Financial Services to Markup FACT Act

WASHINGTON-The House Financial Services Committee was still drudging through a lengthy markup session, which included the Fair and Accurate Credit Transaction Act (H.R. 2622) and five other bills, at deadline. Approximately 15 amendments to the FACT Act were expected to be offered. The FACT Act provides permanent reauthorization of the Fair Credit Reporting Act preemptions and helps combat identity theft. The bill has bipartisan support with a list of cosponsors that has grown to 46 and approval by the Financial Institutions and Consumer Credit Subcommittee by a vote of 41-0. H.R. 2622 was fifth on a list of six bills to be considered Wednesday. In a recent letter to members of the House Financial Services Committee, CUNA President and CEO Dan Mica told the lawmakers that making the preemptions in the Fair Credit Reporting Act permanent “is a critical element in assuring the nation’s consumers have easy access to credit.” He continued, “Your thorough and deliberative hearings have given over 100 witnesses the opportunity to raise concerns from diverse perspectives as well as propose effective solutions on this problem.” CUNA’s witness during a July 9 hearing on the bill, Alabama Credit Union Chief Operating Officer Kaycee Bell told the committee in previous testimony, “The resulting potential problems for financial institutions and consumers could consist of: slower credit approval; higher cost of credit; additional paperwork; and less confidence in credit reports, among many other unintended and unforeseen difficulties.” Though CUNA strongly supports the permanent preemption of states from writing their own credit reporting laws and the prevention of identity theft, Bell suggested that financial institutions be given a year from enactment to get systems in place to comply with the investigation of address changes provision. She also requested that a `good faith standard be created for the so-called “red flag” guidelines when a potential exists for identity theft to protect financial institutions against “unwarranted liability.” Additionally, the language in the section prohibiting furnishers from reporting information to consumer reporting agencies that the furnishers knows “or has reason to believe” is related to fraud could present a problem because the phrase is not well defined and could lead to increased lawsuits or penalties, she said. The bill should also explain the circumstances and procedures for removing the fraud alert. [email protected]