Regulators, Privacy Interests Debate Credit-Reporting Law
Congress should not permit a law governing credit reporting to expire at the end of the year because of the law’s strong consumer benefits, three federal and state financial-services regulators told a congressional panel on Wednesday.
But those regulators — from the Federal Reserve Bank, National Association of Insurance Commissioners and Conference of State Bank Supervisors — were challenged by Julie Brill, assistant attorney general of Vermont, who said Congress should let the law lapse.
Brill, who is co-chairwoman of the privacy working group of the National Association of Attorneys General, said the current credit-granting system is not uniform and that states like Vermont with stricter pre-existing laws have not suffered because of them.
Brill found a receptive ear among Democrats on the House Financial Services Financial Institutions and Consumer Credit Subcommittee in the second of a series of hearings on the Fair Credit Reporting Act.
“Sometimes this discussion sounds a little Orwellian to me,” said Financial Institutions and Consumer Credit Subcommittee ranking member Bernard Sanders, I-Vt. “The people who say they trust the states to do the best job” change their mind when businesses say federal pre-emption of tougher state laws is necessary.
When subcommittee Chairman Spencer Bachus, R-Ala., questioned Brill’s stance in light of Federal Reserve Chairman Greenspan’s support for the extension, Sanders interjected, “In Vermont, some of us do, occasionally, dispute Chairman Greenspan.”
The industry and broader business communities are mounting a major lobbying push this year to extend the FCRA pre-emption Congress enacted in 1996. Business groups worry that failure to reauthorize the extensions would lop a full percentage point off the gross domestic product and limit consumers’ ability to get quick loan decisions.
But privacy and consumer advocates say that states need to fight for stricter privacy laws and that the 1996 act may have spurred an increase in identity theft.
Howard Beales, director of the FTC’s Consumer Protection Bureau, said on Wednesday that the agency’s five commissioners have no official position.
But a solid majority of those who testified on Wednesday urged extending the pre-emption. They represented groups such as the U.S. Hispanic Chamber of Commerce, Allstate, the National Multi-Housing Counsel, Citizens for a Sound Economy and the major credit-bureau companies.
Opponents included the U.S. Public Research Interest Group and National Fair Housing Alliance, and a trial attorney with the National Association of Consumer Advocates.