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Consumer Groups Deliver Suggestions for Improving FCRA

Testimony delivered at US Senate Committee on Banking, Housing, and Urban Affairs

Click here to view or download a copy of the testimony.

July 31, 2003 - Today Edmund Mierzwinski, consumer program director of U. S. Public Interest Research Group, delivered testimony on behalf of U.S. PIRG, Consumer Action and other leading consumer watchdog organizations on ways to enhance the federal Fair Credit Reporting Act before the U.S. Senate Committee on Banking, Housing and Urban Affairs.

Among the key points made by Mierzwinski was a plea to clarify that the law's 1996 preemption of the definition of "affiliate-sharing" was intended to be construed narrowly to prevent companies sharing information from being treated as credit bureaus. He noted that this provision is even more necessary because earlier this week a U.S. district judge overturned local financial privacy ordinances in several California cities, arguing that the FCRA controlled over the clear legislative history of the Sarbanes amendment to the Gramm-Leach-Bliley Act granting states the authority to enact stronger financial privacy laws. If upheld, this decision will have a chilling effect on the right of states to protect their citizens from privacy invasions.

Other key points include the need to give consumers:

  • Stronger rights when they are denied credit on the basis of a credit report, such as the right to automatically obtain from that lender a copy of the subscriber report and score used to deny credit. Employment applicants already have a similar right under the FCRA. This provision, coupled with the annual free credit report on request, and deletion of the House provision allowing a charge for companion credit scores, will be a powerful incentive to improve accuracy. Consumers should also have the right to receive adverse action notices - and FCRA review and dispute rights - when they accept counter-offers for credit at a higher price and when credit information is used in the affiliate-sharing world.
  • The right to go to a court and seek injunctive relief to stop a credit bureau from selling faulty credit reports about them and the right to seek minimum statutory damages of $100-$1,000 per violation of the FCRA, as other consumer laws provide, so that they don't have to prove their actual damages to a court.

Other groups represented include Acorn, Center for Community Change, Consumer Federation of America, Consumers Union, the Electronic Privacy Information Center, the Identity Theft Resource Center, Privacy Rights Clearinghouse, Privacy Times and the low-income clients of the National Consumer Law Center.

For more information, contact Linda Sherry or Ken McEldowney.


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