119-hr306

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 306 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 306

 To amend the Credit Repair Organizations Act to add additional 
 protections against harmful practices within the credit repair 
 organization industry, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 January 9, 2025

 Ms. McBride (for herself and Mrs. Kim) introduced the following bill; 
 which was referred to the Committee on Financial Services

_______________________________________________________________________

 A BILL

 To amend the Credit Repair Organizations Act to add additional 
 protections against harmful practices within the credit repair 
 organization industry, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Ending Scam Credit Repair Act'' or 
the ``ESCRA Act''.

SEC. 2. CREDIT REPAIR ORGANIZATION DEFINITION.

 

Section 403

    (3) of the Credit Repair Organizations Act (15 U.S.C. 
1679a

    (3) )--

    (1) in subparagraph
        (A) , by inserting ``(not including 
 anything received in return for representing a consumer in 
 preparation for or during litigation)'' after 
 ``consideration''; and

    (2) in subparagraph
        (B) --
        (A) by inserting ``an entity or individual that is, 
 in good faith and not for the purpose of evading this 
 title'' after ``include'';
        (B) in clause
            (ii) , by striking ``or'';
            (C) in clause
            (iii) , by striking the period and 
 inserting ``; or''; and
            (D) by adding at the end the following:
 ``
            (iv) any attorney that provides legal 
 services rendered or to be rendered to a 
 consumer in contemplation of or in connection 
 with a case filed, or to be filed within 12 
 months, under title 11 or title 15, United 
 States Code, by an attorney within the same law 
 firm.''.

SEC. 3. PROHIBITED PRACTICES.

    (a) Untrue or Misleading Statements.--

    (1) In general.--

Section 404

    (a)

    (1) of the Credit Repair 
 Organizations Act (15 U.S.C. 1679b

    (a)

    (1) ) is amended--
        (A) by inserting ``knowingly'' before ``make any 
 statement, or'';
        (B) in subparagraph
        (A) , by striking ``or''; and
            (C) by adding at the end the following:
 ``
            (C) the Bureau of Consumer Financial Protection 
 directly or through an online portal established to 
 receive complaints, disputes, or reports of fraud;
 ``
            (D) the Federal Trade Commission directly or 
 through an online portal established to receive 
 complaints, disputes, or reports of fraud; or
 ``
        (E) any Federal, State, local, or Tribal law 
 enforcement agency, directly or through an online 
 portal established to receive complaints, disputes, or 
 reports of fraud;''.

    (2) === Finding ===
-The Congress finds that it is already 
 unlawful to make materially false, fictitious, or fraudulent 
 statements or representations to the Bureau of Consumer 
 Financial Protection.

    (b) Additional Prohibited Practices.--

Section 404 of the Credit 
Repair Organizations Act (15 U.S.C. 1679b) is amended--

    (1) in subsection

    (a)

    (2) --
        (A) in subparagraph
        (B)
            (ii) , by inserting ``or'' 
 after ``credit;''; and
        (B) by adding at the end the following:
 ``
            (C) the Bureau of Consumer Financial Protection 
 or the Federal Trade Commission;'';

    (2) by amending subsection

    (b) to read as follows:
 ``

    (b) Payment in Advance.--
 ``

    (1) In general.--No credit repair organization may 
 request or receive payment of any fee or consideration from a 
 consumer for services represented to remove derogatory or 
 inaccurate information from, or improve, such consumer's credit 
 history, credit record, or credit rating, or services related 
 to such a representation, until the credit repair organization 
 has provided such consumer with documentation in the form of a 
 consumer report, issued not less than 6 months after such 
 service, from a consumer reporting agency that demonstrates 
 that such representation has been achieved.
 ``

    (2) Rule of construction.--Nothing in this subsection 
 shall be construed to alter the permissible purposes of 
 furnishing a consumer report described in 

section 604 of the 
 Fair Credit Reporting Act.''; and

    (3) by adding at the end the following:
 ``
            (c) Jamming.--A credit repair organization may not submit 
multiple disputes described in 

section 611 of the Fair Credit Reporting 
Act of the same information unless all of the following are true:
 ``

    (1) The consumer reporting agency or data furnisher has 
 had the time permitted under the Fair Credit Reporting Act to 
 conduct a reasonable investigation on the prior dispute.
 ``

    (2) The consumer reporting agency or data furnisher has 
 returned the results of its investigation to the consumer with 
 respect to such dispute, unless there are material changes to 
 the information submitted with the dispute.
 ``

    (3) The credit repair organization includes with the 
 resubmitted dispute a specific description of what information 
 is inaccurate.''.

SEC. 4. DISCLOSURES.

 

Section 405 of the Credit Repair Organizations Act (15 U.S.C. 
1679c) is amended--

    (1) in subsection

    (a) --
        (A) by striking ``due to fraud.'' and inserting 
 ``due to fraud. Credit repair organizations do not 
 provide any services that you cannot do yourself for 
 free.'';
        (B) by striking ``regulates'' and inserting ``and 
 the Bureau of Consumer Financial Protection regulate''; 
 and
            (C) by inserting ``The Bureau of Consumer Financial 
 Protection 1700 G St. NW, Washington, DC, 20552 Tel: 
 855-411-2372 TTY/TTD: 855-729-2372'' after ``20580''; 
 and

    (2) in subsection
            (c) --
        (A) in paragraph

    (1) , by striking the period at the 
 end and inserting ``and any recordings of telephone 
 communications with the consumer.''; and
        (B) in paragraph

    (2) --
            (i) by striking ``2'' in the heading and 
 inserting ``5'';
            (ii) by inserting ``and any telephone 
 recordings with the consumer'' after 
 ``consumer's statement'';
            (iii) by striking ``2'' and inserting 
 ``5''; and
            (iv) by striking ``statement is signed by 
 the consumer'' and inserting ``statement or the 
 telephone recordings are created''.

SEC. 5. CONSUMER CONTRACT REQUIRED.

    (a) In General.--

Section 407
            (c) of the Credit Repair Organizations 
Act (15 U.S.C. 1679e
            (c) ) is amended by adding at the end the following:
 ``

    (3) copies of all communications sent on behalf of the 
 consumer, at the time the communication is sent.''.

    (b) Technical Amendment.--

Section 407
            (c) of the Credit Repair 
Organizations Act (15 U.S.C. 1679e
            (c) ) is amended--

    (1) by striking ``at the time the contract or the other 
 document is signed.'';

    (2) in paragraph

    (1) , by striking ``; and'' inserting ``, 
 at the time the contract or the other document is signed;''; 
 and

    (3) in paragraph

    (2) , by adding at the end ``at the time 
 the contract or the other document is signed; and''.

SEC. 6. NONCOMPLIANCE.

 

Section 408 of the Credit Repair Organizations Act (15 U.S.C. 
1679f) is amended by adding at the end following:
 ``
            (d) Legal Services Within Credit Repair Organizations.--A credit 
repair organization shall be subject to this title regardless of 
whether the organization is, or employs, an attorney who also provides 
legal services to a consumer, except if such attorney is an attorney 
described in 

section 403

    (3)
        (B)
            (iv) .
 ``

    (e) Credit Repair Organizations Without a State License.--On or 
after January 1, 2026, no person may act as a credit repair 
organization unless such person is licensed by a State.''.

SEC. 7. CREDIT REPAIR ORGANIZATION COMMUNICATIONS WITH FURNISHERS OF 
 INFORMATION.

    (a) In General.--The Credit Repair Organizations Act (15 U.S.C. 
1679 et seq.) is amended by inserting after 

section 408 the following 
new section:
``

Sec. 408A. Credit repair organization communications with furnishers 
 of information
 ``Disputes submitted to a person who furnishes information to a 
consumer reporting agency by or on behalf of a credit repair 
organization shall meet the following requirements:
 ``

    (1) If sent by mail, the dispute shall be transmitted by 
 first class mail and list on the envelope the--
 ``
        (A) name of the credit repair organization; and
 ``
        (B) State license number of the credit repair 
 organization, if applicable.
 ``

    (2) The dispute shall list the--
 ``
        (A) name of the credit repair organization;
 ``
        (B) State license number of the credit repair 
 organization, if applicable; and
 ``
            (C) name of the consumer on whose behalf the 
 dispute is submitted.
 ``

    (3) In the case of any additional communication after an 
 initial dispute, the additional communication shall clearly and 
 conspicuously identify any material changes to the information 
 provided in the initial written dispute and include the 
 information described in paragraphs

    (1) and

    (2) .
 ``

    (4) In the case where a credit repair organization sells 
 or otherwise provides an online or paper blank dispute form to 
 be completed and filed by the consumer, such form must contain 
 the--
 ``
        (A) name and address of such credit repair 
 organization; and
 ``
        (B) State license number of such credit repair 
 organization, if applicable.
 ``

    (5) In the case where the person responds to a dispute 
 submitted by a credit repair organization seeking clarifying 
 information, verifying if the customer has actually engaged 
 with the credit repair organization, or denying the accuracy of 
 the underlying claim, the credit repair organization shall 
 respond in writing within 15 business days.
 ``

    (6) In the case where the credit repair organization is 
 an attorney, the attorney shall certify that any communication 
 is consistent with any information or documentation provided by 
 the consumer, confirmed based upon methods or means proven to 
 be historically reliable and accurate.
 ``

    (7) A credit repair organization, when sending a dispute, 
 shall disclose the fact that it is a credit repair organization 
 by placing the following disclosure on the dispute letter: 
 `This communication was submitted or prepared on behalf of the 
 consumer by a credit repair organization, as defined in 

section 403 of the Credit Repair Organizations Act (15 U.S.C. 
 1679a).'''.

    (b) Clerical Amendment.--The table of contents for the Credit 
Repair Organizations Act is amended by inserting after the item 
relating to 

section 408 the following:

``408A. Credit repair organization communications with furnishers of 
 information.''.

SEC. 8. CIVIL LIABILITY.

 

Section 409

    (a)

    (1) of the Credit Repair Organizations Act (15 U.S.C. 
1679g

    (a)

    (1) ) is amended--

    (1) by striking ``Actual damages'' and inserting 
 ``Damages'';

    (2) in subparagraph
        (A) , by striking ``or'';

    (3) in subparagraph
        (B) , by striking the period at the end 
 and inserting ``; or''; and

    (4) by adding at the end the following:
 ``
            (C) the amount of $500 in damages for each 
 violation of this title.''.
 <all>