"In Focus: FCRA Passes Panel, Shorn of Amendments" 
(From: American Banker, July 28, 2003) 

by Rob Blackwell

Jul 28, 2003 - American Banker - A vote by the House Financial Services Committee Thursday night overwhelmingly approving a bill to renew a key provision of the Fair Credit Reporting Act represented a victory for the financial services industry as much for what did not happen as for what did. The centerpiece of the industry's agenda - permanently extending a provision that blocks states from enacting laws on a host of credit-related issues - survived easily in a 61-to-3 vote despite two separate Democratic attempts to remove or limit it. Perhaps as noteworthy was that certain other proposals, which appeared to be gaining traction from key committee members during Thursday's marathon session, were watered down to little more than enhanced disclosures for credit reporting agencies and credit card companies. More radical ideas - including plans to considerably restrict the use of Social Security numbers and strengthen consumers' rights to opt out of receiving unsolicited credit card applications - were withdrawn, dismissed, or relegated to studies. Edward Yingling, an executive vice president at the American Bankers Association, said his group had been concerned about some of the amendments early in the day. "When you go into a markup like that, particularly when all kinds of issues like lending to consumers can come into play, you always expect a few wild cards," Mr. Yingling said. "The good news in this case is that none of the wild cards passed." The game is not over. The bill must still clear the House. It is expected to vote in the first weeks after Congress returns from its summer recess in September. After the decisive Financial Services panel vote, industry representatives said they are confident of approval by the full chamber. "It is going to be a big vote," said Robert Davis, the managing director of government affairs with America's Community Bankers. "It will be in the 300s, I'm sure. You only had three Democrats voting against it" in committee, "and the top two ranking members on the Democratic side" - Rep. Barney Frank and Rep. Paul E. Kanjorski - "voted for it, and I think that will carry a lot of weight." Linz Hotels The situation in the Senate is not quite as clear. Senate Banking Committee Chairman Richard Shelby plans to hold his fifth and sixth hearings on the matter this week. He is not expected to introduce legislation until September, and it remains to be seen just what he will demand of the industry. So far the Alabama Republican known for his populist streak has offered few hints about what he wants to do. His bill is expected to reauthorize the preemption provision, but it is uncertain whether he wants to make it permanent or merely extend it for a limited time. On consumer issues he said during a July 10 hearing that he was concerned about errors in credit reports but did not offer a proposed solution. On Friday Sen. Shelby commended the House committee's work and said he continues to write his own bill. "I believe the House has considered many of the important issues involved in the debate," he said in a statement responding to questions from American Banker. "It is my intention to continue building the record through our hearings in the Banking Committee. I look forward to developing legislation for the committee to consider in the coming weeks." Financial services representatives said the bill did have elements that would benefit consumers, including protections against identity theft, such as letting them request a free copy of their credit report annually. But consumer groups said Friday that they would continue opposing the preemption provision, which prevents states from interfering with federal rules on how businesses report, share, and use consumer credit histories for marketing and lending. "It is inexcusable that the committee voted overwhelmingly to preempt forever, and rejected the very modest Kanjorski amendment to provide that the preemption sunset after nine years," said Edmund Mierzwinski, the consumer program director at U.S. Public Interest Research Group. "We intend to fight preemption on the House floor and in the Senate." cheap hotel in Venice If the House committee vote is anything to judge by, Senate lawmakers could have their work cut out for them. The panel's consideration of the bill lasted more than 12 hours Thursday, delayed repeatedly by an unrelated battle on the House floor. More than 20 amendments were proposed to the credit bill: Eleven were accepted by voice vote, seven were defeated, and five were withdrawn. The most dramatic vote was on an amendment from Rep. Bernard Sanders, I-Vt., that would have blocked credit card companies from changing interest rates on accounts because of consumers' credit history unless they were delinquent on the account or 60 days past due on other debt. Despite support from Rep. Spencer Bachus, R-Ala., and initial passage on a voice vote, the measure was soundly defeated on a roll call vote, 44 to 22. Instead, Rep. Carolyn Maloney, D-N.Y., successfully lobbied for an amendment that would make credit card companies provide more consumer disclosures and detail what circumstances could lead to a higher interest rate. That pattern - a prohibition turned into an enhanced disclosure - was repeated more subtly on an amendment from Rep. Paul Gillmor. In a subcommittee vote two weeks ago the Ohio Republican offered an amendment blocking credit reporting agencies from penalizing consumers for multiple inquiries on their history. He later withdrew it, and by Thursday the amendment simply required agencies to notify consumers when their credit score had been harmed by multiple inquiries. It was approved by voice vote. An amendment from Rep. Barbara Lee, R-Calif., that would have gone beyond Rep. Gillmor's original proposal was defeated 48 to 14. Other amendments that were accepted included several studies: a Federal Reserve Board investigation into consumers' ability to avoid receiving prescreened offers of credit and insurance; a General Accounting Office study on how well consumers understand credit reports and scores; and a Treasury Department look at the use of biometrics and other technology to crack down on identity theft. Rep. Frank won approval of a provision to help consumers expunge inaccurate information from their credit reports. It would establish complaint procedures and require a study by the Federal Trade Commission every two years on the accuracy of reports. Also approved was a provision that would block financial institutions from using a person's private medical information for credit decisions and one requiring that companies encode medical information to protect consumer privacy. Copyright 2002 Thomson Financial. All rights reserved.