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May 23, 2009

15 U.S.C 1681a - part two

"(d) Consumer Report

(1) In general. The term 'consumer report' means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which 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 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 604 [(1681b]."

[This means that only credit reports transmitted by a consumer reporting agency to a third party is considered a "consumer report". The credit report provided directly to the consumer by the consumer reporting agency to review is not a "consumer report" but is instead a "consumer disclosure" and thus does not fall under the definition of "consumer report". Also, a credit report is only a "consumer report" if it is either used for personal, family or household purposes, or employment purposes or one of the permissible purposes found in 1681b, which we will cover later. This means that credit reports generated for a business purpose (i.e. a business loan) are not "consumer reports" and thus do not fall under the protections of the FCRA.]

"(2) Exclusions. Except as provided in paragraph (3), the term 'consumer report' does not include

(A) subject to section 624, any

(i) report containing information solely as to transactions or experiences between the consumer and the person making the report;"

[This means that reports that only contain information regarding the dealings between the consumer and the person making the report are not consumer reports. This makes sense because its not an assembly of the overall credit history but only the experiences of that particular consumer with the particular company creating the report.]

"(ii) communication of that information among persons related by common ownership or affiliated by corporate control; or

(iii) communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspiciously disclosed to the consumer that the information may be communicated among such persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that such information not be communicated among such persons;"

[Subsections (ii) and (iii) allow the internal sharing of information between sister corporations or parent/child corporations without triggering the requirements of the FCRA.]

"(B) any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device;"

[In other words, the conveying of a decision to grant or deny a credit application is not a "consumer report" but is obviously often based upon a "consumer report".]

"(C) any report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys his or her decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made, and such person makes the disclosures to the consumer required under section 615 [1681m]; or"

[I am not sure exactly what this section is talking about. It might be the situation where a consumer is attempting to make a purchase (i.e. a car) and the seller shops the note on the purchase to different potential lenders. The communications from these lenders to the seller regarding whether they will grant credit are not "consumer reports".]

"(D) a communication described in subsection (o) or (x)."

[We'll get to these when we cover subsections (o) and (x).]

"(3) Restriction on sharing of medical information. Except for information or any communication of information disclosed as provided in section 604(g)(3), the exclusions in paragraph (2) shall not apply with respect to information disclosed to any person related by common ownership or affiliated by corporate control, if the information is --

(A) medical information;

(B) an individualized list or description based on the payment transactions of the consumer for medical products or services; or

(C) an aggregate list of identified consumers based on payment transactions for medical products or services."

[Basically, the "consumer report" can not include medical information, even just a name of a medical provider, if that name reveals any type of private medical information about the consumer (i.e. a bill from a "Cancer Hospital").]

This concludes the definition of "consumer report" which is long but obviously important. The next post will continue the definitions section of 15 U.S.C 1681a.

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