Lawmakers reconciled their differences on the fair credit reporting bill and easily passed the credit union-backed measure before adjourning for the year last week.
The bill will give credit unions the renewal of federal exemptions of state credit reporting laws, which were due to expire at year-end, and also enact several measures aimed at combating identity theft, the fastest growing financial crime. The bill will also create a national commission on financial literacy, an issue on which credit unions have been in the forefront in recent years.
"This is another major accomplishment for credit unions, along with (passage of) Check 21," said CUNA lobbyist Gary Kohn, who predicted the bill will be signed into law by President Bush.
"This is a positive step for credit unions," said NAFCU lobbyist Brad Thaler. "The permanent reauthorization of federal preemptions puts in place a national standard for credit unions who are often serving members all over the country. It also includes important steps for fighting identity theft and expanding financial literacy."
Among the provisions aimed at combating identity theft are requirements that credit bureaus place fraud alerts on the accounts of identity theft victims and that the bureaus provide all consumers with one free copy of their credit report each year so they might determine both the accuracy of their credit histories and whether their credit has been compromised by thieves.
The Bill's Main Feature
The bill also requires businesses to truncate credit card and debit card numbers on receipts and block out Social Security numbers to make it tougher for crooks to get hold of such personal information.
But the main feature of the bill from the credit union perspective is the reauthorization of the federal preemptions, a growing concern as states seek to pass new laws covering credit reporting, consumer privacy and identity theft. Credit union representatives argue that the federal preemptions are necessary to facilitate interstate transactions without getting bogged down in various and sometimes contradictory laws passed by individual states.
Credit union representatives said last week they hope to get involved in development of the Financial Literacy and Education Commission, which will have the secretary of the Treasury as its chairman and also include representatives from NCUA and all the federal banking agencies. The panel will review the federal government's role in furthering financial literacy and seeks grants to facilitate financial education programs.
Kohn said CUNA is satisfied with the other provisions in the bill, including one covering information sharing with affiliates, but they will have to study the language closer to determine their potential impact on credit unions.
