15 U.S.C. 1681a - part 6

Here's part 6 of my explanation of 15 U.S.C. 1681a (i.e. the definition section of the Fair Credit Reporting Act). This edition starts off with 1681a(l)'s definition of "firm offer of credit or insurance".

"(l) The term 'firm offer of credit or insurance' means any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following:

(1) The consumer being determined, based on information in the consumer's application for the credit or insurance, to meet specific criteria bearing on credit worthiness or insurability, as applicable, that are established

(A) before selection of the consumer for the offer; and

(B) for the purpose of determining whether to extend credit or insurance pursuant to the offer."

(2) Verification

(A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer's application for the credit or insurance, or other information bearing on the credit worthiness or insurability of the consumer; or

(B) of the information in the consumer's application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness or insurability."

[A company has to have a permissible purpose to access your credit report. One such permissible purpose is if the company is making the consumer a firm offer of credit or insurance. Companies often come up with a specific criteria for consumers to which they are willing to offer credit. They then provide this criteria to the credit bureaus, who return the names and addresses of all consumers who meet the company's criteria.]

"(3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was

(A) established before selection of the consumer for the offer of credit or insurance; and

(B) disclosed to the consumer in the offer of credit or insurance."

[Obviously, if the consumer does not provide the required collateral, the credit grantor should be allowed to get out of its firm offer of credit. However, the required collateral must be established before the firm offer of credit is made, so that the company can not just use the collateral as an excuse to obtain a consumer's credit report but then not follow through with the offer.]

"(m) The term "credit or insurance transaction that is not initiated by the consumer" does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of

(1) reviewing the account or insurance policy; or

(2) collecting the account."

[This definition makes clear that a creditor can access its debtor's credit report for account review and collection purposes and that such access is not considered a credit or insurance transaction not initiated by the consumer.]

"(n) The Term 'State' means any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States."

[Some provisions of the FCRA can only be enforced by the "State". This definition expands the meaning of "State" beyond the fifty states of the United States to include Puerto Rico, the District of Columbia and any other United States territory or possession.]

The definition of "excluded communications" comes next but is pretty long, so I will cover it in part seven.