Thanks to RF for this.

[Federal Register: December 26, 1996 (Volume 61, Number 249)]
[Notices]
[Page 68044-68045]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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FEDERAL RESERVE SYSTEM
[Docket No. R-0953]


Fair Credit Reporting

AGENCY: Board of Governors of the Federal Reserve System (Board).

ACTION: Notice; request for comments.

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SUMMARY: The Board solicits comment on issues to be addressed in a study
concerning the public availability and use of social security numbers and
other sensitive identifying information about consumers. The Board's study
is required by the Economic Growth and Regulatory Paperwork Reduction Act of
1996.

DATES: Comments must be received on or before January 31, 1997.

ADDRESSES: Comments should refer to Docket No. R-0953, and may be mailed to
William W. Wiles, Secretary, Board of Governors of the Federal Reserve
System, 20th Street and Constitution Avenue, N.W., Washington, DC 20551.
Comments also may be delivered to Room B-2222 of the Eccles Building between
8:45 a.m. and 5:15 p.m. weekdays, or to the guard station in the Eccles
Building courtyard on 20th Street, N.W. (between Constitution avenue and C
Street) at any time. Comments may be inspected in Room MP-500 of the Martin
Building between 9:00 a.m. and 5:00 p.m. weekdays, except as provided in 12
CFR 261.8 of the Board's rules regarding the availability of information.

FOR FURTHER INFORMATION CONTACT: Jane Jensen Gell or Sheilah Goodman, Staff
Attorneys, Division of Consumer and Community Affairs, at (202) 452-2412 or
(202) 452-3667; for users of Telecommunications Device for the Deaf (TDD)
only, please contact Dorothea Thompson at (202) 452-3544.

SUPPLEMENTARY INFORMATION:

I. Background

    On September 30, 1996, the President signed into law the Economic Growth
and Paperwork Reduction Act of 1996 ( Pub. L. 104-208, 110 Stat. 3009) (the
1996 Act). The 1996 Act amends several consumer credit laws, including the
Fair Credit Reporting Act (FCRA) (15 U.S.C. 1681). An amendment to the FCRA
directs the Board of Governors of the Federal Reserve System (Board), in
consultation with the Federal Trade Commission (the Commission) and the
federal financial regulatory agencies, to conduct a study to determine the
availability to the public of sensitive identifying information about
consumers, the possibility that such information could be used for financial
fraud, and the potential for fraud or risk of loss, if any, to insured
depository institutions. By March 31, 1997, the Board must report the
results of the study to the Congress, including any suggestions for
legislative change. The Board solicits the comment of interested parties on
these issues. The comments received will be used in the Board's study.
Because of the short time frame the Congress gave the Board to study this
matter, all comments must be received by January 31, 1997.

II. Availability of Sensitive Consumer Information

    The Congress became concerned about the availability of sensitive
identifying information about consumers after a widely-publicized incident
in which a large database service offered personal information for
sale--including individuals' social security numbers-- from one of its
electronic databases. After a few days, the service discontinued the
practice of making social security numbers available but continued to permit
users to search for information by social security number. At about the same
time, members of Congress learned of situations in which such identifying
information was being used for financial fraud. In addition, testimony at a
recent Federal Trade Commission hearing highlighted how easy it is to obtain
identifying information about a consumer and to use that information to
fraudulently receive credit in the consumer's name--without the knowledge of
the consumer or the credit granting institution. This practice is often
referred to as ``identity theft.'' Armed with such information, criminals
can request and receive credit or negotiate checks in the consumer's name,
with devastating results for the consumer.
    Sometimes identity theft begins with the use of publicly available
information. A government employee who participated in the Commission
hearings related such an incident. General information about this witness
was listed in a publicly-available government directory. Using that
information, an unknown individual was able to obtain a copy of the
employee's college transcript, which showed his social security number. The
individual was able subsequently to get a copy of the employee's birth
certificate using the social security number. The thief then had all he
needed to ``assume'' the employee's identity and use the information to
commit fraud.

III. Request for Comment

    In response to concerns about the availability of identifying
information about consumers, and anecdotal evidence suggesting an increase
in identity theft and financial fraud, the Congress has directed the Board
to conduct a study regarding the availability to the public of sensitive
information used to identify consumers. The Board is to determine whether
there are organizations ``engaged in the business of making sensitive
consumer identification information, including social security numbers,
mothers' maiden names, prior addresses and dates of birth, available to the
general public.'' To help make this determination, the Board solicits
comment on the following issues:
    1. What is or should be considered sensitive consumer information for
purposes of the study?
    2. What information is currently used, or might be used in the future,
to identify individuals, and what types of public or private organizations,
repositories, or databases make such information available to certain
entities or to the general public?
    3. How is the information obtained (for example, by phone, through the
mail, or on the Internet), what costs are associated with obtaining the
information, what are the specific uses for which the information is
obtained, and does the furnisher place any restrictions on the distribution
or use of this information on the purchaser? If so, how does the furnisher
ensure that use of the data is limited to its intended purposes?
    4. Is the compilation, sale, and use of sensitive identifying
information about consumers subject to industry guidelines or regulations,
and if not, what guidelines, regulatory or legal requirements might be
appropriate?
    If sensitive information about consumers is available, the Board must
determine whether the availability of the information creates ``undue
potential for fraud and risk of loss to insured depository institutions.''
In order to make this assessment, the Board seeks comment on the following
issues:
    5. How is sensitive identifying information about consumers used for
financial fraud (for example, to obtain a credit card in another person's name)?
    6. What types of identifying information about consumers are most
meaningful in granting and verifying credit, and how can consumers,
financial institutions, and others control the fraudulent use of this
information?
    7. What magnitude of financial loss do institutions attribute to
fraudulent use of consumer information?
    Finally, if the Board determines that additional laws are needed to
lessen the risks of fraud and loss to the banking system, the Board is
directed to make legislative recommendations to the Congress. Accordingly,
the Board is seeking comment on the following issues:
    8. What, if any, legislative changes should be considered to help
protect sensitive identifying information about consumers?
    9. What, if any, legislative changes should be considered to limit the
use of such information and reduce the risk of fraud or other loss to the
banking system?

IV. Form of Comment Letters

    Comment letters should refer to Docket No. R-0953, and, when possible,
should use a standard courier typeface with a type size of 10 or 12
characters per inch. This will enable the Board to convert the text to
machine-readable form through electronic scanning, and will facilitate
automated retrieval of comments for review. Also, if accompanied by an
original document in paper form, comments may be submitted on 3\1/2\ inch or
5\1/4\ inch computer diskettes in any IBM-compatible DOS-based format.

    By order of the Board of Governors of the Federal Reserve
System, December 17, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-32495 Filed 12-24-96; 8:45 am]
BILLING CODE 6210-01-P

