FCRA Liability Harmonization Act
- Sponsor
- Rep. Loudermilk, Barry [R-GA-11]
- Committees
- Financial Services Committee (primary)
- Last action
- Jun 30, 2026
Bottom line
The bill caps financial liability for companies in FCRA class action lawsuits, potentially limiting consumer recovery and the economic viability of such litigation.
What it actually does
This bill significantly amends the civil liability provisions of the Fair Credit Reporting Act (FCRA) by imposing caps on damages and attorney's fees in class action lawsuits. Specifically, it removes statutory damages for willful noncompliance in individual actions and introduces strict monetary limits on total recovery and attorney's fees for both willful and negligent noncompliance class actions against entities that fail to comply with FCRA requirements.
Proponents argue
Proponents argue that the current FCRA liability framework leads to excessive and disproportionate awards, particularly in class actions, which can burden businesses for technical violations. They contend that these caps will 'harmonize' liability, reduce frivolous lawsuits, and create a more predictable legal environment, ultimately benefiting consumers by fostering a more stable credit reporting industry.
Opponents contend
Opponents contend that these caps would severely undermine the Fair Credit Reporting Act's ability to protect consumers by limiting their access to justice. They argue that statutory damages and uncapped attorney's fees are crucial for incentivizing litigation against large corporations for widespread, individually small harms, and that these changes would weaken accountability for credit reporting errors and data privacy violations.
The bill is short and relatively straightforward, allowing an informed reader to grasp its core changes quickly, though the full implications require understanding existing FCRA law.
Section 2(a)(1)(B) and (C)
Elimination of Statutory Damages for Willful Noncompliance in Individual Actions
This provision strikes paragraph (2) from Section 616(a) of the Fair Credit Reporting Act. This means that for individual lawsuits where a person willfully fails to comply with FCRA requirements, consumers would no longer be able to recover statutory damages ranging from $100 to $1,000 per violation, in addition to actual damages. Only actual damages would be available.
Supporters argue
Supporters argue that statutory damages can lead to disproportionate penalties for technical violations, and that actual damages are sufficient to compensate consumers for harm. They believe this change promotes a more equitable liability system.
Critics contend
Critics contend that statutory damages are essential for deterring willful noncompliance, especially when actual damages are hard to quantify. They argue that removing this option weakens consumer protection and reduces the incentive for companies to comply with FCRA.
Tradeoffs
This provision balances the desire to limit corporate liability against the need to provide adequate deterrence and compensation for consumers, particularly when actual harm is difficult to measure.
Section 2(a)(1)(D) and (3)
Caps on Damages and Attorney's Fees in Willful Noncompliance Class Actions
This section introduces new limits for class action lawsuits alleging willful noncompliance with FCRA. It explicitly states that courts cannot apply a minimum amount of damages for each class member. The total monetary recovery for the entire class (excluding attorney's fees) is capped at the lesser of $500,000 or 1 percent of the defendant's net worth. Additionally, attorney's fees and costs for the class action are capped at the lesser of $100,000 or 40 percent of any damages awarded.
Section 2(b)(1) and (2)
Caps on Damages and Attorney's Fees in Negligent Noncompliance Class Actions
This section amends Section 617 of FCRA to introduce new liability limits for class action lawsuits involving negligent noncompliance. For individual actions, attorney's fees and costs are capped at the lesser of $100,000 or 40 percent of actual damages. For class actions, the total recovery for the class (excluding attorney's fees) is capped at the lesser of $500,000 or 1 percent of the defendant's net worth. The bill also includes a confusing clause stating that this total recovery (again, excluding attorney's fees) cannot exceed a third amount, which is defined as 'the sum of the costs of the action and reasonable attorney's fees, as determined by the court, not to exceed the lower of $100,000 or an amount equal to 40 percent of actual damages.' This effectively ties the damages cap to the legal fees cap in a potentially contradictory manner.