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Fair Credit Reporting Act
ß 604. Permissible purposes of consumer reports [15 U.S.C. ß 1681b]
(a) In general. Subject to subsection (c), any consumer reporting agency may furnish
a consumer report under the following circumstances and no other:
(1) In response to the order of a court having jurisdiction to issue such an
order, or a subpoena issued in connection with proceedings before a Federal grand
jury.
(2) In accordance with the written instructions of the consumer to whom it relates.
(3) To a person which it has reason to believe
(A) intends to use the information in connection with a credit transaction
involving the consumer on whom the information is to be furnished and involving
the extension of credit to, or review or collection of an account of, the consumer;
or
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the underwriting of insurance
involving the consumer; or
(D) intends to use the information in connection with
a determination of the consumer's eligibility for a license or other benefit
granted by a governmental instrumentality required by law to consider an applicant's
financial responsibility or status; or
(E) intends to use the information, as a potential investor or servicer, or
current insurer, in connection with a valuation of, or an assessment of the
credit or prepayment risks associated with, an existing credit obligation; or
(F) otherwise has a legitimate business need for the information
(i) in connection with a business transaction that is initiated by the consumer;
or
(ii) to review an account to determine whether the consumer
continues to meet the terms of the account.
(4) In response to a request by the head of a State or local child support enforcement
agency (or a State or local government official authorized by the head of such
an agency), if the person making the request certifies to the consumer reporting
agency that
(A) the consumer report is needed for the purpose of establishing an individual’s
capacity to make child support payments or determining the appropriate level
of such payments;
(B) the paternity of the consumer for the child to which the obligation relates
has been established or acknowledged by the consumer in accordance with State
laws under which the obligation arises (if required by those laws);
(C) the person has provided at least 10 days’ prior notice to the consumer
whose report is requested, by certified or registered mail to the last known
address of the consumer, that the report will be requested; and
(D) the consumer report will be kept confidential, will be used solely for
a purpose described in subparagraph (A), and will not be used in connection
with any other civil, administrative, or criminal proceeding, or for any other
purpose.
(5) To an agency administering a State plan under Section 454 of the Social Security
Act (42 U.S.C. § 654) for use to set an initial or modified child support
award.
(b) Conditions for Furnishing and Using Consumer Reports for Employment Purposes.
(1) Certification from user. A consumer reporting agency may furnish a consumer
report for employment purposes only if
(A) the person who obtains such report from the agency certifies to the agency
that
(i) the person has complied with paragraph (2) with respect to the consumer
report, and the person will comply with paragraph (3) with respect to the
consumer report if paragraph (3) becomes applicable; and
(ii) information from the consumer report will not be used in violation of
any applicable Federal or State equal employment opportunity law or regulation;
and
(B) the consumer reporting agency provides with the report, or has previously
provided, a summary of the consumer's rights under this title, as prescribed
by the Federal Trade Commission under section 609(c)(2)
[§ 1681g].
(2) Disclosure to Consumer.
(A) In general. Except as provided in subparagraph (B), a person may not procure
a consumer report, or cause a consumer report to be procured, for employment
purposes with respect to any consumer, unless--
(i) a clear and conspicuous disclosure has been made in writing to the consumer
at any time before the report is procured or caused to be procured, in a document
that consists solely of the disclosure, that a consumer report may be obtained
for employment purposes; and
(ii) the consumer has authorized in writing (which authorization may be made
on the document referred to in clause (i)) the procurement of the report by
that person.
(B) Application by mail, telephone, computer, or other similar means. If a
consumer described in subparagraph (C) applies for employment by mail, telephone,
computer, or other similar means, at any time before a consumer report is procured
or caused to be procured in connection with that application--
(i) the person who procures the consumer report on the consumer for employment
purposes shall provide to the consumer, by oral, written, or electronic means,
notice that a consumer report may be obtained for employment purposes, and
a summary of the consumer's rights under section 615(a)(3);
and
(ii) the consumer shall have consented, orally, in writing, or electronically
to the procurement of the report by that person.
(C) Scope. Subparagraph (B) shall apply to a person procuring a consumer report
on a consumer in connection with the consumer's application for employment only
if--
(i) the consumer is applying for a position over which the Secretary of Transportation
has the power to establish qualifications and maximum hours of service pursuant
to the provisions of section 31502 of title 49, or a position subject to safety
regulation by a State transportation agency; and
(ii) as of the time at which the person procures the report or causes the
report to be procured the only interaction between the consumer and the person
in connection with that employment application has been by mail, telephone,
computer, or other similar means.
(3) Conditions on use for adverse actions.
(A) In general. Except as provided in subparagraph (B), in using a consumer
report for employment purposes, before taking any adverse action based in whole
or in part on the report, the person intending to take such adverse action shall
provide to the consumer to whom the report relates--
(i) a copy of the report; and
(ii) a description in writing of the rights of the consumer under this title,
as prescribed by the Federal Trade Commission under section
609(c)(2).
(B) Application by mail, telephone, computer, or other similar means.
(i) If a consumer described in subparagraph (C) applies for employment by
mail, telephone, computer, or other similar means, and if a person who has
procured a consumer report on the consumer for employment purposes takes adverse
action on the employment application based in whole or in part on the report,
then the person must provide to the consumer to whom the report relates, in
lieu of the notices required under subparagraph (A) of this section and under
section 615(a), within 3 business days of taking such action,
an oral, written or electronic notification--
(I) that adverse action has been taken based in whole or in part on a consumer
report received from a consumer reporting agency;
(II) of the name, address and telephone number of the consumer reporting
agency that furnished the consumer report (including a toll-free telephone
number established by the agency if the agency compiles and maintains files
on consumers on a nationwide basis);
The references in Sections 604(b)(3)(A) and 604(b)(3)(B) should be
to Section 609(c)(1), not (c)(3) that no longer exists
as the result of Congress’ re-organization of Section 609(c)
in 2003 (FACT Act).
(III) that the consumer reporting agency did not make the decision to take
the adverse action and is unable to provide to the consumer the specific
reasons why the adverse action was taken; and
(IV) that the consumer may, upon providing proper identification, request
a free copy of a report and may dispute with the consumer reporting agency
the accuracy or completeness of any information in a report.
(ii) If, under clause (B)(i)(IV), the consumer requests a copy of a consumer
report from the person who procured the report, then, within 3 business days
of receiving the consumer's request, together with proper identification,
the person must send or provide to the consumer a copy of a report and a copy
of the consumer's rights as prescribed by the Federal Trade Commission under
section 609(c)(2).
(C) Scope. Subparagraph (B) shall apply to a person procuring a consumer report
on a consumer in connection with the consumer's application for employment only
if--
(i) the consumer is applying for a position over which the Secretary of Transportation
has the power to establish qualifications and maximum hours of service pursuant
to the provisions of section 31502 of title 49, or a position subject to safety
regulation by a State transportation agency; and
(ii) as of the time at which the person procures the report or causes the
report to be procured the only interaction between the consumer and the person
in connection with that employment application has been by mail, telephone,
computer, or other similar means.
(4) Exception for national security investigations.
(A) In general. In the case of an agency or department
of the United States Government which seeks to obtain and use a consumer report
for employment purposes, paragraph (3) shall not apply to any adverse action
by such agency or department which is based in part on such consumer report,
if the head of such agency or department makes a written finding that–
(i) the consumer report is relevant to a national security investigation
of such agency or department;
(ii) the investigation is within the jurisdiction of such agency or department;
(iii) there is reason to believe that compliance with paragraph (3) will--
(I) endanger the life or physical safety of any person;
(II) result in flight from prosecution;
(III) result in the destruction of, or tampering with, evidence relevant
to the investigation;
(IV) result in the intimidation of a potential witness relevant to the
investigation;
(V) result in the compromise of classified information; or
(VI) otherwise seriously jeopardize or unduly delay the investigation or
another official proceeding.
(B) Notification of consumer upon conclusion of investigation. Upon the conclusion
of a national security investigation described in subparagraph (A), or upon
the determination that the exception under subparagraph (A) is no longer required
for the reasons set forth in such subparagraph, the official exercising the
authority in such subparagraph shall provide to the consumer who is the subject
of the consumer report with regard to which such finding was made--
(i) a copy of such consumer report with any classified information redacted
as necessary;
(ii) notice of any adverse action which is based, in part, on the consumer
report; and
(iii) the identification with reasonable specificity of the nature of the
investigation for which the consumer report was sought.
(C) Delegation by head of agency or department. For purposes of subparagraphs
(A) and (B), the head of any agency or department of the United States Government
may delegate his or her authorities under this paragraph to an official of such
agency or department who has personnel security responsibilities and is a member
of the Senior Executive Service or equivalent civilian or military rank.
(D) Definitions. For purposes of this paragraph, the following definitions
shall apply:
(i) The term “classified information” means
information that is protected from unauthorized disclosure under Executive
Order No. 12958 or successor orders.
(ii) The term “national security investigation” means any official
inquiry by an agency or department of the United States Government to determine
the eligibility of a consumer to receive access or continued access to classified
information or to determine whether classified information has been lost or
compromised.
(c) Furnishing reports in connection with credit or insurance transactions that
are not initiated by the consumer.
(1) In general. A consumer reporting agency may furnish a consumer report relating
to any consumer pursuant to subparagraph (A) or (C) of subsection (a)(3) in connection
with any credit or insurance transaction that is not initiated by the consumer
only if
(A) the consumer authorizes the agency to provide such report to such person;
or
(B)
(i) the transaction consists of a firm offer of credit or insurance;
(ii) the consumer reporting agency has complied with subsection (e); and
(iii) there is not in effect an election by the consumer, made in accordance
with subsection (e), to have the consumer's name and address excluded from
lists of names provided by the agency pursuant to this paragraph.
(2) Limits on information received under paragraph (1)(B). A person may receive
pursuant to paragraph (1)(B) only
(A) the name and address of a consumer;
(B) an identifier that is not unique to the consumer and that is used by the
person solely for the purpose of verifying the identity of the consumer; and
(C) other information pertaining to a consumer that does not identify the relationship
or experience of the consumer with respect to a particular creditor or other
entity.
(3) Information regarding inquiries. Except as provided in section
609(a)(5) [§1681g], a consumer reporting agency shall not furnish to
any person a record of inquiries in connection with a credit or insurance transaction
that is not initiated by a consumer.
(d) Reserved.
(e) Election of consumer to be excluded from lists.
(1) In general. A consumer may elect to have the consumer's name and address
excluded from any list provided by a consumer reporting agency under subsection
(c)(1)(B) in connection with a credit or insurance transaction that is not initiated
by the consumer, by notifying the agency in accordance with paragraph (2) that
the consumer does not consent to any use of a consumer report relating to the
consumer in connection with any credit or insurance transaction that is not initiated
by the consumer.
(2) Manner of notification. A consumer shall notify a consumer reporting agency
under paragraph (1)
(A) through the notification system maintained by the agency under paragraph
(5); or
(B) by submitting to the agency a signed notice of election form issued by
the agency for purposes of this subparagraph.
(3) Response of agency after notification through system. Upon receipt of notification
of the election of a consumer under paragraph (1) through the notification system
maintained by the agency under paragraph (5), a consumer reporting agency shall
(A) inform the consumer that the election is effective only for the 5-year
period following the election if the consumer does not submit to the agency
a signed notice of election form issued by the agency for purposes of paragraph
(2)(B); and
(B) provide to the consumer a notice of election form, if requested by the
consumer, not later than 5 business days after receipt of the notification of
the election through the system established under paragraph (5), in the case
of a request made at the time the consumer provides notification through the
system.
(4) Effectiveness of election. An election of a consumer under paragraph (1)
(A) shall be effective with respect to a consumer reporting agency beginning
5 business days after the date on which the consumer notifies the agency in
accordance with paragraph (2);
(B) shall be effective with respect to a consumer reporting agency
(i) subject to subparagraph (C), during the 5-year period beginning 5 business
days after the date on which the consumer notifies the agency of the election,
in the case of an election for which a consumer notifies the agency only in
accordance with paragraph (2)(A); or
(ii) until the consumer notifies the agency under subparagraph (C), in the
case of an election for which a consumer notifies the agency in accordance
with paragraph (2)(B);
(C) shall not be effective after the date on which the consumer notifies the
agency, through the notification system established by the agency under paragraph
(5), that the election is no longer effective; and
(D) shall be effective with respect to each affiliate of the agency.
(5) Notification System
(A) In general. Each consumer reporting agency that, under subsection (c)(1)(B),
furnishes a consumer report in connection with a credit or insurance transaction
that is not initiated by a consumer, shall
(i) establish and maintain a notification system, including a toll-free telephone
number, which permits any consumer whose consumer report is maintained by
the agency to notify the agency, with appropriate identification, of the consumer's
election to have the consumer's name and address excluded from any such list
of names and addresses provided by the agency for such a transaction; and
(ii) publish by not later than 365 days after the date of enactment of the
Consumer Credit Reporting Reform Act of 1996, and not less than annually thereafter,
in a publication of general circulation in the area served by the agency
(I) a notification that information in consumer files maintained by the
agency may be used in connection with such transactions; and
(II) the address and toll-free telephone number for consumers to use to
notify the agency of the consumer's election under clause (I).
(B) Establishment and maintenance as compliance. Establishment and maintenance
of a notification system (including a toll-free telephone number) and publication
by a consumer reporting agency on the agency's own behalf and on behalf of any
of its affiliates in accordance with this paragraph is deemed to be compliance
with this paragraph by each of those affiliates.
(6) Notification system by agencies that operate nationwide. Each consumer reporting
agency that compiles and maintains files on consumers on a nationwide basis shall
establish and maintain a notification system for purposes of paragraph (5) jointly
with other such consumer reporting agencies.
(f) Certain use or obtaining of information prohibited. A person shall not use
or obtain a consumer report for any purpose unless
(1) the consumer report is obtained for a purpose for which the consumer report
is authorized to be furnished under this section; and
(2) the purpose is certified in accordance with section 607
[§1681e] by a prospective user of the report through a general or specific
certification.
(g) Protection of Medical Information
(1) Limitation on consumer reporting agencies. A consumer reporting agency shall
not furnish for employment purposes, or in connection with a credit or insurance
transaction, a consumer report that contains medical information (other than medical
contact information treated in the manner required under section
605(a)(6) about a consumer, unless--
(A) if furnished in connection with an insurance transaction, the consumer
affirmatively consents to the furnishing of the report;
(B) if furnished for employment purposes or in connection with a credit transaction--
(i) the information to be furnished is relevant to process or effect the
employment or credit transaction; and
(ii) the consumer provides specific written consent for the furnishing of
the report that describes in clear and conspicuous language the use for which
the information will be furnished; or
(C) the information to be furnished pertains solely to transactions, accounts,
or balances relating to debts arising from the receipt of medical services,
products, or devises, where such information, other than account status or amounts,
is restricted or reported using codes that do not identify, or do not provide
information sufficient to infer, the specific provider or the nature of such
services, products, or devices, as provided in section 605(a)(6).
(2) Limitation on creditors. Except as permitted pursuant to paragraph (3)(C)
or regulations prescribed under paragraph (5)(A), a creditor shall not obtain
or use medical information (other than medical contact information treated in
the manner required under section 605(a)(6) pertaining to
a consumer in connection with any determination of the consumer's eligibility,
or continued eligibility, for credit.
(3) Actions authorized by federal law, insurance activities
and regulatory determinations. Section 603(d)(3) shall not
be construed so as to treat information or any communication of information as
a consumer report if the information or communication is disclosed--
(A) in connection with the business of insurance or annuities, including the
activities described in section 18B of the model Privacy of Consumer Financial
and Health Information Regulation issued by the National Association of Insurance
Commissioners (as in effect on January 1, 2003);
(B) for any purpose permitted without authorization under the Standards for
Individually Identifiable Health Information promulgated by the Department of
Health and Human Services pursuant to the Health Insurance Portability and Accountability
Act of 1996, or referred to under section 1179 of such Act, or described in
section 502(e) of Public Law 106-102; or
(C) as otherwise determined to be necessary and appropriate, by regulation
or order and subject to paragraph (6), by the Commission, any Federal banking
agency or the National Credit Union Administration (with respect to any financial
institution subject to the jurisdiction of such agency or Administration under
paragraph (1), (2), or (3) of section 621(b), or the applicable
State insurance authority (with respect to any person engaged in providing insurance
or annuities).
(4) Limitation on redisclosure of medical information. Any person that receives
medical information pursuant to paragraph (1) or (3) shall not disclose such information
to any other person, except as necessary to carry out the purpose for which the
information was initially disclosed, or as otherwise permitted by statute, regulation,
or order.
(5) Regulations and Effective Date for Paragraph (2)
(A) Regulations required. Each Federal banking agency and the National Credit
Union Administration shall, subject to paragraph (6) and after notice and opportunity
for comment, prescribe regulations that permit transactions under paragraph
(2) that are determined to be necessary and appropriate to protect legitimate
operational, transactional, risk, consumer, and other needs (and which shall
include permitting actions necessary for administrative verification purposes),
consistent with the intent of paragraph (2) to restrict the use of medical information
for inappropriate purposes.
(B) Final regulations required. The Federal banking agencies and the National
Credit Union Administration shall issue the regulations required under
subparagraph (A) in final form before the end of the 6-month period beginning
on the date of enactment of the Fair and Accurate Credit Transactions
Act of 2003. See also 12 CFR Parts 41/222/232/334/571/717
(6) Coordination with other laws. No provision of this subsection shall be construed
as altering, affecting, or superseding the applicability of any other provision
of Federal law relating to medical confidentiality.
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Fair Credit Reporting Act - FCRA - Permissible purposes of consumer reports
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