(3) Section 7(a) (3) would require the creditor, when requested, after making an adverse decision based wholly or partly on information in a consumer report, to provide both a copy of the report and, pursuant to §7(a)(2) (C), provide any information needed to translate into "common terms" any codes or abbreviations used. Aside from the obvious fact that this requirement would be totally redundant to $609 of the proposed to be amended FCRA, we submit that the only source of explanation of the consumer report should come from its source, the consumer reporting agency. (4) Section 8 (c) would require creditors, when information on a credit report is disputed, to either convey the substance of the dispute to the consumer reporting agency or supply sufficient information to the consumer so that he can so notify the agency. There are no guidelines as to what the agency is to do with this information if it is conveyed by the creditor. Perform another investigation? File the dispute without investigation? "corrected" reports to previous recipients? Such a requirement could result in redundant investigations on the part of the agency at great expense.

Send

(5) Section 11(c) gives broad enforcement authority to the Federal Trade Commission, utilizing the same language used in previous consumer credit legislation. We submit that it is time to stop granting the FTC the broad mandate which continues to be conferred upon it by Congress. A violation of this bill should be only that and not also a violation of the Federal Trade Commission Act. The FTC already possesses more authority than any agency should have in a democratic society. Congress should stop giving

it more.

In summation, then, both titles of S. 1928 are filled with redundancies, capable of broad misinterpretation, burdensome to both creditor and consumer reporting agency (and thus costly to the consumer) and will ultimately endanger the system of information flow which has worked so well for the Nation.

As the National Commission or Consumer Finance so ably put it, "The increasing importance of data housed in credit reporting agencies is of major importance to consumers and credit grantors. On the one hand, consumers must be assured of the accuracy of the information...On the other hand, credit grantors are also concerned that credit records be comprehensive and accurate. There must be no barrier to the prompt flow of adequate credit information into and out of the data base. Any laws or actions or inaction by industry that impede these flows also lower the availability of credit and raise its price to consumers."8

8. Consumer Credit in the United States, op. cit., p. 213.

Direct Mail/Marketing Association, Inc.

1730 K Street N.W., Suite 905, Washington, DC 20006 (202) 347-1222 ⚫Telex 89 2761

ma

May 7, 1980

The Honorable Paul E. songas

Chairman, Subcommittee on Consumer Affairs

Committee on Banking, Housing and Urban Affairs

342 Russell Senate Cffice Building

Washington, D.C. 20510

Dear Senator Tsongas:

The Subcommittee on Consumer Affairs is now considering S. 1928, the Fair Financial Information Practices Act of 1979. Under Title II, Section 3 (a) (5) (A), there is a provision which is of concer: to the Direct Mail/Marketing Association.

As we understand it, under this section a mail order company, for instance, could not rent its charge accourt list unless it first sent all the names on the list a notice providing the chance to indicate the desire not to have their names disclosed for marketing purposes.

We support the principic of giving consumers the choice of whether or not they want their name rented. This was a recommendation of the Privacy Protection Study Commission and we have adopted it fully. It is the fact that this bill goes against the recommendation of that same Commission in another area which troubles us the recommendation that "a person who maintains a mailing list should not be required by law to remove an individual's name and address from such a list upon request of that individual except as already provided by law."

In making that recommendation, Je Pracy Protection Stud Commission (PPSC) took note of the efforts of the direct marketing industry to introduce and promote the Mal Preference Service which allows people to have their names removed from the majority of mailing lists by completing one form. It was because of lus sincere and effective effort at self-regulation that the PPSC determined that a federal law was not necessary.

If it was not necessary in 1976, we believe it is even less so now. Since the PPSC Report was published, ne Direct Mail/Marketing Association has gone to extraordinary lengths to promote voluntary compliance with the Report's recommendations. We have urged not only our membership of some 2,000 companies to offer the name removal option before renting their lists, but we have, at our own expense, written to every person or company registered as renting or owning a list of names, to urge that they offer this option. We have taken space in magazines and on television to bring the Mail Preference Service to the attention of a wide audience - perhaps you have seen our Bess Myerson booklet referred to in such ads. We have published a brochure spelling out ways in which mailers who use lists can comply with the recommendations of the PPSC. (A copy of this brochure "Do You Want the Freedom to Mail?" and other material referred to here is being sent to you under separate cover.)

As a result of all these efforts, we can now report that in 1979 approximately one billion pieces of mai were sent to consumers offering them the opportunity to have their names removed from lists.

In addition, serious thought should be given to the technological limitations of name removal. Often, because of inadequate or unclear information, the correct name cannot be removed from a computer maintained list. To subject direct marketers to civil penalities because of this would be unfair.

Senator Tsongas, we believe that Congress should applaud and encourage the efforts of the direct mail industry to self-regulate. We feel that such activity should be encouraged for its own sake and because of the saving to the taxpayer in making further regulatory action unnecessary. We urge you to drop from S. 1928 the section which would mandate offering the name removal option and let us continue our vital effort at self-regulation.

Sincerely,

Richard A. Bartn

Richard A. Barton

Vice President/Government Affairs

RAB:kwb

cc: Mr. John E. Quinn

INTERBANK CARD ASSOCIATION 888 SEVENTH AVENUE, NEW YORK, NY 10019 (212) 974-5700

Enclosed is the statement of the Interbank Card Association on S.1928, the Fair Financial Information Practices Act. This statement is submitted to you for inclusion in the record of proceedings on S.1928.

I understand that a revised draft of this bill, or portions of it, will be prepared and circulated to interested parties for comment. Interbank would welcome the opportunity to review a revision of S.1928 and to offer its comments in such an effort. In addition, if you or your staff have any questions concerning our comments or need for further information, Interbank would be pleased to be of assistance.