1681i[a][5]: IRSG v. FTC

David A. Szwak

1681i[a][5]: IRSG v. FTC

Postby David A. Szwak » Sat Nov 19, 2005 6:50 am

Individual Reference Services Group, Inc. v. F.T.C.,
145 F.Supp.2d 6, 2001-1 Trade Cases P 73,262, D.D.C., Apr 30, 2001

Credit reporting agency sought judicial review of regulations promulgated by certain federal agencies under Gramm-Leach-Bliley Act which addressed responsibilities of financial institutions to protect the privacy of the personal financial information of their customers. On government agencies' motion for summary judgment, the District Court, Huvelle, J., held that: (1) regulations did not contravene plain meaning of Act and were permissible construction of that legislation; (2) agencies' action in promulgating final rules was not arbitrary and capricious; (3) regulations did not violate credit reporting agency's right to free speech under First Amendment; (4) regulations did not violate credit reporting agency's right to due process; and (5) regulations did not violate credit reporting agency's right to equal protection under Fifth Amendment.
Motion granted.

An understanding of the legal issues in this case begins with an explanation of the FCRA, which provides a comprehensive regulatory scheme governing CRAs, including Trans Union. Enacted on October 26, 1970, the statute was drafted in an effort to balance the conflicting needs of commerce and consumer protection; its stated purpose was "to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer...." 15 U.S.C. § 1681(b).

Specifically, the Act requires CRAs to "follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681e(b). To ensure the accuracy of this data, CRAs must make available to customers "all information in the consumer's file at the time of the request," § 1681g(a)(1), and promptly investigate any consumer dispute regarding "any item of information." § 1681i(a)(1)(A). The FCRA also requires CRAs to report the results of any investigation and to correct any inaccurate information. § 1681i(a)(5). The financial institutions that report information to CRAs are subject to similar requirements under the Act. § 1681s-2.

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