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| FTC | RIN: 3084-AA94 | Publication ID: Fall 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. The FACT Act also requires that the Commission adopt rules concerning credit reports and credit scores and related issues to be conducted jointly with the banking agencies, including the National Credit Union Administration (NCUA). 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 treatment as nationwide consumer reporting agencies and requested comments on this measure. 69 FR 8532. The interim final rule became effective on March 3, 2004, and the comment period closed on April 23, 2004. Staff is reviewing the comments. 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. On June 24, 2004, the Commission issued a final rule effective on December 1, 2004, for the provision of free reports to consumers, including (1) a central source whereby consumers can make one request and receive their consumer report from each of the three major nationwide consumer reporting agencies, and (2) rules with respect to the provision of free consumer reports by "nationwide specialty consumer reporting agencies," as defined in new FCRA section 603(w). 69 FR 35468. Information Sharing Between Affiliates Three separate rulemakings - (1) FACTA gave the Commission, the banking agencies, and the NCUA authority to determine when the FACTA 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 4, 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. The Commission issued an NPRM on June 15, 2004. 69 FR 33324. The Commission has not yet issued a final rule but anticipates doing so later this year. Enhancement of Opt Out Notice (Prescreen Rule) - 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 that is simple and easy to understand. The Commission and other agencies issued an NPRM on October 5, 2004 and plan to announce the final rule by the statutory deadline. 69 FR 58861. 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 an NPRM and Request for Comments. 69 FR 21388. The comment period ended on June 15, 2004. The Commission and other agencies expect to issue a Final Disposal Rule by early December 2004. The Commission proposes to make the Disposal Rule effective three months after publication of the final rule. Other Required and Discretionary Actions 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. The Commission expects to issue an NPRM seeking comments on reasonable fees for credit scores by November 2004. (2) The Act requires the Commission jointly with the Federal Reserve to issue rules addressing the form, content, time, manner, definitions, exceptions, and model of the risk-based pricing notice. (3) The Commission 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 the Commission to promulgate a summary of consumers identity theft rights and to mount a public education campaign regarding consumers new identity theft rights. The Commission issued proposed summaries and notices of consumers' identity theft rights on July 16, 2004. 69 FR 42616. The Commission expects to issue final model notices during December 2004. 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 "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 23370. The comment period closed on June 15, 2004. The Commission published a Final Fraud Alerts Rule on November 3, 2004. 69 FR 63922. 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 for card changes and would require credit report users to investigate when the address on a credit report differs from the address on a credit application. Miscellaneous - On May 20, 2004, the Commission issued a final rule effective on June 21, 2004, making technical changes to earlier rules, establishing a general organizational scheme for subchapter F of chapter I of title 16 of the Code of Federal Regulations, and setting forth general provisions applicable to all FTC rules under the FCRA. 69 FR 29061. | |
| Agency: Federal Trade Commission(FTC) | Priority: Substantive, Nonsignificant |
| RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Final 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: Andrew Smith Attorney Federal Trade Commission Bureau of Consumer Protection, 600 Pennsylvania Avenue NW, Washington, DC 20580 Phone:202 326-3224 |
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