A member of The Marmon Group of companies The Fair Credit Reporting Act as amended by the FACT Act Eric Rosenberg May 14, 2004 Chicago Association of Direct Marketing

2 FACTA Background Drivers Expiring Federal Preemptions, 12/03 Need for Action on Public Policy Issues — Identity Theft — Accuracy & Fairness of Credit Reporting System — Access to Credit Reports — Privacy (Marketing Use of Personal Information) — Financial Literacy

3 Political & Substantive Evolution, 2003 May-June House hearings focus: identity theft US Chamber Report: The FCRA—Access, Efficiency & Opportunity September Senate hearings focus: accuracy Fair & Accurate Credit Transactions Act (FACT Act) signed December 4, 2003

4 Access to Credit by Family Income Income Quintile Lowest Have a card nd Lowest Have a card Middle Have a card nd Highest Have a card Highest Have a card U.S. Chamber of Commerce Report, June 2003, “The Fair Credit Reporting Act: Access, Efficiency and Opportunity”

5 Distribution of Account Balances by Interest Rate: Interest Rate Tier Year<5.5% % % % >18% U.S. Chamber of Commerce Report, June 2003: “The Fair Credit Reporting Act: Access, Efficiency and Opportunity”

6 Important Sections — 604 Permissible Purpose of Reports — 607 Compliance Procedures — 609 Disclosure of Information — 611 Procedures in Case of Disputed Accuracy — 621 Administrative Enforcement US FAIR CREDIT REPORTING ACT (FCRA)

7 The Good News Expiring Preemptions Made Permanent — Prescreening — Data Furnisher Obligations, Liability — Timeframes for Dispute Processing — Adverse Action Notices — Obsolescence Rules — Affiliate Sharing Current Practices Codified, Preempted — Fraud Alerts — Tradeline Blocking with Police Report

8 Provisions for Users of Consumer Reports Identity Theft Risk-based Pricing Notice Accuracy Provisions Enhanced Notice of Opt-Out Rights Affiliate Sharing Score Disclosure Notice of Negative Information to Consumer

9 Provisions for Consumer Reporting Agencies Increased Consumer Access to Credit Reports — Free annual disclosures Prescreening Opt Out to 5 years, from current 2 Inquiries as Key Factor Score Disclosure to Consumers Statute of Limitations Information Blocking with Identity Theft Report SSN Truncation on Consumer Disclosure Medical Information Restrictions Reinvestigations Address Reconciliation

10 Eric Rosenberg Senior Manager, State Government Affairs 312/