
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC1681b]

 
                      TITLE 15--COMMERCE AND TRADE
 
                 CHAPTER 41--CONSUMER CREDIT PROTECTION
 
                SUBCHAPTER III--CREDIT REPORTING AGENCIES
 
Sec. 1681b. Permissible purposes of consumer reports


(a) In general

    Subject to subsection (c) of this section, 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 654 of 
title 42 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 subchapter, as prescribed by the Federal Trade 
        Commission under section 1681g(c)(3) of this title.

                     (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 
            1681m(a)(3) of this title; 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 subchapter, as prescribed by the Federal 
            Trade Commission under section 1681g(c)(3) of this title.

        (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 1681m(a) of this title, 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);
                (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 1681g(c)(3) of this title.

        (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) Report to the Congress

            Not later than January 31 of each year, the head of each 
        agency and department of the United States Government that 
        exercised authority under this paragraph during the preceding 
        year shall submit a report to the Congress on the number of 
        times the department or agency exercised such authority during 
        the year.

        (E) Definitions

            For purposes of this paragraph, the following definitions 
        shall apply:
            (i) Classified information

                The term ``classified information'' means information 
            that is protected from unauthorized disclosure under 
            Executive Order No. 12958 or successor orders.
            (ii) National security investigation

                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 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) of this section 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) of this section; and
            (iii) there is not in effect an election by the consumer, 
        made in accordance with subsection (e) of this section, 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 1681g(a)(5) of this title, 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) of this section 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 2-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 2-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) of this section, 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 September 
            30, 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 1681e of 
    this title by a prospective user of the report through a general or 
    specific certification.

(g) Furnishing reports containing medical information

    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 about a consumer, 
unless the consumer consents to the furnishing of the report.

(Pub. L. 90-321, title VI, Sec. 604, as added Pub. L. 91-508, title VI, 
Sec. 601, Oct. 26, 1970, 84 Stat. 1129; amended Pub. L. 101-73, title 
IX, Sec. 964(c), Aug. 9, 1989, 103 Stat. 506; Pub. L. 104-193, title 
III, Sec. 352, Aug. 22, 1996, 110 Stat. 2240; Pub. L. 104-208, div. A, 
title II, Secs. 2403, 2404(a), (b), 2405, Sept. 30, 1996, 110 Stat. 
3009-430, 3009-431, 3009-433, 3009-434; Pub. L. 105-107, title III, 
Sec. 311(a), Nov. 20, 1997, 111 Stat. 2255; Pub. L. 105-347, Secs. 2, 3, 
6(4), Nov. 2, 1998, 112 Stat. 3208, 3210, 3211.)

                       References in Text

    Executive Order No. 12958, referred to in subsec. (b)(4)(E)(i), is 
Ex. Ord. No. 12958, Apr. 17, 1995, 60 F.R. 19825, as amended, which is 
set out under section 435 of Title 50, War and National Defense.


                               Amendments

    1998--Subsec. (b)(1)(B). Pub. L. 105-347, Sec. 3, inserted ``, or 
has previously provided,'' before ``a summary''.
    Subsec. (b)(2). Pub. L. 105-347, Sec. 2(a), amended heading and text 
of par. (2) generally. Prior to amendment, text read as follows: ``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--
        ``(A) 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
        ``(B) the consumer has authorized in writing the procurement of 
    the report by that person.''
    Subsec. (b)(3). Pub. L. 105-347, Sec. 2(b), amended heading and text 
of par. (3) generally. Prior to amendment, text read as follows: ``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--
        ``(A) a copy of the report; and
        ``(B) a description in writing of the rights of the consumer 
    under this subchapter, as prescribed by the Federal Trade Commission 
    under section 1681g(c)(3) of this title.''
    Subsec. (g). Pub. L. 105-347, Sec. 6(4), struck out ``or a direct 
marketing transaction'' after ``or insurance transaction''.
    1997--Subsec. (b)(4). Pub. L. 105-107 added par. (4).
    1996--Pub. L. 104-208, Secs. 2403(a), 2404(a)(1), designated 
existing provisions as subsec. (a) and inserted heading, substituted 
``Subject to subsection (c) of this section, any consumer reporting 
agency'' for ``A consumer reporting agency'' in introductory provisions, 
added subpars. (E) and (F) of par. (3), and struck out former subpar. 
(E) of par. (3) which read as follows: ``otherwise has a legitimate 
business need for the information in connection with a business 
transaction involving the consumer.''
    Subsec. (b). Pub. L. 104-208, Sec. 2403(b), added subsec. (b).
    Subsecs. (c) to (e). Pub. L. 104-208, Sec. 2404(a)(2), added 
subsecs. (c) to (e).
    Subsec. (f). Pub. L. 104-208, Sec. 2404(b), added subsec. (f).
    Subsec. (g). Pub. L. 104-208, Sec. 2405, added subsec. (g).
    Pars. (4), (5). Pub. L. 104-193, Sec. 352, added pars. (4) and (5).
    1989--Par. (1). Pub. L. 101-73 inserted ``, or a subpoena issued in 
connection with proceedings before a Federal grand jury'' before period 
at end.


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-347 deemed to have same effective date as 
amendments made by section 2403 of Pub. L. 104-208, see section 7 of 
Pub. L. 105-347, set out as a note under section 1681a of this title.


                    Effective Date of 1997 Amendment

    Pub. L. 105-107, title III, Sec. 311(c), Nov. 20, 1997, 111 Stat. 
2256, provided that: ``The amendments made by subsections (a) and (b) 
[amending this section and section 1681e of this title] shall take 
effect as if such amendments had been included in chapter 1 of subtitle 
D of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 
[chapter 1 (Secs. 2401-2422) of subtitle D of title II of div. A of Pub. 
L. 104-208], as of the date of the enactment of such Act [Sept. 30, 
1996].''


                    Effective Date of 1996 Amendments

    Amendment by Pub. L. 104-208 effective 365 days after Sept. 30, 
1996, with special rule for early compliance, see section 2420 of Pub. 
L. 104-208, set out as a note under section 1681a of this title.
    For effective date of amendment by Pub. L. 104-193, see section 
395(a)-(c) of Pub. L. 104-193, set out as a note under section 654 of 
Title 42, The Public Health and Welfare.


    FTC Guidelines Regarding Prescreening for Insurance Transactions

    Section 2404(c) of div. A of Pub. L. 104-208 provided that: ``The 
Federal Trade Commission may issue such guidelines as it deems necessary 
with respect to the use of consumer reports in connection with insurance 
transactions that are not initiated by the consumer pursuant to section 
604(c) of the Fair Credit Reporting Act [15 U.S.C. 1681b(c)], as added 
by subsection (a) of this section.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1681a, 1681e, 1681f, 1681g, 
1681k, 1681m, 1681s-1, 1681t, 1681u, 1692d of this title; title 31 
section 3711.
