House Subcommittee Gives Favorable Recommendation on FCRA Legislation; On to Senate

WASHINGTON-Legislation to reauthorize the Fair Credit Reporting Act was reported favorably out of the House Subcommittee on Financial Institutions and Consumer Credit last week by a vote 41-0 vote. H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003, sponsored by Subcommittee Chairman Spencer Bachus (R-Ala.) and several others from both political parties, would permanently reauthorize federal preemptions from FCRA, as well as add identity theft protections. On the eve of the markup, NCUA Chairman Dennis Dollar wrote a letter expressing the support of the agency board for the permanent extension of the FCRA preemptions. In a letter to Bachus and Subcommittee Ranking Member Bernie Sanders, he wrote, “Among the items reviewed during the course of examination and supervision of a credit union are the policies and procedures in place to ensure that the provisions required under FCRA have been properly met. Our experience has convinced us that the uniform standards provided in FCRA have helped to ensure consistency in and understanding of credit reporting, thus making it easier and more cost efficient to implement the necessary procedures to provide the consumer protections as directed by Congress.” Dollar hailed the preemptions as helping “consumers achieve greater access to credit regardless of geographic location and economic status, lower cost of credit and more effective privacy and accuracy protections.” The FCRA preemptions allow for pre-screening of credit applicants, permits financial institutions to share information among affiliates, and standardizes credit reports by preempting the states from setting their own credit reporting standards and procedures. In addition to making the federal preemptions permanent, the bill would also provide greater protections against identity theft by allowing consumers to obtain one free credit report and score analysis a year, truncating credit and debit card information, and ordering regulators to figure out how to speed up reviews of disputed information. House Financial Services Committee Chairman Mike Oxley (R-Ohio) has said he generally supports the FACT Act, and the administration came up with a proposal similar to the legislation but with some additional consumer protections against identity theft. The bill contains the FCRA preemption renewals as well as several provisions to combat identity theft. In related news, a bill to renew the Fair Credit Reporting Act exemptions and provide credit-scoring disclosures was introduced in the Senate recently. Senate Banking Committee Members Charles Schumer (D-N.Y.) and Wayne Allard (R-Colo.) introduced the Consumer Credit Score Disclosure Act of 2003 (S. 1370) July 8. It has been referred to the Senate Banking, Housing, and Urban Affairs Committee, which has already held numerous hearings on the subject with more to come. The bill provides for permanent extension of the FCRA preemptions, as well as some consumer protections, but does not go as far as the House bill. If made law, the bill would make the amendments effective 180 days after enactment. -