§ 1681m. Requirements on users of consumer reports
(a)
Duties of users taking adverse actions on basis of information contained in consumer reports
If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall—
(2)
provide to the consumer orally, in writing, or electronically—
(3)
provide to the consumer an oral, written, or electronic notice of the consumer’s right—
(A)
to obtain, under section
1681j of this title, a free copy of a consumer report on the consumer from the consumer reporting agency referred to in paragraph (2), which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and
(B)
to dispute, under section
1681i of this title, with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.
(b)
Adverse action based on information obtained from third parties other than consumer reporting agencies
(1)
In general
Whenever credit for personal, family, or household purposes involving a consumer is denied or the charge for such credit is increased either wholly or partly because of information obtained from a person other than a consumer reporting agency bearing upon the consumer’s credit worthiness,[1] credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, the user of such information shall, within a reasonable period of time, upon the consumer’s written request for the reasons for such adverse action received within sixty days after learning of such adverse action, disclose the nature of the information to the consumer. The user of such information shall clearly and accurately disclose to the consumer his right to make such written request at the time such adverse action is communicated to the consumer.
(2)
Duties of person taking certain actions based on information provided by 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 in subparagraph (C), the person shall—
(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 common ownership or affiliated by common corporate control to the person taking the action; and
(II)
bears on the credit worthiness,[1] credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living of the consumer; and
(c)
Reasonable procedures to assure compliance
No person shall be held liable for any violation of this section if he shows by a preponderance of the evidence that at the time of the alleged violation he maintained reasonable procedures to assure compliance with the provisions of this section.
(d)
Duties of users making written credit or insurance solicitations on basis of information contained in consumer files
(1)
In general
Any person who uses a consumer report on any consumer in connection with any credit or insurance transaction that is not initiated by the consumer, 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 the transaction a clear and conspicuous statement that—
(A)
information contained in the consumer’s consumer report was used in connection with the transaction;
(B)
the consumer received the offer of credit or insurance because the consumer satisfied the criteria for credit worthiness [2] or insurability under which the consumer was selected for the offer;
(C)
if applicable, the credit or insurance may not be extended if, after the consumer responds to the offer, the consumer does not meet the criteria used to select the consumer for the offer or any applicable criteria bearing on credit worthiness [2] or insurability or does not furnish any required collateral;
(2)
Disclosure of address and telephone number; format
A statement under paragraph (1) shall—
(3)
Maintaining criteria on file
A person who makes an offer of credit or insurance to a consumer under a credit or insurance transaction described in paragraph (1) shall maintain on file the criteria used to select the consumer to receive the offer, all criteria bearing on credit worthiness [2] or insurability, as applicable, that are the basis for determining whether or not to extend credit or insurance pursuant to the offer, and any requirement for the furnishing of collateral as a condition of the extension of credit or insurance, until the expiration of the 3-year period beginning on the date on which the offer is made to the consumer.
(4)
Authority of Federal agencies regarding unfair or deceptive acts or practices not affected
This section is not intended to affect the authority of any Federal or State agency to enforce a prohibition against unfair or deceptive acts or practices, including the making of false or misleading statements in connection with a credit 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 Union Administration, and the Commission shall jointly, with respect to the entities that are subject to their respective enforcement authority under section
1681s of this title—
(A)
establish and maintain guidelines for use by each financial institution and each creditor 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 to establish reasonable policies and procedures for implementing the guidelines established pursuant to subparagraph (A), to identify possible risks to account holders or 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 issuer receives notification of a change of address for an existing account, and within a short period 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, the card 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 and provides to the cardholder a means of promptly reporting incorrect address changes;
(2)
Criteria
(A)
In general
In developing the guidelines required by paragraph (1)(A), the agencies described in paragraph (1) shall identify patterns, practices, and specific forms 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 guidelines providing that when a transaction occurs with respect to a credit or deposit account that has been inactive for more than 2 years, the creditor or financial institution shall follow reasonable policies and procedures that provide for notice to be given to a consumer in a manner reasonably designed to reduce the likelihood of identity theft with respect to such account.
(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 collection a debt that such person has been notified under section
1681c–2 of this title has resulted from identity theft.
(2)
Applicability
The prohibitions of this subsection shall apply to all persons collecting a debt described in paragraph (1) after the date of a notification under paragraph (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 requires such repurchase because the debt has resulted from identity theft;
(g)
Debt collector communications concerning identity theft
If a person acting as a debt collector (as that term is defined in subchapter V of this chapter) on behalf of a third party that is a creditor or other user of a consumer report is notified that any information relating to a debt that the person is attempting to collect may be fraudulent or may be the result of identity theft, that person shall—
(h)
Duties of users in certain credit transactions
(1)
In general
Subject to rules prescribed as provided in paragraph (6), if any person 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 less favorable than the most favorable terms available to a substantial proportion of consumers from or through that person, based in whole or in part on a consumer report, the person shall provide an oral, written, or electronic notice to the consumer in the form and manner required by regulations prescribed in accordance with this subsection.
(2)
Timing
The notice required under paragraph (1) may be provided at the time of an application for, or a grant, extension, or other provision of, credit or the time of communication of an approval of an application for, or grant, extension, or other provision 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—
(4)
Other notice not sufficient
A person that is required to provide a notice under subsection (a) of this section cannot meet that requirement by providing a notice under this subsection.
(5)
Content and delivery of notice
A notice under this subsection shall, at a minimum—
(A)
include a statement informing the consumer that the terms offered to the consumer are set based on information from a consumer report;
(6)
Rulemaking
(B)
Content
Rules required by subparagraph (A) shall address, but are not limited to—
(ii)
clarification of the meaning of terms used in this subsection, including what credit terms are material, and when credit terms are materially less favorable;
(7)
Compliance
A person shall not be liable for failure to perform the duties required by this section if, at the time of the failure, the person maintained reasonable policies and procedures to comply with this section.
(8)
Enforcement
(B)
Administrative enforcement
This section shall be enforced exclusively under section
1681s of this title by the Federal agencies and officials identified in that section.
[1] So in original. Probably should be “creditworthiness,”.
[2] So in original. Probably should be “creditworthiness”.