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WASHINGTON-Legislation to make the expiring federal preemptions in the Fair Credit Reporting Act permanent was introduced recently by House Financial Institutions Committee Chairman Spencer Bachus (R-Ala.) and three other legislators from both political parties. On the heels of that action came the statement by the administration, via Treasury Secretary John Snow last week, that it supported the permanency of the FCRA preemptions, in addition to other consumer-targeted benefits and identity theft protection and recovery provisions. The Fair and Accurate Credit Transactions Act (H.R. 2622) was crafted from concerns raised during five subcommittee hearings, which attracted testimony from 75 witnesses. “The national uniform credit reporting system has lowered costs and increased choice and convenience for American consumers,” Bachus said. “But by far the most striking result of our national credit reporting system is the dramatically increased availability of credit – what has been called the democratization of credit. Low- and middle-income families are the big winners under FCRA. My Dad used to say, `you can get a loan if you don’t need it.’ That used to be the case, but no more.” Representatives Darlene Hooley (D-Ore.), Judy Biggert (R-Ill.), and Dennis Moore (D-Kan.) co-sponsored the bill, along with several other lawmakers on both sides of the aisle. “This legislation would not only empower consumers with additional protections, it also would demand creditors and credit bureaus do their part to combat fraud and resolve disputes,” Hooley, an ardent identity theft combatant, commented. CUNA Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn remarked, “CUNA is strongly in favor of extending the federal preemption in FCRA. We think a nationally uniform credit reporting system makes the lending process more efficient and ultimately results in more credit being available to consumers. But we need to take a closer look at Representative Bachus’ bill and see what type of proposal comes out of Treasury before making any final determination on what we intend to support.” In addition to making the federal preemptions permanent, the bill would also provide greater protections against identity theft by increasing the effectiveness of consumer initiated fraud alerts; increase awareness of identity theft victims; allow consumers to obtain one free credit report and score analysis a year; discourage fraudulent information from reentering the reporting system; make it easier to limit unsolicited credit offers; require lenders to develop procedures to look for `red flags,’ investigate certain address changes, and truncate credit and debit card information; and order regulators to find out how to speed up reviews of disputed information. NAFCU Associate Director of Legislative Affairs Dillon Shea said that NAFCU was happy with the preemption provisions but had not had time to completely analyze the remaining provisions in the legislation. He did say that he believed H.R. 2622 would be the basis for any bill that moves forward, but he did not know of anyone yet specifically looking to insert parts of the proposal put out by the administration last week into the bill. The subcommittee will markup the bill before the month-long August recess, according to a media statement. The legislators’ announcement came just prior to Treasury’s declaration of its support of making the federal preemptions contained in the FCRA permanent. “The widespread availability of credit on reasonable terms helps to keep this economy strong. It is important that the uniform national standards of the Fair Credit Reporting Act be extended and made permanent,” Secretary Snow said on June 30. In addition to the preemptions, Treasury was also interested in extra consumer protections and greater safeguarding against identity theft. The administration proposes to: * Combat identity theft by establishing a national security alert system for information sharing to fight identity theft, blocking fraudulent information on credit reports (based on a police report or similar document) immediately, and only requiring one call to a credit reporting bureau to apply to all; * Allow for one free credit report annually; * Direct the Federal Trade Commission and bank regulators to make opt-out notices for pre-screened credit offers simpler and easier to execute; * Provide consumers with information on the formulation of credit scores and how to improve them; * Grant the FTC authority to require notice to consumers when credit scores have led to less favorable rates than those applied for; and * Require credit bureaus to reinvestigate consumer disputes forwarded by intermediaries who consolidate credit reports. “The first priority for the renewed national standards is security, because the greatest threat to consumers today is the growing menace of identity theft,” Snow said. “Identity theft is far more insidious and harmful to our national welfare than many realize. It attacks the trust and confidence that nurture our open economy, even as it destroys individual lives. Identity thieves routinely prey on the vulnerable – families of the recently deceased, seniors, veterans, and men and women serving our nation overseas.” “We’re just seeing a concept that quite frankly sounds really, really good,” CUNA Associate General Counsel Mary Dunn, who attended the meeting, said. However, “the devil is in the details,” she said, adding that CUNA was going to go over the administration proposal with a fine-tooth comb. She and Kohn were able to visit with Snow personally afterward and emphasized credit unions’ work and reminded him of CUNA and his appearance at its 2003 Governmental Affairs Conference. NAFCU Director of Regulatory Affairs Gwen Baker noted that NAFCU was very pleased with the administration’s position and said, “We’ll have to see how that plays out.” Other recommendations to combat identity theft concerning other laws were also included in Treasury’s proposal, such as authorizing debt collectors and creditors to share the information upon which they are basing their collections with identity theft victims and prohibiting creditors, once they learn that a debt was caused by identity theft, from selling or transferring the debt for collection. Treasury’s announcement was the first solid glimpse into the President’s thinking on the issue. [email protected]

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