiliates.

[Your choice to stop marketing from us and our affiliates will apply until youtell us to change your choice.]

To stop all marketing, contact us [include all that apply]:

By telephone: 1-877-- On the Web: www._.comBy mail: Check the box and complete the form below, and send the form to:


__ Do not market to me.

[Repealed effective January 1, 2010] C-6 Model Form for Voluntary "No Marketing"Notice - Your Choice To Stop Marketing


You may choose to stop all marketing from us and our affiliates.

To stop all marketing, contact us [include all that apply]:



__ Do not market to me.



Reg V Appendix D to Part 222 [Reserved] [Effective January 1, 2008 -- MandatoryCompliance November 1, 2008]

Reference

[Reserved]



Reg V Appendix E to Part 222 Interagency Guidelines Concerning the Accuracyand Integrity of Information Furnished to Consumer Reporting Agencies

Reference


The Board encourages voluntary furnishing of information to consumer reportingagencies. Section 222.42 of this part requires each furnisher to establish andimplement reasonable written policies and procedures concerning the accuracyand integrity of the information it furnishes to consumer reporting agencies.Under § 222.42(b) of this part, a furnisher must consider the guidelines set forthbelow in developing its policies and procedures. In establishing these policies andprocedures, a furnisher may include any of its existing policies and proceduresthat are relevant and appropriate. Section 222.42(c) requires each furnisher toreview its policies and procedures periodically and update them as necessary toensure their continued effectiveness.

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

(a) Nature and Scope. Section 222.42(a) of this part requires that a furnisher'spolicies and procedures be appropriate to the nature, size, complexity, andscope of the furnisher's activities. In developing its policies and procedures, afurnisher should consider, for example:

(1) The types of business activities in which the furnisher engages;

(2) The nature and frequency of the information the furnisher provides toconsumer reporting agencies; and

(3) The technology used by the furnisher to furnish information to consumerreporting agencies.

(b) Objectives. A furnisher's policies and procedures should be reasonablydesigned to promote the following objectives:

(1) To furnish information about accounts or other relationships with a consumerthat is accurate, such that the furnished information:

(i) Identifies the appropriate consumer;

(ii) Reflects the terms of and liability for those accounts or other relationships;and

(iii) Reflects the consumer's performance and other conduct with respect to the



account or other relationship;

(2) To furnish information about accounts or other relationships with a consumerthat has integrity, such that the furnished information:

(i) Is substantiated by the furnisher's records at the time it is furnished;

(ii) Is furnished in a form and manner that is designed to minimize the likelihoodthat the information may be incorrectly reflected in a consumer report; thus, thefurnished information should:

(A) Include appropriate identifying information about the consumer to whom itpertains; and

(B) Be furnished in a standardized and clearly understandable form and mannerand with a date specifying the time period to which the information pertains;and

(iii) Includes the credit limit, if applicable and in the furnisher's possession;

(3) To conduct reasonable investigations of consumer disputes and takeappropriate actions based on the outcome of such investigations; and

(4) To update the information it furnishes as necessary to reflect the currentstatus of the consumer's account or other relationship, including, for example:

(i) Any transfer of an account (e.g., by sale or assignment for collection) to athird party; and

(ii) Any cure of the consumer's failure to abide by the terms of the account orother relationship.

II. 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 theaccuracy or integrity of information furnished to consumer reporting agencies,such as by:

(1) Reviewing its existing practices and activities, including the technologicalmeans and other methods it uses to furnish information to consumer reportingagencies and the frequency and timing of its furnishing of information;

(2) Reviewing its historical records relating to accuracy or integrity or todisputes; reviewing other information relating to the accuracy or integrity ofinformation provided by the furnisher to consumer reporting agencies; and



considering the types of errors, omissions, or other problems that may haveaffected the accuracy or integrity of information it has furnished aboutconsumers to consumer reporting agencies;

(3) Considering any feedback received from consumer reporting agencies,consumers, or other appropriate parties;

(4) Obtaining feedback from the furnisher's staff; and

(5) Considering the potential impact of the furnisher's policies and procedureson consumers.

(b) Evaluate the effectiveness of existing policies and procedures of thefurnisher regarding the accuracy and integrity of information furnished toconsumer reporting agencies; consider whether new, additional, or differentpolicies and procedures are necessary; and consider whether implementation ofexisting policies and procedures should be modified to enhance the accuracy andintegrity of information about consumers furnished to consumer reportingagencies.

(c) Evaluate the effectiveness of specific methods (including technologicalmeans) the furnisher uses to provide information to consumer reporting agencies;how those methods may affect the accuracy and integrity of the information itprovides to consumer reporting agencies; and whether new, additional, ordifferent methods (including technological means) should be used to provideinformation to consumer reporting agencies to enhance the accuracy andintegrity of that information.

III. Specific Components of Policies and Procedures

In developing its policies and procedures, a furnisher should address thefollowing, as appropriate:

(a) Establishing and implementing a system for furnishing information aboutconsumers 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 forcompiling and furnishing data, where feasible, such as the electronictransmission of information about consumers to consumer reporting agencies.

(c) Maintaining records for a reasonable period of time, not less than anyapplicable recordkeeping requirement, in order to substantiate the accuracy ofany information about consumers it furnishes that is subject to a direct dispute.



(d) Establishing and implementing appropriate internal controls regarding theaccuracy and integrity of information about consumers furnished to consumerreporting agencies, such as by implementing standard procedures and verifyingrandom samples of information provided to consumer reporting agencies.

(e) Training staff that participates in activities related to the furnishing ofinformation about consumers to consumer reporting agencies to implement thepolicies and procedures.

(f) Providing for appropriate and effective oversight of relevant serviceproviders whose activities may affect the accuracy or integrity of informationabout consumers furnished to consumer reporting agencies to ensure compliancewith the policies and procedures.

(g) Furnishing information about consumers to consumer reporting agenciesfollowing mergers, portfolio acquisitions or sales, or other acquisitions ortransfers of accounts or other obligations in a manner that prevents re-aging ofinformation, duplicative reporting, or other problems that may similarly affectthe accuracy or integrity of the information furnished.

(h) Deleting, updating, and correcting information in the furnisher's records, asappropriate, to avoid furnishing inaccurate information.

(i) Conducting reasonable investigations of disputes.

(j) Designing technological and other means of communication with consumerreporting agencies to prevent duplicative reporting of accounts, erroneousassociation of information with the wrong consumer(s), and other occurrencesthat may compromise the accuracy or integrity of information provided toconsumer reporting agencies.

(k) Providing consumer reporting agencies with sufficient identifying informationin the furnisher's possession about each consumer about whom information isfurnished to enable the consumer reporting agency properly to identify theconsumer.

(l) Conducting a periodic evaluation of its own practices, consumer reportingagency practices of which the furnisher is aware, investigations of disputedinformation, corrections of inaccurate information, means of communication,and other factors that may affect the accuracy or integrity of informationfurnished to consumer reporting agencies.

(m) Complying with applicable requirements under the Fair Credit Reporting Act



and its implementing regulations.



Reg V Appendices F through I to Part 222 [Reserved] [Effective January 1, 2008-- Mandatory Compliance November 1, 2008]

Reference

[Reserved]



Reg V Appendices H Model Forms for Risk-Based Pricing and Credit ScoreDisclosure Exception Notice

Reference


1. This appendix contains two model forms for risk-based pricing notices and threemodel forms for use in connection with the credit score disclosure exceptions. Each ofthe model forms is designated for use in a particular set of circumstances as indicatedby the title of that model form.

2. Model form H-1 is for use in complying with the general risk-based pricing noticerequirements in § 222.72. Model form H-2 is for risk-based pricing notices given inconnection with account review. Model form H-3 is for use in connection with thecredit score disclosure exception for loans secured by residential real property. Modelform H-4 is for use in connection with the credit score disclosure exception for loansthat are not secured by residential real property. Model form H-5 is for use inconnection with the credit score disclosure exception when no credit score isavail-able for a consumer. All forms contained in this appendix are models; their useis optional.

3. A person may change the forms by rearranging the format or by making technicalmodifications to the language of the forms, in each case without modifying thesubstance of the disclosures. Any such rearrangement or modification of the languageof the model forms may not be so extensive as to materially affect the substance,clarity, comprehensibility, or meaningful sequence of the forms. Persons makingrevisions with that effect will lose the benefit of the safe harbor for appropriate useof Appendix H model forms. A person is not required to conduct consumer testingwhen rearranging the format of the model forms.

a. Acceptable changes include, for example:

i. Corrections or updates to telephone numbers, mailing addresses, or Web siteaddresses that may change over time.

ii. The addition of graphics or icons, such as the person's corporate logo.

iii. Alteration of the shading or color contained in the model forms.

iv. Use of a different form of graphical presentation to depict the distribution ofcredit scores.

v. Substitution of the words "credit" and "creditor" or "finance" and "finance company"

debbie.capretta

Reg V



for the terms "loan" and "lender."

vi. Including pre-printed lists of the sources of consumer reports or consumerreporting agencies in a "check-the-box" format.

vii. Including the name of the consumer, transaction identification numbers, a date,and other information that will assist in identifying the transaction to which the formpertains.

viii. Including the name of an agent, such as an auto dealer or other party, whenproviding the "Name of the Entity Providing the Notice."

b. Unacceptable changes include, for example:

i. Providing model forms on register receipts or interspersed with other disclosures.

ii. Eliminating empty lines and extra spaces between sentences within the samesection.

4. If a person uses an appropriate Appendix H model form, or modifies a form inaccordance with the above instructions, that person shall be deemed to be acting incompliance with the provisions of § 222.73 or § 222.74, as applicable, of thisregulation. It is intended that appropriate use of Model Form H-3 also will comply withthe disclosure that may be required under section 609(g) of the FCRA.

H-1 Model form for risk-based pricing notice. (pdf)

H-2 Model form for account review risk-based pricing notice. (pdf)

H-3 Model form for credit score disclosure exception for creditsecured by one to four units of residential real property. (pdf)

H-4 Model form for credit score disclosure exception for loansnot secured by residential real property. (pdf)

H-5 Model form for credit score disclosure exception for loanswhere credit score is not available. (pdf)

debbie.capretta

Reg V



Reg V Appendix J to Part 222 Interagency Guidelines on Identity TheftDetection, Prevention, and Mitigation

Reference

Section 222.90 of this part requires each financial institution and creditor that offersor maintains one or more covered accounts, as defined in §222.90(b)(3) of this part,to develop and provide for the continued administration of a written Program todetect, prevent, and mitigate identity theft in connection with the opening of acovered account or any existing covered account. These guidelines are intended toassist financial institutions and creditors in the formulation and maintenance of aProgram that satisfies the requirements of §222.90 of this part.

I. The Program

In designing its Program, a financial institution or creditor may incorporate, asappropriate, its existing policies, procedures, and other arrangements that controlreasonably foreseeable risks to customers or to the safety and soundness of thefinancial institution or creditor from identity theft.

II. Identifying Relevant Red Flags

(a) Risk Factors. A financial institution or creditor should consider the followingfactors in identifying relevant Red Flags for covered accounts, as appropriate:

(1) The types of covered accounts it offers or maintains;

(2) The methods it provides to open its covered accounts;

(3) The methods it provides to access its covered accounts; and

(4) Its previous experiences with identity theft.

(b) Sources of Red Flags. Financial institutions and creditors should incorporaterelevant Red Flags from sources such as:

(1) Incidents of identity theft that the financial institution or creditor hasexperienced;

(2) Methods of identity theft that the financial institution or creditor has identifiedthat reflect changes in identity theft risks; and

(3) Applicable supervisory guidance.

(c) Categories of Red Flags. The Program should include relevant Red Flags fromthe following categories, as appropriate. Examples of Red Flags from each of these



categories are appended as Supplement A to this Appendix J.

(1) Alerts, notifications, or other warnings received from consumer reportingagencies or service providers, such as fraud detection services;

(2) The presentation of suspicious documents;

(3) The presentation of suspicious personal identifying information, such as asuspicious address change;

(4) The unusual use of, or other suspicious activity related to, a covered account;and

(5) Notice from customers, victims of identity theft, law enforcement authorities,or other persons regarding possible identity theft in connection with covered accountsheld by the financial institution or creditor.

III. Detecting Red Flags

The Program's policies and procedures should address the detection of Red Flags inconnection with the opening of covered accounts and existing covered accounts, suchas by:

(a) Obtaining identifying information about, and verifying the identity of, a personopening a covered account, for example, using the policies and procedures regardingidentification and verification set forth in the Customer Identification Program rulesimplementing 31 U.S.C. 5318(l) (31 CFR 103.121); and

(b) Authenticating customers, monitoring transactions, and verifying the validity ofchange of address requests, in the case of existing covered accounts.

IV. Preventing and Mitigating Identity Theft

The Program's policies and procedures should provide for appropriate responses to theRed Flags the financial institution or creditor has detected that are commensuratewith the degree of risk posed. In determining an appropriate response, a financialinstitution or creditor should consider aggravating factors that may heighten the riskof identity theft, such as a data security incident that results in unauthorized accessto a customer's account records held by the financial institution, creditor, or thirdparty, or notice that a customer has provided information related to a coveredaccount held by the financial institution or creditor to someone fraudulently claimingto represent the financial institution or creditor or to a fraudulent website.Appropriate responses may include the following:

(a) Monitoring a covered account for evidence of identity theft;



(b) Contacting the customer;

(c) Changing any passwords, security codes, or other security devices that permitaccess to a covered account;

(d) Reopening a covered account with a new account number;

(e) Not opening a new covered account;

(f) Closing an existing covered account;

(g) Not attempting to collect on a covered account or not selling a coveredaccount to a debt collector;

(h) Notifying law enforcement; or

(i) Determining that no response is warranted under the particular circumstances.

V. Updating the Program

Financial institutions and creditors should update the Program (including the RedFlags determined to be relevant) periodically, to reflect changes in risks to customersor to the safety and soundness of the financial institution or creditor from identitytheft, based on factors such as:

(a) The experiences of the financial institution or creditor with identity theft;

(b) Changes in methods of identity theft;

(c) Changes in methods to detect, prevent, and mitigate identity theft;

(d) Changes in the types of accounts that the financial institution or creditor offersor maintains; and

(e) Changes in the business arrangements of the financial institution or creditor,including mergers, acquisitions, alliances, joint ventures, and service providerarrangements.

VI. Methods for Administering the Program

(a) Oversight of Program. Oversight by the board of directors, an appropriatecommittee of the board, or a designated employee at the level of senior managementshould include:

(1) Assigning specific responsibility for the Program's implementation;

(2) Reviewing reports prepared by staff regarding compliance by the financialinstitution or creditor with §222.90 of this part; and



(3) Approving material changes to the Program as necessary to address changingidentity theft risks.

(b) Reports.

(1) In general. Staff of the financial institution or creditor responsible fordevelopment, implementation, and administration of its Program should report to theboard of directors, an appropriate committee of the board, or a designated employeeat the level of senior management, at least annually, on compliance by the financialinstitution or creditor with §222.90 of this part.

(2) Contents of report. The report should address material matters related to theProgram and evaluate issues such as: the effectiveness of the policies and proceduresof the financial institution or creditor in addressing the risk of identity theft inconnection with the opening of covered accounts and with respect to existing coveredaccounts; service provider arrangements; significant incidents involving identity theftand management's response; and recommendations for material changes to theProgram.

(c) Oversight of service provider arrangements. Whenever a financial institution orcreditor engages a service provider to perform an activity in connection with one ormore covered accounts the financial institution or creditor should take steps to ensurethat the activity of the service provider is conducted in accordance with reasonablepolicies and procedures designed to detect, prevent, and mitigate the risk of identitytheft. For example, a financial institution or creditor could require the serviceprovider by contract to have policies and procedures to detect relevant Red Flags thatmay arise in the performance of the service provider's activities, and either report theRed Flags to the financial institution or creditor, or to take appropriate steps toprevent or mitigate identity theft.

VII. Other Applicable Legal Requirements

Financial institutions and creditors should be mindful of other related legalrequirements that may be applicable, such as:

(a) For financial institutions and creditors that are subject to 31 U.S.C. 5318(g),filing a Suspicious Activity Report in accordance with applicable law and regulation;

(b) Implementing any requirements under 15 U.S.C. 1681c–1(h) regarding thecircumstances under which credit may be extended when the financial institution orcreditor detects a fraud or active duty alert;

(c) Implementing any requirements for furnishers of information to consumer



reporting agencies under 15 U.S.C. 1681s–2, for example, to correct or updateinaccurate or incomplete information, and to not report information that thefurnisher has reasonable cause to believe is inaccurate; and

(d) Complying with the prohibitions in 15 U.S.C. 1681m on the sale, transfer, andplacement for collection of certain debts resulting from identity theft.

Supplement A to Appendix J

In addition to incorporating Red Flags from the sources recommended in section II.b.of the Guidelines in Appendix J of this part, each financial institution or creditor mayconsider incorporating into its Program, whether singly or in combination, Red Flagsfrom the following illustrative examples in connection with covered accounts:

Alerts, Notifications or Warnings from a Consumer Reporting Agency

1. A fraud or active duty alert is included with a consumer report.

2. A consumer reporting agency provides a notice of credit freeze in response to arequest for a consumer report.

3. A consumer reporting agency provides a notice of address discrepancy, asdefined in §222.82(b) of this part.

4. A consumer report indicates a pattern of activity that is inconsistent with thehistory and usual pattern of activity of an applicant or customer, such as:

a. A recent and significant increase in the volume of inquiries;

b. An unusual number of recently established credit relationships;

c. A material change in the use of credit, especially with respect to recentlyestablished credit relationships; or

d. An account that was closed for cause or identified for abuse of accountprivileges by a financial institution or creditor. Suspicious Documents

5. Documents provided for identification appear to have been altered or forged.

6. The photograph or physical description on the identification is not consistentwith the appearance of the applicant or customer presenting the identification.

7. Other information on the identification is not consistent with informationprovided by the person opening a new covered account or customer presenting theidentification.

8. Other information on the identification is not consistent with readily accessible



information that is on file with the financial institution or creditor, such as a signaturecard or a recent check.

9. An application appears to have been altered or forged, or gives the appearanceof having been destroyed and reassembled.

Suspicious Personal Identifying Information

10. Personal identifying information provided is inconsistent when comparedagainst external information sources used by the financial institution or creditor. Forexample:

a. The address does not match any address in the consumer report; or

b. The Social Security Number (SSN) has not been issued, or is listed on the SocialSecurity Administration's Death Master File.

11. Personal identifying information provided by the customer is not consistentwith other personal identifying information provided by the customer. For example,there is a lack of correlation between the SSN range and date of birth.

12. Personal identifying information provided is associated with known fraudulentactivity as indicated by internal or third-party sources used by the financial institutionor creditor. For example:

a. The address on an application is the same as the address provided on afraudulent application; or

b. The phone number on an application is the same as the number provided on afraudulent application.

13. Personal identifying information provided is of a type commonly associatedwith fraudulent activity as indicated by internal or third-party sources used by thefinancial institution or creditor. For example:

a. The address on an application is fictitious, a mail drop, or a prison; or

b. The phone number is invalid, or is associated with a pager or answering service.

14. The SSN provided is the same as that submitted by other persons opening anaccount or other customers.

15. The address or telephone number provided is the same as or similar to theaddress or telephone number submitted by an unusually large number of otherpersons opening accounts or by other customers.

16. The person opening the covered account or the customer fails to provide all



required personal identifying information on an application or in response tonotification that the application is incomplete.

17. Personal identifying information provided is not consistent with personalidentifying information that is on file with the financial institution or creditor.

18. For financial institutions and creditors that use challenge questions, the personopening the covered account or the customer cannot provide authenticatinginformation beyond that which generally would be available from a wallet orconsumer report.

Unusual Use of, or Suspicious Activity Related to, the Covered Account

19. Shortly following the notice of a change of address for a covered account, theinstitution or creditor receives a request for a new, additional, or replacement card ora cell phone, or for the addition of authorized users on the account.

20. A new revolving credit account is used in a manner commonly associated withknown patterns of fraud. For example:

a. The majority of available credit is used for cash advances or merchandise thatis easily convertible to cash (e.g., electronics equipment or jewelry); or

b. The customer fails to make the first payment or makes an initial payment butno subsequent payments.

21. A covered account is used in a manner that is not consistent with establishedpatterns of activity on the account. There is, for example:

a. Nonpayment when there is no history of late or missed payments;

b. A material increase in the use of available credit;

c. A material change in purchasing or spending patterns;

d. A material change in electronic fund transfer patterns in connection with adeposit account; or

e. A material change in telephone call patterns in connection with a cellularphone account.

22. A covered account that has been inactive for a reasonably lengthy period oftime is used (taking into consideration the type of account, the expected pattern ofusage and other relevant factors).

23. Mail sent to the customer is returned repeatedly as undeliverable althoughtransactions continue to be conducted in connection with the customer's covered



account.

24. The financial institution or creditor is notified that the customer is notreceiving paper account statements.

25. The financial institution or creditor is notified of unauthorized charges ortransactions in connection with a customer's covered account.

Notice From Customers, Victims of Identity Theft, Law Enforcement Authorities, orOther Persons Regarding Possible Identity

Theft in Connection With Covered Accounts Held by the Financial Institution orCreditor

26. The financial institution or creditor is notified by a customer, a victim ofidentity theft, a law enforcement authority, or any other person that it has opened afraudulent account for a person engaged in identity theft.



CODE OF FEDERAL REGULATIONSTITLE 16--COMMERCIAL PRACTICESCHAPTER I--FEDERAL TRADE COMMISSIONSUBCHAPTER F--STATEMENTS OF GENERAL POLICY OR INTERPRETATIONS UNDER THEFAIR CREDIT REPORTING ACTPART 600--STATEMENTS OF GENERAL POLICY OR INTERPRETATIONS



FCRA Commentary Appendix Commentary on the Fair Credit Reporting Act

Reference

Introduction

1. Official status. This Commentary contains interpretations of the Federal TradeCommission (Commission) of the Fair Credit Reporting Act (FCRA). It is a guidelineintended to clarify how the Commission will construe the FCRA in light ofCongressional intent as reflected in the statute and its legislative history. TheCommentary does not have the force or effect of regulations or statutory provisions,and its contents may be revised and updated as the Commission considers necessaryor appropriate.

2. Status of previous interpretations. The Commentary primarily addresses issuesdiscussed in the Commission's earlier formal interpretations of the FCRA (16 C.F.R.600.1-600.8), which are hereby superseded, in the staff's manual entitled "ComplianceWith the Fair Credit Reporting Act" (the current edition of which was published in May1973, and revised in January 1977 and March 1979), and in informal staff opinionletters responding to public requests for interpretations, and it also reflects theresults of the Commission's FCRA enforcement program. It is intended to synthesizethe Commission's views and give clear advice on important issues. The Commentarysets forth some interpretations that differ from those previously expressed by theCommission or its staff, and is intended to supersede all prior formal Commissioninterpretations, informal staff opinion letters, and the staff manual cited above.

3. Statutory references. Reference to several different provisions of the FCRA isfrequently required in order to make a complete analysis of an issue. For varioussections and subsections of the FCRA, the Commentary discusses the most importantand common overlapping references under the heading "Relation to other(sub)sections."

4. Issuance of staff interpretations. The Commission will revise and update theCommentary as it deems necessary, based on the staff's experience in responding topublic inquiries about, and enforcing, the FCRA. The Commission welcomes input frominterested industry and consumer groups and other public parties on the Commentaryand on issues discussed in it. Staff will continue to respond to requests for informalstaff interpretations. In proposing revisions of the Commentary, staff will considerand, where appropriate, recommend that the Commentary incorporate issues raisedin correspondence and other public contacts, as well as in connection with theCommission's enforcement efforts. Therefore, a party may raise an issue for inclusion



in future editions of the Commentary without making any formal submission orrequest to that effect. However, requests for formal Commission interpretations ofthe FCRA may also still be made pursuant to the procedures set forth in theCommission's Rules (16 C.F.R. 1.73).

5. Commentary citations to FCRA. The Commentary should be used in conjunctionwith the text of the statute. In some cases, the Commentary includes an abbreviateddescription of the statute, rather than the full text, as a preamble to discussion ofissues pertaining to various sections and subsections. These summary statements ofthe law should not be used as a substitute for the statutory text.



FCRA Commentary § 601 Short Title

Reference

"This title may be cited as the 'Fair Credit Reporting' ."

The Fair Credit Reporting Act (FCRA) is title VI of the Consumer Credit Protection Act,which also includes other Federal statutes relating to consumer credit, such as theTruth in Lending Act (title I), the Equal Credit Opportunity Act (Title VII), and the FairDebt Collection Practices Act (title VIII).



FCRA Commentary § 602 Findings and Purpose

Reference

Section 602 recites the Congressional findings regarding the significant role ofconsumer reporting agencies in the nation's financial system, and states that the basicpurpose of the FCRA is to require consumer reporting agencies to adopt reasonableprocedures for providing information to credit grantors, insurers, employers andothers in a manner that is fair and equitable to the consumer with regard toconfidentiality, accuracy, and the proper use of such information.



FCRA Commentary § 603 Definitions and Rules of Construction

Reference

Section 603(a) states that "definitions and rules of construction set forth in thissection are applicable for the purposes of this title."

Section 603(b) defines "person" to mean "any individual, partnership, corporation,trust, estate, cooperative, association, government or governmental subdivision oragency or other entity."

1. Relation to Other Sections

Certain "persons" must comply with the Act. The term "consumer reporting agency" isdefined in section 603(f) to include certain "persons." Section 619 subjects any"person" who knowingly and willfully obtains information from a consumer reportingagency on a consumer under false pretenses to criminal sanctions. Requirementsrelating to report users apply to "persons." Section 606 imposes disclosure obligationson "persons" who obtain investigative reports or cause them to be prepared. Section615(c) uses the term "person" to denote those subject to disclosure obligations undersections 615(a) and 615(b).

2. Examples

The term "person" includes universities, creditors, collection agencies, insurancecompanies, private investigators, and employers.

Section 603(c) defines the term "consumer" to mean "an individual."


The term "consumer" denotes an individual entitled to the Act's protections. Consumerreports, as defined in section 603(d), are reports about consumers. A "consumer" isentitled to obtain disclosures under section 609 from consumer reporting agencies andto take certain steps that require such agencies to follow procedures in section 611,concerning disputes about the completeness or accuracy of items of information inthe consumer's file. Disclosures required under section 606 by one procuring aninvestigative report must be made to the "consumer" on whom the report is sought.Notifications required by section 615 must be provided to "consumers." A "consumer" isthe party entitled to sue for willful noncompliance (section 616) or negligentnoncompliance (section 617) with the Act's requirements.

2. General



The definition includes only a natural person. It does not include artificial entities(e.g., partnerships, corporations, trusts, estates, cooperatives, associations) orentities created by statute (e.g., governments, governmental subdivisions oragencies).

Section 603(d) defines "consumer report" to mean "any written, oral, or othercommunication of any information by a consumer reporting agency bearing on aconsumer's credit worthiness, credit standing, credit capacity, character, generalreputation, personal characteristics, or mode of living which is used or expected to beused or collected in whole or in part for the purpose of serving as a factor inestablishing the consumer's eligibility for (1) credit or insurance to be used primarilyfor personal, family, or household purposes, or (2) employment purposes, or (3) otherpurposes authorized under Section 604" (with three specific exclusions).

1. Relation to "Consumer Reporting Agency"

To be a "consumer report," the information must be furnished by a "consumerreporting agency" as that term is defined in section 603(f). Conversely, the term"consumer reporting agency" is restricted to persons that regularly engage inassembling or evaluating consumer credit information or other information onconsumers for the purpose of furnishing "consumer reports" to third parties. In otherwords, the terms "consumer reporting agency" in section 603(f) and "consumer report"in section 603 (d)) are mutually dependent and must therefore be construed together.For example, information is not a "consumer report" if the person furnishing theinformation is clearly not a "consumer reporting agency" (e.g., if the person furnishingthe information does not regularly furnish such information for monetary fees or on acooperative nonprofit basis).

2. Relation to the Applicability of the Act

If a report is not a "consumer report," then the Act does not usually apply to it. Forexample, because a commercial credit report is not a report on a consumer, it is not a"consumer report". Therefore, the user need not notify the subject of the name andaddress of the credit bureau when taking adverse action, and the provider need notomit "obsolete" information, as would be required if the FCRA applied.

However, a creditor denying a consumer's application based on a report from a "thirdparty" must give the disclosure required by section 615(b).

3. Report Concerning a "Consumer's" Attributes and History

A. General. A "consumer report" is a report on a "consumer" to be used for certain



purposes involving that "consumer."

B. Artificial entities. Reports about corporations, associations, and othercollective entities are not consumer reports, and the Act does not apply to them.

C. Reports on businesses for business purposes. Reports used to determine theeligibility of a business, rather than a consumer, for certain purposes, are notconsumer reports and the FCRA does not apply to them, even if they containinformation on individuals, because Congress did not intend for the FCRA to apply toreports used for commercial purposes (see 116 Cong. Rec. 36572 (1970) (Conf. Reporton H.R. 15073)).

4. "(C)redit Worthiness, Credit Standing, Credit Capacity, Character, GeneralReputation, Personal Characteristics, or Mode of Living * * *"

A. General. To be a "consumer report," the information must bear on at least oneof the seven characteristics listed in this definition.

B. Credit guides. Credit guides are listings, furnished by credit bureaus to creditgrantors, that rate how well consumers pay their bills. Such guides are a series of"consumer reports," because they contain information which is used for the purpose ofserving as a factor in establishing the consumers' eligibility for credit. However, ifthey are coded (by identification such as social security number, driver's licensenumber, or bank account number) so that the consumer's identity is not disclosed,they are not "consumer reports" until decoded. (See discussion of uncoded creditguides under section 604(3)(A), item 8 infra.)

C. Motor vehicle reports. Motor vehicle reports are distributed by state motorvehicle departments, generally to insurance companies upon request, and usuallyreveal a consumer's entire driving record, including arrests for driving offenses. Suchreports are consumer reports when they are sold by a Department of Motor Vehiclesfor insurance underwriting purposes and contain information bearing on theconsumer's "personal characteristics," such as arrest information. The Act's legislativehistory indicates Congress intended the Act to cover mutually beneficial exchanges ofinformation between commercial enterprises rather than between governmentalentities. Accordingly, these reports are not consumer reports when provided to othergovernmental authorities involved in licensing or law enforcement activities. (Seediscussion titled "State Departments of Motor Vehicles," under section 603(f), item 10infra.)

D. Consumer lists. A list of the names of creditworthy individuals, or of individualson whom credit bureaus have derogatory information, is a series of "consumer reports"



because the information bears on credit worthiness.

E. Public record information. A report solely of public record information is not a"consumer report" unless that information is provided by a consumer reporting agency,is collected or used for the purposes identified in section 603(d), and bears on at leastone of the seven characteristics listed in the definition. Public record informationrelating to records of arrest, or the institution or disposition of civil or criminalproceedings, bears on one or more of these characteristics.

F. Name and address. A report limited solely to the consumer's name and addressalone, with no connotations as to credit worthiness or other characteristics, does notconstitute a "consumer report," if it does not bear on any of the seven factors.

G. Rental characteristics. Reports about rental characteristics (e.g., consumers'evictions, rental payment histories, treatment of premises) are consumer reports,because they relate to character, general reputation, personal characteristics, ormode of living.

5. "(U)sed or Expected to Be Used or Collected in Whole or in Part for the Purposeof Serving as a Factor in Establishing the Consumer's Eligibility * * *"

A. Law enforcement bulletins. Bulletins that are limited to a series ofdescriptions, sometimes accompanied by photographs, of individuals who are beingsought by law enforcement authorities for alleged crimes are not a series of"consumer reports" because they have not been collected for use in evaluatingconsumers for credit, insurance, employment or other consumer purposes, and itcannot reasonably be anticipated they will be used for such purposes.

B. Directories. Telephone directories and city directories, to the extent they onlyprovide information regarding name, address and phone number, marital status, homeownership, and number of children, are not "consumer reports," because theinformation is not used or expected to be used in evaluating consumers for credit,insurance, employment or other purposes and does not reflect on credit standing,credit worthiness, or any of the other factors. A list of names of individuals withchecking accounts is not a series of consumer reports because the information doesnot bear on credit worthiness or any of the other factors. A trade directory, such as alist of all insurance agents licensed to do business in a state, is not a series ofconsumer reports because it is commercial information that would be used forcommercial purposes.

C. Use of prior consumer report in preparation. A report that would not otherwisebe a consumer report may be a consumer report, notwithstanding the purpose for



which it is furnished, if it includes a prior consumer report or information fromconsumer report files, because it would contain some information "collected in wholeor in part" for consumer reporting purposes. For example, an insurance claims reportwould be a consumer report if a consumer report (or information from a consumerreport) were used to prepare it. (See discussion, infra, in item 6-C under thissubsection.)

D. Use of reports for purposes not anticipated by the reporting party. Thequestion arises whether a report that is not otherwise a consumer report is subject tothe FCRA because the recipient subsequently uses the report for a permissiblepurpose. If the reporting party's procedures are such that it neither knows of norshould reasonably anticipate such use, the report is not a consumer report. If areporting party has taken reasonable steps to insure that the report is not used forsuch a purpose, and if it neither knows of, nor can reasonably anticipate such use, thereport should not be deemed a consumer report by virtue of uses beyond thereporting party's control. A reporting party might establish that it does not reasonablyanticipate such use of the report by requiring the recipient to certify that the reportwill not be used for one of the purposes listed in section 604. (Such procedure may becompared to the requirement in section 607(a), discussed infra, that consumerreporting agencies furnishing consumer reports require that prospective users certifythe purposes for which the information is sought and certify that the information willbe used for no other purpose.) For example, a claims reporting service could use sucha certification to avoid having its insurance claims reports deemed "consumer reports"if the report recipient/insurer were to use the report later for "underwriting purposes"under section 604(3)(C), such as terminating insurance coverage or raising thepremium.

6. "(E)stablishing the Consumer's Eligibility for (1) Credit or Insurance to Be UsedPrimarily for Personal, Family or Household Purposes, or (2) Employment Purposes, or(3) Other Purposes Authorized Under Section 604"

A. Relation to section 604. Because section 603(d)(3) refers to "purposesauthorized under section 604" (often described as "permissible purposes" of consumerreports), some of which overlap purposes enumerated in section 603 (e.g., 603(d)(1)and 603(d)(2)), sections 603 and 604 must be construed together, to determine whatare "consumer reports" and "permissible purposes" under the two sections. Seediscussion infra, under section 604.

B. Commercial credit or insurance. A report on a consumer for credit or insurancein connection with a business operated by the consumer is not a "consumer report,"and the Act does not apply to it.



C. Insurance claims reports. (It is assumed that information in prior consumerreports is not used in claims reports. See discussion, supra, in item 5-C under thissubsection.) Reports provided to insurers by claims investigation services solely todetermine the validity of insurance claims are not consumer reports, because section604(3)(C) specifically sets forth only underwriting (not claims) as an insurance-relatedpurpose, and section 603(d)(1) deals specifically with eligibility for insurance and noother insurance-related purposes. To construe section 604(3)(E) as including reportsfurnished in connection with insurance claims would be to disregard the specificlanguage of sections 604(3)(C) and 603(d)(1).

D. Scope of employment purpose. A report that is used or is expected to be usedor collected in whole or in part in connection with establishing an employee'seligibility for "promotion, reassignment or retention," as well as to evaluate a jobapplicant, is a consumer report because sections 603(d)(2) and 604(3)(B) use the term"employment purposes," which section 603(h) defines to include these situations.

E. Bad check lists. A report indicating that an individual has issued bad checks,provided by printed list or otherwise, to a business for use in determining whether toaccept consumers' checks tendered in transactions primarily for personal, family orhousehold purposes, is a consumer report. The information furnished bears onconsumers' character, general reputation and personal characteristics, and it is usedor expected to be used in connection with business transactions involving consumers.

F. Tenant screening reports. A report used to determine whether to rent aresidence to a consumer is a consumer report, because it is used for a businesstransaction that the consumer wishes to enter into for personal, family or householdpurposes.

7. Exclusions From the Definition of "Consumer Report"

A. "(Any) reports containing information solely as to transactions or experiencesbetween the consumer and the person making the report;" --

(1) Examples of Sources. The exemption applies to reports limited to transactionsor experiences between the consumer and the entity making the report (e.g., retailstores, hospitals, present or former employers, banks, mortgage servicing companies,credit unions, or universities).

(2) Information beyond the reporting entity's own transactions or experiences withthe consumer.

The exemption does not apply to reports by these entities of information beyond their



own transactions or experiences with the consumer. An example is a creditor's or aninsurance company's report of the reasons it cancelled credit or insurance, based oninformation from an outside source.

(3) Opinions Concerning Transactions or Experiences

The exemption applies to reports that are not limited to the facts, but also includeopinions (e.g., use of the term "slow pay" to describe a consumer's transactions with acreditor), as long as the facts underlying the opinions involve only transactions orexperiences between the consumer and the reporting entity.

B. "(A)ny authorization or approval of a specific extension of credit directly orindirectly by the issuer of a credit card or similar device;" -- (1) General. Theexemption applies to a credit or debit card issuer's written, oral, or electroniccommunication of its decision whether or not to authorize a charge, in response to arequest from a merchant or other party that the consumer has asked to honor thecard.

C. "(A)ny report in which a person who has been requested by a third party tomake a specific extension of credit directly or indirectly to the consumer conveys hisdecision with respect to such request, if the third party advises the consumer of thename and address of the person to whom the request was made and such personmakes the disclosures to the consumer required under section 615." --

(1) General. The exemption covers retailers' attempts to obtain credit for theirindividual customers from an outside source (such as a bank or a finance company).The communication by the financial institution of its decision whether to extendcredit is not a "consumer report" if the retailer informs the customer of the name andaddress of the financial institution to which the application or contract is offered andthe financial institution makes the disclosures required by section 615 of the Act. Suchdisclosures must be made only when there is a denial of, or increase in the charge for,credit or insurance. (See discussion of section 615, item 10, infra.)

(2) Information included in the exemption.

The exemption is not limited to a simple "yes" or "no" response, but includes theinformation constituting the basis for the credit denial, because it applies to "anyreport."

(3) How third party creditors can insure that the exemption applies.

Creditors, who are requested by dealers or merchants to make such specificextensions of credit, can assure that communication of their decision to the dealer or



merchant will be exempt under this section from the term "consumer report," byhaving written agreements that require such parties to inform the consumer of thecreditor's name and address and by complying with any applicable provisions ofsection 615.

Section 603(e) defines "investigative consumer report" as "a consumer report orportion thereof in which information on a consumer's character, general reputation,personal characteristics, or mode of living is obtained through personal interviewswith neighbors, friends, or associates of the consumer reported on or with others withwhom he is acquainted or who may have knowledge concerning any such items ofinformation. However, such information shall not include specific factual informationon a consumer's credit record obtained directly from a creditor of the consumer orfrom a consumer reporting agency when such information was obtained directly froma creditor of the consumer or from the consumer."


The term "investigative consumer report" denotes a subset of "consumer report" forwhich the Act imposes additional requirements on recipients and consumer reportingagencies. Persons procuring "investigative consumer reports" must make certaindisclosures to the consumers who are the subjects of the reports, as required bysection 606. Consumer reporting agencies must comply with section 614, whenfurnishing "investigative consumer reports" containing adverse information that is nota matter of public record. Consumer reporting agencies making disclosure toconsumers pursuant to section 609 are not required to disclose "sources of informationacquired solely for use in preparing an investigative consumer report and actuallyused for no other purpose."

2. General

An "investigative consumer report" is a type of "consumer report" that containsinformation that is both related to a consumer's character, general reputation,personal characteristics or mode of living and obtained by personal interviews withthe consumer's neighbors, friends, associates or others.

3. Types of Sources Interviewed

A report consisting of information from any third party concerning the subject'scharacter (reputation, etc.) may be an investigative consumer report because thephrase "obtained through personal interviews * * * with others" includes any sourcethat is a third party interviewee. A report containing interview information obtainedsolely from the subject is not an "investigative consumer report."



4. Telephone Interviews

A consumer report that contains information on a consumer's "character, generalreputation, personal characteristics or mode of living" obtained through telephoneinterviews with third parties is an "investigative consumer report," because "personalinterviews" includes interviews conducted by telephone as well as in person.

5. Identity of Interviewer

A consumer report is an "investigative consumer report" if personal interviews areused to obtain information reported on a consumer's "character, general reputation,personal characteristics or mode of living," regardless of who conducted theinterview.

6. Noninvestigative Information in "Investigative Consumer Reports"

An "investigative consumer report" may also contain noninvestigative information,because the definition includes reports, a "portion" of which are investigative reports.

7. Exclusions From "Investigative Consumer Reports"

A report that consists solely of information gathered from observation by one whodrives by the consumer's residence is not an "investigative consumer report," becauseit contains no information from "personal interviews."

Section 603(f) defines "consumer reporting agency" as "any person which, formonetary fees, dues, or on a cooperative nonprofit basis, regularly engages in wholeor in part in the practice of assembling or evaluating consumer credit information orother information on consumers for the purpose of furnishing consumer reports tothird parties, and which uses any means or facility of interstate commerce for thepurpose of preparing or furnishing consumer reports."


A. Duties imposed on "consumer reporting agencies." The Act imposes a number ofduties on "consumer reporting agencies." They must have permissible purposes tofurnish consumer reports (section 604), avoid furnishing obsolete adverse informationin certain consumer reports (sections 605, 607(a)), adopt reasonable procedures toassure privacy (section 604, 607(a)), and accuracy (section 607(b)) of consumerreports, provide only limited disclosures to governmental agencies (section 608),provide consumers certain disclosures upon request (sections 609 and 610) at no costor for a reasonable charge (section 612), follow certain procedures if a consumerdisputes the completeness or accuracy of any item of information contained in his file



(section 611), and follow certain procedures in reporting public record information foremployment purposes or when reporting adverse information other than public recordinformation in investigative consumer reports (sections 613, 614).

B. Relation to "consumer reports." The term "consumer reporting agency," asdefined in section 603(f), includes certain persons who assemble or evaluateinformation on individuals for the purpose of furnishing "consumer reports" to thirdparties. Conversely, section 603(d) defines the term "consumer report" to mean thecommunication of certain information by a "consumer reporting agency." In otherwords, the terms "consumer report" in section 603(d) and "consumer reporting agency"as defined in section 603(f) are defined in a mutually dependent manner and musttherefore be construed together. For example, a party is not a "consumer reportingagency" if it provides only information that is excepted from the definition of"consumer report" under section 603(d), such as reports limited to the party's owntransactions or experiences with a consumer, or credit information on organizations.

2. Isolated Reports

Parties that do not "regularly" engage in assembling or evaluating information for thepurpose of furnishing consumer reports to third parties are not consumer reportingagencies. For example, a creditor that furnished information on a consumer to agovernmental entity in connection with one of its investigations, would not "regularly"be making such disclosure for a fee or on a cooperative nonprofit basis, and thereforewould not become a consumer reporting agency, even if the information exceeded thecreditor's transactions or experiences with the consumer.

3. Provision of Credit Report to Report Subject

A consumer report user does not become a consumer reporting agency by regularlygiving a copy of the report, or otherwise disclosing it, to the consumer who is thesubject of the report, because it is not disclosing the information to a "third party."

4. Employment Agency

An employment agency that routinely obtains information on job applicants from theirformer employers and furnishes the information to prospective employers is aconsumer reporting agency.

5. Information Compiled for Insurance Underwriting

A business that compiles claim payment histories on individuals from insurers andfurnishes them to insurance companies for use in underwriting decisions concerningthose individuals is a consumer reporting agency.



6. Private Investigators and Detective Agencies

Private investigators and detective agencies that regularly obtain consumer reportsand furnish them to clients may thereby become consumer reporting agencies.

7. Collection Agencies and Creditors

Collection agencies and creditors become consumer reporting agencies if theyregularly furnish information beyond their transactions or experiences with consumersto third parties for use in connection with consumers' transactions.

8. Joint Users of Consumer Reports

Entities that share consumer reports with others that are jointly involved in decisionsfor which there are permissible purposes to obtain the reports may be "joint users"rather than consumer reporting agencies. For example, if a lender forwards consumerreports to governmental agencies administering loan guarantee programs (or to otherprospective loan insurers or guarantors), or to other parties whose approval is neededbefore it grants credit, or to another creditor for use in considering a consumer's loanapplication at the consumer's request, the lender does not become a consumerreporting agency by virtue of such action. An agent or employee that obtainsconsumer reports does not become a consumer reporting agency by sharing suchreports with its principal or employer in connection with the purposes for which thereports were initially obtained.

9. Loan Exchanges

Loan exchanges, which are generally owned and operated on a cooperative basis byconsumer finance companies, constitute a mechanism whereby each memberfurnishes the exchange information concerning the full identity and loan amount ofeach of its borrowers, and receives information from the exchange concerning thenumber and types of outstanding loans for each of its applicants. A loan exchange orany other exchange that regularly collects information bearing on decisions to grantconsumers credit or insurance for personal, family or household purposes, oremployment, is a "consumer reporting agency."

10. State Departments of Motor Vehicles

State motor vehicle departments are "consumer reporting agencies" if they regularlyfurnish motor vehicle reports containing information bearing on the consumer's"personal characteristics," such as arrest information, to insurance companies forinsurance underwriting purposes. (See discussion of motor vehicle reports undersection 603(d), item 4c supra.)



11. Federal Agencies

The Office of Personnel Management collects and files data concerning current andpotential employees of the Federal Government and transmits that information toother government agencies for employment purposes. Because Congress did notintend that the FCRA apply to the Office of Personnel Management and similar federalagencies (see 116 Cong. Rec. 36576 (1970) (remarks of Rep. Brown)), no such agencyis a "consumer reporting agency."

12. Credit Application Information

A creditor that provides information from a consumer's application to a credit bureau,for verification as part of the creditor's evaluation process that includes obtaining areport on the consumer from that credit bureau, does not thereby become a"consumer reporting agency," because the creditor does not provide the informationfor "fees, dues, or on a cooperative nonprofit basis," but rather pays the bureau toverify the information when it provides a consumer report on the applicant.

Section 603(g) defines "file," when used in connection with information on anyconsumer, to mean "all of the information on that consumer recorded and retained bya consumer reporting agency regardless of how the information is stored."


Consumer reporting agencies are required to make disclosures of all information intheir "files" to consumers upon request (section 609) and to follow reinvestigationprocedures if the consumer disputes the completeness or accuracy of any item ofinformation contained in his "file" (section 611).

2. General

The term "file" denotes all information on the consumer that is recorded and retainedby a consumer reporting agency that might be furnished, or has been furnished, in aconsumer report on that consumer.

3. Audit Trail

The term "file" does not include an "audit trail" (a list of changes made by a consumerreporting agency to a consumer's credit history record, maintained to detectfraudulent changes to that record), because such information is not furnished inconsumer reports or used as a basis for preparing them.

4. Other Information

The term "file" does not include information in billing records or in the consumer



relations folder that a consumer reporting agency opens on a consumer who obtainsdisclosures or files a dispute, if the information has not been used in a consumerreport and would not be used in preparing one.

Section 603(h) defines "employment purposes" to mean "a report used for the purposeof evaluating a consumer for employment, promotion, reassignment or retention as anemployee."


The term "employment purposes" is used as part of the definition of "consumerreports" (section 603(d)(2)) and as a permissible purpose for the furnishing ofconsumer reports (section 604(3)(B)). Where an investigative consumer report is to beused for "employment purposes" for which a consumer has not specifically applied,section 606(a)(2) provides that the notice otherwise required by section 606(a)(1)need not be sent. When a consumer reporting agency furnishes public recordinformation in reports "for employment purposes," it must follow the procedure setout in section 613.

2. Security Clearances

A report in connection with security clearances of a government contractor'semployees would be for "employment purposes" under this section.

Section 603(i) defines "medical information" to mean "information or recordsobtained, with the consent of the individual to whom it relates, from licensedphysicians or medical practitioners, hospitals, clinics, or other medical or medicallyrelated facilities."


Under section 609(a)(1), a consumer reporting agency must, upon the consumer'srequest and proper identification, disclose the nature and substance of all informationin its files on the consumer, except "medical information."

2. Information From Non-medical Sources

Information from non-medical sources such as employers, is not "medicalinformation."



FCRA Commentary § 604 Permissible Purposes of Reports

Reference

"A consumer reporting agency may furnish a consumer report under the followingcircumstances and no other: * * *"

1. Relation to Section 603

Sections 603(d)(3) and 604 must be construed together to determine what are"permissible purposes," because section 603(d)(3) refers to "purposes authorized undersection 604" (often described as "permissible purposes" of consumer reports), andsome purposes are enumerated in section 603 (e.g., sections 603(d)(1) and 603(d)(2)).Subsections of sections 603 and 604 that specifically set forth "permissible purposes"relating to credit, insurance and employment, are the only subsections that cover"permissible purposes" relating to those three areas. Section 604(3)(E), a generalsubsection, is limited to purposes not otherwise addressed in section 604(3) (A)-(D).

A. Credit. Sections 603(d)(1) -- which defines "consumer report" to include certainreports for the purpose of serving as a factor in establishing the consumer's eligibilityfor credit or insurance primarily for personal, family, or household purposes -- and604(3)(A) must be read together as fully describing permissible purposes involvingcredit for obtaining consumer reports. Accordingly, section 604(3)(A) permits thefurnishing of a consumer report for use in connection with a credit transactioninvolving the consumer, primarily for personal, family or household purposes, andinvolving the extension of credit to, or review or collection of an account of, theconsumer.

B. Insurance. Sections 603(d)(1) and 604(3)(C) must be read together as describingthe only permissible insurance purposes for obtaining consumer reports. Accordingly,section 604(3)(C) permits the furnishing of a consumer report, provided it is for use inconnection with the underwriting of insurance involving the consumer, primarily forpersonal, family, or household purposes.

C. Employment. Employment is covered exclusively by sections 603(d)(2) and604(3)(B), and by section 603(h) (which defines "employment purposes"). Therefore,"permissible purposes" relating to employment include reports used for evaluating aconsumer "for employment, promotion, reassignment or retention as an employee."

D. Other purposes. "Other purposes" are referred to in section 603(d)(3) andcovered by section 604(3)(E), as well as sections 604(1), 604(2) and 604(3)(D) (whichcontain specific purposes not involving credit, insurance, employment). Permissible



purposes relating to section 604(3)(E) are limited to transactions that consumers enterinto primarily for personal, family or household purposes (excluding credit, insuranceor employment, which are specifically covered by other subsections discussed above).The FCRA does not cover reports furnished for transactions that consumers enter intoprimarily in connection with businesses they operate (e.g., a consumer's rental ofequipment for use in his retail store).


A. Section 607(a). Section 607(a) requires consumer reporting agencies to keepinformation confidential by furnishing consumer reports only for purposes listed undersection 604, and to follow specified, reasonable procedures to achieve this end.Section 619 provides criminal sanctions against any person who knowingly and willfullyobtains information on a consumer from a consumer reporting agency under falsepretenses.

B. Section 608. Section 608 allows "consumer reporting agencies" to furnishgovernmental agencies specified identifying information concerning consumers,notwithstanding the limitations of section 604.



FCRA Commentary § 604(1) A consumer reporting agency may furnish aconsumer report "in response to the order of a court having jurisdiction toissue such an order"

Reference

1. Subpoena

A subpoena, including a grand jury subpoena, is not an "order of a court" unless signedby a judge.

2. Internal Revenue Service Summons

An I.R.S. summons is an exception to the requirement that an order be signed by ajudge before it constitutes an "order of a court" under this section, because a 1976revision to Federal statutes (26 U.S.C. 7609) specifically requires a consumerreporting agency to furnish a consumer report in response to an I.R.S. summons uponreceipt of the designated I.R.S. certificate that the consumer has not filed a timelymotion to quash the summons.



FCRA Commentary § 604(2) A consumer reporting agency may furnish aconsumer report "in accordance with the written instructions of the consumerto whom it relates"

Reference

1. No Other Permissible Purpose Needed

If the report subject furnishes written authorization for a report, that creates apermissible purpose for furnishing the report.

2. Refusal to Furnish Report

The consumer reporting agency may refuse to furnish the report because the statuteis permissive, not mandatory. (Requirements that consumer reporting agencies makedisclosure to consumers (as contrasted with furnishing reports to users) are discussedunder sections 609 and 610, infra.)



FCRA Commentary § 604(3)(A) A consumer reporting agency may issue aconsumer report to "a person which it has reason to believe * * * intends touse the information in connection with a credit transaction involving theconsumer on whom the information is to be furnished and involving theextension of credit to, or review or collection of an account of, the consumer;"

Reference

1. Reports Sought in Connection with the "Review or Collection of an Account"

A. Reports for collection. A collection agency has a permissible purpose under thissection to receive a consumer report on a consumer for use in attempting to collectthat consumer's debt, regardless of whether that debt is assigned or referred forcollection. Similarly, a detective agency or private investigator, attempting to collecta debt owed by a consumer, would have a permissible purpose to obtain a consumerreport on that individual for use in collecting that debt. An attorney may obtain aconsumer report under this section on a consumer for use in connection with adecision whether to sue that individual to collect a credit account.

B. Unsolicited reports. A consumer reporting agency may not send an unsolicitedconsumer report to the recipient of a previous report on the same consumer, becausethe recipient will not necessarily have a permissible purpose to receive the unsolicitedreport. [FN2] For example, the recipient may have rejected the consumer'sapplication or ceased to do business with the consumer. (See also discussion in section607, item 2G, infra.)

Of course a consumer reporting agency must furnish notifications required by section611(d), upon the consumer's requests, to prior recipients of reports containingdisputed information that is deleted or that is the subject of a dispute statementunder section 611(b).

2. Judgment Creditors

A judgment creditor has a permissible purpose to receive a consumer report on thejudgment debtor for use in connection with collection of the judgment debt, becauseit is in the same position as any creditor attempting to collect a debt from a consumerwho is the subject of a consumer report.

3. Child Support Debts

A district attorney's office or other child support agency may obtain a consumer reportin connection with enforcement of the report subject's child support obligation,established by court (or quasi-judicial administrative) orders, since the agency is



acting as or on behalf of the judgment creditor, and is, in effect, collecting a debt.However, a consumer reporting agency may not furnish consumer reports to childsupport agencies seeking to establish paternity or the duty to pay child support.

4. Tax Obligations

A tax collection agency has no general permissible purpose to obtain a consumerreport to collect delinquent tax accounts, because this subsection applies only tocollection of "credit" accounts. However, if a tax collection agency acquired a tax lienhaving the same effect as a judgment or obtained a judgment, it would be a judgmentcreditor and would have a permissible purpose for obtaining a consumer report on theconsumer who owed the tax. Similarly, if a consumer taxpayer entered an agreementwith a tax collection agency to pay taxes according to some timetable, thatagreement would create a debtor-creditor relationship, thereby giving the agency apermissible purpose to obtain a consumer report on that consumer.

5. Information on an Applicant's Spouse

A. Permissible purpose. A creditor may request any information concerning anapplicant's spouse if that spouse will be permitted to use the account or will becontractually liable upon the account, or the applicant is relying on the spouse'sincome as a basis for repayment of the credit requested. A creditor may request anyinformation concerning an applicant's spouse if (1) the state law doctrine ofnecessaries applies to the transaction, or (2) the applicant resides in a communityproperty state, or (3) the property upon which the applicant is relying as a basis forrepayment of the credit requested is located in such a state, or (4) the applicant isacting as the agent of the nonapplicant spouse.

B. Lack of permissible purpose. If the creditor receives information clearlyindicating that the applicant is not acting as the agent of the nonapplicant spouse,and that the applicant is relying only on separate property to repay the creditextended, and that the state law doctrine of necessaries does not apply to thetransaction and that the applicant does not reside in a community property state, thecreditor does not have a permissible purpose for obtaining a report on a nonapplicantspouse. A permissible purpose for making a consumer report on a nonapplicant spousecan never exist under the FCRA, where Regulation B, issued under the Equal CreditOpportunity Act (12 C.F.R. 202), prohibits the creditor from requesting information onsuch spouse. There is no permissible purpose to obtain a consumer report on anonapplicant former spouse or on a nonapplicant spouse who has legally separated orotherwise indicated an intent to legally disassociate with the marriage. (This does notpreclude reporting a prior joint credit account of former spouses for which the spouse



that is the subject of the report is still contractually liable. See discussion in section607, item 3-D infra.)

6. Prescreening

"Prescreening" means the process whereby a consumer reporting agency compiles oredits a list of consumers who meet specific criteria and provides this list to the clientor a third party (such as a mailing service) on behalf of the client for use in solicitingthese consumers for the client's products or services. The process may also includedemographic or other analysis of the consumers on the list (e.g., use of census tractdata reflecting real estate values) by the consumer reporting agency or by a thirdparty employed for that purpose (by either the agency or its client) before the list isprovided to the consumer reporting agency's client. In such situations, the client'screditworthiness criteria may be provided only to the consumer reporting agency andnot to the third party performing the demographic analysis. The consumer reportingagency that performs a "prescreening" service may furnish a client with severaldifferent lists of consumers who meet different sets of creditworthiness criteriasupplied by the client, who intends to make different credit offers (e.g., variouscredit limits) to consumers who meet the different criteria.

A prescreened list constitutes a series of consumer reports, because the list conveysthe information that each consumer named meets certain criteria forcreditworthiness. Prescreening is permissible under the FCRA if the client agrees inadvance that each consumer whose name is on the list after prescreening will receivean offer of credit. In these circumstances, a permissible purpose for the prescreeningservice exists under this section, because of the client's present intent to grant creditto all consumers on the final list, with the result that the information is used "inconnection with a credit transaction involving the consumer on whom the informationis to be furnished and involving the extension of credit to * * * the consumer."

7. Seller of Property Extending Credit

A seller of property has a permissible purpose under this subsection to obtain aconsumer report on a prospective purchaser to whom he is planning to extend credit.

8. Uncoded Credit Guides

A consumer reporting agency may not furnish an uncoded credit guide, because therecipient does not have a permissible purpose to obtain a consumer report on eachconsumer listed. (As discussed under section 603(d), item 4 supra, credit guides arelistings that credit bureaus furnish to credit grantors, rating how consumers pay theirbills. Such guides are a series of "consumer reports" on the "consumers" listed therein,



unless coded so that the consumer's identity is not disclosed.)

9. Liability for Bad Checks

A party attempting to recover the amount due on a bad check is attempting to collecta debt and, therefore, has a permissible purpose to obtain a consumer report on theconsumer who wrote it, and on any other consumer who is liable for the amount ofthat check under applicable state law.



FCRA Commentary § 604(3)(B) A consumer reporting agency may issue aconsumer report to "a person which it has reason to believe * * * intends touse the information for employment purposes;"

Reference

1. Current Employees

An employer may obtain a consumer report on a current employee in connection withan investigation of the disappearance of money from employment premises, because"retention as an employee" is included in the definition of "employment purposes"(section 603(h)).

2. Consumer Reports on Applicants and Non-applicants

An employer may obtain a consumer report for use in evaluating the subject'sapplication for employment but may not obtain a consumer report to evaluate theapplication of a consumer who is not the subject of the report.

3. Grand Jurors

The fact that grand jurors are usually paid a stipend for their service does not providea district attorney's office a permissible purpose for obtaining consumer reports onthem, because such service is a duty, not "employment."



FCRA Commentary § 604(3)(C) A consumer reporting agency may issue aconsumer report to "a person which it has reason to believe * * * intends touse the information in connection with the underwriting of insurance involvingthe consumer;"

Reference

1. Underwriting

An insurer may obtain a consumer report to decide whether or not to issue a policy tothe consumer, the amount and terms of coverage, the duration of the policy, therates or fees charged, or whether or not to renew or cancel a policy, because theseare all "underwriting" decisions.

2. Claims

An insurer may not obtain a consumer report for the purpose of evaluating a claim (toascertain its validity or otherwise determine what action should be taken), becausepermissible purposes relating to insurance are limited by this section to "underwriting"purposes.



FCRA Commentary § 604(3)(D) A consumer reporting agency may issue aconsumer report to "a person which it has reason to believe * * * intends touse the information in connection with a determination of the consumer'seligibility for a license or other benefit granted by a governmentalinstrumentality required by law to consider an applicant's financialresponsibility or status * * *"

Reference

1. Appropriate recipient

Any party charged by law (including a rule or regulation having the force of law) withresponsibility for assessing the consumer's eligibility for the benefit (not only theagency directly responsible for administering the benefit) has a permissible purpose toreceive a consumer report. For example, a district attorney's office or social servicesbureau, required by law to consider a consumer's financial status in determiningwhether that consumer qualifies for welfare benefits, has a permissible purpose toobtain a report on the consumer for that purpose. Similarly, consumer reportingagencies may furnish consumer reports to townships on consumers whose financialstatus the townships are required by law to consider in determining the consumers'eligibility for assistance, or to professional boards (e.g., bar examiners) required bylaw to consider such information on applicants for admission to practice.

2. Inappropriate Recipient

Parties not charged with the responsibility of determining a consumer's eligibility for alicense or other benefit, for example, a party competing for an FCC radio stationconstruction permit, would not have a permissible purpose to obtain a consumerreport on that consumer.

3. Initial or Continuing Benefit

The permissible purpose includes the determination of a consumer's continuingeligibility for a benefit, as well as the evaluation of a consumer's initial application fora benefit. If the governmental body has reason to believe a particular consumer'seligibility is in doubt, or wishes to conduct random checks to confirm eligibility, it hasa permissible purpose to receive a consumer report.



FCRA Commentary § 604(3)(E) A consumer reporting agency may issue aconsumer report to "a person which it has reason to believe * * * otherwisehas a legitimate business need for the information in connection with abusiness transaction involving the consumer"

Reference

1. Relation to Other Subsections of Section 604(3)

The issue of whether credit, employment, or insurance provides a permissible purposeis determined exclusively by reference to subsection (A), (B), or (C), respectively.

2. Commercial Transactions

The term "business transaction" in this section means a business transaction with aconsumer primarily for personal, family, or household purposes. Business transactionsthat involve purely commercial purposes are not covered by the FCRA.

3. "Legitimate Business Need"

Under this subsection, a party has a permissible purpose to obtain a consumer reporton a consumer for use in connection with some action the consumer takes from whichhe or she might expect to receive a benefit that is not more specifically covered bysubsections (A), (B), or (C). For example, a consumer report may be obtained on aconsumer who applies to rent an apartment, offers to pay for goods with a check,applies for a checking account or similar service, seeks to be included in a computerdating service, or who has sought and received over-payments of government benefitsthat he has refused to return.

4. Litigation

The possibility that a party may be involved in litigation involving a consumer does notprovide a permissible purpose for that party to receive a consumer report on suchconsumer under this subsection, because litigation is not a "business transaction"involving the consumer. Therefore, potential plaintiffs may not always obtain reportson potential defendants to determine whether they are worth suing. The transactionthat gives rise to the litigation may or may not provide a permissible purpose. A partyseeking to sue on a credit account would have a permissible purpose under section604(3)(A). (That section also permits judgment creditors and lien creditors to obtainconsumer reports on judgment debtors or individuals whose property is subject to thelien creditor's lien.) If that transaction is a business transaction involving theconsumer, there is a permissible purpose. If the litigation arises from a tort, there isno permissible purpose. Similarly, a consumer report may not be obtained solely for



use in discrediting a witness at trial or for locating a witness. This section does notpermit consumer reporting agencies to furnish consumer reports for the purpose oflocating a person suspected of committing a crime. (As stated in the discussion ofsection 608 infra (item 2), section 608 permits the furnishing of specified, limitedidentifying information to governmental agencies, notwithstanding the provisions ofsection 604.)

5. Impermissible Purposes

A consumer reporting agency may not furnish a consumer report to satisfy arequester's curiosity, or for use by a news reporter in preparing a newspaper ormagazine article.

6. Agents

A. General. An agent of a party with a "permissible purpose" may obtain aconsumer report on behalf of his principal, where he is involved in the decision thatgives rise to the permissible purpose. Such involvement may include the agent'smaking a decision (or taking action) for the principal, or assisting the principal inmaking the decision (e.g., by evaluating information). In these circumstances, theagent is acting on behalf of the principal. In some cases, the agent and principal arereferred to as "joint users." See discussion in section 603(f), supra (item 8).

Of course agents and principals are bound by the Act.

B. Real estate agent. A real estate agent may obtain a consumer report on behalfof a seller, to evaluate the eligibility as a prospective purchaser of a subject who hasexpressed an interest in purchasing property from the seller.

C. Private detective agency. A private detective agency may obtain a consumerreport as agent for its client while investigating a report subject that is a client'sprospective employee, or in connection with advising a client concerning a businesstransaction with the report subject or in attempting to collect a debt owed its clientby the subject of the report. In these circumstances, the detective agency is acting onbehalf of its client.

D. Rental clearance agency. A rental clearance agency that obtains consumerreports to assist owners of residential properties in screening consumers as tenants,has a permissible purpose to obtain the reports, if it uses them in applying thelandlord's criteria to approve or disapprove the subjects as tenant applicants.Similarly, an apartment manager investigating applicants for apartment rentals by alandlord may obtain consumer reports on these applicants.



E. Attorney. An attorney collecting a debt for a creditor client, including a partysuing on a debt or collecting on behalf of a judgment creditor or lien creditor, has apermissible purpose to obtain a consumer report on the debtor to the same extent asthe client.



FCRA Commentary § 604 General

Reference

1. Furnishing of Consumer Reports to Other Consumer Reporting Agencies

A consumer reporting agency may furnish a consumer report to another consumerreporting agency for it to furnish pursuant to a subscriber's request. In thesecircumstances, one consumer reporting agency is acting on behalf of another.

2. Consumer's Permission not Needed

When permissible purposes exist, parties may obtain, and consumer reportingagencies may furnish, consumer reports without the consumers' permission or overtheir objection. Similarly, parties may furnish information concerning theirtransactions with consumers to consumer reporting agencies and others, andconsumer reporting agencies may gather information, without consumers' permission.

3. User's Disclosure of Report to Subject Consumer

The FCRA does not prohibit a consumer report user from giving a copy of the report,or otherwise disclosing it, to the consumer who is the subject of the report.



FCRA Commentary § 605 Obsolete Information

Reference

"(a) Except as authorized under subsection (b), no consumer reporting agency maymake any consumer report containing any of the following items of information * * *:

(b) The provisions of subsection (a) are not applicable in the case of any consumercredit report to be used in connection with --

(1) a credit transaction involving, or which may reasonably be expected to involve,a principal amount of $50,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably beexpected to involve, a face amount of $50,000 or more; or

(3) the employment of any individual at an annual salary which equals, or whichmay reasonably be expected to equal $20,000, or more."

1. General

Section 605(a) provides that most adverse information more than seven yearsold may not be reported, except in certain circumstances set out in section 605(b).With respect to delinquent accounts, accounts placed for collection, and accountscharged to profit and loss, there are many dates that could be deemed to commenceseven year reporting periods. The discussion in subsections (a)(2), (a)(4), and (a)(6) isintended to set forth a clear, workable rule that effectuates Congressional intent.

2. Favorable Information

The Act imposes no time restriction on reporting of information that is notadverse.

3. Retention of Information in Files

Consumer reporting agencies may retain obsolete adverse information andfurnish it in reports for purposes that are exempt under subsection (b) (e.g., credit fora principal amount of $50,000 or more).

4. Use of Shorter Periods

The section does not require consumer reporting agencies to report adverseinformation for the time periods set forth, but only prohibits them from reportingadverse items beyond those time periods.

5. Inapplicability to Users



The section does not limit creditors or others from using adverse informationthat would be "obsolete" under its terms, because it applies only to reporting byconsumer reporting agencies. Similarly, this section does not bar a creditor's reportingsuch adverse obsolete information concerning its transactions or experiences with aconsumer, because the report would not constitute a consumer report.

6. Indicating the Existence of Nonspecified, Obsolete Information

A consumer reporting agency may not furnish a consumer report indicating theexistence of obsolete adverse information, even if no specific item is reported. Forexample, a consumer reporting agency may not communicate the existence of a debtolder than seven years by reporting that a credit grantor cannot locate a debtorwhose debt was charged off ten years ago.

7. Operative Dates

The times or dates set forth in this section, which relate to the occurrence ofevents involving adverse information, determine whether the item is obsolete. Thedate that the consumer reporting agency acquired the adverse information isirrelevant to how long that information may be reported.



FCRA Commentary § 605(a)(1) "Cases under title 11 of the United States Code orunder the Bankruptcy Act that, from the date of entry of the order for relief orthe date of adjudication, as the case may be, antedate the report by more than10 years"

Reference

1. Relation to Other Subsections

The reporting of suits and judgments is governed by subsection (a)(2), thereporting of accounts placed for collection or charged to profit and loss is governed bysubsection (a)(4), and the reporting of other delinquent accounts is governed bysubsection (a)(6). Any such item, even if discharged in bankruptcy, may be reportedseparately for the applicable seven year period, while the existence of the bankruptcyfiling may be reported for ten years.

2. Wage Earner Plans

Wage earner plans may be reported for ten years, because they are covered byTitle 11 of the United States Code.

3. Date for Filing

A voluntary bankruptcy petition may be reported for ten years from the datethat it is filed, because the filing of the petition constitutes the entry of an "order forrelief" under this subsection, just like a filing under the Bankruptcy Act (11 U.S.C.301).



FCRA Commentary § 605(a)(2) "Suits and judgments which, from date of entry,antedate the report by more than seven years or until the governing statute oflimitations has expired, whichever is the longer period"

Reference

1. Operative Date

For a suit, the term "date of entry" means the date the suit was initiated. Aprotracted suit may be reported for more than seven years from the date it wasentered, if the governing statute of limitations has not expired. For a judgment, theterm "date of entry" means the date the judgment was rendered.

2. Paid Judgments

Paid judgments cannot be reported for more than seven years after thejudgment was entered, because payment of the judgment eliminates any "governingstatute of limitations" under this subsection that might otherwise lengthen the period.



FCRA Commentary § 605(a)(3) "Paid tax liens which, from date of payment,antedate the report by more than seven years"

Reference

1. Unpaid Liens

If a tax lien (or other lien) remains unsatisfied, it may be reported as long as itremains filed against the consumer, without limitation, because this subsectionaddresses only paid tax liens.



FCRA Commentary § 605(a)(4) "Accounts placed for collection or charged toprofit and loss which antedate the report by more than seven years"

Reference

1. Placement for Collection

The term "placed for collection" means internal collection activity by thecreditor, as well as placement with an outside collector, whichever occurs first.Sending of the initial past due notices does not constitute placement for collection.Placement for collection occurs when dunning notices or other collection efforts areinitiated. The reporting period is not extended by assignment to another entity forfurther collection, or by a partial or full payment of the account. However, where aborrower brings his delinquent account to date and returns to his regular paymentschedule, and later defaults again, a consumer reporting agency may disregard anycollection activity with respect to the first delinquency and measure the reportingperiod from the date the account was placed for collection as a result of theborrower's ultimate default. A consumer's repayment agreement with a collectionagency can be treated as a new account that has its own seven year period.

2. Charge to Profit and Loss

The term "charged to profit and loss" means action taken by the creditor towrite off the account, and the applicable time period is measured from that event. Ifan account that was charged off is later paid in part or paid in full by the consumer,the reporting period of seven years from the charge-off is not extended by thissubsequent payment.

3. Reporting of a Delinquent Account That is Later Placed for Collection orCharged to Profit and Loss

The fact that an account has been placed for collection or charged to profitand loss may be reported for seven years from the date that either of those eventsoccurs, regardless of the date the account became delinquent. The fact ofdelinquency may also be reported for seven years from the date the account becamedelinquent.



FCRA Commentary § 605(a)(5) "Records of arrest, indictment, or conviction ofcrime which, from date of disposition, release, or parole, antedate the reportby more than seven years"

Reference

1. Records

The term "records" means any information a consumer reporting agency has inits files relating to arrest, indictment or conviction of a crime.

2. Computation of Time Period

The seven year reporting period runs from the date of disposition, release orparole, as applicable. For example, if charges are dismissed at or before trial, or theconsumer is acquitted, the date of such dismissal or acquittal is the date ofdisposition. If the consumer is convicted of a crime and sentenced to confinement,the date of release or placement on parole controls. (Confinement, whethercontinuing or resulting from revocation of parole, may be reported until seven yearsafter the confinement is terminated.) The sentencing date controls for a convictedconsumer whose sentence does not include confinement. The fact that informationconcerning the arrest, indictment, or conviction of crime is obtained by the reportingagency at a later date from a more recent source (such as a newspaper or interview)does not serve to extend this reporting period.



FCRA Commentary § 605(a)(6) "Any other adverse item of information whichantedates the report by more than seven years"

Reference

1. Relation to Other Subsections

This section applies to all adverse information that is not covered by section605(a) (1)-(5). For example, a delinquent account that has neither been placed forcollection, nor charged to profit and loss, may be reported for seven years from thedate of the last regularly scheduled payment. (Accounts placed for collection orcharged to profit and loss may be reported for the time periods stated in section605(a)(4).)

2. Non Tax Liens

Liens (other than paid tax liens) may be reported as long as they remain filedagainst the consumer or the consumer's property, and remain effective (under anyapplicable statute of limitations). (See discussion under section 605(a)(3), supra.)



FCRA Commentary § 606 Disclosure of Investigative Consumer Reports

Reference

"(a) A person may not procure or cause to be prepared an investigative consumerreport on any consumer unless --

(1) it is clearly and accurately disclosed to the consumer that an investigativeconsumer report including information as to his character, general reputation,personal characteristics, and mode of living, whichever are applicable, may be made,and such disclosure (A) is made in a writing mailed, or otherwise delivered, to theconsumer, not later than three days after the date on which the report was firstrequested, and (B) includes a statement informing the consumer of his right torequest the additional disclosures provided for under subsection (b) of this section; or

(2) the report is to be used for employment purposes for which the consumer hasnot specifically applied.

(b) Any person who procures or causes to be prepared an investigative consumerreport on any consumer shall, upon written request made by the consumer within areasonable period of time after receipt by him of the disclosure required bysubsection (a)(1), make a complete and accurate disclosure of the nature and scopeof the investigation requested. This disclosure shall be made in a writing mailed, orotherwise delivered, to the consumer not later than five days after the date on whichthe request for such disclosure was received from the consumer or such report wasfirst requested, whichever is the later.

(c) No person may be held liable for any violation of subsection (a) or (b) of thissection if he shows by a preponderance of the evidence that at the time of theviolation he maintained reasonable procedures to assure compliance with subsection(a) or (b)."


The term "investigative consumer report" is defined at section 603(e) to mean aconsumer report, all or a portion of which contains information obtained throughpersonal interviews (in person or by telephone) with persons other than the subject,which information relates to the subject's character, general reputation, personalcharacteristics or mode of living.

2. Inapplicability to Consumer Reporting Agencies

The section applies only to report users, not consumer reporting agencies. The



FCRA does not require consumer reporting agencies to inform consumers thatinformation will be gathered or that reports will be furnished concerning them.

3. Inapplicability to Noninvestigative Consumer Reports

The section does not apply to noninvestigative reports.

4. Exemptions

An employer who orders investigative consumer reports on a current employeewho has not applied for a job change need not notify the employee, because the term"employment purposes" is defined to include "promotion, reassignment or retention"and subsection (b) provides that the disclosure requirements do not apply to"employment purposes for which the consumer has not specifically applied."

5. Form and Delivery of Notice

The notice must be in writing and delivered to the consumer. The user mayinclude the disclosure in an application for employment, insurance, or credit, if it isclear and conspicuous and not obscured by other language. A user may send therequired notice via first class mail. The notice must be mailed or otherwise deliveredto the consumer not later than three days after the report was first requested.

6. Content of Notice of Right to Disclosure

The notice must clearly and accurately disclose that an "investigative consumerreport" including information as to the consumer's character, general reputation,personal characteristics and mode of living (whichever are applicable), may be made.The disclosure must also state that an investigative consumer report involves personalinterviews with sources such as neighbors, friends, or associates. The notice mayinclude any additional, accurate information about the report, such as the types ofinterviews that will be conducted. The notice must include a statement informing theconsumer of the right to request complete and accurate disclosure of the nature andscope of the investigation.

7. Content of Disclosure of Report

When the consumer requests disclosure of the "nature and scope" of theinvestigation, such disclosure must include a complete and accurate description of thetypes of questions asked, the number and types of persons interviewed, and the nameand address of the investigating agency. The user need not disclose the names ofsources of information, nor must it provide the consumer with a copy of the report. Areport user that provides the consumer with a blank copy of the standardized formused to transmit the report from the agency to the user complies with the



requirement that it disclose the "nature" of the investigation.



FCRA Commentary § 607 Compliance Procedures

Reference

"(a) Every consumer reporting agency shall maintain reasonable proceduresdesigned to avoid violations of section 605 and to limit the furnishing of consumerreports to the purposes listed under section 604. These procedures shall require thatprospective users of the information identify themselves, certify the purposes forwhich the information is sought, and certify that the information will be used for noother purpose. Every consumer reporting agency shall make a reasonable effort toverify the identity of a new prospective user and the uses certified by suchprospective user prior to furnishing such user a consumer report. No consumerreporting agency may furnish a consumer report to any person if it has reasonablegrounds for believing that the consumer report will not be used for a purpose listed inSection 604.

(b) Whenever a consumer reporting agency prepares a consumer report it shallfollow reasonable procedures to assure maximum possible accuracy of the informationconcerning the individual about whom the report relates."

1. Procedures to Avoid Reporting Obsolete Information

A. General. A consumer reporting agency should establish procedures with itssources of adverse information that will avoid the risk of reporting obsoleteinformation. For example, the agency should either require a creditor to supply thedate an account was placed for collection or charged off, or the agency should use aconservative date for such placement or charge off (such as the date of the lastregularly scheduled payment), to be sure of complying with the statute.

B. Retention of obsolete information for reporting in excepted circumstances. If aconsumer reporting agency retains adverse information in its files that is "obsolete"under section 605(a) (e.g., information about a satisfied judgment that is more thanseven years old), so that it may be reported for use in transactions described bysection 605(b) (i.e., applications for credit or life insurance for $50,000 or more, oremployment at an annual salary of $20,000 or more), it must have proceduralsafeguards to avoid reporting the information except in those situations. Theprocedure should require that such obsolete information be released only after aninternal decision that its release will not violate section 605.

2. Procedures to Avoid Reporting for Impermissible Purposes

A. Verification. A consumer reporting agency should have a system to verify that it



is dealing with a legitimate business having a "permissible purpose" for theinformation reported. What constitutes adequate verification will vary with thecircumstances. If the consumer reporting agency is not familiar with the user,appropriate procedures might require an on-site visit to the user's place of business,or a check of the user's references.

B. Required certification by user. A consumer reporting agency should adoptprocedures that require prospective report users to identify themselves, certify thepurpose for which the information is sought, and certify that the information will beused for no other purpose. A consumer reporting agency should determine initiallythat users have permissible purposes and ascertain what those purposes are. It shouldobtain a specific, written certification that the recipient will obtain reports for thosepurposes and no others. The user's certification that the report will be used for noother purposes should expressly prohibit the user from sharing the report or providingit to anyone else, other than the subject of the report or to a joint user having thesame purpose. A consumer reporting agency should refuse to provide reports to thoserefusing to provide such certification.

C. Blanket or individual certification. Once the consumer reporting agency obtainsa certification from a user (e.g., a creditor) that typically has a permissible purposefor receiving a consumer report, stating that it will use those reports only forspecified permissible purposes (e.g., for credit or employment purposes), acertification of purpose need not be furnished for each individual report obtained,provided there is no reason to believe the user may be violating its certification.However, in furnishing reports to users that typically could have both permissible andimpermissible purposes for ordering consumer reports (e.g., attorneys and detectiveagencies), the consumer reporting agency must require the user to provide a separatecertification each time it requests a consumer report.

D. Procedures to avoid recipients' abuse of certification. When doubt arisesconcerning any user's compliance with its contractual certification, a consumerreporting agency must take steps to insure compliance, such as requiring a separate,advance certification for each report it furnishes that user, or auditing that user toverify that it is obtaining reports only for permissible purposes. A consumer reportingagency must cease furnishing consumer reports to users who repeatedly requestconsumer reports for impermissible purposes.

E. Unauthorized access. A consumer reporting agency should take several othersteps when doubt arises concerning whether a user is obtaining reports for apermissible purpose from a computerized system. If it appears that a third party, nota subscriber, has obtained unauthorized access to the system, the consumer reporting



agency should take appropriate steps such as altering authorized users' means ofaccess, such as codes and passwords, and making random checks to ensure that futurereports are obtained only for permissible purposes. If a subscriber has inadvertentlysought reports for impermissible purposes or its employee has obtained reportswithout a permissible purpose, it would be appropriate for the consumer reportingagency to alter the subscriber's means of access, and require an individual writtencertification of the permissible purpose for each report requested or randomly verifysuch purposes. A consumer reporting agency should refuse to furnish any furtherreports to a user that repeatedly violates certifications.

F. Use of computerized systems. A consumer reporting agency may furnishconsumer reports to users via terminals, provided the consumer reporting agency hastaken the necessary steps to ensure that the users have a permissible purpose toreceive the reports. (The agency would have to record the identity of consumerreport recipients for each consumer, to be able to make any disclosures requiredunder section 609(a)(3) or section 611(d)).

G. Activity reports. If a consumer reporting agency provides "activity reports" onall customers who have open-end accounts with a credit grantor, it must make certainthat the credit grantor always notifies the agency when accounts are closed and paidin full, to avoid furnishing reports on former customers or other customers for whomthe credit grantor lacks a permissible purpose. (See also discussion in section604(3)(A), item 1, supra.)

3. Reasonable Procedures to Assure Maximum Possible Accuracy

A. General. The section does not require error free consumer reports. If aconsumer reporting agency accurately transcribes, stores and communicates consumerinformation received from a source that it reasonably believes to be reputable, andwhich is credible on its face, the agency does not violate this section simply byreporting an item of information that turns out to be inaccurate. However, when aconsumer reporting agency learns or should reasonably be aware of errors in itsreports that may indicate systematic problems (by virtue of information fromconsumers, report users, from periodic review of its reporting system, or otherwise) itmust review its procedures for assuring accuracy. Examples of errors that wouldrequire such review are the issuance of a consumer report pertaining entirely to aconsumer other than the one on whom a report was requested, and the issuance of aconsumer report containing information on two or more consumers (e.g., informationthat was mixed in the file) in response to a request for a report on only one of thoseconsumers.



B. Required steps to improve accuracy. If the agency's review of its proceduresreveals, or the agency should reasonably be aware of, steps it can take to improve theaccuracy of its reports at a reasonable cost, it must take any such steps. It shouldcorrect inaccuracies that come to its attention. A consumer reporting agency mustalso adopt reasonable procedures to eliminate systematic errors that it knows about,or should reasonably be aware of, resulting from procedures followed by its sources ofinformation. For example, if a particular credit grantor has often furnished asignificant amount of erroneous consumer account information, the agency mustrequire the creditor to revise its procedures to correct whatever problems cause theerrors or stop reporting information from that creditor.

C. Use of automatic data processing equipment. Consumer reporting agencies thatuse automatic data processing equipment (particularly for long distance transmissionof information) should have reasonable procedures to assure that the data isaccurately converted into a machine-readable format and not distorted by machinemalfunction or transmission failure. Reasonable security procedures must be adoptedto minimize the possibility that computerized consumer information will be stolen oraltered by either authorized or unauthorized users of the information system.

D. Reliability of sources. Whether a consumer reporting agency may rely on theaccuracy of information from a source depends on the circumstances. This sectiondoes not hold a consumer reporting agency responsible where an item of informationthat it receives from a source that it reasonably believes to be reputable appearscredible on its face, and is transcribed, stored and communicated as provided by thatsource. Requirements are more stringent where the information furnished appearsimplausible or inconsistent, or where procedures for furnishing it seem likely to resultin inaccuracies, or where the consumer reporting agency has had numerous problemsregarding information from a particular source.

E. Undesignated information in credit transactions. "Undesignated information"means all credit history information in a married (or formerly married) consumer'sfile, which was not reported to the consumer reporting agency with a designationindicating that the information relates to either the consumer's joint or individualcredit experience. The question arises what is meant by reasonable procedures underthis section for treatment of credit history in the file of only one (present or former)spouse (usually the husband) that has not been designated by the procedure inRegulation B, 12 C.F.R. 202.10, which implements the Equal Credit Opportunity Act.(This situation exists only for certain credit history file information compiled beforeJune 1, 1977, and certain accounts opened before that date.) A consumer reportingagency may report information solely in the file of spouse A, when spouse B applies



for a separate extension of credit, only if such information relates to accounts forwhich spouse B was either a user or was contractually liable, or the report recipienthas a permissible purpose for a report on spouse A. A consumer reporting agency maynot supply all undesignated information from the file of a consumer's spouse inresponse to a request for a report on the consumer, because some or all of thatinformation may not relate to both spouses. Consumer reporting agencies must honorwithout charge the request of a married or formerly married individual thatundesignated information (that appears only in the files of the individual's present orformer spouse) be segregated -- i.e., placed in a separate file that is accessible underthat individual's name. This procedure insures greater accuracy and protection of theprivacy of spouses than does the automatic reporting of undesignated information.

F. Reporting of credit obligation --

(1) Past due accounts. A consumer reporting agency must employ reasonableprocedures to keep its file current on past due accounts (e.g., by requiring itscreditors to notify the credit bureau when a previously past due account has beenpaid or discharged in bankruptcy), but its failure to show such activity in particularinstances, despite the maintenance of reasonable procedures to keep files current,does not violate this section. For example, a consumer reporting agency that reportsaccurately in 1985 that as of 1983 the consumer owed a retail store money, withoutmentioning that the consumer eventually paid the debt, does not violate this sectionif it was not informed by the store or the consumer of the later payment.

(2) Significant, verified information. A consumer reporting agency must reportsignificant, verified information it possesses about an item. For instance, a consumerreporting agency may continue to report a paid account that was previouslydelinquent, but should also report that the account has been paid. Similarly, aconsumer reporting agency may include delinquencies on debts discharged inbankruptcy in consumer reports, but must accurately note the status of the debt(e.g., discharged, voluntarily repaid). Finally, if a reported bankruptcy has beendismissed, that fact should be reported.

(3) Guarantor obligations. Personal guarantees for obligations incurred by others(including a corporation) may be included in a consumer report on the individual whois the guarantor. The report should accurately reflect the individual's involvement(e.g., as guarantor of the corporate debt).

4. Effect of Criminal Sanctions

Notwithstanding the fact that section 619 provides criminal sanctions againstpersons who knowingly and willfully obtain information on a consumer from a



consumer reporting agency under false pretenses, a consumer reporting agency mustfollow reasonable procedures to limit the furnishing of reports to those withpermissible purposes.

5. Disclosure of Credit Denial

When reporting that a consumer was denied a benefit (such as credit), aconsumer reporting agency need not report the reasons for the denial.

6. Content of Report

A consumer report need not be tailored to the user's needs. It may contain anyinformation that is complete, accurate, and not obsolete on the consumer who is thesubject of the report. A consumer report may include an account that was dischargedin bankruptcy (as well as the bankruptcy itself), as long as it reports a zero balancedue to reflect the fact that the consumer is no longer liable for the discharged debt. Aconsumer report may include a list of recipients of reports on the consumer who is thesubject of the report.

7. Completeness of Reports

Consumer reporting agencies are not required to include all existing derogatoryor favorable information about a consumer in their reports. (See, however, discussionin section 611, item 14, infra, concerning conveying consumer dispute statements.)However, a consumer reporting agency may not mislead its subscribers as to thecompleteness of its reports by deleting nonderogatory information and not disclosingits policy of making such deletions.

8. User Notice of Adverse Action Based on a Consumer Report

A consumer reporting agency need not require users of its consumer reports toprovide any notice to consumers against whom adverse action is taken based on aconsumer report. The FCRA imposes such notice requirements directly on users, underthe circumstances set out in section 615.



FCRA Commentary § 608 Disclosures to Governmental Agencies

Reference

"Notwithstanding the provisions of section 604, a consumer reporting agency mayfurnish identifying information respecting any consumer limited to his name, address,former addresses, places of employment, or former places of employment, to agovernmental agency."

1. Permissible Purpose Necessary for Additional Information

A consumer reporting agency may furnish limited identifying informationconcerning a consumer to a governmental agency (e.g., an agency seeking a fugitivefrom justice) even if that agency does not have a "permissible purpose" under section604 to receive a consumer report. However, a governmental agency must have apermissible purpose in order to obtain information beyond what is authorized by thissection.

2. Entities Covered by Section

The term "governmental agency" includes federal, state, county and municipalagencies, and grand juries. Only governmental agencies may obtain disclosures ofidentifying information under this section.



FCRA Commentary § 609 Disclosures to Consumers

Reference

"(a) Every consumer reporting agency shall, upon request and proper identificationof any consumer, clearly and accurately disclose to the consumer:

(1) The nature and substance of all information (except medical information) in itsfiles on the consumer at the time of the request.

(2) The sources of the information; except that the sources of informationacquired solely for use in preparing an investigative consumer report and actuallyused for no other purpose need not be disclosed: Provided, That in the event anaction is brought under this title, such sources shall be available to the plaintiff underappropriate discovery procedures in the court in which the action is brought.

(3) The recipients of any consumer report on the consumer which it has furnished

(A) for employment purposes within the two-year period preceding the request,and

(B) for any other purpose within the six-month period preceding the request.

(b) The requirements of subsection (a) respecting the disclosure of sources ofinformation and the recipients of consumer reports do not apply to informationreceived or consumer reports furnished prior to the effective date of this title exceptto the extent that the matter involved is contained in the files of the consumerreporting agency on that date."


This section states what consumer reporting agencies must disclose toconsumers, upon request and proper identification. Section 610 sets forth theconditions under which those disclosures must be made, and section 612 sets forth thecircumstances under which consumer reporting agencies may charge for making suchdisclosures. The term "file" as used in section 609(a)(1) is defined in section 603(g).The term "investigative consumer report," which is used in section 609(a)(2), isdefined in section 603(e). The term "medical information," which is used in section609(a)(1), is defined in section 603(i).

2. Proper Identification

A consumer reporting agency must take reasonable steps to verify the identityof an individual seeking disclosure under this section.



3. Manner of "Proper Identification"

If a consumer provides sufficient identifying information, the consumerreporting agency cannot insist that the consumer execute a "request for interview"form, or provide the items listed on it, as a prerequisite to disclosure. However, theagency may use a form to identify consumers requesting disclosure if it does not usethe form to inhibit disclosure, or to obtain any waiver of the consumers' rights. Aconsumer reporting agency may provide disclosure by telephone without a writtenrequest, if the consumer is properly identified, but may insist on a written requestbefore providing such disclosure.

4. Power of Attorney

A consumer reporting agency may disclose a consumer's file to a third partyauthorized by the consumer's written power of attorney to obtain the disclosure, ifthe third party presents adequate identification and fulfills other applicableconditions of disclosure. However, the agency may also disclose the informationdirectly to the consumer.

5. Nature of Disclosure Required

A consumer reporting agency must disclose the nature and substance of allitems in the consumer's file, no matter how or where they are stored (e.g., in otheroffices of the consumer reporting agency). The consumer reporting agency must havepersonnel trained to explain to the consumer any information furnished in accordancewith the Act. Particularly when the file includes coded information that would bemeaningless to the consumer, the agency's personnel must assist the consumer tounderstand the disclosures. Any summary must not mischaracterize the nature of anyitem of information in the file. The consumer reporting agency is not required toprovide a copy of the file, or any other written disclosure, or to read the file verbatimto the consumer or to permit the consumer to examine any information in its files. Aconsumer reporting agency may choose to usually comply with the FCRA in writing, byproviding a copy of the file to the consumer or otherwise.

6. Medical Information

Medical information includes information obtained with the consumer's consentfrom physicians and medical facilities, but does not include comments on a consumer'shealth by non-medical personnel. A consumer reporting agency is not required todisclose medical information in its files to consumers, but may do so. Alternatively, aconsumer reporting agency may inform consumers that there is medical information inthe files concerning them and supply the name of the doctor or other source of the



information. Consumer reporting agencies may also disclose such information to aphysician of the consumer's choice, upon the consumer's written instructions pursuantto section 604(2).

7. Ancillary Information

A consumer reporting agency is not required to disclose information consistingof an audit trail of changes it makes in the consumer's file, billing records, or thecontents of a consumer relations folder, if the information is not from consumerreports and will not be used in preparing future consumer reports. Such data is notincluded in the term "information in the files" which must be disclosed to theconsumer pursuant to this section. A consumer reporting agency must disclose claimsreport information only if it has appeared in consumer reports.

8. Information on Other Consumers

The consumer has no right to information in the consumer reporting agency'sfiles on other individuals, because the disclosure must be limited to information "onthe consumer." However, all information in the files of the consumer making therequest must be disclosed, including information about another individual that relatesto the consumer (e.g., concerning that individual's dealings with the subject of theconsumer report).

9. Disclosure of Sources of Information

Consumer reporting agencies must disclose the sources of information, exceptfor sources of information acquired solely for use in preparing an investigativeconsumer report and actually used for no other purpose. When it has used informationfrom another consumer reporting agency, the other agency should be reported as asource.

10. Disclosure of Recipients of Consumer Reports

Consumer reporting agencies must maintain records of recipients of priorconsumer reports sufficient to enable them to meet the FCRA's requirements thatthey disclose the identity of recipients of prior consumer reports. A consumerreporting agency that furnishes a consumer report directly to a report user at therequest of another consumer reporting agency must disclose the identity of the userthat was the ultimate recipient of the report, not the other agency that acted as anintermediary in procuring the report.

11. Disclosure of Recipients of Prescreened Lists

A consumer reporting agency must furnish to a consumer requesting file



disclosure the identity of recipients of any prescreened lists that contained theconsumer's name when submitted to creditors (or other users) by the consumerreporting agency.

12. Risk Scores

A consumer reporting agency is not required to disclose a risk score (or othernumerical evaluation, however named) that is provided to the agency's client (basedon an analysis of data on the consumer) but not retained by the agency. Such a scoreis not information "in (the agency's) files at the time of the request" by the consumerfor file disclosure.



FCRA Commentary § 610 Conditions of Disclosure

Reference

"(a) A consumer reporting agency shall make the disclosures required under section609 during normal business hours and on reasonable notice.

(b) The disclosures required under section 609 shall be made to the consumer --

(1) in person if he appears in person and furnishes proper identification; or

(2) by telephone if he has made a written request, with proper identification, fortelephone disclosure and the toll charge, if any, for the telephone call is prepaid byor charged directly to the consumer.

(c) Any consumer reporting agency shall provide trained personnel to explain tothe consumer any information furnished to him pursuant to section 609.

(d) The consumer shall be permitted to be accompanied by one other person of hischoosing, who shall furnish reasonable identification. A consumer reporting agencymay require the consumer to furnish a written statement granting permission to theconsumer reporting agency to discuss the consumer's file in such person's presence.

(e) Except as provided in section 616 and 617, no consumer may bring any actionor proceeding in the nature of defamation, invasion of privacy, or negligence withrespect to the reporting of information against any consumer reporting agency, anyuser of information or any person who furnishes information to a consumer reportingagency, based on information disclosed pursuant to section 609, 610, or 615, exceptas to false information furnished with malice or willful intent to injure suchconsumers."

1. Time of Disclosure

A consumer reporting agency must make disclosures during normal businesshours, upon reasonable notice. However, the consumer reporting agency may waivereasonable notice, and the consumer may agree to disclosure outside of normalbusiness hours. A consumer reporting agency may make in-person disclosure toconsumers who have made appointments ahead of other consumers, because thedisclosures are only required to be made "on reasonable notice."

2. Extra Conditions Prohibited

A consumer reporting agency may not add conditions not set out in the FCRA asa prerequisite to the required disclosure.



3. Manner of Disclosure

A consumer reporting agency may, with the consumer's actual or impliedconsent, meet its disclosure obligations by mail, in lieu of the in-person or telephonedisclosures specified in the statute.

4. Disclosure in the Presence of Third Parties

When the consumer requests disclosure in a third party's presence, theconsumer reporting agency may require that a consumer sign an authorization beforesuch disclosure is made. The consumer may choose the third party to accompany himor her for the disclosure.

5. Expense of Telephone Calls

A consumer reporting agency is not required to pay the telephone charge for atelephone interview with a consumer obtaining disclosure.

6. Qualified Defamation Privilege

The privilege extended by subsection 610(e) does not apply to an actionbrought by a consumer if the action is based on information not disclosed pursuant tosections 609, 610 or 615. A disclosure to a consumer's representative (e.g., based onthe consumer's power of attorney) constitutes "information disclosed pursuant tosection 609" and is thus covered by this privilege.



FCRA Commentary § 611 Procedure in Case of Disputed Accuracy

Reference

"(a) If the completeness or accuracy of any item of information contained in his fileis disputed by a consumer, and such dispute is directly conveyed to the consumerreporting agency by the consumer, the consumer reporting agency shall within areasonable period of time reinvestigate and record the current status of thatinformation unless it has reasonable grounds to believe that the dispute by theconsumer is frivolous or irrelevant. If after such reinvestigation such information isfound to be inaccurate or can no longer be verified, the consumer reporting agencyshall promptly delete such information. The presence of contradictory information inthe consumer's file does not in and of itself constitute reasonable grounds forbelieving the dispute is frivolous or irrelevant.

(b) If the reinvestigation does not resolve the dispute, the consumer may file abrief statement setting forth the nature of the dispute. The consumer reportingagency may limit such statements to not more than one hundred words if it providesthe consumer with assistance in writing a clear summary of the dispute.

(c) Whenever a statement of a dispute is filed, unless there is reasonable groundsto believe that it is frivolous or irrelevant, the consumer reporting agency shall, inany subsequent consumer report containing the information in question, clearly notethat it is disputed by the consumer and provide either the consumer's statement or aclear and accurate codification or summary thereof.

(d) Following any deletion of information which is found to be inaccurate or whoseaccuracy can no longer be verified or any notation as to disputed information, theconsumer reporting agency shall, at the request of the consumer, furnish notificationthat the item has been deleted or the statement, codification or summary pursuant tosubsection (b) or (c) to any person specifically designated by the consumer who haswithin two years prior thereto received a consumer report for employment purposes,or within six months prior thereto received a consumer report for any other purpose,which contained the deleted or disputed information. The consumer reporting agencyshall clearly and conspicuously disclose to the consumer his rights to make such arequest. Such disclosure shall be made at or prior to the time the information isdeleted or the consumer's statement regarding the disputed information is received."


This section sets forth procedures consumer reporting agencies must follow if aconsumer conveys a dispute of the completeness or accuracy of any item of



information in the consumer's file to the consumer reporting agency. Section 609provides for disclosures by consumer reporting agencies to consumers, and section 610sets forth conditions of disclosure. Section 612 permits a consumer reporting agencyto impose charges for certain disclosures, including the furnishing of certaininformation to recipients of prior reports, as provided by section 611(d).

2. Proper Reinvestigation

A consumer reporting agency conducting a reinvestigation must make a goodfaith effort to determine the accuracy of the disputed item or items. At a minimum, itmust check with the original sources or other reliable sources of the disputedinformation and inform them of the nature of the consumer's dispute. Inreinvestigating and attempting to verify a disputed credit transaction, a consumerreporting agency may rely on the accuracy of a creditor's ledger sheets and need notrequire the creditor to produce documentation such as the actual signed sales slips.Depending on the nature of the dispute, reinvestigation and verification may requiremore than asking the original source of the disputed information the same questionand receiving the same answer. If the original source is contacted for reinvestigation,the consumer reporting agency should at least explain to the source that the originalstatement has been disputed, state the consumer's position, and then ask whether thesource would confirm the information, qualify it, or accept the consumer'sexplanation.

3. Complaint of Insufficient File, or Lack of File

The FCRA does not require a consumer reporting agency to add new items ofinformation to its file. A consumer reporting agency is not required to create new fileson consumers for whom it has no file, nor is it required to add new lines ofinformation about new accounts not reflected in an existing file, because the sectionpermits the consumer to dispute only the completeness or accuracy of particularitems of information in the file. If a consumer reporting agency chooses to add lines ofinformation at the consumer's request, it may charge a fee for doing so.

4. Explanation of Extenuating Circumstances

A consumer reporting agency has no duty to reinvestigate, or take any otheraction under this section, if a consumer merely provides a reason for a failure to pay adebt (e.g., sudden illness or layoff), and does not challenge the accuracy orcompleteness of the item of information in the file relating to a debt. Most creditorsare aware that a variety of circumstances may render consumers unable to repaycredit obligations. Although a consumer reporting agency is not required to accept aconsumer dispute statement that does not challenge the accuracy or completeness of



an item in the consumer's file, it may accept such a statement and may charge a feefor doing so.

5. Reinvestigation of a Debt

A consumer reporting agency must reinvestigate if a consumer conveys to it adispute concerning the validity or status of a debt, such as whether the debt wasowed by the consumer, or whether the debt had subsequently been paid. Forexample, if a consumer alleges that a judgment reflected in the file as unpaid hasbeen satisfied, or notifies a consumer reporting agency that a past due obligationreflected in the file as unpaid was subsequently paid, the consumer reporting agencymust reinvestigate the matter. If a file reflects a debt discharged in bankruptcywithout reflecting subsequent reaffirmation and payment of that debt, a consumermay require that the item be reinvestigated.

6. Status of a Debt

The consumer reporting agency must, upon reinvestigation, "record the currentstatus" of the disputed item. This requires inclusion of any information relating to achange in status of an ongoing matter (e.g., that a credit account had been closed,that a debt shown as past due had subsequently been paid or discharged inbankruptcy, or that a debt shown as discharged in bankruptcy was later reaffirmedand/or paid).

7. Dispute Conveyed to Party Other Than the Consumer Reporting Agency

A consumer reporting agency is required to take action under this section onlyif the consumer directly communicates a dispute to it. It is not required to respond toa dispute of information that the consumer merely conveys to others (e.g., to asource of information). (But see, however, discussion in section 607, item 3A, ofconsumer reporting agencies' duties to correct errors that come to their attention.)

8. Dispute Conveyed to the Consumer Reporting Agency by a Party Other Than theConsumer

A consumer reporting agency need not reinvestigate a dispute about aconsumer's file raised by any third party, because the obligation under the sectionarises only where an "item of information in his file is disputed by the consumer."

9. Consumer Disclosures and Adverse Action Not Prerequisites to ReinvestigationDuty

A consumer reporting agency's obligation to reinvestigate disputed items is notcontingent upon the consumer's having been denied a benefit or having asserted any



rights under the FCRA other than disputing items of information.

10. Reasonable Period of Time

A consumer reporting agency is required to reinvestigate and record thecurrent status of disputed information within a reasonable period of time after theconsumer conveys the dispute to it. Although consumer reporting agencies are able toreinvestigate most disputes within 30 days, a "reasonable time" for a particularreinvestigation may be shorter or longer depending on the circumstances of thedispute. For example, where the consumer provides documentary evidence (e.g., acertified copy of a court record to show that a judgment has been paid) whensubmitting the dispute, the creditor may require a shorter time to reinvestigate. Onthe other hand, where the dispute is more complicated than normal (e.g., theconsumer alleges in good faith that a creditor has falsified its report of the consumer'saccount history because of a personal grudge), the "reasonable time" needed toconduct the reinvestigation may be longer.

11. Frivolous or Irrelevant

The mere presence of contradictory information in the file does not provide theconsumer reporting agency "reasonable grounds to believe that the dispute by theconsumer is frivolous or irrelevant." A consumer reporting agency must assume aconsumer's dispute is bona fide, unless there is evidence to the contrary. Suchevidence may constitute receipt of letters from consumers disputing all information intheir files without providing any allegations concerning the specific items in the files,or of several letters in similar format that indicate that a particular third party (e.g.,a "credit repair" operator) is counselling consumers to dispute all items in their files,regardless of whether the information is known to be accurate. The agency is notrequired to repeat a reinvestigation that it has previously conducted simply becausethe consumer reiterates a dispute about the same item of information, unless theconsumer provides additional evidence that the item is inaccurate or incomplete, oralleges changed circumstances.

12. Deletion of Accurate Information That has not Been Disputed

The consumer reporting agency is not required to delete accurate informationthat could not be verified upon reinvestigation, if it has not been "disputed by aconsumer." For example, if a creditor deletes adverse information from its files withthe result that information could not be reverified if disputed, it is still permissiblefor a consumer reporting agency to report it (subject to the obsolescence provisions ofsection 605) until it is disputed.



13. Consumer Dispute Statements on Multiple Items

A consumer who disputes multiple items of information in his file may submit aone hundred word statement as to each disputed item.

14. Conveying Dispute Statements to Recipients of Subsequent Reports

A consumer reporting agency may not merely tell the recipient of a subsequentreport containing disputed information that the consumer's statement is on file butwill be provided only if requested, because subsection (c) requires the agency toprovide either the statement or "a clear and accurate codification or summarythereof."



FCRA Commentary § 612 Charges for Certain Disclosures

Reference

"A consumer reporting agency shall make all disclosures pursuant to section 609 andfurnish all consumer reports pursuant to section 611(d) without charge to theconsumer if, within thirty days after receipt by such consumer of a notificationpursuant to section 615 or notification from a debt collection agency affiliated withsuch consumer reporting agency stating that the consumer's credit rating may be orhas been adversely affected, the consumer makes a request under section 609 or611(d). Otherwise, the consumer reporting agency may impose a reasonable charge onthe consumer for making disclosure to such consumer pursuant to section 609, thecharge for which shall be indicated to the consumer prior to making disclosure; andfor furnishing notifications, statements, summaries, or codifications to personsdesignated by the consumer pursuant to section 611(d), the charge for which shall beindicated to the consumer prior to furnishing such information and shall not exceedthe charge that the consumer reporting agency would impose on each designatedrecipient for a consumer report except that no charge may be made for notifying suchpersons of the deletion of information which is found to be inaccurate or which can nolonger be verified."

1. Irrelevance of Subsequent Grant of Credit or Reason for Denial

A consumer denied credit because of a consumer report from a consumerreporting agency has the right to a free disclosure from that agency within 30 days ofreceipt of the section 615(a) notice, even if credit was subsequently granted or thebasis of the denial was that the references supplied by the consumer are too few ortoo new to appear in the credit file.

2. Charge for Reinvestigation Prohibited

This section does not permit consumer reporting agencies to charge for makingthe reinvestigation or following other procedures required by section 611(a)-(c).

3. Permissible Charges for Services Requested by Consumers

A consumer reporting agency may charge fees for creating files on consumersat their request, or for other services not required by the FCRA that are requested byconsumers.



FCRA Commentary § 613 Public Record Information for Employment Purposes

Reference

"A consumer reporting agency which furnishes a consumer report for employmentpurposes and which for that purpose compiles and reports items of information onconsumers which are matters of public record and are likely to have an adverse effectupon a consumer's ability to obtain employment shall --

(1) at the time such public record information is reported to the user of suchconsumer report, notify the consumer of the fact that public record information isbeing reported by the consumer reporting agency, together with the name andaddress of the person to whom such information is being reported; or

(2) maintain strict procedures designed to insure that whenever public recordinformation which is likely to have an adverse effect on a consumer's ability to obtainemployment is reported it is complete and up to date. For purposes of this paragraph,items of public record relating to arrests, indictments, convictions, suits, tax liens,and outstanding judgments shall be considered up to date if the current public recordstatus of the item at the time of the report is reported."


A consumer reporting agency that complies with section 613(1) must also followreasonable procedures to assure maximum possible accuracy, as required by section607(b).

2. Alternate Methods of Compliance

A consumer reporting agency that furnishes public record information foremployment purposes must comply with either subsection (1) or (2), but need notcomply with both.

3. Information From Another Consumer Reporting Agency

If a consumer reporting agency uses information or reports from otherconsumer reporting agencies in a report for employment purposes, it must complywith this section.

4. Method of Providing Notice

A consumer reporting agency may use first class mail to provide the noticerequired by subsection (1).

5. Waiver



The procedures required by this section cannot be waived by the consumer towhom the report relates.



FCRA Commentary § 614 Restrictions on Investigative Consumer Reports

Reference

"Whenever a consumer reporting agency prepares an investigative consumer report,no adverse information in the consumer report (other than information which is amatter of public record) may be included in a subsequent consumer report unless suchadverse information has been verified in the process of making such subsequentconsumer report, or the adverse information was received within the three-monthperiod preceding the date the subsequent report is furnished."



FCRA Commentary § 615 Requirements on Users of Consumer Reports

Reference

(a) Whenever credit or insurance for personal, family, or household purposes, oremployment involving a consumer is denied or the charge for such credit or insuranceis increased either wholly or partly because of information contained in a consumerreport from a consumer reporting agency, the user of the consumer report shall soadvise the consumer against whom such adverse action has been taken and supply thename and address of the consumer reporting agency making the report.

(b) Whenever credit for personal, family, or household purposes involving aconsumer is denied or the charge for such credit is increased either wholly or partlybecause of information obtained from a person other than a consumer reportingagency bearing upon the consumer's credit worthiness, credit standing, creditcapacity, character, general reputation, personal characteristics, or mode of living,the user of such information shall, within a reasonable period of time, upon theconsumer's written request for the reasons for such adverse action received within 60days after learning of such adverse action, disclose the nature of the information tothe consumer. The user of such information shall clearly and accurately disclose tothe consumer his right to make such written request at the time such adverse actionis communicated to the consumer.

(c) No person shall be held liable for any violation of this section if he shows by apreponderance of the evidence that at the time of the alleged violation hemaintained reasonable procedures to assure compliance with the provisions ofsubsections (a) and (b)."

1. Relation to Other Sections and Regulation B

Sections 606 and 615 are the only two sections that require users of reports tomake disclosures to consumers. Section 606 applies only to users of "investigativeconsumer reports." Creditors should not confuse compliance with section 615(a),which only requires disclosure of the name and address of the consumer reportingagency, and compliance with the Equal Credit Opportunity Act, 15 U.S.C. 1691 et seq.and Regulation B, 12 C.F.R. 202, which require disclosure of the reasons for adverseaction. Compliance with section 615(a), therefore, does not constitute compliancewith Regulation B.

2. Limited Scope of Requirements

The section does not require that creditors disclose their credit criteria or



standards or that employees furnish copies of personnel files to former employees.The section does not require that the user provide any kind of advance notification toconsumers before a consumer report is obtained. (See section 606 regarding notice ofinvestigative consumer reports.)

3. Method of Disclosure

The disclosures required by this section need not be made in writing. However,users will have evidence that they have taken reasonable steps to comply with thissection if they provide written disclosures and retain copies for at least two years, theapplicable statute of limitations for most civil liability actions under the FCRA.

4. Adverse Action Based on Direct Information

This section does not require that a user send any notice to a consumerconcerning adverse action regarding that consumer that is based neither oninformation from a consumer reporting agency nor on information from a third party.For example, no disclosures are required concerning adverse action based oninformation provided by the consumer in an application or based on past experiencein direct transactions with the consumer.

5. Creditors Using "Prescreened" Mailing Lists

A creditor is not required to provide notices regarding consumer reportingagencies that prepare mailing lists by "prescreening" because they do not involveconsumer requests for credit and credit has not been denied to consumers whosenames are deleted from a list furnished to the agency for use in this procedure. Seediscussion of "prescreening," under section 604(3) (A), item 6, supra.

6. Applicability to Users of Motor Vehicle Reports

An insurer that refuses to issue a policy, or charges a higher than normalpremium, based on a motor vehicle report is required to comply with subsection (a).

7. Securities and Insurance Transactions

A consumer report user that denies credit to a consumer in connection with asecurities transaction must provide the required notice, because the denial is of"credit * * * for personal purposes," unless the consumer engages in such transactionsas a business.

8. Denial of Employment

An employer must provide the notice required by subsection (a) to an individualwho has applied for employment and has been rejected based on a consumer report.



However, an employer is not required to send a notice when it decides not to offer aposition to an individual who has not applied for it, because in this case employmentis not "denied." (See discussion in section 606, item 4, supra.)

9. Adverse Action Involving Credit

A creditor must provide the required notice when it denies the consumer'srequest for credit (including a rejection based on a scoring system, where a creditreport received less than the maximum number of points possible and caused theapplication to receive an insufficient score), denies the consumer's request forincreased credit, grants credit in an amount less than the consumer requested, orraises the charge for credit.

10. Adverse Action Not Involving Credit, Insurance or Employment

The Act does not require that a report user provide any notice to consumerswhen taking adverse action not relating to credit, insurance or employment. Forexample, a landlord who refuses to rent an apartment to a consumer based on creditor other information in a consumer report need not provide the notice. Similarly, aparty that uses credit or other information in a consumer report as a basis for refusingto accept payment by check need not comply with this section. Checks havehistorically been treated as cash items, and thus such refusal does not involve a denialof credit, insurance or employment.

11. Adverse Action Based on Non-derogatory Adverse Information

A party taking adverse action concerning credit or insurance or denyingemployment, "wholly or partly because of information contained in a consumerreport," must provide the required notice, even if the information is not derogatory.For example, the user must give the notice if the denial is based wholly or partly onthe absence of a file or on the fact that the file contained insufficient references.

12. Name and Address of the Consumer Reporting Agency

The "section 615(a)" notice must include the consumer reporting agency's streetaddress, not just a post office box address.

13. Agency To Be Identified

The consumer report user should provide the name and address of theconsumer reporting agency from which it obtained the consumer report, even if thatagency obtained all or part of the report from another agency.

14. Denial Based Partly on a Consumer Report



A "section 615(a)" notice must be sent even if the adverse action is based onlypartly on a consumer report.

15. Denial of Credit Based on Information From "Third Parties"

Subsection (b) imposes requirements on a creditor when it denies (or increasesthe charge for) credit for personal, family or household purposes involving aconsumer, based on information from a "third party" source, which means a sourceother than the consumer reporting agency, the creditor's own files, or the consumer'sapplication (e.g., creditor, employer, landlord, or the public record). Where acreditor denies a consumer's application based on information obtained directly fromanother lender, even if the lender's name was furnished to the creditor by a consumerreporting agency, the creditor must give a "third party" disclosure.

16. Substance of Required "Third Party" Disclosures

When the adverse action is communicated to the consumer, the creditor mustclearly and accurately disclose to the consumer his or her right to make a writtenrequest for the disclosure of the nature of the third party information that led to theadverse action. Upon timely receipt of such a request, however, the creditor needdisclose only the nature of the information that led to the adverse action (e.g.,history of late rent payments or bad checks); it need not identify the source thatprovided the information or the criteria that led to the adverse action. A creditor maycomply with subsection (b) by providing a statement of the nature of the third partyinformation that led to the denial when it notifies the consumer of the denial. Astatement of principal, specific reasons for adverse action based on third partyinformation that is sufficient to comply with the requirements of the Equal CreditOpportunity Act (e.g., "unable to verify employment") is sufficient to constitutedisclosure of the "nature of the information" under subsection (b).



FCRA Commentary § 616 Civil Liability for Willful Noncompliance

Reference

Section 616 permits consumers who sue and prove willful noncompliance with the Actto recover actual damages, punitive damages, and the costs of the action, togetherwith reasonable attorney's fees.



FCRA Commentary § 617 Civil Liability for Negligent Noncompliance

Reference

Section 617 permits consumers who sue and prove negligent noncompliance with theAct to recover actual damages and the costs of the action, together with reasonableattorney's fees.



FCRA Commentary § 618 Jurisdiction of Courts; Limitation of Actions

Reference

Section 618 provides that any action brought under section 616 or section 617 may bebrought in any United States district court or other court of competent jurisdiction.Such suit must be brought within two years from the date on which liability arises,unless a defendant has materially and willfully misrepresented information the Actrequires to be disclosed, and the information misrepresented is material toestablishment of the defendant's liability. In that event, the action must be broughtwithin two years after the individual discovers the misrepresentation.



FCRA Commentary § 619 Obtaining Information Under False Pretense

Reference

Section 619 provides criminal sanctions against any person who knowingly and willfullyobtains information on a consumer from a consumer reporting agency under falsepretenses.


The presence of this provision does not excuse a consumer reporting agency'sfailure to follow reasonable procedures, as required by section 607(a), to limit thefurnishing of consumer reports to the purposes listed under section 604.



FCRA Commentary § 620 Unauthorized Disclosures by Officers or Employees

Reference

Section 620 provides criminal sanctions against any officer or employee of a consumerreporting agency who knowingly and willfully provides information concerning anindividual from the agency's file to a person not authorized to receive it.



FCRA Commentary § 621 Administrative Enforcement

Reference

This section gives the Federal Trade Commission authority to enforce the Act withrespect to consumer reporting agencies, users of reports, and all others, except to theextent that it gives enforcement jurisdiction specifically to some other agency. Thoseexcepted from the Commission's enforcement jurisdiction include certain financialinstitutions regulated by Federal agencies or boards, Federal credit unions, commoncarriers subject to acts to regulate commerce, air carriers, and parties subject to thePackers and Stockyards Act, 1921.

1. General

The Commission can use its cease-and-desist power and other procedural,investigative and enforcement powers which it has under the FTC Act to securecompliance, irrespective of commerce or any other jurisdictional tests in the FTC Act.

2. Geographic Coverage

The Commission's authority encompasses the United States, the District ofColumbia, the Commonwealth of Puerto Rico, and all United States territories butdoes not extend to activities outside those areas.

3. Status of Commission Commentary and Staff Interpretations

The FCRA does not give any Federal agency authority to promulgate ruleshaving the force and effect, of statutory provisions. The Commission has issued thisCommentary, superseding the eight formal Interpretations of the Act (16 C.F.R.600.1-600.8), previously issued pursuant to § 1.73 of the Commission's Rules, 16 C.F.R.1.73. The Commentary does not constitute substantive rules and does not have theforce or effect of statutory provisions. It constitutes guidelines to clarify the Act thatare advisory in nature and represent the Commission's views as to what particularprovisions of the Act mean. Staff opinion letters constitute staff interpretations of theAct's provisions, but do not have the force or effect of statutory provisions and, asprovided in § 1.72 of the Commission's Rules, 16 C.F.R. 1.72, do not bind theCommission.



FCRA Commentary § 622 Relation to State Laws

Reference

"This title does not annul, alter, affect, or exempt any person subject to theprovisions of this title from complying with the laws of any State with respect to thecollection, distribution, or use of any information on consumers, except to the extentthat those laws are inconsistent with any provision of this title, and then only to theextent of the inconsistency."

1. Basic Rule

State law is pre-empted by the FCRA only when compliance with inconsistentstate law would result in violation of the FCRA.

2. Examples of Statutes that are not Pre-empted

A State law requirement that an employer provide notice to a consumer beforeordering a consumer report, or that a consumer reporting agency must provide theconsumer with a written copy of his file, would not be pre-empted, because a partythat complies with such provisions would not violate the FCRA.

3. Examples of Statutes that are Pre-empted

A State law authorizing grand juries to compel consumer reporting agencies toprovide consumer reports, by means of subpoenas signed by a court clerk, ispre-empted by the FCRA's requirement that such reports be furnished only pursuant toan "order of the court" signed by a judge (section 604(1)), or furnished for otherpurposes not applicable to grand jury subpoenas (section 604(2)-(3)), and by section607(a). A State statute requiring automatic disclosure of a deletion or disputestatement to every person who has previously received a consumer report containingthe disputed information, regardless of whether the consumer designates such personsto receive this disclosure, is pre-empted by section 604 of the FCRA, which permitsdisclosure only for specified, permissible purposes and by section 607(a), whichrequires consumer reporting agencies to limit the furnishing of consumer reports topurposes listed under section 604. Absent a specific designation by the consumer, theconsumer reporting agency has no reason to believe all past recipients would have apresent, permissible purpose to receive the reports.

4. Statute Providing Access for Enforcement Purposes

A State "little FCRA" that permits State officials access to a consumer reportingagency's files for the purpose of enforcing that statute just as Federal agencies are



permitted access to such files under the FCRA, is not pre-empted by the FCRA.

(Information collection requirements in this appendix approved by the Office ofManagement and Budget under control number 3084-0091)