The Congressional Research Service works exclusively for the Congress, conducting research, analyzing legislation, and providing information at the request of committees, Members, and their staffs. The Service makes such research available, without partisan bias, in many forms including studies, reports, compilations, digests, and background briefings. Upon request, CRS assists committees in analyzing legislative proposals and issues, and in assessing the possible effects of these proposals and their alternatives. The Service's senior specialists and subject analysts are also available for personal consultations in their respective fields of expertise. FAIR CREDIT REPORTING ACT: COMPARISON OF SUMMARY H.R. 194, H.R. 421, and H.R. 670 are three 102nd Congress bills that would amend the Fair Credit Reporting Act. (H.R. 633 is identical to H.R. 421.) All three bills would amend the provision of the FCRA that sets forth permissible purposes for which consumer reporting agencies may furnish consumer reports, and all three bills would limit prescreening in varying degrees. Prescreening is the practice whereby consumer reporting agencies furnish credit information on persons who have not applied for credit. H.R. 194 and H.R. 670 would shorten the length of time that specific types of credit information may be reported. These two bills would also give consumers greater rights to discover the information in their files. H.R. 194 and H.R. 421 would give consumers greater rights with respect to disputing the accuracy of information in their files. All three bills would impose responsibilities upon persons who furnish information to consumer reporting agencies, and all three would impose civil liability on such persons if they violate the FCRA. H.R. 194 and H.R. 670 would give the Federal Trade Commission the authority to promulgate regulations to enforce the FCRA, and H.R. 670 would authorize the FTC and other appropriate agencies to impose civil money penalties on persons who violate the FCRA. Finally, H.R. 194 would add an entire new title to the Consumer Credit Protection Act that would regulate credit repair organizations. FAIR CREDIT REPORTING ACT: COMPARISON OF This report analyzes the Fair Credit Reporting Act, 15 U.S.C. §§ 16811681t, and three 102nd Congress bills (H.R. 194, H.R. 421, H.R. 670), with respect to the bills' key provisions. (H.R. 633 is identical to H.R. 421.) I. Permissible Purposes of Consumer Reports The FCRA provides that "[a] consumer reporting agency may furnish a consumer report under the following circumstances and no other: . . . To a person it has reason to believe... intends to use the information in connection with a credit transaction involving the consumer . . . ; or intends to use the information in connection with the underwriting of insurance involving the consumer; or... ." 15 U.S.C. § 1681b (italics added). To be noted is that in several instances the statute uses the words "information in connection with,' and each instance is separated by the word "or."1 1 Section 1681b provides: A consumer reporting agency may furnish a consumer report under the (1) In response to the order of a court having jurisdiction to issue such an order, or a 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 (B) intends to use the information for employment (C) intends to use the information in connection (D) intends to use the information in connection CRS-2 H.R. 194 would change the words "information in connection with," each time they appear, to "information only in connection with." What, if any, effect this would have is unclear. At first glance it might appear that adding the word "only" would prevent consumer reporting agencies from furnishing consumer reports for reasons not listed in the statute. However, the words "and no other" in the statute (italicized above) already accomplish that purpose. Reading the change literally, it appears that its effect would be to preclude a consumer reporting agency from furnishing a report to a person who intended to use the information for more than one of the permissible purposes; e.g., in connection with both a credit transaction and the underwriting of insurance. It could be furnished only to persons who intended to use it only in connection with a credit transaction or only in connection with the underwriting of insurance. It seems doubtful, however, that this is what the bill's drafters intended. H.R. 194 would also add two new permissible purposes: "a review of any consumer's application for the rental or a dwelling or for check cashing privileges." H.R. 421 would change "To a person it has reason to believe" (intends to use the information in connection with one of the specified purposes) to "To any person which the consumer reporting agency has reasonable cause to believe." The effect of this change is not apparent. Perhaps the drafters construed the statute to permit a consumer reporting agency to furnish a consumer report even when it had a reason that would not constitute a "reasonable cause" to believe that a recipient of the report would use the information in connection with one of the specified purposes, and might have wished to change this. It seems likely, however, that a court would construe the words "reason to believe" as already implicitly requiring a reasonable cause to believe. H.R. 670 would add the following: "No consumer reporting agency may provide or use any information concerning any consumer, including the name and address of any consumer, for any purpose, including the creation of marketing plans or mailing lists, other than in connection with providing a consumer report on such consumer to the extent permitted under [the FCRA]." II. Prescreening The FCRA section on the permissible purposes of consumer reports seems to anticipate a situation in which a potential user of a consumer report, such as a credit card issuer, having received an application for credit from an individual, requests a consumer report on such individual. Prescreening is a practice under which the potential user contacts the consumer reporting agency before (E) otherwise has a legitimate business need for |