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Fair Credit Reporting: 1.3.3.2.2 FTC informal opinion letters

Prior to the FTC Official Staff Commentary, FTC staff issued hundreds of informal opinion letters. After the FTC Official Staff Commentary, the FTC issued only a trickle of letters. The volume of letters grew after passage of the Consumer Credit Reporting Reform Act of 1996 (1996 Reform Act), which amended the FCRA in many respects, and then stopped after June 28, 2001.

Fair Credit Reporting: 1.3.3.2.3 CFPB Supervisory Highlights and Complaint Reports

The CFPB has issued periodic Supervisory Highlights reports that discuss general observations regarding the Bureau’s examinations of its supervisees, including CRAs and furnishers.136 Such reports might not provide “authoritative guidance” or adequately put CRAs or furnishers on notice that certain practices are unreasonable for purposes of finding that the CRA or furnisher acted recklessly137 and thus ar

Fair Credit Reporting: 1.3.3.2.4 FTC and CFPB studies

In addition to the Staff Summary and informal staff opinions, the FTC has issued a number of reports and studies on credit reporting issues.145

Since 2011, the CFPB has issued a number of such studies as well.146 Such reports do not constitute binding authority, in that they are not a statutory interpretation, rulemaking, or other agency action to which a court must give deference.147

Fair Credit Reporting: 1.4.1 Overview

The FCRA has a curious legislative history. The impulse behind the FCRA was to protect consumers from abuses of the consumer reporting industry. Nevertheless, initial consumer support for the legislation turned to opposition, and it was the consumer reporting industry that embraced the Act with enthusiasm. Moreover, the most extensive and considered hearings and discussions occurred in the House of Representatives, but the final language was drafted almost entirely by the Senate with only little regard for House considerations.

Fair Credit Reporting: 1.4.2 Early Legislative History

The very first proposal in Congress for a Fair Credit Reporting Act arose as a proposed amendment to the original Truth in Lending Act. During the 1968 debate on the Truth in Lending Act in the House of Representatives, Representative Zablocki offered an amendment which would have addressed the practices of CRAs.148 Although seldom recalled, Representative Zablocki might thus be considered the father of the FCRA.

Fair Credit Reporting: 1.4.3 Senate Bill 823

At the beginning of the new congressional session, Senator Proxmire and a bipartisan group of nine other senators introduced Senate Bill 823, the bill that would eventually become law. For the first time, the legislation was called the Fair Credit Reporting Act. It was designed to “establish certain Federal safeguards over the activities of CRAs in order to protect consumers against arbitrary, erroneous, and malicious credit information.”153

Fair Credit Reporting: 1.4.5 FCRA Amendments Before the Consumer Credit Reporting Reform Act of 1996

Although Senator Proxmire had his day with the House of Representatives, pressing his version of the FCRA on the House by parliamentary legerdemain, he came to have second thoughts. In 1973, Senator Proxmire rose on the floor of the Senate and proposed a series of FCRA amendments reflecting earlier House and consumer concerns.196 Acknowledging disappointment and shortcomings with the FCRA he drafted, he now proposed to correct deficiencies.

Fair Credit Reporting: 1.4.7 1997 and 1999 Amendments

In 1997, Congress adopted a narrow exception to the rule that a person using a report of employment must make certain disclosures to the consumer before taking an adverse action. The exception applies to certain national security uses by the federal government, properly documented; in those cases, the disclosure rule is superseded by other requirements.281

Fair Credit Reporting: 1.4.8 The USA PATRIOT Act

In 2001, Congress passed the USA PATRIOT Act which, among other changes, lightened the requirements for the FBI to gain access to consumer credit information.286 Specifically, Congress amended section 1681u to reduce the administrative certification requirements for FBI access to credit information. This amendment was one of many contained in the USA PATRIOT Act intended to protect against international terrorism.

Fair Credit Reporting: 1.4.9.1 Legislative History

In 2003, Congress made significant changes to the FCRA by passing the Fair and Accurate Credit Transactions Act (FACTA).287 The impetus for the FACTA amendments was the industry’s concern over the expiration of the FCRA’s preemption of certain state laws.288 These preemptions were due to sunset on January 1, 2004.289 With the end of preemption looming, the credit reporting and financial industry were concerned about states enacting enhanced consume

Fair Credit Reporting: 1.4.9.2 Key Provisions

The FACTA amendments contained several provisions intended to assist consumers with credit reporting problems. The Act provided for free annual credit reports from the “Big Three” nationwide CRAs and newly defined nationwide specialty CRAs (for instance, tenant screening, insurance, and employment).309 In addition to permanently extending the preemption provisions that were due to sunset, FACTA added a long list of additional preemptions.310

Fair Credit Reporting: 1.4.10.1 Post-FACTA National Security Amendments

In 2006, Congress modified the Fair Credit Reporting Act to respond to the perceived need for additional confidentiality in national security investigations.340 The Act was amended to allow the FBI to prohibit a CRA from disclosing that the FBI had sought information from the CRA.341 Similarly, if “the head of a government agency authorized to conduct investigations of intelligence or counterintelligence activities or analysis related to international terrorism, or his designee” makes the same c

Fair Credit Reporting: 1.4.10.2 Credit and Debit Card Truncation Clarification Act

A 2008 amendment pertained to FACTA’s provision that persons who accept credit cards or debit cards may print no more than the last five digits of the card or the expiration date on any electronically-printed receipt provided at the point of sale.345 Almost five years after FACTA, Congress amended the FCRA’s provision authorizing suits for willful noncompliance to specify that a merchant’s failure to comply with the prohibition on printing card expiration dates would not be the basis of an action for willful noncompliance, so long as the rece

Fair Credit Reporting: 1.4.11 The Dodd-Frank Act

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act),353 the most important change to consumer protection law since passage in the late 1960s–early 1970s of the various laws that make up the Consumer Credit Protection Act. The Dodd-Frank Act was passed as a response to consumer abuses in mortgages, credit cards, and other financial products.

Fair Credit Reporting: 1.4.12.1 The Red Flag Program Clarification Act of 2010

In 2010, Congress enacted a short, single-purpose amendment to the FCRA, the Red Flag Program Clarification Act of 2010 (the Clarification Act).366 Legislators had expressed concern that the Red Flag Guidelines mandated by FACTA367 could apply to small businesses that only incidentally extended credit, imposing a significant and expensive burden on them.368 Accordingly, the Clarification Act narrowed the scope of the term “creditor,” but only for p

Fair Credit Reporting: 1.4.12.2 Child Support FCRA Provisions in the 2015 Highway Funding Act

In 2015, Congress included an amendment to the Fair Credit Reporting Act as part of the Fixing America’s Surface Transportation (FAST) Act, an enormous bill that ostensibly provided funding for highway and transportation infrastructure, but also included numerous non-transportation-related provisions.373 The FAST Act amendment eliminated a notice that the FCRA had previously required when a consumer report was used to determine the amount of child support payments required of the consumer.374 Th

Fair Credit Reporting: 1.4.12.5 Debt Bondage Repair Act

In 2021, the FCRA was amended by a provision in the National Defense Authorization Act (NDAA), known as the Debt Bondage Repair Act.388 The Act sets up a process whereby a survivor of a “severe form of trafficking” or “sex trafficking” can prevent CRAs from reporting adverse information that is a result of such trafficking. If a survivor fits within these definitions, they must provide documentation of their trafficking status and what information was the result of trafficking.

Fair Credit Reporting: 4.3.9.1 Reporting of Charge-Offs

A charge-off occurs when a creditor moves a debt from profit to loss on its balance sheet.553 The FTC Staff Summary characterizes the phrase “charged to profit and loss” in Section 1681c(a)(4) as an action taken by a creditor to write off an account.554 Certain creditors, such as depository financial institutions, are subject to rules as to when delinquent debts must be charged off.555 However, one court has held that violation of this policy