Text: S.1786 — 115th Congress (2017-2018)All Information (Except Text)

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Introduced in Senate (09/11/2017)


115th CONGRESS
1st Session
S. 1786


To amend the Fair Credit Reporting Act to enhance the accuracy of credit reporting and provide greater rights to consumers who dispute errors in their credit reports, and for other purposes.


IN THE SENATE OF THE UNITED STATES

September 11, 2017

Mr. Schatz (for himself, Ms. Warren, Mr. Merkley, Mrs. McCaskill, Mr. Blumenthal, and Mr. Sanders) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs


A BILL

To amend the Fair Credit Reporting Act to enhance the accuracy of credit reporting and provide greater rights to consumers who dispute errors in their credit reports, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “Stopping Errors in Consumer Use and REporting Act of 2017” or the “SECURE Act of 2017”.

SEC. 2. Legal recourse for consumers.

(a) Injunctive relief.—The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended—

(1) in section 616 (15 U.S.C. 1681n)—

(A) in subsection (a), in the subsection heading, by striking “(a) In general.—” and inserting “(a) Damages.—”;

(B) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and

(C) by inserting after subsection (b) the following:

“(c) Injunctive relief.—

“(1) IN GENERAL.—In addition to any other remedy under this section, a court may award injunctive relief to require compliance with the requirements imposed under this title with respect to any consumer.

“(2) COSTS AND ATTORNEY’S FEES.—In the event of any successful action for injunctive relief under this subsection, a court may award to the prevailing party costs and reasonable attorney’s fees (as determined by the court) incurred by the prevailing party during the action.”; and

(2) in section 617 (15 U.S.C. 1681o)—

(A) in subsection (a), in the subsection heading, by striking “(a) In general.—” and inserting “(a) Damages.—”;

(B) by redesignating subsection (b) as subsection (c); and

(C) by inserting after subsection (a) the following:

“(b) Injunctive relief.—

“(1) IN GENERAL.—In addition to any other remedy under this section, a court may award injunctive relief to require compliance with the requirements imposed under this title with respect to any consumer.

“(2) COSTS AND ATTORNEY’S FEES.—In the event of any successful action for injunctive relief under this subsection, a court may award to the prevailing party costs and reasonable attorney’s fees (as determined by the court) incurred by the prevailing party during the action.”.

(b) Enforcement by federal trade commission.—Section 621(a)(2)(A) of the Fair Credit Reporting Act (15 U.S.C. 1681s(a)(2)(A)) is amended—

(1) in the subparagraph heading, by striking “(A) Knowing violations.—” and inserting “(A) Negligent, willful, or knowing violations.—”; and

(2) in the first sentence, by inserting “negligent, willful, or” before “knowing”.

SEC. 3. Increased requirements for consumer reporting agencies and furnishers of information.

(a) Provision and consideration of documentation provided by consumers.—The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended—

(1) in section 611 (15 U.S.C. 1681i)—

(A) in subsection (a)—

(i) in paragraph (2)—

(I) in subparagraph (A), in the second sentence, by inserting “, including all documentation provided by the consumer” after “received from the consumer or reseller”; and

(II) in subparagraph (B), by inserting “, including all documentation provided by the consumer,” after “from the consumer or the reseller”; and

(ii) in paragraph (4), by inserting “, including all documentation,” after “relevant information”; and

(B) in subsection (f)(2)(B)(ii), by inserting “, including all documentation,” after “relevant information”; and

(2) in section 623 (15 U.S.C. 1681s–2)—

(A) in subsection (a)(8)(E), by striking clause (ii) and inserting the following:

“(ii) review and consider all relevant information, including all documentation, provided by the consumer with the notice;”; and

(B) in subsection (b)(1), by striking subparagraph (B) and inserting the following:

“(B) review and consider all relevant information, including all documentation, provided by the consumer reporting agency under section 611(a)(2);”.

(b) Gathering and reporting of information relating to consumer disputes.—Section 611 of the Fair Credit Reporting Act (15 U.S.C. 1681i) is amended by adding at the end the following:

“(g) Gathering and reporting of information relating to consumer disputes.—

“(1) REPORTS REQUIRED.—The Bureau shall provide reports regarding the disputes described in subsection (a)(1) received by consumer reporting agencies in such intervals and to such parties as the Bureau deems appropriate.

“(2) GATHERING OF INFORMATION.—The Bureau shall prescribe rules for the gathering of information relating to disputes described in subsection (a)(1) received by consumer reporting agencies to be used in generating the reports under paragraph (1), including rules establishing—

“(A) the type and format of information that the Bureau shall receive from each consumer reporting agency; and

“(B) the frequency with which the Bureau shall receive the information from consumer reporting agencies.”.

(c) Accuracy compliance procedures.—Section 607 of the Fair Credit Reporting Act (15 U.S.C. 1681e) is amended by striking subsection (b) and inserting the following:

“(b) Accuracy of report.—

“(1) IN GENERAL.—A consumer reporting agency shall follow reasonable procedures when preparing a consumer report to ensure the maximum possible accuracy of the information concerning the individual to whom the consumer report relates.

“(2) BUREAU RULE TO ENSURE MAXIMUM POSSIBLE ACCURACY.—

“(A) PROPOSED RULE.—Not later than 1 year after the date of enactment of the Stopping Errors in Consumer Use and REporting Act of 2017, the Bureau shall issue a proposed rule establishing the procedures that a consumer reporting agency shall follow to ensure maximum possible accuracy of all consumer reports furnished by the agency in compliance with this subsection.

“(B) CONSIDERATIONS.—When formulating the rule required under subparagraph (A), the Bureau shall consider if requiring the matching of the following information would improve the accuracy of consumer reports:

“(i) The first name and last name of a consumer.

“(ii) The date of birth of a consumer.

“(iii) All 9 digits of the social security number of a consumer.

“(iv) Any other information that the Bureau determines would aid in ensuring maximum possible accuracy of all consumer reports furnished by consumer reporting agencies in compliance with this subsection.”.

(d) Responsibilities of furnishers of information to consumer reporting agencies.—Section 623(a)(8)(F)(i)(II) of the Fair Credit Reporting Act (15 U.S.C. 1681s–2(a)(8)(F)(i)(II)) is amended by inserting “, and does not include any new or additional information that would be relevant to a reinvestigation” before the period at the end.

(e) Disclosures to consumers.—Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended—

(1) in subsection (a)(3)(B)—

(A) in clause (i), by striking “and” at the end; and

(B) by striking clause (ii) and inserting the following:

“(ii) the address and telephone number of the person; and

“(iii) the permissible purpose of the person for obtaining the consumer report, including the specific type of credit product that is extended, reviewed, or collected, as described in section 604(a)(3)(A).”;

(2) in subsection (f)—

(A) by amending paragraph (7)(A) to read as follows:

“(A) supply the consumer with a credit score that—

“(i) is derived from a credit scoring model that is widely distributed to users by the consumer reporting agency for the purpose of any extension of credit or other transaction designated by the consumer who is requesting the credit score; or

“(ii) is widely distributed to lenders of common consumer loan products and predicts the future credit behavior of the consumer; and”; and

(B) in paragraph (8), by inserting “, except that a credit score shall be provided free of charge to the consumer if requested in connection with a free annual consumer report described in section 612(a)” before the period at the end; and

(3) in subsection (g)(1)—

(A) in subparagraph (A)(ii), by striking “subparagraph (D)” and inserting “subparagraph (C)”;

(B) in subparagraph (B)(ii), by striking “consistent with subparagraph (C)”;

(C) by striking subparagraph (C); and

(D) by redesignating subparagraphs (D) through (G) as subparagraphs (C) through (F), respectively.

(f) Notification requirements.—

(1) ADVERSE INFORMATION NOTIFICATION.—The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended—

(A) in section 612 (15 U.S.C. 1681j), by striking subsection (b) and inserting the following:

“(b) Free disclosure after notice of adverse action or offer of credit on materially less favorable terms.—

“(1) IN GENERAL.—Not later than 14 days after the date on which a consumer reporting agency receives a notification under subsection (a)(2) or (h)(6) of section 615, or from a debt collection agency affiliated with the consumer reporting agency, the consumer reporting agency shall make, without charge to the consumer, all disclosures required in accordance with the rules prescribed by the Bureau under section 609(h).

“(2) TRANSITION PERIOD.—During the period beginning on the effective date of the Stopping Errors in Consumer Use and REporting Act of 2017 and ending on the date on which the Bureau finalizes the rule required under section 609(h), a consumer reporting agency that is required to make disclosures under this subsection shall provide to the consumer a copy of the current credit report on the consumer and any other disclosures required under this Act or the Stopping Errors in Consumer Use and REporting Act of 2017, without charge to the consumer.”; and

(B) in section 615(a) (15 U.S.C. 1681m(a))—

(i) by redesignating paragraphs (2), (3), and (4) as paragraphs (3), (4), and (5), respectively;

(ii) by inserting after paragraph (1) the following:

“(2) direct the consumer reporting agency that provided the consumer report that was used in the decision to take the adverse action to provide the consumer with the disclosures described in section 612(b);”; and

(iii) in paragraph (5), as so redesignated—

(I) in the matter preceding subparagraph (A), by striking “of the consumer's right”;

(II) by striking subparagraph (A) and inserting the following:

“(A) that the consumer shall receive a copy of the consumer report with respect to the consumer, free of charge, from the consumer reporting agency that furnished the consumer report; and”; and

(III) in subparagraph (B), by inserting “of the right of the consumer” before “to dispute”.

(2) NOTIFICATION IN CASES OF LESS FAVORABLE TERMS.—Section 615(h) of the Fair Credit Reporting Act (15 U.S.C. 1681m(h)) is amended—

(A) in paragraph (1), by striking “paragraph (6)” and inserting “paragraph (7)”;

(B) in paragraph (2), by striking “paragraph (6)” and inserting “paragraph (7)”;

(C) in paragraph (5)(C), by striking “may obtain” and inserting “shall receive”;

(D) by redesignating paragraphs (6), (7), and (8) as paragraphs (7), (8), and (9), respectively; and

(E) by inserting after paragraph (5) the following:

“(6) REPORTS PROVIDED TO CONSUMERS.—A person who uses a consumer report as described in paragraph (1) shall notify and direct the consumer reporting agency that provided the consumer report to provide the consumer with the disclosures described in section 612(b).”.

(3) NOTIFICATION OF SUBSEQUENT SUBMISSIONS OF NEGATIVE INFORMATION.—Section 623(a)(7)(A)(ii) of the Fair Credit Reporting Act (15 U.S.C. 1681s–2(a)(7)(A)(ii)) is amended by striking “account, or customer” and inserting “or account”.

(4) BUREAU RULE DEFINING CERTAIN DISCLOSURE REQUIREMENTS.—Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended by adding at the end the following:

“(h) Bureau rule defining certain disclosure requirements.—

“(1) PROPOSED RULE.—Not later than 1 year after the date of enactment of the Stopping Errors in Consumer Use and REporting Act of 2017, the Bureau shall publish a proposed rule to implement the disclosure requirements described in section 612(b).

“(2) CONSIDERATIONS.—In formulating the rule required under paragraph (1), the Bureau shall consider—

“(A) what information would enable consumers to—

“(i) determine the reasons for which a person—

“(I) took adverse action; or

“(II) offered credit on materially less favorable terms; and

“(ii) verify the accuracy of that information; and

“(B) how to provide the information described in subparagraph (A) while protecting consumer privacy, including procedures to ensure that the information is provided to the consumer at the appropriate address.”.

SEC. 4. Regulatory reform.

Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended by adding at the end the following:

“(h) Consumer reporting agency registry.—

“(1) ESTABLISHMENT OF REGISTRY.—Not later than 180 days after the date of enactment of the Stopping Errors in Consumer Use and REporting Act of 2017, the Bureau shall establish 3 publicly available registries of consumer reporting agencies, including a registry that contains—

“(A) each consumer reporting agency that compiles and maintains files on consumers on a nationwide basis;

“(B) each nationwide specialty consumer reporting agency; and

“(C) all other consumer reporting agencies that are not included under section 603(p) or 603(x).

“(2) REGISTRATION REQUIREMENT.—Each consumer reporting agency shall register with a registry established by the Bureau under this subsection in a timeframe established by the Bureau.”.

SEC. 5. Identity theft protection for minors.

(a) In general.—The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after section 605B (15 U.S.C. 1681c–2) the following:

“SEC. 605C. Additional protections for credit reports of minor consumers.

“(a) Definitions.—In this section—

“(1) the term ‘blocked file’ means a file of a minor consumer with respect to which, under this section, a consumer reporting agency—

“(A) maintains with the name, social security number, date of birth, and, if applicable, any credit information of the minor consumer;

“(B) may not provide any person with a consumer report of the minor consumer; and

“(C) blocks the input of any information, except with permission from a covered guardian of the minor consumer;

“(2) the term ‘covered guardian’ means—

“(A) the legal guardian of a minor child;

“(B) the custodian of a minor child; or

“(C) in the case of a child in foster care, the State agency or Indian tribe or tribal organization responsible for the foster care of the child; and

“(3) the term ‘minor consumer’ means a consumer who has not attained 16 years of age.

“(b) Blocking a file.—A consumer reporting agency that compiles and maintains files on consumers on a nationwide basis shall, upon request by, and receipt of appropriate proof of identity of, a minor consumer or the covered guardian of a minor consumer—

“(1) create a blocked file for the minor consumer; or

“(2) convert a file of the minor consumer already in existence to a blocked file.

“(c) Unblocking a file.—A consumer reporting agency that compiles and maintains files on consumers on a nationwide basis shall unblock a blocked file—

“(1) upon request by the covered guardian of a minor consumer;

“(2) if the file was blocked as a result of a material misrepresentation, including a representation that—

“(A) the consumer was a minor consumer when the consumer was not a minor consumer as of the date on which the representation was made; and

“(B) an individual was the covered guardian of a minor consumer when the individual was not the covered guardian of the minor consumer as of the date on which the representation was made;

“(3) on the date of the 16th birthday of the minor consumer; or

“(4) if the minor consumer becomes emancipated under the law of the State in which the minor consumer resides, on the date of the emancipation of the minor consumer.

“(d) Regulations.—The Bureau shall promulgate regulations to carry out this section.

“(e) Fees.—

“(1) IN GENERAL.—A credit reporting agency may charge a fair and reasonable fee, as determined by the Bureau, to create a blocked file or to unblock a file.

“(2) EXEMPTION.—The Bureau may exempt an individual who suspects that the individual has been a victim of fraud or identity theft from a fee described in paragraph (1).

“(f) Exceptions.—Nothing in this section may be construed as requiring a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis to prevent a Federal, State, or local law enforcement agency from accessing a blocked file.”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after the item relating to section 605B the following:


“605C. Additional protections for credit reports of minor consumers.”.

SEC. 6. Study of a public credit reporting system.

(a) Study.—Not later than 180 days after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study—

(1) of credit systems in the international credit system with government-administered consumer credit reporting systems;

(2) of available information regarding the accuracy of government-administered consumer credit reporting systems that are in existence as of the date on which the Comptroller General begins conducting the study;

(3) to evaluate the feasibility of a national, government-administered consumer credit reporting system;

(4) of any consumer benefits that might reasonably be expected to result from a government-administered consumer credit reporting system; and

(5) of any costs that might result from a government-administered consumer credit reporting system in the United States.

(b) Publication of findings.—Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall publish the findings of the study conducted under subsection (a).

SEC. 7. Effective date.

Except as otherwise provided in this Act and the amendments made by this Act, this Act and the amendments made by this Act shall take effect on the date that is 180 days after the date of enactment of this Act.