The Fair Credit Reporting Act
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Regulation of Consumers' Credit Information
The Fair Credit Reporting Act ("FCRA") governs the use of consumer reports, which are defined as:
any written, oral or other communication of any information by a consumer reporting agency [1] bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which [2] is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for --
(A) credit or insurance to be used primarily for personal, family, or household purposes;
(B) employment purposes; or
(C) any other purpose authorized under Section 1681b of this title (listing "permissible purposes" for use of consumer reports).
These "permissible purposes," as set forth in Section 1681b of the FCRA, allow a consumer reporting agency to furnish a consumer report:
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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.
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In accordance with the written instruction of the consumer to whom it relates.
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To a person which it has reason to believe
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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
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intends to use the information for employment purposes; or
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intends to use the information in connection with the underwriting of insurance involving the consumer; or
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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
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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
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otherwise has a legitimate business need for the information
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in connection with a business transaction that is initiated by the consumer; or
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to review an account to determine whether the consumer continues to meet the terms of the account.
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for certain specified uses in connection with the payment of child support.
It should also be noted that the D.C. Circuit's decision in Trans Union v. FTC, 245 F.3d 809 (D.C. Cir. 2001), may result in a more expansive interpretation of the FCRA by the FTC and the courts, as the court reaffirmed its statement in an earlier opinion that the terms "general characteristics" and "mode of living" could be interpreted to include almost anything about consumers.
Related Reading
For those of you wishing to research this topic in more depth, we provide the following public record documents for your use.
FTC Gramm-Leach-Bliley Act Regulations
Regulation of Disclosure of Financial Information.
History of the Fair Credit Reporting Act
A brief chronology of the Fair Credit Reporting Act ("FCRA")
as it has evolved over the years.
Monitor Unauthorized Access to Credit Report
It is equally important to keep an eye on who is accessing
your information and ensuring that you have authorized that access.
For more information on credit related products and services,
choose from the following:
Reports | Monitoring | Scores | 3-in-1 | Debt Help
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