§ 1681b. — Permissible purposes of consumer reports.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 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
Except as provided in subparagraph (E), 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) Reports to congressional intelligence committees
In the case of a report to be submitted under subparagraph
(D) to the congressional intelligence committees (as defined in
section 401a of title 50), the submittal date for such report
shall be as provided in section 415b of title 50.
(F) 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; Pub. L. 107-306, title
VIII, Sec. 811(b)(8)(A), Nov. 27, 2002, 116 Stat. 2426.)
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
2002--Subsec. (b)(4)(D). Pub. L. 107-306, Sec. 811(b)(8)(A)(i),
substituted ``Except as provided in subparagraph (E), not later than''
for ``Not later than''.
Subsec. (b)(4)(E), (F). Pub. L. 107-306, Sec. 811(b)(8)(A)(ii),
(iii), added subpar. (E) and redesignated former subpar. (E) as (F).
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, 1681v, 1692d of this title; title
31 section 3711; title 50 section 415b.
