The second in what reportedly promised to be a long series of hearings on the reauthorization of seven key preemptions in the federal Fair Credit Report Act (FCRA) took place Wednesday in the Subcommittee on Financial Institutions and Consumer Credit, chaired by Rep. Spencer Bachus (R-Ala.). The National Association of Independent Insurers (NAII) along with a broad cross section of financial institutions, retailers, manufacturers and other business and consumer groups, is urging Congress to take swift action to renew the expiring provisions.
The FCRA, enacted in 1970, governs the use of consumer credit reports and permits the use of credit information by personal lines insurers for underwriting purposes. Certain provisions of the FCRA critical to insurers and other businesses that rely on credit information expire this year.
Witnesses for the hearing included regulators, users and furnishers of information, credit reporting agencies and consumer interests.
“NAII hopes this hearing will help legislators understand the essence of the FCRA and how important timely reauthorization is for the consumers and the economy. FCRA touches many basic operations of consumers lives, such as allowing day care centers to check for past criminal convictions of potential employees, for consumers to drive a new car off the lot in less than a day, and for countless more Americans to become homeowners,” Carl Parks, senior vice president, government relations, said.
Like many federal laws, the FCRA contains a permanent preemption prohibiting states from enacting laws that are inconsistent with the federal statute.
The FCRA also contains seven specific preemptions dealing with prescreening activities, affiliate sharing, adverse action notices, consumer rights, procedures by which consumers dispute the accuracy of credit report information and the content of consumer reports. These specific preemptions are the only provisions up for reauthorization.
“NAII applauds Rep. Bachus and the subcommittee for their bipartisan efforts in recognizing the critical need for both the FCRA and the reauthorization of expiring standards. We urge Congress to take decisive action on this issue to protect and maintain the nation’s credit system,” said Parks.
House Financial Services Committee Chairman Mike Oxley (R-Ohio) and Ranking Member Barney Frank (D-Mass.) have publicly stated that FCRA reauthorization is a top priority for the year.
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