The Tug Of War Over The Fair Credit Reporting Act
Wednesday, July 09, 2003PAUL KANGAS: Privacy advocates and the Bush administration sparred today over standards for credit reporting agencies. Treasury Secretary John Snow told a House panel that extending federal standards under the Fair Credit Reporting Act is a crucial issue for the economy. But as Darren Gersh reports, not everyone agrees.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Every year consumers are barraged with billions of offers for pre-approved credit cards. And now some banks promise to OK mortgage applications in just minutes. Treasury Secretary John Snow says national standards for credit reporting make it possible for lenders to offer such easy access to cash.
JOHN SNOW, TREASURY SECRETARY: We have the best credit markets and the most available credit, and the lowest cost credit in the world and that is in large part due to these standards.
GERSH: Now the Bush administration is pushing for a permanent extension of national standards under the Fair Credit Reporting Act before they expire at the end of the year. The administration wants to add tougher protections against identity theft, free annual access to credit reports, and new rights to fix incorrect credit reports. But the administration also wants Congress to pre-empt states from imposing tougher privacy and consumer protections on credit reporting agencies. Liberals and privacy activists disagree.
REP. BERNARD SANDERS (I), VERMONT: Why would a conservative administration that tells us how bad the big bad federal government is want to crush states rights in protecting consumers needs?
GERSH: Snow says it is a question of preserving the greater economic good.
SNOW: And I think these national standards are integral to the enormous success of the American economy.
GERSH: While calling for free access to credit reports, the administration would not force reporting agencies to tell consumers their actual credit score, calling such information "proprietary." But congressional Republicans disagree, and are drafting legislation to force disclosure of the number which determines if a consumer gets a loan.
REP. SPENCER BACHUS (R), ALABAMA: If they don't know what their score is, it is pretty impossible to improve that score, so it is our intention that they do receive their credit scores.
GERSH: But the battle to extend the Fair Credit Reporting Act is likely to be toughest in the Senate Banking Committee, which is chaired by well-known privacy advocate Richard Shelby. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
