| Credit reporting agencies, often called credit bureaus, gather information on credit users. These agencies sell this information to banks, finance companies, and retailers. In addition, the credit reporting agencies maintain records on all consumers. This information shows the accounts a consumer has, how a consumer has made payments on those accounts, how much the consumer owes, whether the accounts are up to date or are overdue, whether action has been taken against a consumer, and whether a consumer has been assigned for collection purposes. From the viewpoint of the consumer, it is by economic necessity, not by choice, that this information is disclosed to creditors. Yet, a consumer could be denied credit or lose a promotion because of inaccurate information in the credit report. In addition, the more a consumer uses credit, the more information is gathered and disseminated about him. A negative credit report can keep a consumer from having a credit card, obtaining an insurance policy, buying a house, getting a job, and more. Because a credit report can have such a powerful impact, its importance cannot be understated, and the law that regulates credit reporting should not, indeed cannot, be ignored.The Congress enacted the Fair Credit Reporting Act (FCRA) in response to growing public concern about the rights of consumers and the expanding use of credit in society. The FCRA regulates the issuance of both consumer credit reports and investigative consumer reports and protects consumers from unfair credit reporting methods and enables credit grantors to obtain necessary information. The purpose of the FCRA was to ensure that the nation's credit reporting system functions fairly, accurately, and without undue intrusion into the privacy rights of consumers. The FCRA sought to achieve a balance between the legitimate business need of creditors toobtain the necessary information on which to base credit decisions and the right of consumers to protect the accuracy and confidentiality of their personal and financial records.However, advances in technology and the volume of consumer credit transactions have rendered the FCRA dangerously ill-equipped to meet the needs of today's consumers. The findings of Congressional hearings, independent studies, and federal and state enforcement agency experiences with the credit reporting industry cast serious doubt on the effectiveness of the law in achieving its basic goals. Under the FCRA of 1970, information about consumers' life is too easily accessible. Sensitive personal and financial information on consumers is collected and disseminated with little or no regard for consumers' right to privacy. Errors riddle consumer reports that are difficult to correct.The failure of the FCRA to achieve its intended purposes to ensure the accuracy, relevancy, and confidentiality of consumer reports has never been more apparent. Widespread public support for reform of the law continues to grow with each new revelation of abuse involving the credit reporting industry. The response to this clamor for reform has come from both state and federal governments. A number of states have considered legislation to enact new state laws regulating credit reporting or to strengthen existing state statutes in this area. Moreover, state law enforcement agencies have taken significant actions to curb credit reporting abuses. On September 30, 1996, President Clinton signed into law the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA). EGRPRA contained changes to numerous laws affecting depository institutions and other providers of consumer financial services. These changes included major revisions to the Fair Credit Reporting Act. Theamendments to the FCRA are contained in the Consumer Credit Reporting Reform Act of 1996 (CCRA of 1996). The CCRA of 1996 contained extensive revisions to certain portions of the FCRA, many of which had been proposed and introduced in the Senate or House of Representatives during the past few years.Ever s... |
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