Legislation to Amend Fair Credit Reporting Act Clears House

By Sarah Borchersen-Keto, CCH Washington Staff Writer

The House of Representatives voted 392-30 on September 10, 2003, to pass the Fair and Accurate Credit Transactions Act, which amends the Fair Credit Reporting Act (FCRA) and reauthorizes uniform national consumer protection standards that were set to expire January 1, 2004. The bill now moves to the Senate.

The bill provides consumers with new tools to fight the growing crime of identity theft, while offering free access to credit reports and a new fraud alert system.

"Consumers rely on affordable access to credit," House Financial Services Committee Chairman Michael Oxley (R-Ohio) said. "When identity thieves strike, they take away that access and ruin the lives of their victims. This bill will give those victims the ability to clear their names and realize the dreams they have for their families," Oxley said.

U.S. Chamber of Commerce executive vice-president Bruce Josten called the vote "a big victory for businesses and consumers. With the recent sharp rise in identity theft these credit rules will provide greater protection for Americans."

Opponents of reauthorization preferred to let the states develop their own tougher, and possibly more innovative, standards to battle identity theft and other consumer credit abuses.

But supporters of reauthorization claimed a national standard was needed to level the playing field in a national economy. The American Banking Association said the measure "strikes the right balance to ensure the availability of credit, and fighting identity theft while not undermining the credit reporting system."

The various provisions include:

• Allowing consumers to place "fraud alerts" in their credit reports to prevent identity thieves from opening accounts in their names
• Giving consumers the right to see their credit scores
• Allowing consumers to stop information from being given to a credit bureau and from being reported by a credit bureau if such information results from identity theft
• Providing consumers with "one-call-for-all" protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking
• Restricting access to consumers' sensitive health information
• Prohibiting merchants from printing more than the last 5 digits of a payment card on an electronic receipt

An amendment offered by Rep. Bob Ney (R-Ohio) would establish national standards with regard to the free credit report provisions included in the act.

Meanwhile, the National Association of Mutual Insurance Companies (NAMIC) said that while it supports reauthorization of FCRA it is not pleased that the House agreed to direct the Federal Trade Commission, in consultation with the Office of Fair Housing and Equal Opportunity, to study the use and effects of credit scores and credit-based insurance scores on the availability and affordability of financial products. NAMIC said it was unsuitable for any agency without authority over insurance to conduct the study.

Related items:

Congress Likely To Reform National Credit Reporting Systems

Lawmakers Debate Extension of Fair Credit Reporting Act Preemption Provisions

''Identity Theft Has Exploded'': Gov't Review

Posted September 15, 2003.