Lawmakers Closer to Credit Reporting Bill

From Reuters and Bloomberg News

Congress moved closer Friday to approving legislation that would give consumers new tools for preventing identity theft while restricting the ability of states such as California to impose their own tougher provisions.

House and Senate negotiators agreed to combine similar versions of a measure, approved overwhelmingly by both houses, that would give consumers access to free annual credit reports and would permanently renew national standards for the sharing of consumer credit data, which are set to expire at the end of this year.

The bill, which would renew provisions of the Fair Credit Reporting Act, would require credit bureaus to place fraud alerts on the accounts of identity theft victims and shield medical information. Federal regulators would be called on to publish standards for credit report accuracy.

Lawmakers have said the bill reflects a balance between ensuring that credit is widely available and protecting borrowers from fraud and errors.

But opponents have said the bill would allow affiliated companies to share personal information, including magazine subscriptions, stock holdings and political contributions without seeking approval from consumers.

Although the measure allows consumers to opt out of letting affiliated financial services companies market services to them, it doesn't prevent affiliated companies from sharing information about them, the National Assn. of State Public Interest Research Groups has said.

California Sens. Dianne Feinstein and Barbara Boxer, both Democrats, have opposed the measure on the grounds it would override California's stronger protections against data sharing. But the bill passed in the Senate by a 95-2 vote.

The bill will go to the full House and Senate for votes. Congress is under pressure to act because current prohibitions against action by states are set to lapse Jan. 1.

Congressional leaders have said they would finish all action for the year before the Thanksgiving holiday Thursday. The Bush administration endorses the legislation.

Supporters include credit card companies, banks and mortgage lenders, who have been eager to extend the national standards.

Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, called the bill a "a mixed bag for consumers."

It would strengthen consumers' ability to place fraud alerts in their reports, but "unfortunately, it permanently prevents states from acting in a number of areas," Mierzwinski said.

Among its other provisions, the bill would prohibit merchants from printing more than the last five digits of a credit card number on an electronic receipt and would call for creation of a financial literacy commission to help consumers understand finances and credit.

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