EMBARGOED UNTIL 5:00 P.M. (EDT) JANUARY 9, 1992

              CREDIT REPORTING LAW NEEDS BEEFING UP
    TO PROTECT CONSUMERS, FTC TESTIFIES IN RENO AND LAS VEGAS

     The federal law governing the accuracy and privacy of consumer
credit records would be improved both by strengthening the Federal
Trade Commission's enforcement capabilities, and by clarifying the
responsibilities of the credit reporting industry, FTC Chairman
Janet D. Steiger said in testimony at a Congressional hearing this
afternoon.  Steadily rising consumer complaints -- primarily about
inaccurate information in credit reports -- and FTC investigations
together suggest that credit bureaus, which compile and sell
consumer credit information, "too often fail to measure up to the
standards that the Fair Credit Reporting Act requires," Steiger
said.  Updating the Act could lead to improvements in credit
reporting that, in turn, could reduce the need for formal law
enforcement action, she added.

     Steiger delivered the Commission's testimony at a hearing on
S. 1853, a bill to amend the FCRA.  The hearing was held by the
U.S. Senate Commerce, Science and Transportation Committee's
Consumer Subcommittee, in Las Vegas beginning at 2:00 p.m. today. 
The Subcommittee will hold a second hearing at 2:30 p.m. tomorrow
in Reno, at which David Medine, Associate Director of the FTC's
Division of Credit Practices, will deliver similar FTC testimony.

                             - more -
Steiger on FCRA--01/09/92)

     According to the FTC, errors in consumer credit reports
generally arise in one of two ways: when credit grantors report
inaccurate information to credit bureaus, and when credit bureaus
include information about one consumer in a report on another
consumer (this is called a "mixed-file" error).  The proposed
legislation could help reduce both types of errors and speed up the
investigation and correction of these errors when they do occur,
the FTC said, by:

     -- holding credit grantors, who provide information to credit
     bureaus, to the same standard of accuracy as credit bureaus --
     that is, credit grantors would be required to follow reason-
     able procedures to ensure the maximum possible accuracy of
     information they report;

     -- requiring credit bureaus to reinvestigate information
     challenged by a consumer within 30 days, inform the consumer
     of the outcome, provide the consumer with a copy of his or her
     report if corrections are made, and to notify the consumer if
     any information deleted following a reinvestigation is
     subsequently re-entered; and

     -- requiring anyone who takes an adverse action against a
     consumer based on his or her credit report to notify the
     consumer that the report was a factor, and to identify the
     credit bureau that supplied the report (currently this
     requirement only applies when consumers are denied credit,
     employment or insurance -- the proposed bill would extend this
     requirement to any permissible purpose for which a report is
     obtained including, for example, landlords who obtain credit
     reports on prospective tenants).

     The proposed legislation also would give both consumers and
the FTC greater authority to enforce the FCRA by:

     -- allowing consumers to sue anyone who obtains their credit
     report by false pretenses;

     -- allowing the FTC to impose civil penalties on those who
     violate the FCRA (current law authorizes the FTC to seek only
     cease and desist orders); and

     -- allowing consumers to sue credit grantors for negligent or
     willful violation of the FCRA -- for example, if a credit
     grantor fails to have reasonable procedures to ensure the
     maximum possible accuracy of the data it sends to credit
     bureaus (consumers currently can sue only credit bureaus for
     these types of FCRA violations).
Steiger on FCRA--01/09/92)

     A provision in the bill to prohibit credit repair companies,
which promise to help consumers clean up their bad credit records,
from charging consumers before completing the promised services,
"although stringent . . . is warranted given the credit repair
industry's history of consumer fraud," Steiger said. 

     Copies of the Commission's testimony are available from the
FTC's Public Reference Branch, Room 130, 6th Street and Pennsyl-
vania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY 202-
326-2502.

                               # # #

MEDIA CONTACT:      Bonnie Jansen, Office of Public Affairs
                    202-326-2161

STAFF CONTACT:      David Medine, Bureau of Consumer Protection
                    202-326-3224

(FCRAtest)