Division of
Financial Practices
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Clarke W. Brinckerhoff
Attorney
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202-326-3224
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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, DC 20580
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June 24, 1999
Mr. Wainwright S. Watkins
1001 E. California Ave., #16
Glendale, California 91206
Dear Mr. Watkins:
This responds to your letter concerning
the relationship between Sections 607(b) and 623(a) of the Fair
Credit Reporting Act ("FCRA"). You note that Section
623(a)(1)(C) allows a party that furnishes information to a consumer
reporting agency ("CRA") to provide an address for consumers
to dispute information, and thereby avoid the general accuracy
requirements of Section 623(a)(1)(A). You also note that Section
623(c) prohibits consumers from suing furnishers who violate Section
623(a), meaning that the only remedy is enforcement by governmental
authorities. You ask whether these limitations increase the obligation
of CRAs under Section 607(b), which requires such organizations
to "follow reasonable procedures to assure maximum possible
accuracy of the information" in their consumer reports.
Section 623 was added to the FCRA by
the Consumer Credit Reporting Reform Act of 1996 (Public Law 104-208,
Title II, Subtitle D, Chapter 1, the "CCRRA"). That
major overhaul of the FCRA was signed into law on September 30,
1996, and most of its provisions became effective one year later.
We understand your point that the obligations imposed by Section
623(a) on furnishers of information to CRAs (and the remedies
it provides consumers for violation) are limited, and your view
that CRAs should be more vigilant as a result. However, the
FCRA imposed no accuracy duties at all on the furnishers of information
to CRAs prior to the addition of Section 623 in the CCRRA.
Even though the Section is limited in some respects, it imposes
legal obligations where none existed before. Section 623(a)(1)(B)
forbids furnishers from continuing to report inaccurate information
that is disputed by consumers in writing to the address provided
by the furnisher (using the procedure you cited). In addition,
Section 623(b) imposes clear investigative duties on furnishers
when they receive disputes from CRAs, and allows consumers to
sue violators of this subsection to obtain damages (which may
be punitive if the consumer shows willful violation) and attorney
fees. Prior to the addition of Section 623 in 1996, the FCRA provided
for none of those duties or liabilities on furnishers of information
to CRAs.
Section 607(b) was not changed by the
CCRRA. It remains in the same form as when the FCRA became law
on October 26, 1970. Congress left Section 607(b) intact when
it rewrote the FCRA in 1996, and on several other occasions when
it amended the statute over the years. Despite some deficiencies
in Section 623(a) from the consumer perspective, it does impose
accuracy duties on furnishers where none existed prior to the
effective date of the CCRRA. Nothing suggests that, in prescribing
obligations for furnishers for the first time, Congress intended
to change CRA duties under Section 607(b). Therefore, it is our
view that the duties of CRAs under Section 607(b) were neither
expanded nor reduced by the addition of Section 623 by the CCRRA.
The opinions set forth in this informal
staff letter are not binding on the Commission.
Sincerely yours,
Clarke W. Brinckerhoff
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