FAIR CREDIT REPORTING ACT 91 Rights have penumbras, formed by emanations from those guarantees that help give them life and substance." The right to privacy is not new. What is new is the expansion of the concept. Various guarantees create zones of privacy. The right of association is within the first amendment; the third amendment is another facet of that privacy. The fourth amendment affirms the right to privacy against unreasonable searches and seizures; the fifth amendment gives a person a zone of privacy which government may not force him to surrender to his detriment; and the ninth amendment provides: "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people." Concurring in Griswold, Justice Goldberg differed with the majority in that his conception of personal liberty and rights reserved under the ninth amendment encompassed the right to marital privacy, and obviated the necessity of pinning that right to penumbral emanations of other specific constitutional guarantees. 131 The Supreme Court, in its recent decision on the question of abortion, has defined a new aspect of privacy. The Court held that the right to privacy. whether based on the fourteenth amendment's concept of personal liberty or on the ninth amendment's reservation of rights to the people, is broad enough to encompass a woman's decision whether or not to terminate her pregnancy. In a concurring opinion, Justice Douglas recites a catalogue of those "certain rights... retained by the people" in the ninth amendment which includes customary, traditional, and time-honored rights, amenities, privi- He then proceeded to set out those rights which come within the meaning of the term "liberty" as used in the fourteenth amendment. First, is the individual's control over the development and expression of his intellect, Id. at 484. ld. For the Court's discussion of these penumbral rights of privacy and repose see Wyman v. James, 400 U.S. 309 (1971); Stanley v. Georgia, 394 U.S. 557 (1969); Katz v. United States, 389 U.S. 347 (1967); See v. Seattle, 387 U.S. 541 (1967); Camara v. Municipal Court, 387 U.S. 523, 528 (1967); Lanza v. New York, 370 U.S. 139 (1962); Monroe v. Pape, 365 U.S. 167 (1961); Frank v. Maryland, 359 U.S. 360 (1959); Public Utilities Comm'n v. Pollak, 343 U.S. 451 (1952); Rochin v. California, 342 U.S. 165, 172 (1952); Breard v. Alexandria, 341 U.S. 622, 626 (1951); Skinner v. Oklahoma, 316 U.S. 535, 541 (1942); Olmstead v. United States, 277 U.S. 438, 478 (1928) (Brandeis, J., dissenting); Boyd v. United States, 116 U.S. 616 (1886). 1381 U.S. at 486-99. Roe v. Wade, 93 S.Ct. 705 (1973). (2393 S. Ct. at 757. 92 JOURNAL OF PUBLIC LAW EMORY LAW SCHOOL interests, tastes, and personality.134 Second, is freedom of choice in the basic decisions of life involving marriage, divorce, procreation, contraception, and the education and upbringing of children.135 Third, is the freedom to care for one's health and person, to be free from bodily restraint or compulsion, and to walk, stroll, or loaf,136 As new zones of privacy are defined, we are reminded of Justice Brandeis' dissenting opinion in Olmstead v. United States: The makers of our Constitution. . . sought to protect Americans Yet, as informational privacy is gaining recognition, collected information is only one aspect of the threat to that privacy. The method in which it is gathered is as great a concern, and it is to this problem which the Fair Credit Reporting Act addresses itself. The Fair Credit Reporting Act On August 2, 1968, Senator William Proxmire introduced a draft of the 134 See, e.g., United States v. Van Leeuwan, 397 U.S. 249, 253 (1970); New York Times Co. v. Sullivan, 376 U.S. 254, 293 (1964) (Black, Douglas, JJ., concurring): Kingsley Pictures Corp. v. Regents, 360 U.S. 684, 697 (1958) (Douglas, J., concurring); Roth v. United States, 354 U.S. 476, 508 (1957) (Douglas, J., dissenting); Watkins v. United States, 354 U.S. 178. 196-199 (1957); Terminiello v. Chicago, 337 U.S. 1 (1948). Justice Douglas views these rights which are protected by the first amendment as absolute, permitting of no exceptions. Roe v. Wade, 93 S. Ct. 705, 757 (1973) (Douglas J., concurring). 135 See, eg.. Eisenstadt v. Baird, 405 U.S. 438 (1972); Kramer v. Union Free School Dist.. 395 U.S. 621 (1969); Shapiro v. Thompson, 394 U.S. 618 (1969); Loving v. Virginia, 388 U.S. I (1967); Griswold v. Connecticut, 381 U.S. 479 (1965); Carrington v. Rash, 380 U.S. 89 (1965); Sherbert v. Verner, 374 U.S. 398 (1963); NAACP v. Alabama, 357 U.S. 449 (1958); Kent v. Dulles, 357 U.S. 116, 126 (1958); Skinner v. Oklahoma, 316 U.S. 535 (1942); Pierce v. Society of Sisters, 268 U.S. 510 (1925). Justice Douglas views these rights as fundamental, and, in order to support some legislative control of them, a statute must be narrowly and precisely drawn, and a "compelling state interest" must be shown to support a limitation. Roe v. Wade, 93 S. Ct 705, 758 (1973) (Douglas, J., concurring). 13*Papachristou v. City of Jacksonville, 405 U.S. 156, 164 (1972); Terry v. Ohio, 392 U.S. 1, 8-9 (1968); Katz v. United States, 389 U.S. 347, 350 (1967); Meyer v. Nebraska, 262 U.S. 390, 399 (1923); Jacobson v. Massachusetts, 197 U.S. 11, 29, (1905); Union Pac. Ry. Co. v. Botsford, 141 U.S. 250, 252 (1891). Justice Douglas states that these rights, while also fundamental, are subject to regulation on a showing of "compelling state interest". Roe v. Wade, (93 S. Ct. 705, 758 (1973) (Douglas, J., concurring). 137277 US 438. 478 (1928). FAIR CREDIT REPORTING ACT 93 Fair Credit Reporting Bill. 138 The bill was first presented in its skeletal form. for the stated purpose of bringing it to the immediate attention of the other members of Congress so that they might give it serious consideration and focus in on the issues and problems it was designed to correct. 139 Consumer issues were an important and appealing political concern, especially after the Gallagher hearings exposed some of the serious, yet heretofore unknown, problems dealing with credit reporting. The advantage of imposing uniform regulation through congressional action was obvious. The need, at least insofar as the consumers were concerned, was immediate. Having recently passed the Consumer Credit Protection Act, 140 Congress had a perspective from which to evaluate problems dealing with the broad topic of credit as well as an interest in the specific area of credit reporting. In a certain sense the time was right. Senator Proxmire had become aware of the problem of credit reporting while working toward passage of the Truth in Lending Act." This experience was supplemented by correspondence he received during that time which pointed to other consumer credit problems. The draft of the Fair Credit Reporting Bill included only major areas and objectives because of a lack of specific expertise in the area, in spite of the Gallagher hearings, as well as a desire for as much constructive input as possible. Proxmire had hoped that this input would be the result of hearings which he wanted to conduct later that same year. However, these hearings never materialized because the new Congress was more concerned with other matters. In the interim, Senator Philip Hart held two days of hearings on the credit. industry in mid-December. 142 He was then chairman of the Subcommittee on Antitrust and Monopoly which was used as an effective forum for investigating and documenting abuse under the guise of considering the possible antitrust implications of credit agencies being controlled by a handful of people. The testimony and the witnesses were basically repeats of the Gallagher hearings. The subcommittee held hearings again in January of the following year. However, no legislative action was forthcoming. 143 During the same month, Gallagher presented to Congress the self 138 See 114 CONG. REC. 10031 (daily ed. Aug. 2, 1968). 139 See id. at 10029. 115 U.S.C. § 1601 et seq. (1970) (effective May 29, 1968). 141Much of the information which follows was obtained from an interview with Mr. Kenneth McLean, staff economists for the Senate Committee on Banking and Currency. March 24, 1972. See Hearings on the Credit Industry Before the Subcomm. on Antitrust and Monopoly of the Senate Comm. on the Judiciary, 90th Cong., 2d Sess. (1968). 14327 CONGRESSIONAL QUARTERLY 13 (January 3, 1969) (Weekly Report). 94 JOURNAL OF PUBLIC LAW EMORY LAW SCHOOL 144 regulating guidelines developed by the Associated Credit Bureaus. As mentioned above, 145 Proxmire criticized the guidelines as being practically useless. In effect, they provided too little too late. Two weeks later Proxmire introduced S. 823, the Fair Credit Reporting Bill." It differed in only a few respects from the draft submitted on August 2, 1968. Excluded from the bill was a long list of definitions which was later to be expanded in the Act.147 S. 823 expanded one section of the draft and added two new sections, all of which were designed to meet head-on some of the major problems that surfaced during the hearings on the credit industry. The original section on "Prohibitions" limited the dissemination of credit information and prohibited it unless procedures insuring confidentiality and providing for notification and access were established. 148 This section was included in S. 823 under the title "Requirements of credit rating agencies." It more narrowly limited the scope of the data collected and retained, permitting it to be furnished only to persons with a "legitimate business need."" The Act outlined the permissible use of reports in greater specificity, but also included allowances. for its release pursuant to a court order or at the request of the consumer. 150 The Act also included a special section limiting the access which governmental agencies could have to the files. 151 S. 823 included a section (not part of the original draft) which required the user of a credit report who denies credit to a consumer wholly or partly because of the report to so inform the consumer and supply the name and address of the credit reporting agency which made the report. 152 The Act went one step further by requiring the user to inform the consumer that a report may be prepared and that the consumer has a right to request additional disclosures. 153 The Act further defined the procedures and conditions 144115 CONG. REC. E198-99 (daily ed. Jan. 13, 1969). 147 Compare § 502 of the draft with § 163 of S. 823 and § 1681a of the Act. See § 503(2) of the draft. 114 Cong. Rec. S10031 (daily ed. Aug. 2, 1968). "See § 164(c), (f)(1) and (f)(2) of S. 823. 115 Cong. Rec. S1168 (daily ed. Jan. 31, 1969). The Senate bill was subsequently criticized for allowing market researchers, detective agencies, lawyers, and various investigative groups access to the file. See Miller, The Credit Networks, Detour to 1984, NATION, June 1, 1971, at 669. 15 See 15 U.S.C. § 1681b (1970). In 15 U.S.C. § 1681e (1970), the Act also outlined the required compliance procedures so as to avoid unauthorized access. 1515 U.S.C. § 1681f (1970). This information is limited to identifying information such as his name, address, former addresses, place of employment, or former places of employment. 152 See § 165 of the bill. 115 CONG. REC. S1168 (daily ed. Jan. 31, 1969). 15 U.S.C. § 1681d, 1681m (1970). These sections, like others, have been narrowly interpreted by various agencies. An example of the standard notification is that of New England Mutual Life Insurance Co.: FAIR CREDIT REPORTING ACT 95 of disclosure as well as the type of information to which the consumer will have access. 154 S. 823 included one other section not contained in the draft-one which would give the consumer a remedy for any willful noncompliance. This section dealt with “civil liability” and allowed the consumer to collect actual damages sustained as a result of noncompliance by a user or a credit reporting agency, reasonable attorney fees, and punitive damages within a range of $100-$1000 at the discretion of the court. In addition, the section conferred jurisdiction upon federal courts and imposed a two-year statute of limitations which would begin to run at the date of the occurrence of the violation. This section, however, in effect, did little more than codify existing case law. The burden on the consumer of showing "willful noncompliance" would have been nearly as impossible as showing "actual malice" which was generally required previously. 157 By making intent an element of the violation, S. 823, for all but a very few instances, would have given a right without anything more than a hollow remedy. This problem was recognized, and the Act made a distinction between "willful noncompliance"158 and "negligent noncompliance."15 The section in the Act dealing with willful noncompliance was the same as that contained in S. 823, with one important exception: the range of punitive damages which the court could allow was omitted. This was a significant change because it allowed the punitive damages to be just that, thereby providing an effective deterrent. It could reasonably be questioned that the $100-$1000 range of damages allowed by S. 823 would have been punitive or would have provided any deterrence factor. An investigation has been requested. It is a routine investigation made in connection with almost all applications for life insurance and includes such general identification information as residence verification, marital status, number of children, occupation, employment, general health, habits, reputation and mode of living, obtained through personal interviews. Consumer Report Letter from New England Mutual Life Insurance Co. to the author, June 15, 1971. 1415 U.S.C. § 1681g, 1681h (1970). The Act requires that the nature and substance of all information (except medical information) in its files at the time of the request be disclosed to the consumer. It also provides for the disclosure of the sources of information except when these sources were acquired solely for use in preparing an investigative report. The agencies must also disclose the names of those who had received reports within a certain stipulated time depending upon the purpose of the report. 158 See § 166(a)(1)-(3) of S. 823. 115 CONG. REC. S1168 (daily ed. Jan. 31, 1969). 19 Id. at § 166(a)(4). 157 See note 16 supra and accompanying text. 15 U.S.C. § 1681n (1970). 15015 U.S.C. § 1681o (1970). |