Sec. 2. Protection of consumer credit services
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The Credit Repair Organizations Act ( 15 U.S.C. 1679 et seq.) is amended— by striking title each place such term appears and inserting chapter ; by striking and inserting TITLE IV—CREDIT REPAIR ORGANIZATIONS ; TITLE IV—CONSUMER CREDIT SERVICES by inserting before the table of contents for such Act the following: ; in section 403(3)(B)— in clause (ii), by striking or at the end; in clause (iii), by striking the period and inserting ; or ; and by adding at the end the following: any authorized credit services provider to the extent such provider offers, sells, provides, or performs credit and identity protection services or credit education services (as such terms are defined, respectively, under section 423). ; and by inserting after section 413 the following:
Sec. 421. Short title. Sec. 422. Findings. Sec. 423. Definitions. Sec. 424. Promotion of credit and identity protection services and credit education services. Sec. 425. Applicability of Credit Repair Organizations Act to activities of authorized credit services providers other than credit and identity protection services or credit education services. Sec. 426. Relation to State law. Sec. 427. Process for registering as authorized credit services provider. This chapter may be cited as the Credit Services Protection Act .
The Congress makes the following findings: Consumer reports and credit scores have become widely available to consumers. In order to fully benefit from such access, however, consumers also need the tools to understand and improve their credit standing. By doing so consumers can gain greater access to credit and on better terms, which can help alleviate poverty, sustain the middle class, and grow the economy. As cyber-attacks and data breaches have proliferated, consumers’ credit standing has also become increasingly threatened by identity theft, fraud, and other forms of unauthorized access.
To help protect against these threats, consumers turn to credit monitoring and other credit and identity protection tools and services. Enacted in 1996, the Credit Repair Organizations Act ( 15 U.S.C. 1679 et seq.) remains an important law to protect consumers from exploitation, but in recent years the law also has worked to prevent credit education and credit and identity theft protection services from reaching consumers. The provision of credit and identity protection services and credit education services should be accompanied by reasonable and appropriate consumer protections.
Persons who choose to register as an authorized credit services provider pursuant to section 427 and who offer, sell, provide, or perform credit and identity protection services and credit education services should have the certainty of a safe harbor from the Credit Repair Organizations Act that this chapter providers. For the purposes of this chapter, the following definitions apply: The term authorized credit services provider means a person that has registered as an authorized credit services provider under section 427.
The term credit has the meaning given that term under section 403 of the Credit Repair Organizations Act. The term credit and identity protection service — means any service offered, sold, provided, or performed to or for consumers for the express or implied purpose of protecting a consumer’s credit standing or to detect or prevent the commission or remediate the consequences of identity theft, fraud, data breach, or other unauthorized financial or credit-related activity; and does not include— advising or assisting in any activity described in subparagraphs
(A)through
(C)of section 427(b)(2); any services marketed to a consumer during a call or session with a consumer reporting agency (as defined under section 603(f) of the Fair Credit Reporting Act) regarding the exercise of any consumer right under the Fair Credit Reporting Act or applicable State laws prior to the consumer reporting agency meeting its obligations under the Fair Credit Reporting Act or applicable State law required for such call or session; or any services provided without compliance with sections 424(c) and 424(d). The term credit education service — means any service offered, sold, provided, or performed to or for consumers for the express or implied purpose of counseling, educating, or assisting consumers in understanding, managing, or prospectively improving their credit standing, consumer report, credit scores, or access to credit; and does not include— advising or assisting in any activity described in subparagraphs
(A)through
(C)of section 427(b)(2); any services marketed to a consumer during a call or session with a consumer reporting agency (as defined under section 603(f) of the Fair Credit Reporting Act) regarding the exercise of any consumer right under the Fair Credit Reporting Act or applicable State laws prior to the consumer reporting agency meeting its obligations under the Fair Credit Reporting Act or applicable State law required for such call or session; or any services provided without compliance with sections 424(c) and 424(d). The term consumer has the meaning given that term under section 403 of the Credit Repair Organizations Act. The term consumer report has the meaning given that term under section 603 of the Fair Credit Reporting Act. The Credit Repair Organizations Act ( 15 U.S.C. 1679 et seq.) shall not apply to any authorized credit services provider to the extent such provider offers, sells, provides, or performs credit and identity protection services or credit education services. No authorized credit services provider may— make any statement, or counsel or advise any consumer to make any statement, which is untrue or misleading (or which, upon the exercise of reasonable care, should be known by the authorized credit services provider officer, employee, agent, or other person to be untrue or misleading) with respect to any consumer’s credit worthiness, credit standing, or credit capacity to— any consumer reporting agency (as defined under section 603(f) of the Fair Credit Reporting Act); or any person— who has extended credit to the consumer; or to whom the consumer has applied or is applying for an extension of credit; make any statement, or counsel or advise any consumer to make any statement, the intended effect of which is to alter the consumer’s identification to prevent the display of the consumer’s credit record, history, or rating for the purpose of concealing adverse information that is accurate and not obsolete to— any consumer reporting agency (as defined under section 603(f) of the Fair Credit Reporting Act); or any person— who has extended credit to the consumer; to whom the consumer has applied or is applying for an extension of credit; or who has a permissible purpose to obtain a consumer report under section 604 of the Fair Credit Reporting Act ( 15 U.S.C. 1681b ) and is making an eligibility determination in a transaction initiated by the consumer; make or use any untrue or misleading statement of the services offered by the authorized credit services provider; or engage, directly or indirectly, in any act, practice, or course of business that constitutes or results directly in the commission of, or attempt to commit, a fraud or deception on any person in connection with the offer or sale of the services of the authorized credit services provider. Except as otherwise provided by law, an authorized credit services provider shall disclose, in writing or electronically, the following disclosure, or a substantially similar disclosure, to the consumer prior to the authorized credit services provider commencing credit and identity protection services or credit education services to the consumer: Consumer Credit File Rights You have a right to dispute inaccurate information in your credit report free of charge by contacting the credit bureau directly. However, neither you nor any other company or organization has the right to have accurate, current, and verifiable information removed from your credit report. Under Federal law, the credit bureau must remove accurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for 10 years. It is unlawful to conceal, distort, or otherwise provide misleading information to a credit bureau. You have a right to obtain a free copy of your credit report annually from each of the three nationwide credit bureaus at www.annualcreditreport.com. You have a right to obtain a copy of your credit report from a credit bureau at any other time for a reasonable fee. There is no fee, however, if you have been turned down for credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days. The credit bureau must provide at no cost to you someone to explain to you any information in the credit file disclosure you receive from the credit reporting agency. You are entitled to receive a free copy of your credit report if you are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of public welfare assistance, or if you have reason to believe that there is inaccurate information in your credit report due to fraud. Credit bureaus are required to follow reasonable procedures to ensure that the information they report is accurate. However, mistakes may occur. You may, on your own, notify a credit bureau in writing, through a toll-free telephone number established by the credit bureau or through a function of the credit bureau’s website, if available, that you dispute the accuracy of information in your credit file. The credit bureau must then investigate your dispute and modify or remove inaccurate or incomplete information. The credit bureau may not charge any fee for this service. Any pertinent information and copies of all documents you have concerning an error should be given to the credit bureau. If the credit bureau’s investigation does not resolve the dispute to your satisfaction, you may send a brief statement to the credit bureau, to be kept in your file, explaining why you think the record is inaccurate. The credit bureau must include a summary of your statement about disputed information with any report it issues about you. There are many different credit score models that can give an assessment of your relative risk of default for the same credit report. This risk of default is typically expressed in a three-digit number known as a credit score. There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions. The Federal Trade Commission is one of the agencies that regulates credit bureaus. For more information visit www.consumer.ftc.gov. You may also contact the Bureau of Consumer Financial Protection at www.consumerfinance.gov. A consumer shall have the right to terminate a contract for credit and identity theft protection services and credit education services within three business days beginning on the date that the consumer enters into such contract with the authorized credit services provider. If a consumer terminates a contract pursuant to paragraph (1), the authorized credit services provider shall be entitled to the reasonable value for services actually rendered prior to termination, not to exceed the total amount paid by the consumer, but an authorized credit services provider is not entitled to retain any fees if no services were rendered. A violation of this section shall be treated as a violation of a rule issued under section 18(a)(1)(B) of the Federal Trade Commission Act ( 15 U.S.C. 57a(a)(1)(B) ) regarding unfair or deceptive acts or practices. The Federal Trade Commission shall enforce this section in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act ( 15 U.S.C. 41 et seq.) were incorporated into and made a part of this section. The Credit Repair Organizations Act ( 15 U.S.C. 1679 et seq.) shall be enforced solely by the Federal Trade Commission in accordance with subsections
(a)and
(b)of section 410 of that Act with respect to any authorized credit services provider. Sections 409 and 410(c) of the Credit Repair Organizations Act ( 15 U.S.C. 1679 et seq.) shall not apply to any authorized credit services provider. The provisions of this chapter supersede any law or regulation of any State with respect to the subject matter of this chapter or the Credit Repair Organizations Act ( 15 U.S.C. 1679 et seq.) to the extent that the State law would apply to any authorized credit services provider. Except for any provision contained in any State law superseded under subsection (a), this section is not intended to preempt any law of any State that prohibits unfair or deceptive acts or practices, including the making of false or misleading statements in the marketing of products or services. A person that seeks to be registered as an authorized credit services provider under the provisions of this chapter shall submit to the Federal Trade Commission an application for registration that contains the information described in subsection (b). An application for registration under this section shall contain the following: A statement setting forth the person’s full corporate organization, all affiliates of the person, and all officers, directors, and any other individuals with substantial management oversight over the person. A statement that the person has elected to adhere to, and duly represents and warrants annually and publicly, the following standards: The person, or any of its affiliates, does not advise or assist consumers in modifying or removing, or attempting to modify or remove, adverse information that is accurate and not obsolete from a consumer’s consumer report. The person, or any of its affiliates, does not assist consumers in altering a consumer’s existing credit record, credit history, or credit score by concealing or distorting, or attempting to conceal or distort, adverse information that is accurate and not obsolete. The person, or any of its affiliates, does not assist consumers in interacting with consumer reporting agencies described in section 603(f) of the Fair Credit Reporting Act in any manner which interferes with the lawful operation of such consumer reporting agencies. The person, or any of its affiliates, does not use the term credit repair in its marketing of credit and identity protection services and credit education services. The person provides consumers with the mandatory disclosure described in section 424(c) prior to entering into a contract or agreement for services, and a right to cancellation, in accordance with the provisions of this chapter. A copy of the policies and procedures adopted and implemented by the person to ensure and document compliance with the provisions of this Act, including, policies and procedures for— executing a contract with the consumer to commence the authorized services; providing the mandatory disclosure set forth in subsection 424(c); providing consumers with the right to terminate a contract for services in accordance with subsection 424(d); and upon termination, determining the reasonable value of services actually rendered, in accordance with the provisions of 424(d)(2). A general description of the credit and identity protection services and credit education services that the person plans to offer, sell, provide, or perform to or for consumers under the provisions of this Act. A statement that the person will— on a biennial basis, provide to the Federal Trade Commission an update, if needed, to the person’s corporate organization, policies and procedures, and general description of services provided pursuant to this subsection; on a biennial basis, obtain an assessment from a qualified, objective, independent, third-party professional of the person’s actual compliance record with the representations and warranties in paragraph (2); and retain such assessment and provide it to the Federal Trade Commission as soon as reasonably practicable, but in no event more than 30 business days, after the Federal Trade Commission requests the assessment. The Federal Trade Commission shall act by approving or denying applications submitted pursuant to this section within 60 days of the submission, and shall set forth in writing its conclusions with regard to such requests. The Federal Trade Commission may request that an applicant provide additional information that is reasonably related to one or more of the application elements enumerated in subsection (b), including by requesting that the applicant submit supplemental materials, answer questions in writing, or appear in person before the Commissioners or their designee. An application that has not been acted upon by the Federal Trade Commission within 60 days of submission shall be deemed as approved and the person shall be registered as an authorized credit services provider. If the Federal Trade Commission requests additional information pursuant to paragraph (2), the applicant shall have up to 30 days to respond in writing or appear before the Commission as requested. The Commission shall then have an additional 30 days to act upon such response, and if not acted upon within 30 days, the application shall be deemed as approved and the person shall be registered as an authorized credit services provider. In no event shall the status of an application remain unresolved beyond 120 days from the date of its original submission. The Federal Trade Commission shall have the authority to rescind a person’s registration that was issued under this section if the Commission determines that the person has failed to comply with the obligations and standards set forth in this Act. The Federal Trade Commission shall provide an authorized credit services provider a reasonable opportunity to cure any defects before moving to revoke a person’s registration as an authorized credit services provider. If the Federal Trade Commission determines that a person who has registered as an authorized credit services provider, or any of the person’s affiliates, has— engaged in any activity described under subparagraphs
(A)through
(C)of subsection (b)(2); knowingly made false statements in any written statement required under this chapter; or willfully or repeatedly violated, or willfully or repeatedly failed to observe, any provision of this Act, the Federal Trade Commission shall have the authority to deem a revocation effective at the time immediately prior to when the activity occurred. Any person for whom a registration under this section has been revoked may obtain review of such revocation in a court of appeals of the United States in accordance with the procedures set forth in section 5(c) of the Federal Trade Commission Act, except that— the court of appeals shall hold unlawful and set aside a revocation if the court finds that the Federal Trade Commission’s action is not supported by substantial evidence in the adjudicatory record; and the filing of a petition for review shall operate as a stay of the revocation until the date on which the determination of the court is final (including any appeal of the determination), but in the event the court’s final determination upholds revocation, the effective date of the revocation shall be the date as determined by the Federal Trade Commission. For purposes of this subsection, the term adjudicatory record means the Federal Trade Commission’s statement of basis and purpose for revocation, the person’s registration application materials, any written submissions by the person or transcripts of oral testimony, and any other evidence that the Commission considers relevant to the revocation. If the person or the Federal Trade Commission applies to the court for leave to make additional oral submissions or written presentations and shows to the satisfaction of the court that such submissions and presentations would be material and that there were reasonable grounds for the submissions and failure to make such submissions and presentations in the proceeding before the Commission, the court may order the Commission to provide additional opportunity to make such submissions and presentations. . The amendments made by this section shall take effect after the 60-day period beginning on the date of the enactment of this Act.
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