SENATE BILL: Bad Credit Relief Act of 2020 (Passed)

[Southern Senator North Carolina Yankee]

A BILL
To amend the Fair Credit Reporting Act to restore the impaired credit of victims of predatory activities and unfair consumer reporting practices, to expand access to tools to protect vulnerable consumers from identity theft, fraud, or a related crime, and protect victims from further harm, and for other purposes.

Be it enacted by the Senate and the House of Representatives, in Congress assembled:

Section 1. Title

This legislation may be cited as the Bad Credit Relief Act of 2020.

Section 2. Findings

(1) Many Atlasians across the country are faced with mounting medical debt, dealing with predatory lenders and fraudulent activity, and prevented from accessing credit due to their credit reports containing older debt, providing little to no insight of credit worthiness.

(2) Consumer reports play an increasingly important role in the lives of Atlasian consumers.  Most creditors, for example, review these reports to make decisions about whether to extend credit to consumers and what terms and conditions to offer them.  As such, information contained in these reports affects whether a person is able to get a private education loan to pay for college costs, to secure a mortgage loan to buy a home, or to obtain a credit card, as well as the terms and conditions under which consumer credit products or services are offered to them.

(3) Credit reports are also increasingly used for many noncredit decisions, including by landlords to determine whether to rent an apartment to a prospective tenant and by employers to decide whether to hire potential job applicants or to offer a promotion to existing employees.

TITLE I—Restoring the impaired credit of victims of predatory activities and unfair consumer reporting practices

Section 101. Shortening the time period that most adverse credit information stays on consumer reports

1.) Section 605 of the Fair Credit Reporting Act is hereby amended:

(1) in subsection (a)—

(A) by striking “Except as authorized under subsection (b), no” and inserting “No”;

(B) in paragraph (1), by striking “10 years” and inserting “7 years”;

(C) in paragraph (2), by striking “Civil suits, civil judgments, and records” and inserting “Records”;

(D) in paragraph (3), by striking “seven years” and inserting “4 years”;

(E) in paragraph (4), by striking “seven years” and inserting “4 years, except as provided in paragraph [8], (10), (11), (12), or (13), or as required by section 605C, 605D, 605E, or 605F”;

(F) in paragraph (5)—

(i) by striking “, other than records of convictions of crimes”; and

(ii) by striking “seven years” and inserting “4 years, except as required by section 605C, 605D, 605E, or 605F”; and

(G) by adding at the end the following new paragraphs:

“(9) Civil suits and civil judgments (except as provided in paragraph [8]) that, from date of entry, antedate the report by more than 4 years or until the governing statute of limitations has expired, whichever is the longer period.

“(10) A civil suit or civil judgment—

“(A) brought by a private education loan holder that, from the date of successful completion of credit restoration or rehabilitation in accordance with the requirements of section 605D or 605E, antedates the report by 45 calendar days; or

“(B) brought by a lender with respect to a covered residential mortgage loan that antedates the report by 45 calendar days.

“(11) Records of convictions of crimes which antedate the report by more than 7 years.

“(12) Any other adverse item of information relating to the collection of debt that did not arise from a contract or an agreement to pay by a consumer, including fines, tickets, and other assessments, as determined by the Bureau, excluding tax liability.”;

(2) by striking subsection (b) and redesignating subsections (c) through (h) as subsections (b) through (g), respectively; and

(3) in subsection (b) (as so redesignated), by striking “7-year period referred to in paragraphs (4) and (6)” and inserting “4-year period referred to in paragraphs (4) and (5)”.

(b) Conforming amendments.—The Fair Credit Reporting Act is amended—

(1) in section 616(d), by striking “section 605(g)” each place that term appears and inserting “section 605(f)”; and

(2) in section 625(b)(5)(A), by striking “section 605(g)” and inserting “section 605(f)”.

Section 102. Mandating the expedited removal of fully paid or settled debt from consumer reports

Section 605(a) of the Fair Credit Reporting Act , as amended by section 101(a)(1), is further amended by adding at the end the following new paragraph:

“(13) Any other adverse item of information related to a fully paid or settled debt that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 calendar days.”.

Section 103. Imposing restrictions on the appearance of medical collections on consumer reports and requires the expedited removal of fully paid or settled medical collections from consumer reports

(a) Removal of fully paid or settled medical debt from consumer reports.—Section 605(a) of the Fair Credit Reporting Act, as amended by section 102, is further amended by adding at the end the following new paragraph:

“(14) Any other adverse item of information related to a fully paid or settled debt arising from the receipt of medical services, products, or devices that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 calendar days.”.

(b) Establishing an extended time period before certain medical debt information may be reported.—Section 605(a) of such Act is further amended by adding at the end the following new paragraph:

“(15) Any information related to a debt arising from the receipt of medical services, products, or devices, if the date on which such debt was placed for collection, charged to profit or loss, or subjected to any similar action antedates the report by less than 365 calendar days.”.

(c) Prohibition on reporting medically necessary procedures.—Section 605(a) of such Act is further amended by adding at the end the following new paragraph:

“(16) Any information related to a debt arising from a medically necessary procedure.”.

(d) Technical amendment.—Section 604(g)(1)(C) of the Fair Credit Reporting Act is further amended by striking “devises” and inserting “devices”.

Section 104. Providing credit restoration for victims of predatory mortgage lending and servicing

(a) In general.—The Fair Credit Reporting Act is amended by inserting after section 605B the following new section:

Section 105. Credit restoration for victims of predatory mortgage lending

“(a) In general.—A consumer reporting agency may not furnish any consumer report containing any adverse item of information relating to a covered residential mortgage loan (including the origination and servicing of such a loan, any loss mitigation activities related to such a loan, and any foreclosure, deed in lieu of foreclosure, or short sale related to such a loan), if the action or inaction to which the item of information relates—

“(1) resulted from an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity of a financial institution, as determined by the Bureau or a court of competent jurisdiction; or

“(2) is related to an unfair, deceptive, or abusive act, practice, or a fraudulent, discriminatory, or illegal activity of a financial institution that is the subject of a settlement agreement initiated on behalf of a consumer or consumers and that is between the financial institution and an agency or department of a local, State, or Federal Government, regardless of whether such settlement includes an admission of wrongdoing.

“(b) Covered residential mortgage loan defined.—In this section, the term ‘covered residential mortgage loan’ means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling (as defined in section 103(w) of the Truth in Lending Act), including a loan in which the proceeds will be used for—

“(1) a manufactured home (as defined in section 603 of the Housing and Community Development Act of 1974;

“(2) any installment sales contract, land contract, or contract for deed on a residential property; or

“(3) a reverse mortgage transaction (as defined in section 103 of the Truth in Lending Act).”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605B the following new item:

Section 106. Credit restoration for victims of predatory mortgage lending

“(a) In general.—A consumer reporting agency may not furnish any consumer report containing any adverse item of information relating to a covered residential mortgage loan (including the origination and servicing of such a loan, any loss mitigation activities related to such a loan, and any foreclosure, deed in lieu of foreclosure, or short sale related to such a loan), if the action or inaction to which the item of information relates—

“(1) resulted from an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity of a financial institution, as determined by the Bureau or a court of competent jurisdiction; or

“(2) is related to an unfair, deceptive, or abusive act, practice, or a fraudulent, discriminatory, or illegal activity of a financial institution that is the subject of a settlement agreement initiated on behalf of a consumer or consumers and that is between the financial institution and an agency or department of a local, State, or Federal Government, regardless of whether such settlement includes an admission of wrongdoing.

“(b) Covered residential mortgage loan defined.—In this section, the term ‘covered residential mortgage loan’ means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling (as defined in section 103(w) of the Truth in Lending Act), including a loan in which the proceeds will be used for—

“(1) a manufactured home (as defined in section 603 of the Housing and Community Development Act of 1974;

“(2) any installment sales contract, land contract, or contract for deed on a residential property; or

“(3) a reverse mortgage transaction (as defined in section 103 of the Truth in Lending Act).”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605B the following new item:

“605C. Credit restoration for victims of predatory mortgage lending.”.

(c) Effective date.—The amendments made by this section shall take effect at the end of the 18-month period beginning on the date of the enactment of this Act.

Section 107. Providing credit relief for private education loans borrowers who were defrauded or mislead by proprietary education institution or career education programs

(a) In general.—The Fair Credit Reporting Act, as amended by section 104, is further amended by inserting after section 605C the following new section:

Ҥ 605D. Private education loan credit restoration for defrauded student borrowers who attend certain proprietary educational institution or career education programs

“(a) Process for certification as a qualifying private education loan borrower.—

“(1) IN GENERAL.—A consumer may submit a request to the Bureau, along with a defraudment claim, to be certified as a qualifying private education loan borrower with respect to a private education loan.

“(2) CERTIFICATION.—The Bureau shall certify a consumer described in paragraph (1) as a qualifying private education loan borrower with respect to a private education loan if the Bureau or a court of competent jurisdiction determines that the consumer has a valid defraudment claim with respect to such loan.

“(b) Removal of adverse information.—Upon receipt of a notice described in subsection (d)(5), a consumer reporting agency shall remove any adverse information relating to any private education loan with respect to which a consumer is a qualifying private education loan borrower from any consumer report within 45 calendar days of receipt of such notification.

“(c) Disclosure.—The Bureau shall disclose the results of a certification determination in writing to the consumer that provides a clear and concise explanation of the basis for the determination of whether such consumer is a qualifying private education loan borrower with respect to a private education loan and, as applicable, an explanation of the consumer’s right to have adverse information relating to such loan removed from their consumer report by a consumer reporting agency.

“(d) Procedures.—The Bureau shall—

“(1) establish procedures for a consumer to submit a request described in subsection (a);

“(2) establish procedures to efficiently review, accept, and process such a request;

“(3) develop ongoing outreach initiatives and education programs to inform consumers of the circumstances under which such consumer may be eligible to be certified as a qualifying private education loan borrower with respect to a private education loan;

“(4) establish procedures, including the manner, form, and content of the notice informing a private educational loan holder of the prohibition on reporting any adverse information relating to a private education loan with respect to which a consumer is a qualifying private education loan borrower; and

“(5) establish procedures, including the manner, form, and content of the notice informing a consumer reporting agency of the obligation to remove any adverse information as described in subsection (c).

“(e) Standardized reporting codes.—A consumer reporting agency shall develop standardized reporting codes for use by private education loan holders to identify and report a qualifying private education loan borrower’s status of a request to remove any adverse information relating to any private education loan with respect to which such consumer is a qualifying private education loan borrower. A consumer report in which a person furnishes such codes shall be deemed to comply with the requirements for accuracy and completeness required under sections 623(a)(1) and 630. Such codes shall not appear on any report provided to a third party, and shall be removed from the consumer’s credit report upon the successful restoration of the consumer’s credit under this section.

“(f) Defraudment claim defined.—For purposes of this section, the term ‘defraudment claim’ means a claim made with respect to a consumer who is a borrower of a private education loan with respect to a proprietary educational institution or career education program in which the consumer alleges that—

“(1) the proprietary educational institution or career education program—

“(A) engaged in an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity—

“(i) as defined by Regional or State law of the Region or State in which the proprietary educational institution or career education program is headquartered or maintains or maintained significant operations; or

“(ii) under Federal law;

“(B) is the subject of an enforcement order, a settlement agreement, a memorandum of understanding, a suspension of tuition assistance, or any other action relating to an unfair, deceptive, or abusive act or practice that is between the proprietary educational institution or career education program and an agency or department of a local, Regional, State, or Federal Government; or

“(C) misrepresented facts to students or accrediting agencies or associations about graduation or gainful employment rates in recognized occupations or failed to provide the coursework necessary for students to successfully obtain a professional certification or degree from the proprietary educational institution or career education program; or

“(2) the consumer has submitted a valid defense to repayment claim with respect to such loan, as determined by the Secretary of Education.”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605C (as added by section 104) the following new item:

“605D. Private education loan credit restoration for defrauded student borrowers who attend certain proprietary educational institution or career education programs.”.

Section 108. Establishing the right for victims of financial abuse to have adverse information associated with an abuser’s fraudulent activity removed from their consumer reports

(a) In general.—The Fair Credit Reporting Act, as amended by section 105, is further amended by inserting after section 605D the following new section:

Ҥ 605E. Financial abuse prevention

“For a consumer who is the victim of intentionally abusive or harmful financial behavior, as determined by a court of competent jurisdiction including a family court, juvenile court, or other court with personal jurisdiction, that was conducted by a spouse, family or household member, caregiver, or person with whom such consumer had a dating relationship in a manner which resulted in the inclusion of an adverse item of information on the consumer report of the consumer, and the consumer did not participate in or consent to such behavior, the consumer may apply to a court of competent jurisdiction, including a family court, juvenile court, or other court with personal jurisdiction, for an order to require the removal of such adverse information from the consumer’s file maintained by any consumer reporting agency.”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605D the following new item:

“605E. Financial abuse prevention.”.

Section 109. Prohibiting treatment of credit restoration or rehabilitation as adverse information

The Fair Credit Reporting Act is amended—

(1) by adding at the end the following new section:

Ҥ 630. Prohibition of certain factors related to Federal credit restoration or rehabilitation

“(a) Restriction on credit scoring models.—A credit scoring model may not—

“(1) take into consideration, in a manner adverse to a consumer’s credit score or educational credit score, any information in a consumer report concerning the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E; or

“(2) treat negatively, in a manner adverse to a consumer’s credit score or educational credit score, the absence of payment history data for an existing account, whether the account is open or closed, where the absence of such information is the result of a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E.

“(b) Restriction on persons obtaining consumer reports.—A person who obtains a consumer report may not—

“(1) take into consideration, in a manner adverse to a consumer, any information in a consumer report concerning the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E; or

“(2) treat negatively the absence of payment history data for an existing account, whether the account is open or closed, where the absence of such information is the result of a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E.

“(c) Accuracy and completeness.—If a person who furnishes information to a consumer reporting agency requests the removal of information from a consumer report or a consumer reporting agency removes information from a consumer report in compliance with the requirements under section 605C, 605D, or 605E, or such information was removed pursuant at section 605(a)(11), such report shall be deemed to satisfy the requirements for accuracy and completeness with respect to such information.

“(d) Prohibition related to adverse actions and risk-Based pricing decisions.—No person shall use information related to a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E in connection with any determination of—

“(1) the consumer’s eligibility or continued eligibility for an extension of credit;

“(2) the terms and conditions offered to a consumer regarding an extension of credit; or

“(3) an adverse action made for employment purposes.”; and

(2) in the table of contents for such Act, by adding at the end the following new item:

“630. Prohibition of certain factors related to Federal credit restoration or rehabilitation.”.

[Southern Senator North Carolina Yankee]

TITLE II—Expanding access to tools to protect vulnerable consumers from identity theft, fraud, or a related crime, and protect victims from further harm

Section 201. Identity theft report definition

Paragraph (4) of section 603(q) of the Fair Credit Reporting Act is amended to read as follows:

“(4) IDENTITY THEFT REPORT.—The term ‘identity theft report’ has the meaning given that term by rule of the Bureau, and means, at a minimum, a report—

“(A) that is a standardized affidavit that alleges that a consumer has been a victim of identity theft, fraud, or a related crime, or has been harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, that was developed and made available by the Bureau; or

“(B) (i) that alleges an identity theft, fraud, or a related crime, or alleges harm from the unauthorized disclosure of the consumer’s financial or personally identifiable information;

“(ii) that is a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency, including the United States Postal Inspection Service, or such other government agency deemed appropriate by the Bureau; and

“(iii) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false.”.

Section 202. Amendment to protection for files and credit records of protected consumers

(a) Amendment to definition of “file”.—Section 603(g) of the Fair Credit Reporting Act is amended by inserting “, except that such term excludes a record created pursuant to section 605A(j)” after “stored”.

(b) Amendment to protection for files and credit records.—Section 605A(j) of the Fair Credit Reporting Act is amended—

(1) in paragraph (1)—

(A) in subparagraph (B)(ii), by striking “an incapacitated person or a protected person” and inserting “a person”; and

(B) by amending subparagraph (E) to read as follows:

“(E) The term ‘security freeze’—

“(i) has the meaning given in subsection (i)(1)(C); and

“(ii) with respect to a protected consumer for whom the consumer reporting agency does not have a file, means a record that is subject to a security freeze that a consumer reporting agency is prohibited from disclosing to any person requesting the consumer report for the purpose of opening a new account involving the extension of credit.”; and

(2) in paragraph (4)(D), by striking “a protected consumer or a protected consumer’s representative under subparagraph (A)(i)” and inserting “a protected consumer described under subparagraph (A)(ii) or a protected consumer’s representative”.

Section 203. Enhancing fraud alert protections

Section 605A of the Fair Credit Reporting Act is amended—

(1) in subsection (a)—

(A) in the subsection heading, by striking “One-Call” and inserting “One-Year”;

(B) in paragraph (1)—

(i) in the paragraph heading, by striking “Initial alerts” and inserting “In general”;

(ii) by inserting “or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information,” after “identity theft,”;

(iii) in subparagraph (A), by striking “and” at the end;

(iv) in subparagraph (B)—

(I) by inserting “1-year” before “fraud alert”; and

(II) by striking the period at the end and inserting “; and”; and

(v) by adding at the end the following new subparagraph:

“(C) upon the expiration of the 1-year period described in subparagraph (A) or a subsequent 1-year period, and in response to a direct request by the consumer or such representative, continue the fraud alert for a period of 1 additional year if the information asserted in this paragraph remains applicable.”; and

(C) in paragraph (2)—

(i) in the paragraph heading, by inserting “and credit or educational credit scores” after “reports”;

(ii) by inserting “1-year” before “fraud alert”;

(iii) in subparagraph (A), by inserting “and credit score or educational credit score” after “file”; and

(iv) in subparagraph (B), by striking “any request described in subparagraph (A)” and inserting “the consumer reporting agency includes the 1-year fraud alert in the file of a consumer”;

(2) in subsection (b)—

(A) in the subsection heading, by striking “Extended” and inserting “Seven-Year”;

(B) in paragraph (1)—

(i) in subparagraph (B)—

(I) by striking “5-year period beginning on the date of such request” and inserting “such 7-year period”; and

(II) by striking “and” at the end;

(ii) in subparagraph (C)—

(I) by striking “extended” and inserting “7-year”; and

(II) by striking the period at the end and inserting “; and”; and

(iii) by adding at the end the following new subparagraph:

“(D) upon the expiration of such 7-year period or a subsequent 7-year period, and in response to a direct request by the consumer or such representative, continue the fraud alert for a period of 7 additional years if the consumer or such representative submits an updated identity theft report.”; and

(C) in paragraph (2)—

(i) in the paragraph heading, by inserting “and credit or educational credit scores” after “reports”; and

(ii) by amending subparagraph (A) to read as follows:

“(A) disclose to the consumer that the consumer may request a free copy of the file and credit score or educational credit score of the consumer pursuant to section 612(d) during each 12-month period beginning on the date on which the 7-year fraud alert was included in the file and ending on the date of the last day that the 7-year fraud alert applies to the consumer’s file; and”;

(3) in subsection (c)—

(A) in paragraph (1), by inserting “or educational credit score” after “credit score”;

(B) by redesignating paragraphs (1), (2), and (3), as subparagraphs (A), (B), and (C), respectively (and conforming the margins accordingly);

(C) by striking “Upon the direct request” and inserting:

“(1) IN GENERAL.—Upon the direct request”; and

(D) by adding at the end the following new paragraph:

“(2) ACCESS TO FREE REPORTS AND CREDIT OR EDUCATIONAL CREDIT SCORES.—If a consumer reporting agency includes an active duty alert in the file of an active duty military consumer, the consumer reporting agency shall—

“(A) disclose to the active duty military consumer that the active duty military consumer may request a free copy of the file and credit score or educational credit score of the active duty military consumer pursuant to section 612(d), during each 12-month period beginning on the date that the activity duty military alert is requested and ending on the date of the last day the active duty alert applies to the file of the active duty military consumer; and

“(B) provide to the active duty military consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A).”;

(4) by amending subsection (d) to read as follows:

“(d) Procedures.—Each consumer reporting agency described in section 603(p) shall include on the webpage required under subsection (i) policies and procedures to comply with this section, including policies and procedures—

“(1) that inform consumers of the availability of 1-year fraud alerts, 7-year fraud alerts, active duty alerts, and security freezes (as applicable);

“(2) that allow consumers to request 1-year fraud alerts, 7-year fraud alerts, and active duty alerts (as applicable) and to place, temporarily lift, or fully remove a security freeze in a simple and easy manner; and

“(3) for asserting in good faith a suspicion that the consumer has been or is about to become a victim of identity theft, fraud, or a related crime, or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, for a consumer seeking a 1-year fraud alert or security freeze.”;

(5) in subsection (e), by inserting “1-year or 7-year” before “fraud alert”;

(6) in subsection (f), by striking “or active duty alert” and inserting “active duty alert, or security freeze (as applicable)”;

(7) in subsection (g)—

(A) by inserting “or has been harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, or to inform such agency of the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E,” after “identity theft,”; and

(B) by inserting “or security freezes” after “request alerts”;

[8] in subsection (h)—

(A) in paragraph (1)—

(i) in the paragraph heading, by striking “initial” and inserting “1-year”; and

(ii) by striking “initial” and inserting “1-year” each place such term appears; and

(B) in paragraph (2)—

(i) in the paragraph heading, by striking “extended” and inserting “7-year”; and

(ii) by striking “extended” and inserting “7-year” each place such term appears; and

(9) in subsection (i)(4)—

(A) by striking subparagraphs (E) and (I); and

(B) by redesignating subparagraphs (F), (G), (H), and (J) as subparagraphs (E), (F), (G), and (H), respectively.

Section 204. Amendment to security freezes for consumer reports

(a) In general.—Section 605A(i) of the Fair Credit Reporting Act is amended—

(1) by amending the subsection heading to read as follows: “Security freezes for consumer reports”;

(2) in paragraph (3)(E), by striking “Upon receiving” and all that follows through “subparagraph (C),” and inserting “Upon receiving a direct request from a consumer for a temporary removal of a security freeze, a consumer reporting agency shall”; and

(3) by adding at the end the following:

“(7) RELATION TO STATE LAW.—This subsection does not modify or supersede the laws of any State relating to security freezes or other similar actions, except to the extent those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this subsection, a term or provision of a State law is not inconsistent with the provisions of this subsection if the term or provision affords greater protection to the consumer than the protection provided under this subsection as determined by the Bureau.”.

(b) Amendment to webpage requirements.—Section 605A(i)(6)(A) of the Fair Credit Reporting Act is amended—

(1) in clause (ii), by striking “initial fraud alert” and inserting “1-year fraud alert”;

(2) in clause (iii), by striking “extended fraud alert” and inserting “7-year fraud alert”; and

(3) in clause (iv), by striking “fraud”.

(c) Amendment to exceptions for certain persons.—Section 605A(i)(4)(A) of the Consumer Credit Protection Act is amended to read as follows:

“(A) A person, or the person’s subsidiary, affiliate, agent, subcontractor, or assignee with whom the consumer has, or prior to assignment had, an authorized account, contract, or debtor-creditor relationship for the purposes of reviewing the active account or collecting the financial obligation owed on the account, contract, or debt.”.

(e) Effective date.—The amendments made by subsection (a) shall take effect on the date of the enactment of this Act.

Section 205. Clarification of information to be included with agency disclosures

Section 609(c)(2) of such Act is amended—

(1) in subparagraph (B)—

(A) by striking “consumer reporting agency described in section 603(p)” and inserting “consumer reporting agency described in subsection (p) or (x) of section 603”;

(B) by striking “the agency” and inserting “such an agency”; and

(C) by inserting “and an Internet website address” after “hours”; and

(2) in subparagraph (E), by striking “outdated under section 605 or” and inserting “outdated, required to be removed, or”.

Section 206. Providing access to fraud records for victims

Section 609(e) of the Fair Credit Reporting Act is amended—

(1) in paragraph (1)—

(A) by striking “resulting from identity theft”;

(B) by striking “claim of identity theft” and inserting “claim of fraudulent activity”; and

(C) by striking “any transaction alleged to be a result of identity theft” and inserting “any fraudulent transaction”;

(2) in paragraph (2)(B)—

(A) by striking “identity theft, at the election of the business entity” and inserting “fraudulent activity”;

(B) by amending clause (i) to read as follows:

“(i) a copy of an identity theft report; or”; and

(C) by amending clause (ii) to read as follows:

“(ii) an affidavit of fact that is acceptable to the business entity for that purpose.”;

(3) in paragraph (3)(C), by striking “identity theft” and inserting “fraudulent activity”;

(4) by striking paragraph [8] and redesignating paragraphs (9) through (13) as paragraphs [8] through (12), respectively; and

(5) in paragraph (10) (as so redesignated), by striking “or a similar crime” and inserting “, fraud, or a related crime”.

Section 207. Requiring Bureau to set procedures for reporting identity theft, fraud, and other related crime

Section 621(f)(2) of the Fair Credit Reporting Act is amended—

(1) in the paragraph heading, by striking “Model form” and inserting “Standardized affidavit”;

(2) by striking “The Commission” and inserting “The Bureau”;

(3) by striking “model form” and inserting “standardized affidavit”;

(4) by inserting after “identity theft” the following: “, fraud, or a related crime, or otherwise are harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information,”; and

(5) by striking “fraud.” and inserting “identity theft, fraud, or other related crime. Such standardized affidavit and procedures shall not include a requirement that a consumer obtain a police report.”.

Section 208. Establishing the right to free credit monitoring and identity theft protection services for certain consumers

(a) Enforcement of credit monitoring for servicemembers.—

(1) IN GENERAL.—Subsection (k) of section 605A is amended by striking paragraph (4).

(2) EFFECTIVE DATE.—This subsection and the amendments made by this subsection shall take effect on the date of the enactment of this Act.

(b) Free credit monitoring and identity theft protection services for certain consumers.—Subsection (k) of section 605A, is amended to read as follows:

“(k) Credit monitoring and identity theft protection services.—

“(1) IN GENERAL.—Upon the direct request of a consumer, a consumer reporting agency described in section 603(p) that maintains a file on the consumer and has received appropriate proof of the identity of the requester (as described in section 1022.123 of title 12, Code of Federal Regulations) shall provide the consumer with credit monitoring and identity theft protection services not later than 1 business day after receiving such request sent by postal mail, toll-free telephone, or secure electronic means as established by the agency.

“(2) FEES.—

“(A) CLASSES OF CONSUMERS.—The Bureau may establish classes of consumers eligible to receive credit monitoring and identity theft protection services free of charge.

“(B) NO FEE.—A consumer reporting agency described in section 603(p) may not charge a consumer a fee to receive credit monitoring and identity theft protection services if the consumer or a representative of the consumer—

“(i) asserts in good faith a suspicion that the consumer has been or is about to become a victim of identity theft, fraud, or a related crime, or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information;

“(ii) is unemployed and intends to apply for employment in the 60-day period beginning on the date on which the request is made;

“(iii) is a recipient of public welfare assistance;

“(iv) is an active duty military consumer or a member of the National Guard (as defined in section 101(c) of title 10, United States Code);

“(v) is 65 years of age or older; or

“(vi) is a member of a class established by the Bureau under subparagraph (A).

“(3) BUREAU RULEMAKING.—The Bureau shall issue regulations—

“(A) to define the scope of credit monitoring and identity theft protection services required under this subsection; and

“(B) to set a fair and reasonable fee that a consumer reporting agency may charge a consumer (other than a consumer described under paragraph (2)(B)) for such credit monitoring and identity theft protection services.

“(4) RELATION TO STATE LAW.—This subsection does not modify or supersede of the laws of any State relating to credit monitoring and identity theft protection services or other similar actions, except to the extent those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this subsection, a term or provision of a State law is not inconsistent with the provisions of this subsection if the term or provision affords greater protection to the consumer than the protection provided under this subsection as determined by the Bureau.”.

Section 209. Ensuring removal of inquiries resulting from identity theft, fraud, or other related crime from consumer reports

Section 605(a) of the Fair Credit Reporting Act, as amended by section 103, is further amended by adding at the end the following:

“(17) Information about inquiries made for a credit report based on requests that the consumer reporting agency verifies were initiated as the result of identity theft, fraud, or other related crime.”.

TITLE III—Miscellaneous

Section 301. Definitions

Section 603 of the Fair Credit Reporting Act is further amended by adding at the end the following:

“(bb) Definitions related to days.—

“(1) CALENDAR DAY; DAY.—The term ‘calendar day’ or ‘day’ means a calendar day, excluding any federally recognized holiday.

“(2) BUSINESS DAY.—The term ‘business day’ means a day between and including Monday to Friday, and excluding any federally recognized holiday.”.

Section 302. Technical correction related to risk-based pricing notices

Section 615(h)[8] of the Fair Credit Reporting Act is amended—

(1) in subparagraph (A), by striking “this section” and inserting “this subsection”; and

(2) in subparagraph (B), by striking “This section” and inserting “This subsection”.

Section 303. FCRA findings and purpose; voids certain contracts not in the public interest

(a) FCRA findings and purpose.—Section 602 of the Fair Credit Reporting Act is amended—

(1) in subsection (a)—

(A) by amending paragraph (1) to read as follows:

“(1) Many financial and non-financial decisions affecting consumers’ lives depend upon fair, complete, and accurate credit reporting. Inaccurate and incomplete credit reports directly impair the efficiency of the financial system and undermine the integrity of using credit reports in other circumstances, and unfair credit reporting and credit scoring methods undermine the public confidence which is essential to the continued functioning of the financial services system and the provision of many other consumer products and services.”; and

(B) in paragraph (4), by inserting after “agencies” the following: “, furnishers, and credit scoring developers”; and

(2) in subsection (b)—

(A) by striking “It is the purpose of this title to require” and inserting the following: “The purpose of this title is the following:

“(1) To require”; and

(B) by adding at the end the following:

“(2) To prohibit any practices and procedures with respect to credit reports and credit scores that are not in the public interest.”.

(b) Voiding of certain contracts not in the public interest.—

The Fair Credit Reporting Act, as amended by section 107, is further amended—

(1) by adding at the end the following new section:

Ҥ 631. Voiding of certain contracts not in the public interest

“(a) In general.—Any provision contained in a contract that requires a person to not follow a provision of this title, that is against the public interest, or that otherwise circumvents the purposes of this title shall be null and void.

“(b) Rule of construction.—Nothing in subsection (a) shall be construed as affecting other provisions of a contract that are not described under subsection (a).”; and

(2) in the table of contents for such Act, by adding at the end the following new item:

“631. Voiding of certain contracts not in the public interest.”.

Sponsor: Scott
Senate Designation: SB23:02

[Southern Senator North Carolina Yankee]

The sponsor has 24 hours to advocate and the other members a subsequent 48 hours.

I suggest everyone read through this carefully as this is long and the more eyes on it, the more likely to find any issues that may exist.

[Bleach Blonde Bad Built Butch Bodies for Biden]

This bill is based on a real-life bill, which recently passed the US House.  Essentially, this would shorten the time that negative information stays on your credit report, including that which is incurred from unfair consumer reporting practices, medical debt, predatory mortgage lending, fraud, and identity theft.  By restoring the impaired credit of victims of unfair lending practices and fraud, as well as expanding protections against abuse, this bill would create opportunities for millions of Atlasians across the country to obtain student loans, credit cards, transportation, as well as employment, and increase home ownership.

In addition to the great strides we've already made in expanding access to public healthcare, those with debt from medically necessary procedures will no longer be hurt long-term from having that information included on credit reports.  Those who are victims of identity theft and deceptive practices will have their credit repaired right away - a very personal issue to me, as one who has been a victim of fraud and identity theft.

This bill is about fairness, opportunity, and justice, and I hope that my colleagues in both chambers share in the bill's goals to expand economic opportunity and protect survivors of economic and domestic abuse.

[Former President tack50]

Well, and I thought I was being lazy with RL bills full of legalese

[Bleach Blonde Bad Built Butch Bodies for Biden]

Well, and I thought I was being lazy with RL bills full of legalese

I mean, I did read Tlaib's bill as I was copying it.   I also linked to the FCRA that is amended by the bill.  Copying from RL bills is useful, particularly for "quickie amendments" or bills that are legally complex.

[Southern Senator North Carolina Yankee]

Many years ago, before Scott was even on the forum, I pushed through a bill to attempt to help people recover after identity theft. I also in a non-atlasian topic that I think was in the context of immigration, referred to identify theft as economic terrorism and this was very controversial at the time. I think it might even have been Cinyc who objected to me using that descriptor though I cannot remember for sure.

Certainly now, with all of the data breaches and attacks via cyber to compromise, steal and access financial and personal data via the internet, I think if anything I was prescient in its usage since we see acts of actual cyber terrorism being carried out for the sole purposes of compromising large numbers of people.

As to the point about lingering health care related debts that is certainly something that needs to be addressed since obviously health care only mitigated that going forward, not address that which already happened so this bill is a good step in the right direction in that sense.

I hope to complete a more formal review of the text later and may have questions at that time.

[At-Large Senator LouisvilleThunder]

This bill definitely contains a lot of interesting legalese that will need to be looked at closely. I do think that the aims of this bill is pretty good to protect people against identity theft and fraud. But if we're going to pass debt forgiveness, then we need to make sure that the reforms are suitable enough to prevent the inevitable moral hazard resulting from people using this legislation as an excuse to go into more debt that they know that can't pay back.

[Southern Senator North Carolina Yankee]

This bill definitely contains a lot of interesting legalese that will need to be looked at closely. I do think that the aims of this bill is pretty good to protect people against identity theft and fraud. But if we're going to pass debt forgiveness, then we need to make sure that the reforms are suitable enough to prevent the inevitable moral hazard resulting from people using this legislation as an excuse to go into more debt that they know that can't pay back.

This is a good point. Like I said during the Credit unions bill when discussing broader financial reforms, you need to balance stability, avoiding moral hazard and accountability. The same applies here though differently in some ways.

[Bleach Blonde Bad Built Butch Bodies for Biden]

Any questions or comments?

[Bleach Blonde Bad Built Butch Bodies for Biden]

Motion for a final vote.

[Southern Senator North Carolina Yankee]

Senators have 24 hours to object.

[Bleach Blonde Bad Built Butch Bodies for Biden]

Hearing no objection, a final vote is now open.

Senators, please vote Aye, Nay, or Abstain.

[Bleach Blonde Bad Built Butch Bodies for Biden]

Aye

[Former President tack50]

Aye

[At-Large Senator LouisvilleThunder]

Nay

[Southern Senator North Carolina Yankee]

Extending this to midnight to get to a quorum.

AYE

[Former President tack50]

Extending this to midnight to get to a quorum.

AYE

For the record, what is the minimum amount of Senators to get a quorum?

[Devout Centrist]

Aye

[Peanut]

So since this was extended before the other one, after it's passed it'll go to the currently open House slot. I'll also be bringing up one of the bills I've got on the queue for you guys since these two are done.

[Southern Senator North Carolina Yankee]

Vote on final Passage of the Bad Credit Relief Act of 2020:

Aye (4): Devout Centrist, NC Yankee, Scott and Tack50
Nay (1): LT
Abstain (0):

Didn't Vote (1): Pyro

This has passed the Senate and is sent to the VP For House action.

[Southern Senator North Carolina Yankee]

A BILL
To amend the Fair Credit Reporting Act to restore the impaired credit of victims of predatory activities and unfair consumer reporting practices, to expand access to tools to protect vulnerable consumers from identity theft, fraud, or a related crime, and protect victims from further harm, and for other purposes.

Be it enacted by the Senate and the House of Representatives, in Congress assembled:

Section 1. Title

This legislation may be cited as the Bad Credit Relief Act of 2020.

Section 2. Findings

(1) Many Atlasians across the country are faced with mounting medical debt, dealing with predatory lenders and fraudulent activity, and prevented from accessing credit due to their credit reports containing older debt, providing little to no insight of credit worthiness.

(2) Consumer reports play an increasingly important role in the lives of Atlasian consumers.  Most creditors, for example, review these reports to make decisions about whether to extend credit to consumers and what terms and conditions to offer them.  As such, information contained in these reports affects whether a person is able to get a private education loan to pay for college costs, to secure a mortgage loan to buy a home, or to obtain a credit card, as well as the terms and conditions under which consumer credit products or services are offered to them.

(3) Credit reports are also increasingly used for many noncredit decisions, including by landlords to determine whether to rent an apartment to a prospective tenant and by employers to decide whether to hire potential job applicants or to offer a promotion to existing employees.

TITLE I—Restoring the impaired credit of victims of predatory activities and unfair consumer reporting practices

Section 101. Shortening the time period that most adverse credit information stays on consumer reports

1.) Section 605 of the Fair Credit Reporting Act is hereby amended:

(1) in subsection (a)—

(A) by striking “Except as authorized under subsection (b), no” and inserting “No”;

(B) in paragraph (1), by striking “10 years” and inserting “7 years”;

(C) in paragraph (2), by striking “Civil suits, civil judgments, and records” and inserting “Records”;

(D) in paragraph (3), by striking “seven years” and inserting “4 years”;

(E) in paragraph (4), by striking “seven years” and inserting “4 years, except as provided in paragraph [8], (10), (11), (12), or (13), or as required by section 605C, 605D, 605E, or 605F”;

(F) in paragraph (5)—

(i) by striking “, other than records of convictions of crimes”; and

(ii) by striking “seven years” and inserting “4 years, except as required by section 605C, 605D, 605E, or 605F”; and

(G) by adding at the end the following new paragraphs:

“(9) Civil suits and civil judgments (except as provided in paragraph [8]) that, from date of entry, antedate the report by more than 4 years or until the governing statute of limitations has expired, whichever is the longer period.

“(10) A civil suit or civil judgment—

“(A) brought by a private education loan holder that, from the date of successful completion of credit restoration or rehabilitation in accordance with the requirements of section 605D or 605E, antedates the report by 45 calendar days; or

“(B) brought by a lender with respect to a covered residential mortgage loan that antedates the report by 45 calendar days.

“(11) Records of convictions of crimes which antedate the report by more than 7 years.

“(12) Any other adverse item of information relating to the collection of debt that did not arise from a contract or an agreement to pay by a consumer, including fines, tickets, and other assessments, as determined by the Bureau, excluding tax liability.”;

(2) by striking subsection (b) and redesignating subsections (c) through (h) as subsections (b) through (g), respectively; and

(3) in subsection (b) (as so redesignated), by striking “7-year period referred to in paragraphs (4) and (6)” and inserting “4-year period referred to in paragraphs (4) and (5)”.

(b) Conforming amendments.—The Fair Credit Reporting Act is amended—

(1) in section 616(d), by striking “section 605(g)” each place that term appears and inserting “section 605(f)”; and

(2) in section 625(b)(5)(A), by striking “section 605(g)” and inserting “section 605(f)”.

Section 102. Mandating the expedited removal of fully paid or settled debt from consumer reports

Section 605(a) of the Fair Credit Reporting Act , as amended by section 101(a)(1), is further amended by adding at the end the following new paragraph:

“(13) Any other adverse item of information related to a fully paid or settled debt that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 calendar days.”.

Section 103. Imposing restrictions on the appearance of medical collections on consumer reports and requires the expedited removal of fully paid or settled medical collections from consumer reports

(a) Removal of fully paid or settled medical debt from consumer reports.—Section 605(a) of the Fair Credit Reporting Act, as amended by section 102, is further amended by adding at the end the following new paragraph:

“(14) Any other adverse item of information related to a fully paid or settled debt arising from the receipt of medical services, products, or devices that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 calendar days.”.

(b) Establishing an extended time period before certain medical debt information may be reported.—Section 605(a) of such Act is further amended by adding at the end the following new paragraph:

“(15) Any information related to a debt arising from the receipt of medical services, products, or devices, if the date on which such debt was placed for collection, charged to profit or loss, or subjected to any similar action antedates the report by less than 365 calendar days.”.

(c) Prohibition on reporting medically necessary procedures.—Section 605(a) of such Act is further amended by adding at the end the following new paragraph:

“(16) Any information related to a debt arising from a medically necessary procedure.”.

(d) Technical amendment.—Section 604(g)(1)(C) of the Fair Credit Reporting Act is further amended by striking “devises” and inserting “devices”.

Section 104. Providing credit restoration for victims of predatory mortgage lending and servicing

(a) In general.—The Fair Credit Reporting Act is amended by inserting after section 605B the following new section:

Section 105. Credit restoration for victims of predatory mortgage lending

“(a) In general.—A consumer reporting agency may not furnish any consumer report containing any adverse item of information relating to a covered residential mortgage loan (including the origination and servicing of such a loan, any loss mitigation activities related to such a loan, and any foreclosure, deed in lieu of foreclosure, or short sale related to such a loan), if the action or inaction to which the item of information relates—

“(1) resulted from an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity of a financial institution, as determined by the Bureau or a court of competent jurisdiction; or

“(2) is related to an unfair, deceptive, or abusive act, practice, or a fraudulent, discriminatory, or illegal activity of a financial institution that is the subject of a settlement agreement initiated on behalf of a consumer or consumers and that is between the financial institution and an agency or department of a local, State, or Federal Government, regardless of whether such settlement includes an admission of wrongdoing.

“(b) Covered residential mortgage loan defined.—In this section, the term ‘covered residential mortgage loan’ means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling (as defined in section 103(w) of the Truth in Lending Act), including a loan in which the proceeds will be used for—

“(1) a manufactured home (as defined in section 603 of the Housing and Community Development Act of 1974;

“(2) any installment sales contract, land contract, or contract for deed on a residential property; or

“(3) a reverse mortgage transaction (as defined in section 103 of the Truth in Lending Act).”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605B the following new item:

Section 106. Credit restoration for victims of predatory mortgage lending

“(a) In general.—A consumer reporting agency may not furnish any consumer report containing any adverse item of information relating to a covered residential mortgage loan (including the origination and servicing of such a loan, any loss mitigation activities related to such a loan, and any foreclosure, deed in lieu of foreclosure, or short sale related to such a loan), if the action or inaction to which the item of information relates—

“(1) resulted from an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity of a financial institution, as determined by the Bureau or a court of competent jurisdiction; or

“(2) is related to an unfair, deceptive, or abusive act, practice, or a fraudulent, discriminatory, or illegal activity of a financial institution that is the subject of a settlement agreement initiated on behalf of a consumer or consumers and that is between the financial institution and an agency or department of a local, State, or Federal Government, regardless of whether such settlement includes an admission of wrongdoing.

“(b) Covered residential mortgage loan defined.—In this section, the term ‘covered residential mortgage loan’ means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling (as defined in section 103(w) of the Truth in Lending Act), including a loan in which the proceeds will be used for—

“(1) a manufactured home (as defined in section 603 of the Housing and Community Development Act of 1974;

“(2) any installment sales contract, land contract, or contract for deed on a residential property; or

“(3) a reverse mortgage transaction (as defined in section 103 of the Truth in Lending Act).”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605B the following new item:

“605C. Credit restoration for victims of predatory mortgage lending.”.

(c) Effective date.—The amendments made by this section shall take effect at the end of the 18-month period beginning on the date of the enactment of this Act.

Section 107. Providing credit relief for private education loans borrowers who were defrauded or mislead by proprietary education institution or career education programs

(a) In general.—The Fair Credit Reporting Act, as amended by section 104, is further amended by inserting after section 605C the following new section:

Ҥ 605D. Private education loan credit restoration for defrauded student borrowers who attend certain proprietary educational institution or career education programs

“(a) Process for certification as a qualifying private education loan borrower.—

“(1) IN GENERAL.—A consumer may submit a request to the Bureau, along with a defraudment claim, to be certified as a qualifying private education loan borrower with respect to a private education loan.

“(2) CERTIFICATION.—The Bureau shall certify a consumer described in paragraph (1) as a qualifying private education loan borrower with respect to a private education loan if the Bureau or a court of competent jurisdiction determines that the consumer has a valid defraudment claim with respect to such loan.

“(b) Removal of adverse information.—Upon receipt of a notice described in subsection (d)(5), a consumer reporting agency shall remove any adverse information relating to any private education loan with respect to which a consumer is a qualifying private education loan borrower from any consumer report within 45 calendar days of receipt of such notification.

“(c) Disclosure.—The Bureau shall disclose the results of a certification determination in writing to the consumer that provides a clear and concise explanation of the basis for the determination of whether such consumer is a qualifying private education loan borrower with respect to a private education loan and, as applicable, an explanation of the consumer’s right to have adverse information relating to such loan removed from their consumer report by a consumer reporting agency.

“(d) Procedures.—The Bureau shall—

“(1) establish procedures for a consumer to submit a request described in subsection (a);

“(2) establish procedures to efficiently review, accept, and process such a request;

“(3) develop ongoing outreach initiatives and education programs to inform consumers of the circumstances under which such consumer may be eligible to be certified as a qualifying private education loan borrower with respect to a private education loan;

“(4) establish procedures, including the manner, form, and content of the notice informing a private educational loan holder of the prohibition on reporting any adverse information relating to a private education loan with respect to which a consumer is a qualifying private education loan borrower; and

“(5) establish procedures, including the manner, form, and content of the notice informing a consumer reporting agency of the obligation to remove any adverse information as described in subsection (c).

“(e) Standardized reporting codes.—A consumer reporting agency shall develop standardized reporting codes for use by private education loan holders to identify and report a qualifying private education loan borrower’s status of a request to remove any adverse information relating to any private education loan with respect to which such consumer is a qualifying private education loan borrower. A consumer report in which a person furnishes such codes shall be deemed to comply with the requirements for accuracy and completeness required under sections 623(a)(1) and 630. Such codes shall not appear on any report provided to a third party, and shall be removed from the consumer’s credit report upon the successful restoration of the consumer’s credit under this section.

“(f) Defraudment claim defined.—For purposes of this section, the term ‘defraudment claim’ means a claim made with respect to a consumer who is a borrower of a private education loan with respect to a proprietary educational institution or career education program in which the consumer alleges that—

“(1) the proprietary educational institution or career education program—

“(A) engaged in an unfair, deceptive, or abusive act or practice, or a fraudulent, discriminatory, or illegal activity—

“(i) as defined by Regional or State law of the Region or State in which the proprietary educational institution or career education program is headquartered or maintains or maintained significant operations; or

“(ii) under Federal law;

“(B) is the subject of an enforcement order, a settlement agreement, a memorandum of understanding, a suspension of tuition assistance, or any other action relating to an unfair, deceptive, or abusive act or practice that is between the proprietary educational institution or career education program and an agency or department of a local, Regional, State, or Federal Government; or

“(C) misrepresented facts to students or accrediting agencies or associations about graduation or gainful employment rates in recognized occupations or failed to provide the coursework necessary for students to successfully obtain a professional certification or degree from the proprietary educational institution or career education program; or

“(2) the consumer has submitted a valid defense to repayment claim with respect to such loan, as determined by the Secretary of Education.”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605C (as added by section 104) the following new item:

“605D. Private education loan credit restoration for defrauded student borrowers who attend certain proprietary educational institution or career education programs.”.

Section 108. Establishing the right for victims of financial abuse to have adverse information associated with an abuser’s fraudulent activity removed from their consumer reports

(a) In general.—The Fair Credit Reporting Act, as amended by section 105, is further amended by inserting after section 605D the following new section:

Ҥ 605E. Financial abuse prevention

“For a consumer who is the victim of intentionally abusive or harmful financial behavior, as determined by a court of competent jurisdiction including a family court, juvenile court, or other court with personal jurisdiction, that was conducted by a spouse, family or household member, caregiver, or person with whom such consumer had a dating relationship in a manner which resulted in the inclusion of an adverse item of information on the consumer report of the consumer, and the consumer did not participate in or consent to such behavior, the consumer may apply to a court of competent jurisdiction, including a family court, juvenile court, or other court with personal jurisdiction, for an order to require the removal of such adverse information from the consumer’s file maintained by any consumer reporting agency.”.

(b) Table of contents amendment.—The table of contents of the Fair Credit Reporting Act is amended by inserting after the item relating to section 605D the following new item:

“605E. Financial abuse prevention.”.

Section 109. Prohibiting treatment of credit restoration or rehabilitation as adverse information

The Fair Credit Reporting Act is amended—

(1) by adding at the end the following new section:

Ҥ 630. Prohibition of certain factors related to Federal credit restoration or rehabilitation

“(a) Restriction on credit scoring models.—A credit scoring model may not—

“(1) take into consideration, in a manner adverse to a consumer’s credit score or educational credit score, any information in a consumer report concerning the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E; or

“(2) treat negatively, in a manner adverse to a consumer’s credit score or educational credit score, the absence of payment history data for an existing account, whether the account is open or closed, where the absence of such information is the result of a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E.

“(b) Restriction on persons obtaining consumer reports.—A person who obtains a consumer report may not—

“(1) take into consideration, in a manner adverse to a consumer, any information in a consumer report concerning the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E; or

“(2) treat negatively the absence of payment history data for an existing account, whether the account is open or closed, where the absence of such information is the result of a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E.

“(c) Accuracy and completeness.—If a person who furnishes information to a consumer reporting agency requests the removal of information from a consumer report or a consumer reporting agency removes information from a consumer report in compliance with the requirements under section 605C, 605D, or 605E, or such information was removed pursuant at section 605(a)(11), such report shall be deemed to satisfy the requirements for accuracy and completeness with respect to such information.

“(d) Prohibition related to adverse actions and risk-Based pricing decisions.—No person shall use information related to a consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E in connection with any determination of—

“(1) the consumer’s eligibility or continued eligibility for an extension of credit;

“(2) the terms and conditions offered to a consumer regarding an extension of credit; or

“(3) an adverse action made for employment purposes.”; and

(2) in the table of contents for such Act, by adding at the end the following new item:

“630. Prohibition of certain factors related to Federal credit restoration or rehabilitation.”.

Continued in Part II

[Southern Senator North Carolina Yankee]

TITLE II—Expanding access to tools to protect vulnerable consumers from identity theft, fraud, or a related crime, and protect victims from further harm

Section 201. Identity theft report definition

Paragraph (4) of section 603(q) of the Fair Credit Reporting Act is amended to read as follows:

“(4) IDENTITY THEFT REPORT.—The term ‘identity theft report’ has the meaning given that term by rule of the Bureau, and means, at a minimum, a report—

“(A) that is a standardized affidavit that alleges that a consumer has been a victim of identity theft, fraud, or a related crime, or has been harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, that was developed and made available by the Bureau; or

“(B) (i) that alleges an identity theft, fraud, or a related crime, or alleges harm from the unauthorized disclosure of the consumer’s financial or personally identifiable information;

“(ii) that is a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency, including the United States Postal Inspection Service, or such other government agency deemed appropriate by the Bureau; and

“(iii) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false.”.

Section 202. Amendment to protection for files and credit records of protected consumers

(a) Amendment to definition of “file”.—Section 603(g) of the Fair Credit Reporting Act is amended by inserting “, except that such term excludes a record created pursuant to section 605A(j)” after “stored”.

(b) Amendment to protection for files and credit records.—Section 605A(j) of the Fair Credit Reporting Act is amended—

(1) in paragraph (1)—

(A) in subparagraph (B)(ii), by striking “an incapacitated person or a protected person” and inserting “a person”; and

(B) by amending subparagraph (E) to read as follows:

“(E) The term ‘security freeze’—

“(i) has the meaning given in subsection (i)(1)(C); and

“(ii) with respect to a protected consumer for whom the consumer reporting agency does not have a file, means a record that is subject to a security freeze that a consumer reporting agency is prohibited from disclosing to any person requesting the consumer report for the purpose of opening a new account involving the extension of credit.”; and

(2) in paragraph (4)(D), by striking “a protected consumer or a protected consumer’s representative under subparagraph (A)(i)” and inserting “a protected consumer described under subparagraph (A)(ii) or a protected consumer’s representative”.

Section 203. Enhancing fraud alert protections

Section 605A of the Fair Credit Reporting Act is amended—

(1) in subsection (a)—

(A) in the subsection heading, by striking “One-Call” and inserting “One-Year”;

(B) in paragraph (1)—

(i) in the paragraph heading, by striking “Initial alerts” and inserting “In general”;

(ii) by inserting “or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information,” after “identity theft,”;

(iii) in subparagraph (A), by striking “and” at the end;

(iv) in subparagraph (B)—

(I) by inserting “1-year” before “fraud alert”; and

(II) by striking the period at the end and inserting “; and”; and

(v) by adding at the end the following new subparagraph:

“(C) upon the expiration of the 1-year period described in subparagraph (A) or a subsequent 1-year period, and in response to a direct request by the consumer or such representative, continue the fraud alert for a period of 1 additional year if the information asserted in this paragraph remains applicable.”; and

(C) in paragraph (2)—

(i) in the paragraph heading, by inserting “and credit or educational credit scores” after “reports”;

(ii) by inserting “1-year” before “fraud alert”;

(iii) in subparagraph (A), by inserting “and credit score or educational credit score” after “file”; and

(iv) in subparagraph (B), by striking “any request described in subparagraph (A)” and inserting “the consumer reporting agency includes the 1-year fraud alert in the file of a consumer”;

(2) in subsection (b)—

(A) in the subsection heading, by striking “Extended” and inserting “Seven-Year”;

(B) in paragraph (1)—

(i) in subparagraph (B)—

(I) by striking “5-year period beginning on the date of such request” and inserting “such 7-year period”; and

(II) by striking “and” at the end;

(ii) in subparagraph (C)—

(I) by striking “extended” and inserting “7-year”; and

(II) by striking the period at the end and inserting “; and”; and

(iii) by adding at the end the following new subparagraph:

“(D) upon the expiration of such 7-year period or a subsequent 7-year period, and in response to a direct request by the consumer or such representative, continue the fraud alert for a period of 7 additional years if the consumer or such representative submits an updated identity theft report.”; and

(C) in paragraph (2)—

(i) in the paragraph heading, by inserting “and credit or educational credit scores” after “reports”; and

(ii) by amending subparagraph (A) to read as follows:

“(A) disclose to the consumer that the consumer may request a free copy of the file and credit score or educational credit score of the consumer pursuant to section 612(d) during each 12-month period beginning on the date on which the 7-year fraud alert was included in the file and ending on the date of the last day that the 7-year fraud alert applies to the consumer’s file; and”;

(3) in subsection (c)—

(A) in paragraph (1), by inserting “or educational credit score” after “credit score”;

(B) by redesignating paragraphs (1), (2), and (3), as subparagraphs (A), (B), and (C), respectively (and conforming the margins accordingly);

(C) by striking “Upon the direct request” and inserting:

“(1) IN GENERAL.—Upon the direct request”; and

(D) by adding at the end the following new paragraph:

“(2) ACCESS TO FREE REPORTS AND CREDIT OR EDUCATIONAL CREDIT SCORES.—If a consumer reporting agency includes an active duty alert in the file of an active duty military consumer, the consumer reporting agency shall—

“(A) disclose to the active duty military consumer that the active duty military consumer may request a free copy of the file and credit score or educational credit score of the active duty military consumer pursuant to section 612(d), during each 12-month period beginning on the date that the activity duty military alert is requested and ending on the date of the last day the active duty alert applies to the file of the active duty military consumer; and

“(B) provide to the active duty military consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A).”;

(4) by amending subsection (d) to read as follows:

“(d) Procedures.—Each consumer reporting agency described in section 603(p) shall include on the webpage required under subsection (i) policies and procedures to comply with this section, including policies and procedures—

“(1) that inform consumers of the availability of 1-year fraud alerts, 7-year fraud alerts, active duty alerts, and security freezes (as applicable);

“(2) that allow consumers to request 1-year fraud alerts, 7-year fraud alerts, and active duty alerts (as applicable) and to place, temporarily lift, or fully remove a security freeze in a simple and easy manner; and

“(3) for asserting in good faith a suspicion that the consumer has been or is about to become a victim of identity theft, fraud, or a related crime, or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, for a consumer seeking a 1-year fraud alert or security freeze.”;

(5) in subsection (e), by inserting “1-year or 7-year” before “fraud alert”;

(6) in subsection (f), by striking “or active duty alert” and inserting “active duty alert, or security freeze (as applicable)”;

(7) in subsection (g)—

(A) by inserting “or has been harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information, or to inform such agency of the consumer’s participation in credit restoration or rehabilitation under section 605C, 605D, or 605E,” after “identity theft,”; and

(B) by inserting “or security freezes” after “request alerts”;

[8] in subsection (h)—

(A) in paragraph (1)—

(i) in the paragraph heading, by striking “initial” and inserting “1-year”; and

(ii) by striking “initial” and inserting “1-year” each place such term appears; and

(B) in paragraph (2)—

(i) in the paragraph heading, by striking “extended” and inserting “7-year”; and

(ii) by striking “extended” and inserting “7-year” each place such term appears; and

(9) in subsection (i)(4)—

(A) by striking subparagraphs (E) and (I); and

(B) by redesignating subparagraphs (F), (G), (H), and (J) as subparagraphs (E), (F), (G), and (H), respectively.

Section 204. Amendment to security freezes for consumer reports

(a) In general.—Section 605A(i) of the Fair Credit Reporting Act is amended—

(1) by amending the subsection heading to read as follows: “Security freezes for consumer reports”;

(2) in paragraph (3)(E), by striking “Upon receiving” and all that follows through “subparagraph (C),” and inserting “Upon receiving a direct request from a consumer for a temporary removal of a security freeze, a consumer reporting agency shall”; and

(3) by adding at the end the following:

“(7) RELATION TO STATE LAW.—This subsection does not modify or supersede the laws of any State relating to security freezes or other similar actions, except to the extent those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this subsection, a term or provision of a State law is not inconsistent with the provisions of this subsection if the term or provision affords greater protection to the consumer than the protection provided under this subsection as determined by the Bureau.”.

(b) Amendment to webpage requirements.—Section 605A(i)(6)(A) of the Fair Credit Reporting Act is amended—

(1) in clause (ii), by striking “initial fraud alert” and inserting “1-year fraud alert”;

(2) in clause (iii), by striking “extended fraud alert” and inserting “7-year fraud alert”; and

(3) in clause (iv), by striking “fraud”.

(c) Amendment to exceptions for certain persons.—Section 605A(i)(4)(A) of the Consumer Credit Protection Act is amended to read as follows:

“(A) A person, or the person’s subsidiary, affiliate, agent, subcontractor, or assignee with whom the consumer has, or prior to assignment had, an authorized account, contract, or debtor-creditor relationship for the purposes of reviewing the active account or collecting the financial obligation owed on the account, contract, or debt.”.

(e) Effective date.—The amendments made by subsection (a) shall take effect on the date of the enactment of this Act.

Section 205. Clarification of information to be included with agency disclosures

Section 609(c)(2) of such Act is amended—

(1) in subparagraph (B)—

(A) by striking “consumer reporting agency described in section 603(p)” and inserting “consumer reporting agency described in subsection (p) or (x) of section 603”;

(B) by striking “the agency” and inserting “such an agency”; and

(C) by inserting “and an Internet website address” after “hours”; and

(2) in subparagraph (E), by striking “outdated under section 605 or” and inserting “outdated, required to be removed, or”.

Section 206. Providing access to fraud records for victims

Section 609(e) of the Fair Credit Reporting Act is amended—

(1) in paragraph (1)—

(A) by striking “resulting from identity theft”;

(B) by striking “claim of identity theft” and inserting “claim of fraudulent activity”; and

(C) by striking “any transaction alleged to be a result of identity theft” and inserting “any fraudulent transaction”;

(2) in paragraph (2)(B)—

(A) by striking “identity theft, at the election of the business entity” and inserting “fraudulent activity”;

(B) by amending clause (i) to read as follows:

“(i) a copy of an identity theft report; or”; and

(C) by amending clause (ii) to read as follows:

“(ii) an affidavit of fact that is acceptable to the business entity for that purpose.”;

(3) in paragraph (3)(C), by striking “identity theft” and inserting “fraudulent activity”;

(4) by striking paragraph [8] and redesignating paragraphs (9) through (13) as paragraphs [8] through (12), respectively; and

(5) in paragraph (10) (as so redesignated), by striking “or a similar crime” and inserting “, fraud, or a related crime”.

Section 207. Requiring Bureau to set procedures for reporting identity theft, fraud, and other related crime

Section 621(f)(2) of the Fair Credit Reporting Act is amended—

(1) in the paragraph heading, by striking “Model form” and inserting “Standardized affidavit”;

(2) by striking “The Commission” and inserting “The Bureau”;

(3) by striking “model form” and inserting “standardized affidavit”;

(4) by inserting after “identity theft” the following: “, fraud, or a related crime, or otherwise are harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information,”; and

(5) by striking “fraud.” and inserting “identity theft, fraud, or other related crime. Such standardized affidavit and procedures shall not include a requirement that a consumer obtain a police report.”.

Section 208. Establishing the right to free credit monitoring and identity theft protection services for certain consumers

(a) Enforcement of credit monitoring for servicemembers.—

(1) IN GENERAL.—Subsection (k) of section 605A is amended by striking paragraph (4).

(2) EFFECTIVE DATE.—This subsection and the amendments made by this subsection shall take effect on the date of the enactment of this Act.

(b) Free credit monitoring and identity theft protection services for certain consumers.—Subsection (k) of section 605A, is amended to read as follows:

“(k) Credit monitoring and identity theft protection services.—

“(1) IN GENERAL.—Upon the direct request of a consumer, a consumer reporting agency described in section 603(p) that maintains a file on the consumer and has received appropriate proof of the identity of the requester (as described in section 1022.123 of title 12, Code of Federal Regulations) shall provide the consumer with credit monitoring and identity theft protection services not later than 1 business day after receiving such request sent by postal mail, toll-free telephone, or secure electronic means as established by the agency.

“(2) FEES.—

“(A) CLASSES OF CONSUMERS.—The Bureau may establish classes of consumers eligible to receive credit monitoring and identity theft protection services free of charge.

“(B) NO FEE.—A consumer reporting agency described in section 603(p) may not charge a consumer a fee to receive credit monitoring and identity theft protection services if the consumer or a representative of the consumer—

“(i) asserts in good faith a suspicion that the consumer has been or is about to become a victim of identity theft, fraud, or a related crime, or harmed by the unauthorized disclosure of the consumer’s financial or personally identifiable information;

“(ii) is unemployed and intends to apply for employment in the 60-day period beginning on the date on which the request is made;

“(iii) is a recipient of public welfare assistance;

“(iv) is an active duty military consumer or a member of the National Guard (as defined in section 101(c) of title 10, United States Code);

“(v) is 65 years of age or older; or

“(vi) is a member of a class established by the Bureau under subparagraph (A).

“(3) BUREAU RULEMAKING.—The Bureau shall issue regulations—

“(A) to define the scope of credit monitoring and identity theft protection services required under this subsection; and

“(B) to set a fair and reasonable fee that a consumer reporting agency may charge a consumer (other than a consumer described under paragraph (2)(B)) for such credit monitoring and identity theft protection services.

“(4) RELATION TO STATE LAW.—This subsection does not modify or supersede of the laws of any State relating to credit monitoring and identity theft protection services or other similar actions, except to the extent those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this subsection, a term or provision of a State law is not inconsistent with the provisions of this subsection if the term or provision affords greater protection to the consumer than the protection provided under this subsection as determined by the Bureau.”.

Section 209. Ensuring removal of inquiries resulting from identity theft, fraud, or other related crime from consumer reports

Section 605(a) of the Fair Credit Reporting Act, as amended by section 103, is further amended by adding at the end the following:

“(17) Information about inquiries made for a credit report based on requests that the consumer reporting agency verifies were initiated as the result of identity theft, fraud, or other related crime.”.

TITLE III—Miscellaneous

Section 301. Definitions

Section 603 of the Fair Credit Reporting Act is further amended by adding at the end the following:

“(bb) Definitions related to days.—

“(1) CALENDAR DAY; DAY.—The term ‘calendar day’ or ‘day’ means a calendar day, excluding any federally recognized holiday.

“(2) BUSINESS DAY.—The term ‘business day’ means a day between and including Monday to Friday, and excluding any federally recognized holiday.”.

Section 302. Technical correction related to risk-based pricing notices

Section 615(h)[8] of the Fair Credit Reporting Act is amended—

(1) in subparagraph (A), by striking “this section” and inserting “this subsection”; and

(2) in subparagraph (B), by striking “This section” and inserting “This subsection”.

Section 303. FCRA findings and purpose; voids certain contracts not in the public interest

(a) FCRA findings and purpose.—Section 602 of the Fair Credit Reporting Act is amended—

(1) in subsection (a)—

(A) by amending paragraph (1) to read as follows:

“(1) Many financial and non-financial decisions affecting consumers’ lives depend upon fair, complete, and accurate credit reporting. Inaccurate and incomplete credit reports directly impair the efficiency of the financial system and undermine the integrity of using credit reports in other circumstances, and unfair credit reporting and credit scoring methods undermine the public confidence which is essential to the continued functioning of the financial services system and the provision of many other consumer products and services.”; and

(B) in paragraph (4), by inserting after “agencies” the following: “, furnishers, and credit scoring developers”; and

(2) in subsection (b)—

(A) by striking “It is the purpose of this title to require” and inserting the following: “The purpose of this title is the following:

“(1) To require”; and

(B) by adding at the end the following:

“(2) To prohibit any practices and procedures with respect to credit reports and credit scores that are not in the public interest.”.

(b) Voiding of certain contracts not in the public interest.—

The Fair Credit Reporting Act, as amended by section 107, is further amended—

(1) by adding at the end the following new section:

Ҥ 631. Voiding of certain contracts not in the public interest

“(a) In general.—Any provision contained in a contract that requires a person to not follow a provision of this title, that is against the public interest, or that otherwise circumvents the purposes of this title shall be null and void.

“(b) Rule of construction.—Nothing in subsection (a) shall be construed as affecting other provisions of a contract that are not described under subsection (a).”; and

(2) in the table of contents for such Act, by adding at the end the following new item:

“631. Voiding of certain contracts not in the public interest.”.

People's Regional Senate
Passed 4-1 in the Atlasian Senate Assembled,