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Fair Credit Reporting: 13.2.4.5 “Larger Participants” in Consumer Financial Markets, Including CRAs

The CFPB has exclusive enforcement authority, relative to other federal agencies, over any person who “is a larger participant of a market for other consumer financial products or services, as defined by rule.”27 The Dodd-Frank Act required the CFPB to issue a rule defining such “larger participants.”28 The CFPB’s authority over CRAs depends on whether they meet the definition of “larger participant,” which includes the “Big Three” nationwide CRAs

Fair Credit Reporting: Section 604(e)

Section 604(e) requires CRAs to allow consumers to opt out of prescreened offers. CRAs must establish and maintain a toll-free telephone number that a consumer can call to opt out. Nationwide CRAs must establish a joint notification system for processing prescreening opt-outs.

1. RELATION TO OTHER SECTIONS

Fair Credit Reporting: Section 604(f)

Section 604(f) prohibits any person from using or obtaining a consumer report, unless the person obtains the report for a permissible purpose and certifies that it will be used for that permissible purpose.

Fair Credit Reporting: Section 604(g)

Section 604(g) generally prohibits CRAs from furnishing medical information in consumer reports without consumer consent, unless the information being furnished pertains to medical debts, and the information is coded to avoid identifying the provider and nature of the transaction, prohibits creditors from obtaining uncoded medical information for credit purposes, with limited exceptions, requires parties who receive medical information to keep such information confidential, and directs the Federal financial agencies to promulgate rules permitting the transmission of certai

Fair Credit Reporting: Section 605(a)

Section 605(a) generally provides time limits beyond which CRAs cannot include information in consumer reports, subject to exceptions set forth in section 605(b).

1. GENERAL

Fair Credit Reporting: Section 605(a)(1)

Section 605(a)(1) prohibits CRAs from reporting “Cases under title 11 of the United States Code or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.”

1. RELATION TO OTHER SUBSECTIONS

Fair Credit Reporting: Section 605(a)(2)

Section 605(a)(2) prohibits CRAs from reporting “Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.”

1. OPERATIVE DATE

Fair Credit Reporting: Section 605(a)(3)

Section 605(a)(3) prohibits CRAs from reporting “Paid tax liens which, from date of payment, antedate the report by more than seven years.”

1. INAPPLICABILITY TO UNPAID LIENS

If a valid tax or other lien remains unsatisfied, it may be reported as long as it remains filed against the consumer because this subsection addresses only paid tax liens.253 See comment 605(a)(5)-2.

Fair Credit Reporting: Section 605(a)(4)

Section 605(a)(4) prohibits CRAs from reporting “Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.”

1. RELATION TO OTHER SECTIONS

Fair Credit Reporting: Section 605(a)(5)

Section 605(a)(5) prohibits CRAs from reporting “Any other adverse item of information, other than convictions of crimes which antedates the report by more than seven years.”

1. RELATION TO OTHER SUBSECTIONS

Fair Credit Reporting: Section 605(a)(6)

Section 605(a)(6) prohibits a CRA from reporting the name or contact information of any medical information furnisher that has notified the CRA of its status, unless (1) such information is coded so that a recipient cannot infer the specific provider or the nature of the services; or (2) the report is being provided to a life or health insurance company.

1. RELATION TO OTHER SECTIONS

Fair Credit Reporting: VI. Other Significant Interpretations in the FTC Staff Summary

The Staff Summary also reflects the statutory modifications made to the FCRA over the years,56 rules issued by the Commission and other Agencies as directed by the 2003 FACT Act, many of the interpretations reflected in the over 80 informal staff opinion letters issued over the last two decades,57 and the staff’s experience from significant enforcement actions. The Staff Summary notes, where appropriate, the related staff opinion letters and enforcement actions.

Fair Credit Reporting: OVERVIEW

This Staff Summary contains the Federal Trade Commission staff’s interpretations of the Fair Credit Reporting Act. It includes many of the interpretations from the “Statement of General Policy or Interpretations” that the Commission published in May 1990, 16 CFR Part 600. It includes informal guidance staff has provided to the public in the ensuing years and our experience in enforcing the FCRA. The Staff Summary does not have the force or effect of regulations or statutory provisions.

Fair Credit Reporting: REFERENCE TO MULTIPLE SECTIONS

Reference to several different provisions of the FCRA is frequently required in order to discuss or provide guidance on an issue. For some sections and subsections of the FCRA, the Staff Summary discusses the most important and common overlapping references under the heading “Relation to other (sub)sections.”

Fair Credit Reporting: SUMMARY REFERENCES TO FCRA

The Staff Summary should be used in conjunction with the text of the FCRA. In some cases, the Staff Summary includes a partial summary of the statute, rather than the full text, as a preamble to discussion of issues pertaining to various sections and subsections. These summary statements of the law (often very abbreviated, especially for sections where no interpretations are offered) should not be used as a substitute for the statutory text.

Fair Credit Reporting: TERMINOLOGY

Several terms that are used repeatedly are abbreviated for convenience:

“Board” means the Board of Governors of the Federal Reserve System.

“Bureau” means the Bureau of Consumer Financial Protection, which assumed some of the Commission’s FCRA responsibilities on July 21, 2011, pursuant to Title X of the Consumer Financial Protection Act of 2010 (Public Law 111-203).

“CFR” means the Code of Federal Regulations.

“Commission” means the Federal Trade Commission.

Fair Credit Reporting: CITATIONS TO FACT ACT RULES

Some of the rules required by the FACT Act were promulgated by the Commission jointly or in consultation with some or all of the Federal financial agencies. This Staff Summary cites only the Commission’s FCRA regulations, which are set forth in 16 CFR Parts 601–699. The other agencies’ regulations may be found in 12 CFR Parts 41, 222, 334, 571, and 717.

Fair Credit Reporting: Section 601—Short Title

“This title may be cited as the Fair Credit Reporting Act.”

The FCRA is Title VI of the Consumer Credit Protection Act, which also includes other federal statutes relating to consumer credit, such as the Truth in Lending Act (Title I), the Credit Repair Organizations Act (Title II-A), the Equal Credit Opportunity Act (Title VII), and the Fair Debt Collection Practices Act (Title VIII).

Fair Credit Reporting: Section 602—Findings and Purpose 15 USC 1681

Section 602 recites the Congressional findings regarding the significant role of CRAs in the nation’s financial system, and states that the basic purpose of the FCRA is to require CRAs to adopt reasonable procedures for providing information to credit grantors, insurers, employers and others in a manner that is fair and equitable to the consumer with regard to confidentiality, accuracy, and the proper use of such information.