WASHINGTON -- The House is to vote Wednesday on an amendment that would make it more difficult for credit card issuers to market additional services to cardholders.
The measure, sponsored by Rep. Charles E. Schumer, D-N.Y., will be considered when the House takes up the Consumer Reporting Reform Act. The bill is primarily intended to overhaul the Fair Credit Reporting Act of 1970, making it easier for consumers to identify and correct errors in their credit histories.
A Surprise Addition
The Schumer amendment, co-sponsored by Rep. Chalmers Wylie, R-Ohio, was cleared for floor action last week by the House Rules Committee, Previously, it had not been part of the package -- and bank lobbyists had not focused on it.
"This amendment goes well beyond the credit information debate," said Joseph Belew, president of the Consumer Bankers Association. "The way it's drafted could go so far as to affect overdraft protection on debit cards."
Most observes think the bill, with or without the Schumer amendment, has little chance of being enacted this year. The Senate does not have a companion bill, and with the 1992 congressional session drawing quickly to a close, it would be easy for opponents to block consideration.
But the short congressional timetable adds an air of unpredictability that concerns banks lobbyists.
A Political Opening?
"What worries me is that, in the weeks before the election, the Democrats could decide this is a proconsumer vote and push it through," said J. Denis O'Toole, vice president for federal government relations at Household International, which owns a leading credit card bank.
Bank lobbyists have concentrated so far on protecting a provision in the package that pre-empts states' authority to pass
V3 stronger credit reporting laws.
Rep. Henry B. Gonzalez, D-Tex., has waged a long campaign to delete the preemption provision, and he will try again when the House takes up the measure.
Rep. Gonzalez, the banking committee's chairman, has strong support from consumer groups, state attorneys general, and others who argue that it is an issue of states' rights.
Opposing a Legal 'Patchwork'
Bankers, other lenders, and credit bureaus have lined up behind the measure, arguing that businesses with a nationwide reach cannot deal with a patchwork of laws that vary from state to state.
Rep. Gonzales put the legislation on hold after the preemption provision was adopted in subcommittee, and it is widely expected that he would not permit the bill to move to a final vote if he loses on the floor.
However, Rep. Gonzalez highlighted the importance he attaches to the bill in testimony before the House Rules Committee last Wednesday.
"Errors in credit reporting are rampant," he said. "And errors cost people their access to credit, result in job denials, lost chances to rent or own a home, and they cost people their privacy and piece of mind."