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| FTC | RIN: 3084-AA94 | Publication ID: Spring 2004 |
| Title: ●Fair and Accurate Credit Transactions Act of 2003 | |
| Abstract: The Fair and Accurate Credit Transactions Act of 2003 (the "FACT Act" or "FACTA" or the Act) was enacted on December 4, 2003. The Act requires that the Commission undertake a number of rulemakings and studies. Effective Dates The FACT Act requires that the FTC, together with the banking agencies, jointly adopt the effective dates of portions of the statute where the effective dates are not prescribed within two months of enactment of the Act. On December 24, 2003, the Board of Governors of the Federal Reserve System (the Federal Reserve) and the FTC jointly adopted Interim Final Rules that established December 31, 2003, as the effective date for provisions of the Act that determine the relationship between the Fair Credit Reporting Act and state laws and provisions that authorize rulemakings or other implementing actions by agencies. 68 FR 74467. On December 24, 2003, the Federal Reserve and FTC also issued a Notice of Proposed Rulemaking (NPRM) requesting comments and specifying the effective dates for the other provisions of the FACT Act for which the statute does not specify an effective date. 68 FR 74529. The comment period for these notices ended on January 12, 2004. On February 11, 2004, the Commission and the Federal Reserve published joint Final Rules that established a schedule of effective dates for many of the provisions of the FACT Act for which the Act itself did not specifically provide an effective date. The Agencies also made final what had previously been interim; namely, establishing December 31, 2003, as the effective date for provisions of the Act that determine the relationship between the Fair Credit Reporting Act and state laws and provisions that authorize rulemakings or other implementing actions by agencies. 69 FR 6526. (Contacts: Katherine Armstrong, Christopher Keller). The FACT Act also requires that the Commission adopt rules concerning: (1) Credit Reports and Credit Scores and related issues to be cod jointly with the banking agencies, including the National Credit Union Administration. The rulemaking mandates for the next 12 months are detailed below. Additional rule requirements are either mandatory with no specified deadline or discretionary. These will be addressed once the mandatory rulemakings with deadlines are completed. Credit Reports and Reporting Agencies Circumvention With respect to Credit Reports, the Act requires that the Commission issue rules by March 3, 2004, on preventing corporate and technological circumvention of the obligations imposed on nationwide consumer reporting agencies. On February 24, 2004, the FTC published an Interim Final Rule prohibiting consumer reporting agencies from the avoidance of treatment as nationwide consumer reporting agencies and requested comments on this measure. 69 FR 8532. The Interim Final Rule was effective on March 3, 2004, and the comment period closed on April 23, 2004. Staff is reviewing the comments. (Contacts: Helen Foster, Sandra Farrington). Free Credit Reports By June 3, 2004, the FACT Act requires that the Commission issue rules concerning (1) a centralized source for free consumer reports by national credit reporting agencies; (2) the provision of free credit reports by nationwide consumer reporting agencies; and (3) a streamlined process for consumers to obtain free credit reports from specialized bureaus. On March 19, 2004, the Commission requested comments on a Proposed Rule that would establish a centralized source, a standardized form, and a streamlined process through which consumers may request a free annual file disclosure from each nationwide consumer reporting agency. 69 FR 13192. The comment period closed on April 16, 2004. (Contacts: Helen Foster, Sandra Farrington) Information Sharing Between Affiliates Three separate rulemakings- (1) FACTA gave the Commission, the bank agencies, and the National Credit Union Administration (NCUA) authority to determine when tng FCRA exception allowing medical information to be shared among affiliates should apply. FACTA also required the banking agencies and NCUA but not the Commission to make rules by June 3, 2004, regarding when medical information can be obtained or used in connection with a credit decision. (2) By September 3, 2004, with the banking agencies, the NCUA, and the Securities and Exchange Commission (SEC); the Commission is required to issue rules to implement the Acts provisions allowing consumers to opt out of marketing by affiliates. (3) By December 4, 2004, the Commission, in consultation with the banking agencies and the NCUA, is required to issue rules concerning the enhancement of notices to consumers about their right to opt out of prescreened solicitations. FACTA calls for these notices to be presented in a format and in a type, size, and manner as simple and easy to understand. Disposal of Credit Report Information By December 4, 2004, the Commission is required in coordination with the banking agencies, NCUA, and the SEC to issue rules concerning the proper disposal of credit report information and records. On April 20, 2004, the Commission published a Notice of Proposed Rulemaking and Request for Comments. 69 FR 21387. The comment period ended on June 15, 2004. Staff is reviewing the comments and plans to make its recommendation to the Commission during the summer of 2004. The Commission proposes to make the Disposal Rule effective three months after publication of the final rule. (Contacts: Ellen Finn, Susan McDonald) Other Required and Discretionary Rulemakings on Credit Reports and Information (1) Also, with respect to credit reports and related issues, the Commission is required to issue rules effecting fair and reasonable fees for credit scores. (2) The Act requires the Commission jointwith Federal Reserve to issue rules addressing the form, content, time, manner, definitions, exceptions, and model of the risk-based pricing notice.)e Cission is required, in coordination with the banking agencies and NCUA, to issue guidelines and rules concerning credit report accuracy and rules relating to the ability of consumers to dispute information directly with furnishers as well as rules regarding reconciling addresses. (4) Finally, the Commission may issue rules regarding the compilation and submission to nationwide consumer reporting agencies of all complaints of inaccurate or incomplete files and the treatment of medical information in credit reporting agency files. Identity Theft The Act requires that the Commission promulgate a summary of consumers identity theft rights and to mount a public education campaign regarding consumers new identity theft rights. FACTA requires the Commission to define certain terms that are relevant to consumers new identity theft rights and to promulgate the length of time for active duty/military alerts (the fraud alerts rule). On April 28, 2004, the Commission published an NPRM proposing rules that would establish definitions for identity theft and identity theft report; the duration of an active duty alert; and the appropriate proof of identity for purposes of Sections 605A (fraud alerts and active duty alerts), 605B (consumer report information blocks), and 609(a)(1) (truncation of Social Security numbers) of the FCRA, as amended by the FACT Act. 69 FR 23369. The comment period closed on June 15, 2004. The Commission is also required along with the banking agencies and NCUA to promulgate a standard form for consumers to use to place fraud alerts, block fraudulent tradelines or otherwise complain to consumer reporting agencies about identity theft (the "Complaint Form); and to jointly promulgate with banking regulators Identity Theft red flag" guidelines and rules to ensure these guidelines (the "ID theft red flag rule). The ID theft red flag rule would, among other things, require card issuers to investigate requests f cardchange would require users of credit reports to investigate when the address on a credit report differs from the address on a credit application. (Contact: Naomi B. Lefkovitz) | |
| Agency: Federal Trade Commission(FTC) | Priority: Substantive, Nonsignificant |
| RIN Status: First time published in the Unified Agenda | Agenda Stage of Rulemaking: Proposed Rule Stage |
| Major: No | Unfunded Mandates: No |
| CFR Citation: 16 CFR 602 16 CFR 603 16 CFR 604 16 CFR 610 16 CFR 611 16 CFR 613 16 CFR 614 16 CFR 682 ... (To search for a specific CFR, visit the Code of Federal Regulations.) | |
| Legal Authority: PL 108-159, 117 Stat. 1952 | |
Legal Deadline:
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Overall Description of Deadline: The FACT Act requires that the Commission and other agencies complete rulemakings by deadlines set within the statute or by effective dates set by the Federal Reserve Board and the Commission by Federal Register notice. |
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Timetable:
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| Regulatory Flexibility Analysis Required: No | Government Levels Affected: None |
| Small Entities Affected: Businesses | Federalism: No |
| Included in the Regulatory Plan: No | |
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Agency Contact: Katherine Armstrong Attorney Federal Trade Commission Division of Financial Practices, Bureau of Consumer Protection, 600 Pennsylvania Ave. N.W., Washington, DC 20580 Phone:202 326-3224 Email: karmstrong@ftc.gov Christopher Keller Attorney Federal Trade Commission Division of Financial Practices, Bureau of Consumer Protection, 600 Pennsylvania Ave. N.W., Washington, DC 20580 Phone:202 326-3224 Email: ckeller@ftc.gov Helen Foster Attorney Federal Trade Commission Division of FInancial Practices, Bureau of Consumer Protection, 600 Pennsylvania Ave. N.W., Washington, DC 20580 Phone:202 326-3224 Email: hfoster@ftc.gov Sandra Farrington Attorney Federal Trade Commission Division of Financial Practices, Bureau of Consumer Protection, 600 Pennsylvania Ave. N.W., Washington, DC 20580 Phone:202 326-3224 Email: sfarrington@ftc.gov Ellen Finn Attorney Federal Trade Commission Division of Financial Services, Bureau of Consumer Protection, 600 Pennsylvania Ave. N.W., Washington, DC 20580 Phone:202 326-3224 Email: efinn@ftc.gov Susan McDonald Attorney Federal Trade Commission Division of Financial Practices, Bureau of Consumer Protection, 600 Pennsylvania Ave. N.W., Washington, DC 20580 Phone:202 326-3224 Email: smcdonald@ftc.gov Naomi B. Lefkovitz Attorney Federal Trade Commission Division of Planning and Information, Bureau of Consumer Protection, 600 Pennsylvania Ave N.W., Washington, DC 20580 Phone:202 326-3058 Email: nlefkovitz@ftc.gov |
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