WASHINGTON (July 16, 2003)—Today, the House Financial Institutions and Consumer Credit Subcommittee passed H.R. 2622, the “Fair and Accurate Credit Transactions Act” by a vote of 41-0. The full House Financial Services Committee is expected to take up the bill next week. The legislation is intended to amend the Fair Credit Reporting Act (FCRA), to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and for other purposes.
“It is very important that Congress reauthorize the expiring provisions of the Fair Credit Reporting Act (FCRA),” said Monte Ward, NAMIC’s federal affairs vice president.
“Since their enactment in 1996, these provisions, set to expire Jan. 1, 2004, have helped to increase consumers’ access to credit, which has played a key role in strengthening the economy,” said Ward.
Ward added, “However, NAMIC is concerned about the amendment offered by Rep. Luis Gutierrez, D. Ill., and adopted by the Subcommittee that would commission the Federal Trade Commission, in consultation with the Office of Fair Housing and Equal Opportunity of the U.S. Department of Housing and Urban Development, to study the use and effects of credit scores and credit-based insurance scores on availability and affordability of financial products.”
“States, not the U.S. Department of Housing and Urban Development, have jurisdiction over insurance and have been active in addressing this aspect of insurance regulation,” said Ward.
“Since the 1996 amendments, the insurance industry has more fully begun to utilize credit history as a predictor of future losses, resulting in substantial consumer benefits by allowing insurers to offer a better product to the consumer,” he said.
“Many states have looked at this issue and adopted measures such as the National Council of Insurance Legislators model, which strikes an appropriate balance between the needs of consumers and insurers,” said Ward.
Earlier this month, U.S. Treasury Secretary John Snowe issued a statement urging Congress to renew FCRA. In June, the House Financial Services Subcommittee on Financial Institutions Chairman Spencer Bachus, R-Ala. and 32 bipartisan cosponsors introduced H.R. 2622.
Since the beginning of the year, there have been five hearings, over 75 witnesses and months of deliberations by lawmakers. In those hearings, testimony indicated that an expiration of the uniform national consumer protection standards in the FCRA would negatively affect consumer access to credit and the economy as a whole.
NAMIC supports a clean reauthorization of the FCRA. In its current form, the FCRA achieves the important objectives of facilitating access to necessary information to conduct business and protecting the privacy and accuracy of consumer information. An important goal of the FCRA is to quickly restore the credit rating of people who have had their identity stolen and good credit ruined. The provisions of the FCRA help law enforcement officials to quickly contact a victim's creditors and discover all of the ways that person's financial privacy has been violated. Also, a uniform consumer information system helps insurers investigate and mitigate fraud.
“NAMIC looks forward to working with the full House Financial Services Committee to move this significant FCRA proposal through the legislative process,” said Ward.
Posted: Thursday, July 17, 2003 12:00:00 AM. Modified: Friday, May 07, 2004 1:48:03 PM.
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