The Federal Trade Commission is seeking public comment on proposed interpretations of the provisions of the Fair Credit Reporting Act (FCRA) that permit companies to communicate consumer information to their affiliates (affiliate information sharing) without incurring the obligations of consumer reporting agencies (CRAs). The proposed interpretations provide guidance on compliance with the affiliate information sharing provisions, and are similar to the proposed regulations issued by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office of Thrift Supervision (collectively the "Federal banking agencies"). In addition, the proposed interpretations allow companies to provide notices and process opt-out elections in a manner similar to the final regulations implementing the privacy provisions of the Gramm-Leach-Bliley Act.
The FCRA sets forth legal standards governing the collection, use, and communication of credit data and certain other information about consumers. The Consumer Credit Reporting Reform Act of 1996 amended the FCRA extensively - the "1996 Amendments - one of which allowed businesses to share information with affiliated companies without becoming CRAs, as long as they allow consumers to "opt out" prior to such information sharing. Specifically, the amendment excluded from the definition of "consumer report" the sharing of certain information among affiliates, so long as the consumer, having been given notice and an opportunity to opt out, did not opt out.
These interpretations clarify that institutions may communicate among their affiliates: (i) information solely as to transactions or experiences between the consumer and the person making the communication (transaction or experience information); and (ii) "other" information (that is, information covered by the FCRA but not transaction or experience information), provided that (a) the institution has given notice to the consumer that the other information may be communicated, (b) the institution has provided the consumer an opportunity to "opt out" (i.e., to direct that the information not be communicated), and (c) the consumer has not opted out. These interpretations address such matters as the content and delivery of the notice to consumers that "other" information may be communicated (opt out notice).
In a Federal Register notice to be published shortly, the Commission solicits comment on all aspects of the proposed interpretations (16 CFR Part 600, Appendix B), and poses a number of questions and examples to consider. Comments must be received by January 31, 2001 and should be addressed to: Secretary, Federal Trade Commission, Room H-159, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.
The proposed interpretations would be added as Appendix B to 16 CFR Part 600 following the "Commentary on the FCRA" that the Commission issued in 1990, which would be re-designated as Appendix A.
The Commission vote to publish the proposed interpretations of the FCRA's affiliate information sharing provisions in the Federal Register was 5-0.
Copies of the Federal Register notice, as well as a number of other documents pertaining to the FCRA are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for consumers to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at https://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
Office of Public Affairs
Clarke Brinckerhoff or Christopher Keller
Division of Financial Practices,
(FTC Matter No. P004809)