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June 06, 2009

15 U.S.C. 1681b - part 3

Now, moving on to explain subsection (c) to 15 U.S.C. 1681b of the Fair Credit Reporting Act:

"(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."

[This means that, when the consumer does not initiate the transaction that forms the basis for the request for the credit report, the credit bureau may only provide the consumer report to a third party if the consumer consents to the disclosure or if there is a firm offer of credit or insurance, the consumer reporting agency has complied with 15 U.S.C. 1681b(e) (more on that in the next post) and, the consumer has not opted out of pre-screening lists (i.e. the consumer has taken his or her name off the list of consumers who accept preapproved offers). If the consumer did not initiate the transaction and neither of the two other exceptions apply, then there is no permissible purpose for the disclosure of the consumer report.]

"(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."

[So if the consumer neither initiates the transaction nor consents to the credit report's disclosure (i.e. when the basis for the consumer report's disclosure is that there was a firm offer of credit or insurance), the credit bureau can not disclose the whole consumer report but is only allowed to disclose the name and address of the consumer and other non-credit related information. In other words, the credit bureau returns a list of names and addresses of consumers who meet the criteria provided by the company requesting the credit report.]

"(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."

[In addition to not being able to produce credit information, subsection (3) makes it clear that the consumer reporting agency can not furnish the record of inquiries (i.e. the list of companies receiving that consumer's credit report within the last two years) when the transaction is not initiated by the consumer.]

"(d) Reserved."

[Hey, an easy one. This subsection is reserved for any later amendment to 1681b.]

I will move on to subsection (e) of 15 U.S.C. 1681b in part 4's explanation. Thanks for reading.

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