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FTC RIN: 3084-AA94 Publication ID: Spring 2005 
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 required that the FTC, together with the Governors of the Federal Reserve System (the Federal Reserve), 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 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. 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 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 – The FACT Act required 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. On June 24, 2004, the Commission published 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 – The Commission, along with the banking agencies, the NCUA, and the Securities and Exchange Commission (SEC), is required to issue rules to implement the Act’s provisions allowing consumers to opt out of marketing by affiliates. The Commission issued an NPRM on June 15, 2004. 69 FR 33324. On July 21, 2004, the Commission extended the Comment Period. The agencies are now assessing the comments. Enhancement of Opt Out Notice (Prescreen Rule) - The Commission, in consultation with the banking agencies and the NCUA, was also 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 published an NPRM on October 28, 2004 (69 FR 58861), and subsequently published the final rule on January 31, 2005. 70 FR 5022. Disposal of Credit Report Information – By December 4, 2004, the Commission was 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 Commission and the other agencies published a Final Disposal Rule on November 24, 2004. 69 FR 68690. The Disposal Rule is effective on June 1, 2005. Other Required and Discretionary Actions on Credit Reports and Information – (1) With respect to credit reports and related issues, on November 3, 2004, the Commission issued an ANPRM seeking comments on rules effecting fair and reasonable fees for credit scores. 69 FR 64698. The comment period closed on January 5, 2005, and the staff is currently reviewing comments. (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 issued final model notices on November 30, 2004. 69 FR 69776. 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 Commission published a Final Fraud Alerts Rule on November 3, 2004. 69 FR 63922. The Commission is also required to jointly promulgate with banking regulators identity theft “red flag" guidelines and rules to implement these guidelines (the "ID theft red flag rule”) and an address change rule (the "address change rule"). The ID theft red flag rule would, among other things, require card issuers to investigate requests for card changes. The address change rule 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: 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:
Action Source Description Date
Final  Statutory  Rules Allowing Consumers to Opt Out of Marketing by Affiliates  09/04/2004 
Final  Statutory  Rules Concerning Free Consumer Credit Reports  06/03/2004 
Final  Statutory  Rules Prohibiting Consumer Reporting Agencies from Circumventing FACTA Provisions  03/03/2004 
Final  Statutory  Rules Specifying Effective Dates of FACTA Provisions Where Statute Does Not Specify Dates  02/11/2004 
Final  Statutory  Effective Date for FACTA Provisions Affecting FCRA and State Laws  12/31/2003 

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, either solely or jointly with other agencies, by Federal Register notice.

Action Date FR Cite
Joint Interim Final Rules (Effective Date FACT Act Provisions)  12/24/2003  68 FR 74467   
NPRM (Effective Date FACT Act Provisions)  12/24/2003  68 FR 74529   
Joint Final Rules (Effective Date FACT Act Provisions)  02/11/2004  69 FR 6526   
Interim Final Rule/Request for Comments (Prohibition Against Circumvention)  02/24/2004  69 FR 8532   
NPRM/Request for Comments (Free Annual Credit File Disclosures)  03/19/2004  69 FR 13192   
Final Rule (Free Annual Credit File Disclosures)  06/24/2004  69 FR 35468   
NPRM - Request for Comments (Information Sharing Between Affiliates)  06/15/2004  69 FR 33324   
Comment Period Extended (NPRM on Information Sharing Between Affiliates)  07/21/2004  69 FR 43546   
NPRM (Prescreen Opt Out Disclosure)  10/28/2004  69 FR 58861   
Final Rule (Prescreen Opt Out Disclosure)  01/31/2005  70 FR 5022   
NPRM - Request for Comments (Disposal of Consumer Report Information)  04/20/2004  69 FR 21388   
Final Rule (Disposal of Consumer Report Information)  11/24/2004  69 FR 68690   
Effective Date for Disposal Rule  05/01/2005    
ANPRM (Credit Score Fees)  11/08/2004  69 FR 64698   
Proposed Summaries and Notices (Model Disclosures for Identity Theft Rights)  07/16/2004  69 FR 42616   
Final Action (Model Disclosures for Identity Theft Rights)  11/30/2004  69 FR 69776   
Effective Date (Model Disclosures for Identity Theft Rights)  01/31/2005    
NPRM (Identity Theft Fraud Alerts)  04/28/2004  69 FR 23370   
Final Rule (Identity Theft Fraud Alerts)  11/03/2004  69 FR 63922   
Effective Date (Identity Theft Fraud Alerts)  12/01/2004    
Final Rule (Miscellaneous Technical Amendments)  05/20/2004  69 FR 29061   
NPRM  09/00/2005    
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Small Entities Affected: Businesses  Federalism: No 
Included in the Regulatory Plan: No 
Agency Contact:
Andrew Smith
Federal Trade Commission
Bureau of Consumer Protection, 600 Pennsylvania Avenue NW,
Washington, DC 20580
Phone:202 326-3224