Section 604 of the Fair Credit Reporting Act (FCRA).
The Fair Credit Reporting Act - Section 604
604. Permissible purposes of consumer reports [15 U.S.C. 1681b]
(a) In general. Subject to subsection (c), any consumer reporting agency may
furnish a consumer report under the following circumstances and no other:
(1) In response to the order of a court having jurisdiction to issue such an
order, or a subpoena issued in connection with proceedings before a Federal
grand jury.
(2) In accordance with the written instructions of the consumer to whom it
relates.
(3) To a person which it has reason to believe
(A) intends to use the information in connection with a credit transaction
involving the consumer on whom the information is to be furnished and involving
the extension of credit to, or review or collection of an account of, the
consumer; or
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the underwriting of
insurance involving the consumer; or
(D) intends to use the information in connection with a determination of the
consumer's eligibility for a license or other benefit granted by a governmental
instrumentality required by law to consider an applicant's financial
responsibility or status; or
(E) intends to use the information, as a potential investor or servicer, or
current insurer, in connection with a valuation of, or an assessment of the
credit or prepayment risks associated with, an existing credit obligation; or
(F) otherwise has a legitimate business need for the information
(i) in connection with a business transaction that is initiated by the consumer;
or
(ii) to review an account to determine whether the consumer continues to meet
the terms of the account.
(4) In response to a request by the head of a State or local child support
enforcement agency (or a State or local government official authorized by the
head of such an agency), if the person making the request certifies to the
consumer reporting agency that
(A) the consumer report is needed for the purpose of establishing an
individual's capacity to make child support payments or determining the
appropriate level of such payments;
(B) the paternity of the consumer for the child to which the obligation relates
has been established or acknowledged by the consumer in accordance with State
laws under which the obligation arises (if required by those laws);
(C) the person has provided at least 10 days' prior notice to the consumer whose
report is requested, by certified or registered mail to the last known address
of the consumer, that the report will be requested; and
(D) the consumer report will be kept confidential, will be used solely for a
purpose described in subparagraph (A), and will not be used in connection with
any other civil, administrative, or criminal proceeding, or for any other
purpose.
(5) To an agency administering a State plan under Section 454 of the Social
Security Act (42 U.S.C. 654) for use to set an initial or modified child
support award.
(b) Conditions for furnishing and using consumer reports for employment
purposes.
(1) Certification from user. A consumer reporting agency may furnish a consumer
report for employment purposes only if
(A) the person who obtains such report from the agency certifies to the agency
that
(i) the person has complied with paragraph (2) with respect to the consumer
report, and the person will comply with paragraph (3) with respect to the
consumer report if paragraph (3) becomes applicable; and
(ii) information from the consumer report will not be used in violation of any
applicable Federal or State equal employment opportunity law or regulation; and
(B) the consumer reporting agency provides with the report, or has previously
provided, a summary of the consumer's rights under this title, as prescribed by
the Federal Trade Commission under section 609(c)(3) [1681g].
(2) Disclosure to consumer.
(A) In general. Except as provided in subparagraph (B), a person may not procure
a consumer report, or cause a consumer report to be procured, for employment
purposes with respect to any consumer, unless--
(i) a clear and conspicuous disclosure has been made in writing to the consumer
at any time before the report is procured or caused to be procured, in a
document that consists solely of the disclosure, that a consumer report may be
obtained for employment purposes; and
(ii) the consumer has authorized in writing (which authorization may be made on
the document referred to in clause (i)) the procurement of the report by that
person.
(B) Application by mail, telephone, computer, or other similar means. If a
consumer described in subparagraph (C) applies for employment by mail,
telephone, computer, or other similar means, at any time before a consumer
report is procured or caused to be procured in connection with that
application--
(i) the person who procures the consumer report on the consumer for employment
purposes shall provide to the consumer, by oral, written, or electronic means,
notice that a consumer report may be obtained for employment purposes, and a
summary of the consumer's rights under section 615(a)(3); and
(ii) the consumer shall have consented, orally, in writing, or electronically to
the procurement of the report by that person.
(C) Scope. Subparagraph (B) shall apply to a person procuring a consumer report
on a consumer in connection with the consumer's application for employment only
if--
(i) the consumer is applying for a position over which the Secretary of
Transportation has the power to establish qualifications and maximum hours of
service pursuant to the provisions of section 31502 of title 49, or a position
subject to safety regulation by a State transportation agency; and
(ii) as of the time at which the person procures the report or causes the report
to be procured the only interaction between the consumer and the person in
connection with that employment application has been by mail, telephone,
computer, or other similar means.
(3) Conditions on use for adverse actions.
(A) In general. Except as provided in subparagraph (B), in using a consumer
report for employment purposes, before taking any adverse action based in whole
or in part on the report, the person intending to take such adverse action shall
provide to the consumer to whom the report relates--
(i) a copy of the report; and
(ii) a description in writing of the rights of the consumer under this title, as
prescribed by the Federal Trade Commission under section 609(c)(3).
(B) Application by mail, telephone, computer, or other similar means.
(i) If a consumer described in subparagraph (C) applies for employment by mail,
telephone, computer, or other similar means, and if a person who has procured a
consumer report on the consumer for employment purposes takes adverse action on
the employment application based in whole or in part on the report, then the
person must provide to the consumer to whom the report relates, in lieu of the
notices required under subparagraph (A) of this section and under section
615(a), within 3 business days of taking such action, an oral, written or
electronic notification--
(I) that adverse action has been taken based in whole or in part on a consumer
report received from a consumer reporting agency;
(II) of the name, address and telephone number of the consumer reporting agency
that furnished the consumer report (including a toll-free telephone number
established by the agency if the agency compiles and maintains files on
consumers on a nationwide basis);
(III) that the consumer reporting agency did not make the decision to take the
adverse action and is unable to provide to the consumer the specific reasons why
the adverse action was taken; and
(IV) that the consumer may, upon providing proper identification, request a free
copy of a report and may dispute with the consumer reporting agency the accuracy
or completeness of any information in a report.
(ii) If, under clause (B)(i)(IV), the consumer requests a copy of a consumer
report from the person who procured the report, then, within 3 business days of
receiving the consumer's request, together with proper identification, the
person must send or provide to the consumer a copy of a report and a copy of the
consumer's rights as prescribed by the Federal Trade Commission under section
609(c)(3).
(C) Scope. Subparagraph (B) shall apply to a person procuring a consumer report
on a consumer in connection with the consumer's application for employment only
if--
(i) the consumer is applying for a position over which the Secretary of
Transportation has the power to establish qualifications and maximum hours of
service pursuant to the provisions of section 31502 of title 49, or a position
subject to safety regulation by a State transportation agency; and
(ii) as of the time at which the person procures the report or causes the report
to be procured the only interaction between the consumer and the person in
connection with that employment application has been by mail, telephone,
computer, or other similar means.
(4) Exception for national security investigations.
(A) In general. In the case of an agency or department of the United States
Government which seeks to obtain and use a consumer report for employment
purposes, paragraph (3) shall not apply to any adverse action by such agency or
department which is based in part on such consumer report, if the head of such
agency or department makes a written finding that--
(i) the consumer report is relevant to a national security investigation of such
agency or department;
(ii) the investigation is within the jurisdiction of such agency or department;
(iii) there is reason to believe that compliance with paragraph (3) will--
(I) endanger the life or physical safety of any person;
(II) result in flight from prosecution;
(III) result in the destruction of, or tampering with, evidence relevant to the
investigation;
(IV) result in the intimidation of a potential witness relevant to the
investigation;
(V) result in the compromise of classified information; or
(VI) otherwise seriously jeopardize or unduly delay the investigation or another
official proceeding.
(B) Notification of consumer upon conclusion of investigation. Upon the
conclusion of a national security investigation described in subparagraph (A),
or upon the determination that the exception under subparagraph (A) is no longer
required for the reasons set forth in such subparagraph, the official exercising
the authority in such subparagraph shall provide to the consumer who is the
subject of the consumer report with regard to which such finding was made--
(i) a copy of such consumer report with any classified information redacted as
necessary;
(ii) notice of any adverse action which is based, in part, on the consumer
report; and
(iii) the identification with reasonable specificity of the nature of the
investigation for which the consumer report was sought.
(C) Delegation by head of agency or department. For purposes of subparagraphs
(A) and (B), the head of any agency or department of the United States
Government may delegate his or her authorities under this paragraph to an
official of such agency or department who has personnel security
responsibilities and is a member of the Senior Executive Service or equivalent
civilian or military rank.
(D) Report to the congress. Not later than January 31 of each year, the head of
each agency and department of the United States Government that exercised
authority under this paragraph during the preceding year shall submit a report
to the Congress on the number of times the department or agency exercised such
authority during the year.
(E) Definitions. For purposes of this paragraph, the following definitions shall
apply:
(i) Classified information. The term `classified information' means information
that is protected from unauthorized disclosure under Executive Order No. 12958
or successor orders.
(ii) National security investigation. The term `national security
investigation' means any official inquiry by an agency or department of the
United States Government to determine the eligibility of a consumer to receive
access or continued access to classified information or to determine whether
classified information has been lost or compromised.
(c) Furnishing reports in connection with credit or insurance transactions
that are not initiated by the consumer.
(1) In general. A consumer reporting agency may furnish a consumer report
relating to any consumer pursuant to subparagraph (A) or (C) of subsection
(a)(3) in connection with any credit or insurance transaction that is not
initiated by the consumer only if
(A) the consumer authorizes the agency to provide such report to such person; or
(B) (i) the transaction consists of a firm offer of credit or insurance;
(ii) the consumer reporting agency has complied with subsection (e); and
(iii) there is not in effect an election by the consumer, made in accordance
with subsection (e), to have the consumer's name and address excluded from lists
of names provided by the agency pursuant to this paragraph.
(2) Limits on information received under paragraph (1)(B). A person may receive
pursuant to paragraph (1)(B) only
(A) the name and address of a consumer;
(B) an identifier that is not unique to the consumer and that is used by the
person solely for the purpose of verifying the identity of the consumer; and
(C) other information pertaining to a consumer that does not identify the
relationship or experience of the consumer with respect to a particular creditor
or other entity.
(3) Information regarding inquiries. Except as provided in section 609(a)(5) [
1681g], a consumer reporting agency shall not furnish to any person a record of
inquiries in connection with a credit or insurance transaction that is not
initiated by a consumer.
(d) Reserved.
(e) Election of consumer to be excluded from lists.
(1) In general. A consumer may elect to have the consumer's name and address
excluded from any list provided by a consumer reporting agency under subsection
(c)(1)(B) in connection with a credit or insurance transaction that is not
initiated by the consumer, by notifying the agency in accordance with paragraph
(2) that the consumer does not consent to any use of a consumer report relating
to the consumer in connection with any credit or insurance transaction that is
not initiated by the consumer.
(2) Manner of notification. A consumer shall notify a consumer reporting agency
under paragraph (1)
(A) through the notification system maintained by the agency under paragraph
(5); or
(B) by submitting to the agency a signed notice of election form issued by the
agency for purposes of this subparagraph.
(3) Response of agency after notification through system. Upon receipt of
notification of the election of a consumer under paragraph (1) through the
notification system maintained by the agency under paragraph (5), a consumer
reporting agency shall
(A) inform the consumer that the election is effective only for the 2-year
period following the election if the consumer does not submit to the agency a
signed notice of election form issued by the agency for purposes of paragraph
(2)(B); and
(B) provide to the consumer a notice of election form, if requested by the
consumer, not later than 5 business days after receipt of the notification of
the election through the system established under paragraph (5), in the case of
a request made at the time the consumer provides notification through the
system.
(4) Effectiveness of election. An election of a consumer under paragraph (1)
(A) shall be effective with respect to a consumer reporting agency beginning 5
business days after the date on which the consumer notifies the agency in
accordance with paragraph (2);
(B) shall be effective with respect to a consumer reporting agency
(i) subject to subparagraph (C), during the 2-year period beginning 5 business
days after the date on which the consumer notifies the agency of the election,
in the case of an election for which a consumer notifies the agency only in
accordance with paragraph (2)(A); or
(ii) until the consumer notifies the agency under subparagraph (C), in the case
of an election for which a consumer notifies the agency in accordance with
paragraph (2)(B);
(C) shall not be effective after the date on which the consumer notifies the
agency, through the notification system established by the agency under
paragraph (5), that the election is no longer effective; and
(D) shall be effective with respect to each affiliate of the agency.
(5) Notification system.
(A) In general. Each consumer reporting agency that, under subsection (c)(1)(B),
furnishes a consumer report in connection with a credit or insurance transaction
that is not initiated by a consumer, shall
(i) establish and maintain a notification system, including a toll-free
telephone number, which permits any consumer whose consumer report is maintained
by the agency to notify the agency, with appropriate identification, of the
consumer's election to have the consumer's name and address excluded from any
such list of names and addresses provided by the agency for such a transaction;
and
(ii) publish by not later than 365 days after the date of enactment of the
Consumer Credit Reporting Reform Act of 1996, and not less than annually
thereafter, in a publication of general circulation in the area served by the
agency
(I) a notification that information in consumer files maintained by the agency
may be used in connection with such transactions; and
(II) the address and toll-free telephone number for consumers to use to notify
the agency of the consumer's election under clause (I).
(B) Establishment and maintenance as compliance. Establishment and maintenance
of a notification system (including a toll-free telephone number) and
publication by a consumer reporting agency on the agency's own behalf and on
behalf of any of its affiliates in accordance with this paragraph is deemed to
be compliance with this paragraph by each of those affiliates.
(6) Notification system by agencies that operate nationwide. Each consumer
reporting agency that compiles and maintains files on consumers on a nationwide
basis shall establish and maintain a notification system for purposes of
paragraph
(5) jointly with other such consumer reporting agencies.
(f) Certain use or obtaining of information prohibited. A person shall not
use or obtain a consumer report for any purpose unless
(1) the consumer report is obtained for a purpose for which the consumer report
is authorized to be furnished under this section; and
(2) the purpose is certified in accordance with section 607 [1681e] by a
prospective user of the report through a general or specific certification.
(g) Furnishing reports containing medical information. A consumer reporting
agency shall not furnish for employment purposes, or in connection with a credit
or insurance transaction, a consumer report that contains medical information
about a consumer, unless the consumer consents to the furnishing of the report.
