NAMIC Reacts to House Passage of FCRA Legislation

September 11, 2003

Late Wednesday, the U.S. House of Representatives passed H.R. 2622, the “Fair and Accurate Credit Transactions Act,” by a vote of 392-30.

The legislation reportedly amends the Fair Credit Reporting Act (FCRA), to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records and make improvements in the use of, and consumer access to, credit information.

“NAMIC is very pleased that the House voted in favor of reauthorizing the FCRA,” said Jennifer Gibson, NAMIC’s federal affairs director. “Since their enactment in 1996, the national uniformity provisions of the FCRA, 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 Gibson.

Gibson added, “We are not pleased, however, that the House has decided to go forward in directing 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 (HUD), to study the use and effects of credit scores and credit-based insurance scores on the availability and affordability of financial products.

“It is unsuitable for any agency without the authority over insurance to conduct this study. States, not agencies such as HUD, have jurisdiction over insurance and have been active in addressing this aspect of insurance regulation. In recent years, 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.

“Many states have looked at this issue and adopted measures such as the National Conference of Insurance Legislators model, which strikes an appropriate balance between the needs of consumers and insurers,” continued Gibson.

On July 24, the House Financial Services Committee passed H.R. 2622 by a vote of 61-3.

Earlier that month, the House Financial Institutions and Consumer Credit Subcommittee passed H.R. 2622 by a vote of 41-0. Prior to these mark-ups, the committee held six hearings and heard from almost 100 witnesses. In those hearings, testimony indicated that an expiration of the provisions in the FCRA would negatively affect consumer access to credit and the economy as a whole.

“We look forward to the Senate Banking Committee’s consideration of a companion bill later this month,” added Gibson.

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