Treasury: ID Theft at the Heart of FCRA Reauthorization

WASHINGTON-According to Treasury Assistant Secretary for Financial Institutions Wayne A. Abernathy, the Fair Credit Reporting Act “experiment” has been successful in increasing credit availability and the new challenge is safeguarding the information. His written testimony for the House Financial Institutions and Consumer Credit Subcommittee suggested, “It is the impact of the legislation on Americans-consumers and businesses-that should guide us in our considerations. We should keep in mind that all Americans have two interests at stake in this matter: an interest in access to credit and other financial services, and an interest in the security of their personal financial information.” He emphasized that these interests need to be weighed and accommodated. Abernathy also listed several questions to be considered in continuing the federal preemption, including whether progress against crime will be better with or without national standards for information sharing. This hearing was the first in several expected hearings. The Senate Banking Committee had a hearing scheduled for shortly after deadline on the issue. So far the only witness scheduled is from the Federal Trade Commission. Certain provisions in the Fair Credit Reporting Act were added seven years ago with a sunset date of January 1, 2004. Provisions requiring reauthorization include standardizing credit reports; allowing pre-screening of credit applicants; setting procedures for credit reporting bureaus when a consumer questions the accuracy of a credit report; permitting financial institutions to share certain information with affiliates; guarding consumers’ rights with respect to credit reports; explaining how creditors send data to reporting agencies; and requiring institutions t provide consumers notice regarding adverse actions based on a credit report. The check truncation legislation (H.R. 1474), better known as Check 21, was approved by the House Financial Institutions and Consumer Credit Subcommittee Wednesday, May 14 (see related news brief on page 12). The markup is in preparation for its expected full committee markup with several other bills next week, including regulatory relief legislation. Additionally the president’s jobs and growth tax package was approved by the Senate Finance Committee last week with one Democrat crossing party lines and voting in favor of the cuts. The Senate was still debating the legislation with tax cuts of $350 billion, really $428 billion with revenue offsets, as press time loomed. Because of the new taxes, the Senate bill has been characterized as more controversial than the House version, which passed earlier this month with $550 billion in tax cuts. “[T]he conference is really where it’s going to be written and hashed out,” CUNA Legislative Affairs Manager Leon Peace predicted. In its current form the House bill provides for a lower tax rate for corporate dividends, while the Senate bill would eliminate corporate dividends, which banks are very interested in. On May 6, CUNA wrote a letter to the House Ways and Means Committee members urging them to enhance retirement savings rules. At this point, proposed credit union-backed pension reform elements are not included in the package. Legislation introduced last month by Congressmen Rob Portman (R-Ohio) and Ben Cardin (D-Md.) is expected to be marked up in the House in the next couple of weeks. In addition, CUNA asked the committee to speed up consideration of legislation containing provisions to expand the reach of Individual Development Accounts. [email protected]