The debate on renewal of the Fair Credit Reporting Act is expected to reach the floor of the Senate some time this week, probably the last major piece of legislation affecting credit unions to be voted on this year.
The debate was being held up last week by the two California senators, Democrats Barbara Boxer and Diane Feinstein, who wanted to include some kind of provision preventing the new law from preempting California's recently enacted "opt-in" privacy law. But it appeared last week that the two senators had little support for their position and little leverage to force the issue.
The reality is, though the concept of the California law may be sound, the idea that financial service providers in this day and age should have to comply with different, sometimes conflicting, laws in the various states they do business is not a practical one. It violates the whole idea of the fair credit law and its preemptions, which is to make uniform the different standards from state to state and ease the way for credit, which is already hampered by dozens of regulations and laws.
The California senators' fallback position, to authorize renewal of the fair credit law for one year, also does not make sense, as it would require that Congress revisit the issue again next year.
Credit union lobbyists were confident last week that the bill being voted by the Senate will have language regarding information sharing that will allow credit unions to retain their traditional relationships with such essential partners as the corporate credit unions, CUSOs, and CUNA Mutual.
The bill will also include provisions aimed at thwarting identity fraud, such as a requirement that all consumers be provided free copies of their credit reports on an annual basis.
Even if the bill passes the Senate this week, as it is expected to do, it must still be reconciled with a separate and different version in the House. Such differences are usually ironed out in so-called conference committees, in which broad amendments may be added.
