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1.4.9.1 Legislative History

In 2003, Congress made significant changes to the FCRA by passing the Fair and Accurate Credit Transactions Act (FACTA).262 The impetus for the FACTA amendments was the industry’s concern over the expiration of the FCRA’s preemption of certain state laws.263 These preemptions were due to sunset on January 1, 2004.264 With the end of preemption looming, the credit reporting and financial industry were concerned about states enacting enhanced consumer protection laws, and lobbied Congress to establish so-called “uniform” standards for the credit reporting industry by ensuring that existing preemptions continued.265

In addition, Congress sought to address the problem of identity theft, viewed as reaching near epidemic proportions.266 Other issues Congress focused on were accuracy, privacy, furnisher responsibilities, the protection of medical information, employee investigations, and financial literacy.267

Both the House and Senate held several hearings concerning the credit reporting industry and its practices. Many of the documents and much of the testimony produced from these hearings, including Committee Reports, are available digitally as companion material to this treatise. The topics covered by hearings in the House included the following: fighting identity theft; the role of the FCRA in employee background checks; the collection of medical information; the role of the FCRA in the credit granting process; the function of the FCRA for consumers and the economy; and the importance of the national credit reporting system to consumers and the U.S. economy.268 On the Senate side, the hearings related to a general overview of the credit reporting system;269 identity theft;270 affiliate sharing practices;271 accuracy of credit report information;272 consumer awareness and understanding of the credit granting process;273 issues presented by reauthorizing the preemption provisions;274 and measures to enhance the operation of the FCRA.275

Although several bills had been proposed on one or more FCRA issues since 1996, it was not until the House Committee on Financial Services drafted House Bill 2622 that Congress began the process of substantially amending the FCRA to address the preemption and identity theft issues that had become predominant. House Bill 2622 made it clear that the preemption provisions would become permanent. Its proponents professed that it would benefit consumers, asserting that it provided consumers with tools to fight identity theft and ensure accuracy.276 However, in reality, it only contained modest measures to protect consumers from identity theft, inaccuracies, and invasions of financial privacy.

The Senate took a more balanced approach to the need for consumer protection and preemption. Its bill, Senate Bill 1753, the National Consumer Credit Reporting System Improvement Act of 2003, was the Senate’s response to the House Bill 2622. This bill sought to address the needs of consumers while providing for the efficient operation of the national credit markets.277 The Senate Report for the Senate Banking Committee, which oversaw Senate Bill 1753, focused on several areas including accuracy, risk-based pricing practices, identity theft, financial literacy, information use practices, and national standards for preemption.278 The Committee was particularly concerned with the “tremendous significance” of consumer credit information,279 especially in the form of credit scores:

Increasingly, these scores determine whether a consumer can purchase a mortgage loan, a consumer loan, auto insurance, homeowners insurance, a rental unit and utilities, and at what price; and increasingly, these scores influence whether Americans can obtain and retain a job.280

The subsequent legislative history for the FACTA amendments is not extensive, and neither the House nor the Senate engaged in much debate or substantive discussion. There are very few comments on the Senate floor concerning FACTA; only Senator Sarbanes provided meaningful comments.281 On the House side, many members praised the Act’s benefits, but offered little explanation of the Act’s content.282 The most extensive comments were made by Congressmen Oxley, who also provided supplemental comments several weeks after the FACTA amendments were passed.283 On December 4, 2003, the President signed the FACTA amendments to the FCRA.

Footnotes

  • 262 Pub. L. No. 108-159 (2003).

  • 263 15 U.S.C. § 1681t(d).

  • 264 Id. (2002).

  • 265 H.R. Rep. No. 108-263, at 23–25 (2003).

  • 266 H.R. Rep. No. 108-263, at 25 (2003).

  • 267 H.R. Rep. No. 108-263 (2003); S. Rep. No. 108-166 (2003).

  • 268 , 108th Cong. (2003), available at http://commdocs.house.gov.

  • 269 The Fair Credit Reporting Act and Issues Presented by Reauthorization of the Expiring Preemption Provisions: Hearings Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (2003).

  • 270 The Growing Problem of Identity Theft and Its Relationship to the Fair Credit Reporting Act: Hearings Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (2003).

  • 271 Affiliate Sharing Practices and Their Relationship with the Fair Credit Reporting Act: Hearings Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (2003), available at http://banking.senate.gov.

  • 272 The Accuracy of Credit Report Information and the Fair Credit Reporting Act, Hearings Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (2003).

  • 273 Consumer Awareness and Understanding of the Credit Granting Process: Hearings Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (July 29, 2003).

  • 274 The Fair Credit Reporting Act and Issues Presented by Reauthorization of the Expiring Preemption Provisions: Hearings Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (2003), available at www.access.gpo.gov.

  • 275 Addressing Measures to Enhance the Operation of the Fair Credit Reporting Act: Hearings Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (2003).

  • 276 H.R. Rep. No. 108-263 (2003).

  • 277 S. Rep. No. 108-166, at 2 (2003).

  • 278 S. Rep. No. 108-166 (2003).

  • 279 S. Rep. No. 109-166, at 6–7 (2003).

  • 280 Id. at 7.

  • 281 Cong. Rec. S15,806–807 (daily ed. Nov. 24, 2003).

  • 282 Cong. Rec. H12,198–224 (daily ed. Nov. 21, 2003).

  • 283 Id. See Cong. Rec. E2512–19 (daily ed. Dec. 9, 2003).