WASHINGTON -- The House appears likely to take up amendments to the Fair Credit Reporting Act Monday under a procedure that almost guarantees passage.
The compromise that is expected to be offered for a vote is based on a Senate version of the measure. However, the compromise yields a little more ground to lenders on the key issue of whether states should be preempted from passing tougher laws of their own.
The Senate bill would bar states from passing their own laws, but only for six years after passage. The House bill "will probably end up at seven or eight years," said one House aide who is working on the measure.
Preemption at Issue
Bankers and other credit providers have made preemption a top issue. Their businesses are nationwide, they say, and it is impossible to deal with a patchwork quilt of 50 different sets of laws.
House Republicans, led by Rep. Jim Leach of Iowa, had proposed preempting the states for 10 years. Democrats countered this week with eight years and Hill aides said the final deal will probably include a number close to the Democratic counter-offer.
An agreement between Democrats and Republicans would make it possible to move the bill Monday under "suspension of the rules," a procedure reserved for noncontroversial legislation.
Because the bill is so close to the Senate version, the two bodies could avoid the lengthy process of negotiating a final measure in a House-Senate conference and instead bat the bill back and forth until agreement was reached.
Concerns Linger
Some bankers still expressed reservations about the bill yesterday.
"The bill is troublesome for the banking industry because it does increase our regulatory burden," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.
Mr. Guenther warned that the bill would still set new penalties for lenders who provide inaccurate data to credit bureaus.
The agreement would permit large credit providers to continue to share credit information internally without falling under all the requirements of the Fair Credit Reporting Act.
However, if the company rejected a credit application on the basis of shared information, the applicant would have to be given a written explanation.
Verifying Credit Information
The agreement under discussion would also permit banks to verify credit information after offering preapproved credit lines to individuals whose names were obtained from credit bureaus.
The bill that passed the House Banking Committee took a tougher stand, permitting lenders to verify only employment and income information. The compromise would permit lenders to use any criteria relevant to creditworthiness.
Banks and other credit card issuers frequently obtain lists of potential customers who meet certain criteria from credit bureaus, a process known as pre-screening. However, lenders want to retain the right to post-screen, or verify credit histories.
