Senate Committee Approves FCRA Legislation

By Steven Brostoff, Washington Editor

NU Online News Service, Sept. 24, 10:54a.m. EDT,Washington?Industry groups are praising the SenateBanking Committee's action yesterday approving legislationreauthorizing the Fair Credit Reporting Act, but some concernsremain.

The legislation, called the National Consumer Credit ReportingSystem Improvement Act, permanently reauthorizes FCRA, includingits preemptions of inconsistent state laws, and adds new provisionsaimed at combating identity theft and enhancing consumer access totheir credit records.

In addition, the legislation approved by the Senate mandates aFederal Trade Commission study of the impact of insurance companycredit scoring on the availability of financial products.

The legislation also contains language requiring financialinstitutions that share personal financial information of customersamong affiliates to give their customers the opportunity to opt outof marketing and solicitation calls.

Gary Karr, a representative of the Washington-based AmericanInsurance Association, said AIA is encouraged by the Senate BankingCommittee's action.

AIA strongly supports permanent reauthorization of FCRA, Mr.Karr said. Reauthorization, he said, is crucial to the nation'seconomy.

The important thing, he said, is that Senate Banking CommitteeChairman Dick Shelby, R-Ala., and Ranking Democrat Paul Sarbanes,D-Md., are moving quickly in a bipartisan way that hopefully willsee enactment of legislation by the end of the year.

As for AIA's concerns, he said, the affiliate sharing provisionis a problem, but AIA hopes to have a good chance to address thatissue as the legislation advances.

The FTC study, Mr. Karr said, also is headed in a positivedirection.

Regarding the study, Marliss A. Browder, federal affairsrepresentative for the Indianapolis-based National Association ofMutual Insurance Companies, said NAMIC is unhappy with theCommittee's decision to go forward with the study, which wasincluded in the bill as an amendment sponsored by Sen. Jon Corzine,D-N.J.

However, Ms. Browder added, the amendment was changed by theCommittee. Originally, she noted, the study was to be done by FTCin conjunction with the Office of Fair Housing and EqualOpportunity of the Department of Housing and Urban Development. Butthe Committee decided to exclude HUD participation in the finalversion of the amendment.

"It is unsuitable for any agency without authority overinsurance to conduct this study," Ms. Browder said. "States, notagencies such as HUD, have jurisdiction over insurance and havebeen active in addressing this aspect of insurance regulation."

Carl Parks, senior vice president of government relations withthe Des Plaines, Ill.-based National Association of IndependentInsurers, said he hopes the quick action by the Banking Committeein approving FCRA reauthorization will move the process towards avote on the Senate floor as quickly as possible.

He noted that the House, on Sept. 12, passed its own version ofFCRA reauthorization by a 392-30 vote.