by Unknown
subsection if it is a communication—
(1) that, but for subsection (d)(2)(D) of this section, would be an
investigative consumer report;
(2) that is made to a prospective employer for the purpose of—
(A) procuring an employee for the employer; or
(B) procuring an opportunity for a natural person to work for
the employer;
(3) that is made by a person who regularly performs such
procurement;
(4) that is not used by any person for any purpose other than a pur-
pose described in subparagraph (A) or (B) of paragraph (2); and
(5) with respect to which—
(A) the consumer who is the subject of the communication—
(i) consents orally or in writing to the nature and
scope of the communication, before the collection
of any information for the purpose of making the
communication;
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(ii) consents orally or in writing to the making of the
communication to a prospective employer, before
the making of the communication; and
(iii) in the case of consent under clause (i) or (ii) given
orally, is provided written confirmation of that con-
sent by the person making the communication, not
later than 3 business days after the receipt of the con-
sent by that person;
(B) the person who makes the communication does not, for the
purpose of making the communication, make any inquiry
that if made by a prospective employer of the consumer
who is the subject of the communication would violate any
applicable Federal or State equal employment opportunity
law or regulation; and
(C) the person who makes the communication
(i) discloses in writing to the consumer who is the
subject of the communication, not later than
5 business days after receiving any request from
the consumer for such disclosure, the nature and
substance of all information in the consumer’s file
at the time of the request, except that the sources
of any information that is acquired solely for use
in making the communication and is actually used
for no other purpose, need not be disclosed other
than under appropriate discovery procedures in any
court of competent jurisdiction in which an action
is brought; and
(ii) notifies the consumer who is the subject of the com-
munication, in writing, of the consumer’s right to
request the information described in clause (i).
(p) Consumer Reporting Agency That Compiles and Maintains Files
on Consumers on a Nationwide Basis. The term “consumer report-
ing agency that compiles and maintains files on consumers on a
nationwide basis” means a consumer reporting agency that regularly
engages in the practice of assembling or evaluating, and maintain-
ing, for the purpose of furnishing consumer reports to third par-
ties bearing on a consumer’s credit worthiness, credit standing, or
credit capacity, each of the following regarding consumers residing
nationwide:
(1) Public record information
(2) Credit account information from persons who furnish that
information regularly and in the ordinary course of business
Appendix D: Consumer and Credit Data Privacy Laws
437
(q) Definitions Relating to Fraud Alerts.
(1)
Active duty military consumer: The term “active duty military consumer” means a consumer in military service who
(A) is on active duty (as defined in section 101 (d)(1) of title 10)
or is a reservist performing duty under a call or order to
active duty under a provision of law referred to in section
101 (a)(13) of title 10; and
(B) is assigned to service away from the usual duty station of
the consumer.
(2)
Fraud alert; active duty alert: The terms “fraud alert” and “active duty alert” mean a statement in the file of a consumer that—
(A) notifies all prospective users of a consumer report relat-
ing to the consumer that the consumer may be a victim of
fraud, including identity theft, or is an active duty military
consumer, as applicable; and
(B) is presented in a manner that facilitates a clear and con-
spicuous view of the statement described in subparagraph
(A) by any person requesting such consumer report.
(3)
Identity theft: The term “identity theft” means a fraud committed using the identifying information of another person, subject to such
further definition as the Commission may prescribe, by regulation.
(4)
Identity theft report: The term “identity theft report” has the meaning given that term by rule of the Commission, and means,
at a minimum, a report—
(A) that alleges an identity theft;
(B) that is a copy of an official, valid report filed by a consumer
with an appropriate Federal, State, or local law enforce-
ment agency, including the United States Postal Inspection
Service, or such other government agency deemed appro-
priate by the Commission; and
(C) 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.
(5)
New credit plan: The term “new credit plan” means a new account under an open end credit plan (as defined in section 1602 (i) of this
title) or a new credit transaction not under an open end credit plan.
(r) Credit and Debit Related Terms.
(1)
Card issuer: The term “card issuer” means
(A) a credit card issuer, in the case of a credit card; and
(B) a debit card issuer, in the case of a debit card.
(2)
Credit card: The term “credit card” has the same meaning as in section 1602 of this title.
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(3)
Debit card: The term “debit card” means any card issued by a financial institution to a consumer for use in initiating an
electronic fund transfer from the account of the consumer
at such financial institution, for the purpose of transferring
money between accounts or obtaining money, property, labor,
or services.
(4)
Account and electronic fund transfer: The terms “account” and
“electronic fund transfer” have the same meanings as in section
1693a of this title.
(5)
Credit and creditor: The terms “credit” and “creditor” have the same meanings as in section 1691a of this title.
(s) Federal Banking Agency. The term “Federal banking agency” has
the same meaning as in section 1813 of title 12.
(t) Financial Institution. The term “financial institution” means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or
any other person that, directly or indirectly, holds a transaction
account (as defined in section 461 (b) of title 12) belonging to
a consumer.
(u) Reseller. The term “resel er” means a consumer r
eporting agency that—
(1) assembles and merges information contained in the database
of another consumer reporting agency or multiple consumer
reporting agencies concerning any consumer for purposes of
furnishing such information to any third party, to the extent of
such activities; and
(2) does not maintain a database of the assembled or merged infor-
mation from which new consumer reports are produced.
(v) Commission. The term “Commission” means the Federal Trade
Commission.
(w) Nationwide Specialty Consumer Reporting Agency. The term
“nationwide specialty consumer reporting agency” means a con-
sumer reporting agency that compiles and maintains files on con-
sumers on a nationwide basis relating to
(1) medical records or payments;
(2) residential or tenant history;
(3) check writing history;
(4) employment history; or
(5) insurance claims.
(x) Exclusion of Certain Communications for Employee Investigations.
(1)
Communications described in this subsection: A communication is described in this subsection if
(A) but for subsection (d)(2)(D) of this section, the communi-
cation would be a consumer report;
Appendix D: Consumer and Credit Data Privacy Laws
439
(B) the communication is made to an employer in connection
with an investigation of
(i) suspected misconduct relating to employment; or
(ii) compliance with Federal, State, or local laws and reg-
ulations, the rules of a self-regulatory organization, or
any preexisting written policies of the employer;
(C) the communication is not made for the purpose of investi-
gating a consumer’s credit worthiness, credit standing, or
credit capacity; and
(D) the communication is not provided to any person except
(i) to the employer or an agent of the employer;
(ii) to any Federal or State officer, agency, or department,
or any officer, agency, or department of a unit of gen-
eral local government;
(iii)
to any self-regulatory organization with regulatory
authority over the activities of the employer or employee;
(iv) as otherwise required by law; or
(v) pursuant to section 1681f of this title.
(2)
Subsequent disclosure. After taking any adverse action based in whole or in part on a communication described in paragraph (1),
the employer shall disclose to the consumer a summary contain-
ing the nature and substance of the communication upon which
the adverse action is based, except that the sources of informa-
tion acquired solely for use in preparing what would be but for
subsection (d)(2)(D) of this section an investigative consumer
report need not be disclosed.
(3)
Self-regulatory organization defined. For purposes of this subsection, the term “self-regulatory organization” includes any
self-regulatory organization (as defined in section 78c (a)(26) of
this title), any entity established under title I of the Sarbanes-
Oxley Act of 2002 [15 U.S.C. 7211 et seq.], any board of trade
designated by the Commodity Futures Trading Commission,
and any futures association registered with such Commission.
§ 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.
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Appendix D: Consumer and Credit Data Privacy Laws
(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 infor-
mation is to be furnished and involving the extension of
credit to, or review or collection of an account of, the con-
sumer; 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 deter-
mination 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 asso-
ciated 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 initi-
ated by the consumer; or
(ii) to review an account to determine whether the con-
sumer continues to meet the terms of the account.
(G) executive departments and agencies in connection with
the issuance of government-sponsored individually billed
travel charge cards.
(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 estab-
lishing 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
Appendix D: Consumer and Credit Data Privacy Laws
441
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.
(6) To the Federal Deposit Insurance Corporation or the National
Credit Union Administration as part of its preparation for its
appointment or as part of its exercise of powers, as conservator,
receiver, or liquidating agent for an insured depository institu-
tion or insured credit union under the Federal Deposit Insurance
Act [12 U.S.C. 1811 et seq.] or the Federal Credit Union Act [12
U.
S.C. 1751 et seq.], or other applicable Federal or State law, or
in connection with the resolution or liquidation of a failed or
failing insured depository institution or insured credit union, as
applicable.
(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 certi-
fies 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 con-
sumer 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 consum-
er’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
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Appendix D: Consumer and Credit Data Privacy Laws
be procured, for employment purposes with respect to any
consumer, unless—
(i) a clear and conspicuous disclosure has been made
