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WASHINGTON-Renewal of federal preemptions in the Fair Credit Reporting Act could hit another snag with the threat of an amendment to tighten the affiliate information sharing provision. Senators Dianne Feinstein (D-Calif.) and Barbara Boxer (D-Calif.) have said they plan to offer an amendment to the National Consumer Credit System Improvement Act that would provide customers an opportunity to opt-out of certain affiliate information sharing, based on the recently passed California privacy law. The Feinstein-Boxer amendment would require notice of intent to share “transaction and experience” and other information with affiliates and provides customers the chance to opt-out. However, it would exempt “closely related” affiliates from the opt-out, defined as affiliates in the same line of business, under the same functional regulator, sharing a common brand identification, and a wholly owned subsidiary of the same company. The amendment would also maintain the bill’s current study of affiliate sharing practices. “Put simply,” Feinstein and Boxer wrote in a `Dear Colleague’ letter, “the affiliate sharing language in the Banking Committee bill allows huge conglomerates, with just limited restrictions on marketing, to freely share vast quantities of personal customer information with their affiliated partners even if a consumer asks that the information not be shared. This could include the most intimate details of a customer’s life such as checks they write to political or social organizations, the size of their bank balance and the stocks they own, the names of stores they frequent, and a comprehensive profile of their spending habits.” At the same time, CUNA, NAFCU, and about 23 other organizations have signed onto a letter, addressed to Senate Majority Leader Bill Frist (R-Tenn.) and Minority Leader Tom Daschle (D-S.D.), promoting swift approval in the Senate of legislation to reauthorize the Fair Credit Reporting Act preemptions and bolstering protections against identity theft. Signers include the American Bankers Association, America’s Community Bankers, the Independent Community Bankers of America, American Council of Life Insurers, Coalition for Fair and Affordable Lending, National Association of REALTORS, and the U.S. Chamber of Commerce, among many others. The Sept. 29 letter pushed for passage of the National Consumer Credit System Improvement Act this year immediately after the Supplemental Appropriations bill. “These uniform standards are the backbone of our credit granting system, which allows millions of Americans to purchase and finance everything from groceries to homes,” the letter read. It quoted a study that found the Gross Domestic Product would drop 2% and another 3.5 million jobs would be lost if the FCRA preemptions are not renewed. “In addition,” the industry’s letter continued, “the bill contains critical new measures to combat identity theft. ID theft is one of the fastest-growing white collar crimes, and devastates thousands of American families each year. Protections encompassed in this bill will help ensure that innocent victims have means available to clear their credit history and regain their good name without spending hundreds of hours and thousands of dollars.” The Senate Banking Committee approved the bill unanimously and the House passed it by an overwhelming 392-30. NAFCU followed up with its own letter on Sept. 30, which personalized the issue for credit unions. After a meeting NAFCU President and CEO Fred Becker had with Senate Banking Committee Chairman Richard Shelby (R-Ala.) and representatives from Redstone and Auburn University Federal Credit Unions, he wrote to congratulate the lawmaker on the strides made for greater protection from identity theft in the National Consumer Reporting System Improvement Act. Becker also thanked Shelby for the inclusion of permanent FCRA preemptions in the bill, which the Senate Banking Committee recently approved by voice vote. “As you know, the FCRA has been integral in allowing credit unions and other financial institutions to extend credit at reasonable rates to individuals who previously would have been unable to secure credit altogether,” Becker wrote. He also pointed out, “As not-for-profit, member owned cooperatives, credit unions generally do not have the same financial assets and market power that other, larger financial institutions enjoy. Accordingly, failure to reauthorize the FCRA would have a disproportionate effect on credit unions as many would find it difficult to compete in a national market without the security and accuracy of a national credit reporting system.” -

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