Credit Cards, Credit Reports, Banks

SUMMARY: The Federal Trade Commission announces that the current ceiling on allowable charges under Section 612(a) of the Fair Credit Reporting Act ("FCRA") will increase from $8.00 to $8.50 on January 1, 2000. Under 1996 amendments to the FCRA, the Federal Trade Commission is required to increase the $8.00 amount referred to in paragraph (1)(A)(i) of Section 612(a) on January 1 of each year, based proportionally on changes in the Consumer Price Index ("CPI"), with fractional changes rounded to the nearest fifty cents. The CPI increased 4.16 percent between September 1997, the date the FCRA amendments took effect, and September 1999. This increase in the CPI and the requirement that any increase be rounded to the nearest fifty cents results in an increase in the maximum allowable charge to $8.50.

EFFECTIVE DATE: January 1, 2000.

ADDRESSES: Federal Trade Commission, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Keith B. Anderson, Bureau of Economics, Federal Trade Commission, Washington, DC 20580, 202-326-3428.

SUPPLEMENTARY INFORMATION:

Section 612(a)(1)(A) of the Fair Credit Reporting Act, as amended in 1996, states that, where a consumer reporting agency is permitted to impose a reasonable charge on a consumer for making a disclosure to the consumer pursuant to Section 609, the charge shall not exceed $8 and shall be indicated to the consumer before making the disclosure. Section 612(a)(2) goes on to state that the Federal Trade Commission ("the Commission") shall increase the $8.00 maximum amount on January 1 of each year, based proportionally on changes in the Consumer Price Index, with fractional changes rounded to the nearest fifty cents.

The Commission considers the $8 amount referred to in paragraph (1)(A)(i) of Section 612(a) to be the baseline for the effective ceiling on reasonable charges dating from the effective date of the amended FCRA, i.e., September 30, 1997. In November of each year, the Commission calculates the proportional increase in the Consumer Price Index (using the most general CPI, which is for all urban consumers, all items) from September 1997 to September of the current year. The Commission then determines what modification, if any, from the original base of $8 should be made effective on January 1 of each subsequent year, given the requirement that fractional changes be rounded to the nearest fifty cents.

Between September 1997 and September 1999, the Consumer Price Index for all urban consumers and all items increased by 4.16 percent -- from an index value of 161.2 in September 1997 to a value of 167.9 in September 1999. An increase of 4.16 percent in the $8.00 base figure would lead to a new figure of $8.33. However, because the statute directs that the resulting figure be rounded to the nearest $0.50, the allowable charge should be increased to $8.50.

The Commission therefore determines that the allowable charge for the year 2000 will be $8.50.

By direction of the Commission.

Donald S. Clark,

Secretary

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