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AMENDMENTS TO THE FAIR CREDIT REPORTING

ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON
CONSUMER AFFAIRS AND COINAGE

OF THE

COMMITTEE ON BANKING, FINANCE AND

URBAN AFFAIRS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIRST CONGRESS

SECOND SESSION

JUNE 12, 1990

Printed for the use of the Committee on Banking, Finance and Urban Affairs

Serial No. 101-132

U.S. GOVERNMENT PRINTING OFFICE

31-3135

WASHINGTON : 1990

For sale by the Superintendent of Documents, Congressional Sales Office

U.S. Government Printing Office, Washington, DC 20402

HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS

HENRY B. GONZALEZ, Texas, Chairman FRANK ANNUNZIO, Illinois

CHALMERS P. WYLIE, Ohio WALTER E. FAUNTROY, District of

JIM LEACH, Iowa Columbia

NORMAN D. SHUMWAY, California STEPHEN L. NEAL, North Carolina

STAN PARRIS, Virginia CARROLL HUBBARD, Jr., Kentucky

BILL MCCOLLUM, Florida JOHN J. LAFALCE, New York

MARGE ROUKEMA, New Jersey MARY ROSE OAKAR, Ohio

DOUG BEREUTER, Nebraska BRUCE F. VENTO, Minnesota

DAVID DREIER, California DOUG BARNARD, JR., Georgia

JOHN HILER, Indiana CHARLES E. SCHUMER, New York

THOMAS J. RIDGE, Pennsylvania BARNEY FRANK, Massachusetts

STEVE BARTLETT, Texas RICHARD H. LEHMAN, California

TOBY ROTH, Wisconsin BRUCE A. MORRISON, Connecticut

ALFRED A. (AL) MCCANDLESS, California MARCY KAPTUR, Ohio

JIM SAXTON, New Jersey BEN ERDREICH, Alabama

PATRICIA F. SAIKI, Hawaii THOMAS R. CARPER, Delaware

JIM BUNNING, Kentucky ESTEBAN EDWARD TORRES, California RICHARD H. BAKER, Louisiana GERALD D. KLECZKA Wisconsin

CLIFF STEARNS, Florida BILL NELSON, Florida

PAUL E. GILLMOR, Ohio
PAUL E. KANJORSKI Pennsylvania

BILL PAXON, New York
ELIZABETH J. PATTERSON, South Carolina
JOSEPH P. KENNEDY II, Massachusetts
FLOYD H. FLAKE, New York
KWEISI MFUME, Maryland
DAVID E. PRICE, North Carolina
NANCY PELOSI, California
JIM MCDERMOTT, Washington
PETER HOAGLAND, Nebraska
RICHARD E. NEAL, Massachusetts
ELIOT L. ENGEL, New York

KE21
Bs36

1990 d

SUBCOMMITTEE ON CONSUMER AFFAIRS AND COINAGE

RICHARD H. LEHMAN, California, Chairman HENRY B. GONZALEZ, Texas

JOHN HILER, Indiana NANCY PELOSI, California

CHALMERS P. WYLIE, Ohio CARROLL HUBBARD, JR., Kentucky

THOMAS J. RIDGE, Pennsylvania DOUG BARNARD, JR., Georgia

DAVID DREIER, California CHARLES E. SCHUMER, New York

STEVE BARTLETT, Texas
MARCY KAPTUR, Ohio

JIM SAXTON, New Jersey
BEN ERDREICH, Alabama
DAVID E. PRICE, North Carolina

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691 477 710 750 746 769 556 768 511 322 622 631 447

Comptroller of the Currency, statement
Computer Professionals for Social Responsibility, statement
Consumers Union, questions with response to Mr. Lehman
Deluxe Corporation, statement .......
Direct Marketing Association, statement and pamplets entitled "Mailing List

Practices" and "Personal Information Protection
Equifax, Inc., report on Consumers in the Information Age
Fannie Mae, statement.
Federal Deposit Insurance Corporation, statement
Federal Reserve System, statement
Freddie Mac, statement.
Goldman, Janlori, questions with response to Mr. Lehman
Government National Mortgage Association, statement
Guiton, Bonnie, questions with response to Mr. Lehman
Holstein, Elgie, questions with response to Mr. Lehman..
Hoerr, Kenneth E., questions with response to Mr. Lehman.
Kurth, Walter R., questions with response to Mr. Lehman
Lehman, Hon. Richard, miscellaneous letters of correspondence
MasterCard International, Inc., and VISA U.S.A. Inc.

Letter to Mr. Lehman dated June 27, 1990....

Statement.......
Mierzwinski, Edmund, questions with response to Mr. Lehman.
Miscellaneous newspaper articles....
Montgomery County Government, letter dated June 27, 1990
Mortgage Bankers Association of America, statement...
National Taxpayers Union, letter dated June 19, 1990.
Noonan, Jean, questions with response to Mr. Lehman
Office of Thrift Supervision, statement.....
Sovran Financial Corporation, statement.
State of Minnesota, Hubert H. Humphrey, III, letter to Mr. Lehman dated

June 7, 1990..
Sullivan, Marcia Z., questions with response to Mr. Lehman
Text of H.R. 4213...
Text of H.R. 4122.
Text of H.R. 3740.
The Attorney General of Texas, letter to Mr. Lehman dated June 7, 1990..
The Attorneys General of Texas, Massachusetts, West Virginia, Vermont and

California, letter to Mr. Lehman dated July 2, 1990........
The Independent Bankers Association of America, statement
The National Apartment Association, statement......
The National Council of Savings Institutions, statement
TRW, booklet entitled "You and TRW's Credit Reporting Service"
TRW Target Marketing Services, booklet entitled "The Perfect Match”
United States League of Savings Institutions, statement.

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AMENDMENTS TO THE FAIR CREDIT

REPORTING ACT

Tuesday, June 12, 1990

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON CONSUMER AFFAIRS AND COINAGE,
COMMITTEE ON BANKING, FINANCE, AND URBAN AFFAIRS,

Washington, DC. The subcommittee met, pursuant to call, at 9:30 a.m., in room 2322, Rayburn House Office Building, Hon. Richard Lehman (chairman of the subcommittee) presiding.

Present: Chairman Lehman, Representatives Hubbard, Barnard, Schumer, Price and Hiler.

Chairman LEHMAN. Good morning. Today the Subcommittee on Consumer Affairs and Coinage convenes to hear testimony on legislation to amend the Fair Credit Reporting Act.

As everyone knows, this subcommittee held an oversight hearing in September 1989 to review the effectiveness of the act. This law, 20 years old this year, was intended to guarantee that as credit reporting agencies work to provide consumer information to businesses, they would also work to ensure the confidentiality, accuracy, relevancy, and proper use of such information.

Three bills were introduced subsequent to the hearing-H.R. 3740, Mr. Rinaldo's bill; H.R. 4122, Mr. Schumer's bill; and my bill, H.R. 4213. Each shares some provisions as we all incorporated at least some of the many amendments suggested at the hearing.

[The text of the bills can be found in the appendix.]

Chairman LEHMAN. My bill, H.R. 4213, is a comprehensive bill that would amend the law in a number of ways. The purpose is to give consumers a better understanding of how to use the rights they have under the law, and to involve them more in the reporting process. It seems to me, too, that with an educated, involved consumer population, creditors could count on more accurate and up to date reports.

Briefly, my bill would require reporting agencies to investigate inaccuracies and make a good faith effort to correct them within 30 days of a consumer's request to do so. It would require that reporting agencies send consumers written notice when they have finished investigating so that the consumer can know the outcome. My bill would place a requirement on persons who furnish information to reporting agencies to establish procedures in order to ensure that the information they supply is as accurate as possible. Under my bill, consumers would have the right to one free copy of their report a year, if they request it, which should make it easier

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