WASHINGTON-The promised series of Fair Credit Reporting Act hearings is winding its way down with the final preliminary hearings coming in the next week or two. The House Financial Services Financial Institutions and Consumer Credit Subcommittee held its fourth in its series of hearings on FCRA last week regarding credit checks and job applications. Another hearing is scheduled for June 24 concerning the role of FCRA in fighting identity theft. The Summit Federal Credit Union President and CEO Mike Vadala testified on behalf of NAFCU at a recent hearing on how credit reports are used in lending decisions. He emphasized the importance of reauthorization the FCRA federal preemptions to the cost effectiveness and efficiency of the lending industry. He explained that The Summit currently serves more than 43,000 members in all 50 states, but due to the various state laws regarding mortgage lending, the credit union only offers real estate loans in its home base of New York. The Summit does offer other credit opportunities to all of its members. "If the FCRA preemptions are not extended it is likely that The Summit will not make any loans outside of New York," Vadala told the members of the subcommittee during his testimony June 12. On the same day as that hearing, CUNA's Board unanimously approved privacy recommendations in light of that aspect of the debate over reauthorizing the FCRA preemptions. CUNA's recommendations include urging the extension of the FCRA preemptions and encouraging voluntary improvements to the promotion of current information sharing "opt-out" provisions. CUNA's Board has also resolved not to promote legislation with "opt-in" provisions unless an exemption for affiliates is included. This has been a big issue for credit unions since credit union service organizations are currently considered affiliates. Additionally, the CUNA Board also expressed caution when considering legislation with specific "opt-in" legislation for confidential information and "nutrition label"-style disclosures, such as an institution's affiliates. It also suggested providing consumers with details regarding the benefits of information sharing and how restricting it could affect access to credit as well as cost. CUNA will support legislation aimed at preventing identity theft if the language allows credit unions to continue to operate efficiently and in a cost effective manner. Identity theft was one of the key issues for a dozen Democratic House Financial Services Committee members who signed onto a letter supporting the FCRA reauthorizations. However, they had a few strings attached. "We believe that these seven provisions enhance the efficiency of the nation's credit system, promote access to the financial industry, and protect American consumers; therefore, we are firmly committee to extending them," the letter to the House Financial Services Committee leaders, signed by a dozen Democratic committee members, read. Additionally, the Representatives wrote that it is imperative that the committee address the areas of identity theft prevention and mitigation; expeditious handling of consumer complaints and disputes; greater accuracy in credit reports; and consumer access to their credit information. The U.S. Chamber of Commerce, which represents more than three million businesses and organizations, recently commissioned a study that concluded, "In all areas of inquiry, we find that federal preemption had contributed significantly to the benefits currently enjoyed by consumers. On the other side of the ledger, we see few quantifiable direct or indirect costs. Loss of the existing framework of preemption, or change to that framework consistent with state legislative proposals examined in this report, would threaten the benefits currently enjoyed by consumers." [email protected]

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