WASHINGTON -- Bank lobbyists said a credit reporting bill that cleared the House Monday is much improved from earlier versions but warned that the measure would still add modestly to the industry's regulatory burden.

"The industry won't exactly be wild about it, especially when you look at the operational burdens the bill imposes," said Joe Belew, president of the Consumer Bankers Association.

Mr. Belew said, however, that many institutions would be pleased by improvements made in provisions that affect the ability of banks to solicit customers from screened lists of consumers.

Concessions on Credit Bureaus

And large institutions won concessions in a section of the bill that permits them to operate what are, in effect, in-house credit bureaus.

While the Consumer Bankers Association isn't supporting the bill, Mr. Belew said, it won't oppose the measure, either.

Similar legislation has already cleared the Senate, and Monday's House action virtually assures that a bill will be enacted into law. The House and Senate versions are very similar, and the two chambers may try to resolve differences by "ping-ponging" the bills back and forth rather than meeting for formal talks.

In a "Dear Colleague" letter, House Banking Committee Chairman Henry B. Gonzalez, D-Tex., and Rep. Joseph P. Kennedy 2d, D-Mass., praised the bill, contending that it offers important consumer protections.

"It may be the most important piece of consumer legislation that Congress considers this year," the two wrote.

The bill that passed the House Monday was a compromise worked out by Rep. Gonzalez and Rep. Kennedy with two key Republicans, Rep. Jim Leach of Iowa and Rep. Alfred McCandless of California.

Rep. Leach is the banking committee's ranking Republican, and Rep. Kennedy and Rep. McCandless are the chairman and ranking Republican of the panel's consumer credit subcommittee.

Once those four agreed, passage of the bill "was pretty much a slam-dunk," said Edward L. Yingling, chief lobbyist for the American Bankers Association.

While the ABA has problems with the measure, it was not worth opposing once bipartisan agreement was reached, Mr. Yingling said.

Consumer groups hailed the House action, with one organization calling it a "major victory for the American consumer."

"The reforms in this bill will provide financial peace of mind to millions of American consumers who get caught in reams of credit bureau red tape when they try to correct errors in their credit records," said Michelle Meier, the groups' government affairs counsel.

From the standpoint of consumers, the bill will make it easier to find and correct errors in their credit reports. Consumers would be entitled to a copy of their report each year for a $3 charge, and credit bureaus would be required to correct mistakes within 30 days.

Erroneous Data Penalized

Banks and other credit providers would also be subject to penalities for errors in information they pass on to credit bureaus.

Lenders had sought a provision preempting state passage of tougher laws and won a partial victory. The bill preempts state laws but only for eight years. After that, states are free to enact their own laws.

"It calls into question the strength of a national system, compared to a patchwork quilt of laws," said Mr. Belew of the consumer bankers group.

In one important area for credit card issuers, the bill would permit lenders to make offers of credit based on lists obtained from credit bureaus, while retaining the right to reject such customers on the basis of information provided in a later application.

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