Banker Update: Senate Passes FCRA Bill; Issue Heads to Conference
WWR Article - November 7, 2003
By an overwhelming 95-2 vote, the Senate this Wednesday passed legislation (S. 1753) that would make permanent critical federal preemptions for credit bureau reporting and affiliate information sharing under the Fair Credit Reporting Act (FCRA). The measure now heads to a House-Senate conference committee, where differences between it and the House-passed version (H.R. 2622) need to be reconciled. It is imperative that Congress finalize this legislation before adjourning this fall, as the above-noted federal preemptions expire on January 1, 2004.
While ICBA is very pleased that the Senate passed its bill, we generally prefer the more-balanced House measure, which places fewer compliance burdens on community banks and sets a federal standard on identity-theft protections. The Senate bill would require creditors to inform customers of higher loan rates due to their credit history. Both bills would enable consumers to request one free credit report per year from the credit-reporting bureaus.
As expected, the two votes against final passage of S. 1753 came from California Democrats Diane Feinstein and Barbara Boxer, who attempted to graft tougher information-sharing restrictions onto the bill based on a new financial privacy law (S.B. 1) enacted late this summer in the Golden State. This effort failed Tuesday afternoon, when the Senate voted 70-24 to table the Feinstein-Boxer amendment.
However, the Senate did accept a Feinstein-Boxer amendment to allow consumers to opt-out permanently of marketing solicitations from affiliates. The original marketing opt-out in the Senate bill would have expired after five years. This restriction on affiliate-related marketing is the single biggest difference between the House and Senate bills. H.R. 2622 contains no such restriction. Should the conferees ultimately adopt some form of marketing restriction in the final bill, ICBA will want to make certain that this provision does not place community banks that rely on third-party relationships for marketing purposes at a disadvantage to large banks with affiliate structures. Our lobbying efforts will continue to focus on maintaining this competitive parity.
In a major win on the Senate bill, ICBA also lobbied hard against a potentially onerous amendment from Sen. Chuck Schumer (D-NY) to require point-of-sale (POS) disclosures on debit-card fees. He ended up not offering the amendment, but along with Senate Banking Committee chairman Richard Shelby (R-AL) and ranking member Paul Sarbanes (D-MD), has asked the Federal Reserve to conduct a six-month study on the issue.
We are hopeful that the House-Senate conference will move to a quick conclusion so this key legislation can be enacted before the FCRA preemptions expire. At press time, we had just met with House Financial Services Committee chairman Mike Oxley (R-OH) along with other trade groups and subcommittee chairman Spencer Bachus (R-AL) to talk about the pending conference. Stay tuned for updates.