WASHINGTON -- The House Banking Committee approved legislation on Thursday aimed at making it easier for consumers to correct errors in their credit histories.
The bill would establish a regulatory framework for credit-reporting bureaus and prevent states from passing tougher measures on their own.
The restriction on state measures was pushed by lenders and other industry groups that want to standardize credit-reporting rules.
Floor Fight Promised
However, two key committee members oppose that restriction and will try to strip it out of the bill on the House floor.
Committee Chairman Henry B. Gonzalez, D-Tex., complained that the legislation "had been mugged by the credit providers and the credit bureaus."
Rep. Gonzalez had delayed full committee consideration of the bill for months because he was unhappy with the provision, which was adopted when the measure was considered by the panel's consumer affairs subcommittee in March.
The chairman of the subcommittee, Rep. Esteban Torres, D-Calif., had attempted to negotiate a compromise, but finally concluded that opponents of the prevailing on the House floor than before the banking committee, an aide said.
Rep. Torres called the provision "a poison pill" that would kill the bill if not modified.
Industry groups say the provision is needed to bring some order to the nation's consumer credit markets.
"It's very important because of the patchwork quilt of laws out there," said Joe Belew, president of the Consumer Bankers Association.
With the provision intact, Mr. Belew said, "we could live with the bill" though only reluctantly." He added: "Nobody really needs another law."
In addition to making it easier for consumers to correct errors in their credit reports, the bill would also require lenders and other providers of credit records to ensure the accuracy of information they provide or face civil penalties.
Elsewhere on Capitol Hill, Rep. Doug Bereuter, R-Neb., introduced legislation intended to reduce regulations that banks say are unduly burdensome.
That bill has little prospect of passage this year, but provides a road map for the industry's legislative strategy for reducing red tape, particularly for small institutions.
It would permit banks with less than $100 million in assets to certify on their own authority that they are in compliance with the Community Reinvestment Act. It would also repeal disclosure requirements for small business and farm loans.
Banks with less than $250 million in assets would be subject to less-frequent examinations, and some requirements for advance disclosure of branch closings would be eliminated.
The bill would also repeal a series of amendments passed last year that require regulators to set standards for compensation, asset quality, and stock values.