CITE

    15 USC Sec. 1681                                            01/05/2009

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 41 - CONSUMER CREDIT PROTECTION
    SUBCHAPTER III - CREDIT REPORTING AGENCIES

HEAD

    Sec. 1681. Congressional findings and statement of purpose

STATUTE

    (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, and unfair credit reporting methods
    undermine the public confidence which is essential to the continued
    functioning of the banking system.
      (2) An elaborate mechanism has been developed for investigating
    and evaluating the credit worthiness,(!1) credit standing, credit
    capacity, character, and general reputation of consumers.
      (3) Consumer reporting agencies have assumed a vital role in
    assembling and evaluating consumer credit and other information on
    consumers.
      (4) There is a need to insure that consumer reporting agencies
    exercise their grave responsibilities with fairness, impartiality,
    and a respect for the consumer's right to privacy.
    (b) Reasonable procedures
      It is the purpose of this subchapter to require that consumer
    reporting agencies adopt reasonable procedures for meeting the
    needs of commerce for consumer credit, personnel, insurance, and
    other information in a manner which is fair and equitable to the
    consumer, with regard to the confidentiality, accuracy, relevancy,
    and proper utilization of such information in accordance with the
    requirements of this subchapter.

SOURCE

    (Pub. L. 90-321, title VI, Sec. 602, as added Pub. L. 91-508, title
    VI, Sec. 601, Oct. 26, 1970, 84 Stat. 1128.)

MISCELLANEOUS

                     EFFECTIVE DATE OF 2003 AMENDMENT
      Pub. L. 108-159, Sec. 3, Dec. 4, 2003, 117 Stat. 1953, provided
    that: "Except as otherwise specifically provided in this Act [see
    Short Title of 2003 Amendment note set out under section 1601 of
    this title] and the amendments made by this Act -
        "(1) before the end of the 2-month period beginning on the date
      of enactment of this Act [Dec. 4, 2003], the Board and the
      Commission shall jointly prescribe regulations in final form
      establishing effective dates for each provision of this Act; and
        "(2) the regulations prescribed under paragraph (1) shall
      establish effective dates that are as early as possible, while
      allowing a reasonable time for the implementation of the
      provisions of this Act, but in no case shall any such effective
      date be later than 10 months after the date of issuance of such
      regulations in final form."
    [For final rules adopted by Board of Governors of the Federal
    Reserve System and Federal Trade Commission establishing effective
    dates for provisions of Pub. L. 108-159, see 68 F.R. 74467 (joint
    interim final rules) and 69 F.R. 6526 (joint final rules).]
                              EFFECTIVE DATE
      Section 504(d) of Pub. L. 90-321, as added by Pub. L. 91-508,
    title VI, Sec. 602, Oct. 26, 1970, 84 Stat. 1136, provided that:
    "Title VI [enacting this subchapter] takes effect upon the
    expiration of one hundred and eighty days following the date of its
    enactment [Oct. 26, 1970]."
                                SHORT TITLE
      This subchapter known as the "Fair Credit Reporting Act", see
    Short Title note set out under section 1601 of this title.
    STUDY OF EFFECTS OF CREDIT SCORES AND CREDIT-BASED INSURANCE SCORES
          ON AVAILABILITY AND AFFORDABILITY OF FINANCIAL PRODUCTS
      Pub. L. 108-159, title II, Sec. 215, Dec. 4, 2003, 117 Stat.
    1984, provided that:
      "(a) Study Required. - The Commission and the Board, in
    consultation with the Office of Fair Housing and Equal Opportunity
    of the Department of Housing and Urban Development, shall conduct a
    study of -
        "(1) the effects of the use of credit scores and credit-based
      insurance scores on the availability and affordability of
      financial products and services, including credit cards,
      mortgages, auto loans, and property and casualty insurance;
        "(2) the statistical relationship, utilizing a multivariate
      analysis that controls for prohibited factors under the Equal
      Credit Opportunity Act [15 U.S.C. 1691 et seq.] and other known
      risk factors, between credit scores and credit-based insurance
      scores and the quantifiable risks and actual losses experienced
      by businesses;
        "(3) the extent to which, if any, the use of credit scoring
      models, credit scores, and credit-based insurance scores impact
      on the availability and affordability of credit and insurance to
      the extent information is currently available or is available
      through proxies, by geography, income, ethnicity, race, color,
      religion, national origin, age, sex, marital status, and creed,
      including the extent to which the consideration or lack of
      consideration of certain factors by credit scoring systems could
      result in negative or differential treatment of protected classes
      under the Equal Credit Opportunity Act, and the extent to which,
      if any, the use of underwriting systems relying on these models
      could achieve comparable results through the use of factors with
      less negative impact; and
        "(4) the extent to which credit scoring systems are used by
      businesses, the factors considered by such systems, and the
      effects of variables which are not considered by such systems.
      "(b) Public Participation. - The Commission shall seek public
    input about the prescribed methodology and research design of the
    study described in subsection (a), including from relevant Federal
    regulators, State insurance regulators, community, civil rights,
    consumer, and housing groups.
      "(c) Report Required. -
        "(1) In general. - Before the end of the 24-month period
      beginning on the date of enactment of this Act [Dec. 4, 2003],
      the Commission shall submit a detailed report on the study
      conducted pursuant to subsection (a) to the Committee on
      Financial Services of the House of Representatives and the
      Committee on Banking, Housing, and Urban Affairs of the Senate.
        "(2) Contents of report. - The report submitted under paragraph
      (1) shall include the findings and conclusions of the Commission,
      recommendations to address specific areas of concerns addressed
      in the study, and recommendations for legislative or
      administrative action that the Commission may determine to be
      necessary to ensure that credit and credit-based insurance scores
      are used appropriately and fairly to avoid negative effects."
       FTC STUDY OF ISSUES RELATING TO THE FAIR CREDIT REPORTING ACT
      Pub. L. 108-159, title III, Sec. 318, Dec. 4, 2003, 117 Stat.
    1998, provided that:
      "(a) Study Required. -
        "(1) In general. - The Commission shall conduct a study on ways
      to improve the operation of the Fair Credit Reporting Act [15
      U.S.C. 1681 et seq.].
        "(2) Areas for study. - In conducting the study under paragraph
      (1), the Commission shall review -
          "(A) the efficacy of increasing the number of points of
        identifying information that a credit reporting agency is
        required to match to ensure that a consumer is the correct
        individual to whom a consumer report relates before releasing a
        consumer report to a user, including -
            "(i) the extent to which requiring additional points of
          such identifying information to match would -
         "(I) enhance the accuracy of credit reports; and
         "(II) combat the provision of incorrect consumer reports to
          users;
            "(ii) the extent to which requiring an exact match of the
          first and last name, social security number, and address and
          ZIP Code of the consumer would enhance the likelihood of
          increasing credit report accuracy; and
            "(iii) the effects of allowing consumer reporting agencies
          to use partial matches of social security numbers and name
          recognition software on the accuracy of credit reports;
          "(B) requiring notification to consumers when negative
        information has been added to their credit reports, including -
            "(i) the potential impact of such notification on the
          ability of consumers to identify errors on their credit
          reports; and
            "(ii) the potential impact of such notification on the
          ability of consumers to remove fraudulent information from
          their credit reports;
          "(C) the effects of requiring that a consumer who has
        experienced an adverse action based on a credit report receives
        a copy of the same credit report that the creditor relied on in
        taking the adverse action, including -
            "(i) the extent to which providing such reports to
          consumers would increase the ability of consumers to identify
          errors in their credit reports; and
            "(ii) the extent to which providing such reports to
          consumers would increase the ability of consumers to remove
          fraudulent information from their credit reports;
          "(D) any common financial transactions that are not generally
        reported to the consumer reporting agencies, but would provide
        useful information in determining the credit worthiness of
        consumers; and
          "(E) any actions that might be taken within a voluntary
        reporting system to encourage the reporting of the types of
        transactions described in subparagraph (D).
        "(3) Costs and benefits. - With respect to each area of study
      described in paragraph (2), the Commission shall consider the
      extent to which such requirements would benefit consumers,
      balanced against the cost of implementing such provisions.
      "(b) Report Required. - Not later than 1 year after the date of
    enactment of this Act [Dec. 4, 2003], the chairman of the
    Commission shall submit a report to the Committee on Banking,
    Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives containing a
    detailed summary of the findings and conclusions of the study under
    this section, together with such recommendations for legislative or
    administrative actions as may be appropriate."
               FTC STUDY OF THE ACCURACY OF CONSUMER REPORTS
      Pub. L. 108-159, title III, Sec. 319, Dec. 4, 2003, 117 Stat.
    1999, provided that:
      "(a) Study Required. - Until the final report is submitted under
    subsection (b)(2), the Commission shall conduct an ongoing study of
    the accuracy and completeness of information contained in consumer
    reports prepared or maintained by consumer reporting agencies and
    methods for improving the accuracy and completeness of such
    information.
      "(b) Biennial Reports Required. -
        "(1) Interim reports. - The Commission shall submit an interim
      report to the Congress on the study conducted under subsection
      (a) at the end of the 1-year period beginning on the date of
      enactment of this Act [Dec. 4, 2003] and biennially thereafter
      for 8 years.
        "(2) Final report. - The Commission shall submit a final report
      to the Congress on the study conducted under subsection (a) at
      the end of the 2-year period beginning on the date on which the
      final interim report is submitted to the Congress under paragraph
      (1).
        "(3) Contents. - Each report submitted under this subsection
      shall contain a detailed summary of the findings and conclusions
      of the Commission with respect to the study required under
      subsection (a) and such recommendations for legislative and
      administrative action as the Commission may determine to be
      appropriate."

DEFINITIONS

      Pub. L. 108-159, Sec. 2, Dec. 4, 2003, 117 Stat. 1953, provided
    that: "As used in this Act [see Short Title of 2003 Amendment note
    set out under section 1601 of this title] -
        "(1) the term 'Board' means the Board of Governors of the
      Federal Reserve System;
        "(2) the term 'Commission', other than as used in title V [20
      U.S.C. 9701 et seq.], means the Federal Trade Commission;
        "(3) the terms 'consumer', 'consumer report', 'consumer
      reporting agency', 'creditor', 'Federal banking agencies', and
      'financial institution' have the same meanings as in section 603
      of the Fair Credit Reporting Act [15 U.S.C. 1681a], as amended by
      this Act; and
        "(4) the term 'affiliates' means persons that are related by
      common ownership or affiliated by corporate control."

FOOTNOTE

    (!1) So in original. Probably should be "creditworthiness,".