Division of Financial Practices
Clarke W. Brinckerhoff
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
June 29, 1999
Mr. Ben Cohan
Chase Credit Research Corp.
6350 Laurel Canyon Blvd.
North Hollywood, CA 91606
Dear Mr. Cohan:
This responds to your letter asking "if a consumer
reporting agency (CRA) who is a reseller of credit reports
(such as a mortgage credit reporting agency) and has no affiliation
with any of the three main credit repositories would be required
... to provide a toll free telephone number" by Section
615(a)(2)(A) of the Fair Credit Reporting Act (FCRA) (your emphasis).
For the reasons set forth below, we answer in the negative.
Section 609(c)(1)(B) of the FCRA imposes the requirement
of establishing a toll-free number at which personnel are available
only on a "consumer reporting agency that compiles and maintains
files on consumers on a nationwide basis." Section 603(p)
defines the quoted phrase to include only CRAs whose manner of
business includes assembling or evaluating, and maintaining for
the purpose of furnishing consumer reports to third parties, both
"(1) [p]ublic record information (and) (2)[c]redit account
information from persons who furnish that information regularly
and in the ordinary course of business." Section 615(a)(2)(A)
requires that users of consumer reports from such a CRA report
that number when they supply required adverse action notices to
Thus, the issue of whether or not a reseller of
consumer reports is required to establish a toll-free number turns
on whether or not it is a "nationwide" CRA under the
definition set forth in Section 603(p), which was added to the
FCRA by the Consumer Credit Reporting Reform Act of 1996.(1)
In our view, it is not. The definition clearly covers major credit
data repositories, because they provide consumer reports that
include public record information and credit account information
they regularly receive from creditors. The definition does not
appear to include resellers that only obtain credit reports from
other CRAs for resale to a customer, and do not receive credit
account information from creditors on a regular basis.
The legislative history of Section 603(p) demonstrates
that our interpretation of its terms is accurate. The explanation
of this provision by Rep. Joseph Kennedy, in the context of a
predecessor bill that contained the new definition,(2)
leaves no doubt that Congress intended to limit its application
to major nationwide repositories of consumer credit data and therefore
exclude mortgage reporting services and other resellers from its
Only three systems (Equifax, Trans
Union, and TRW) are truly nationwide consumer reporting agencies
which compile and maintain consumers' files on an automated
basis.(3) The 3 repositories
we mentioned above regularly engage in the practice of gathering
or evaluating public record information and credit account information
from credit grantors and others who furnish such information
regularly and in the ordinary course of business on consumers
residing in substantially all of the 50 states.
...Companies involved in (mortgage
reporting) and similar activities are not meant to be included
under the definition of a nationwide consumer reporting agency.
140 Cong. Rec. 25,871 (1994) (statement of Rep.
Based on the statutory language and clear statement
of Congressional intent, we do not believe that a reseller such
as a mortgage reporting service is a "nationwide" CRA
"that maintains files on consumers on a nationwide basis"
under Section 603(p). Thus, this type of CRA is not required by
Section 609(c)(1)(B) to establish a toll-free telephone number,
and a user of its services complies with Section 615(a)(2)(A)
by providing the telephone number which it commonly uses to respond
The opinions set forth in this informal staff letter
are not binding on the Commission.
Clarke W. Brinckerhoff
1. Public Law
104-208, Title II, Subtitle D, Chapter 1, Section 2402(g).
2. The new Section
603(p) definition in S. 783, the bill on which Rep. Kennedy was
commenting, is the one that became law.
3. TRW, one of
the three nationwide CRAs cited by Rep. Kennedy, was subsequently
acquired by another company and now operates under the name Experian.
In a subsequent portion of his remarks, the Congressman noted
the possibility that at some point in the future more than three
entities might meet the definition of "nationwide" CRA:
While the expression, "consumer
reporting agency that compiles and maintains files on consumers
on a nationwide basis," would presently apply only to the
three companies identified above, we should recognize the possibility
exists that some other company may someday decide to engage
in this activity. If that company meets all the terms and conditions,
as we have attempted to define them, as an automated nationwide
consumer reporting agency, the provisions of this bill regarding
such nationwide consumer reporting agencies would be applicable.