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U.S. may derail limits on credit-report access: State law could fall to national standard(Milwaukee Journal Sentinel, The (KRT) Via Thomson Dialog NewsEdge) Jun. 19--A new law that will allow Wisconsin residents to freeze their credit reports to ward off identity thieves is in danger of being undone by federal legislation, lawmakers and consumer advocates say. Data security legislation being considered in Washington would pre-empt credit freeze laws on the books in 17 states and let people put a lock on their credit report only if they can show they have been a victim of ID theft. Credit reports contain personal financial information and payment histories that help creditors such as banks and retailers decide whether a person is likely to pay back a loan or credit card purchases. In March, Gov. Jim Doyle signed an identity protection bill that will let consumers, at a cost of no more than $10, place a security freeze on their credit report at any time as a precautionary measure. The process gives consumers the ability to control when and to whom their credit report is released. The Wisconsin law is set to take effect Jan. 1, but it might never get off the ground if a federal data protection legislation package being considered in the House Committee on Financial Services is approved. That bill could come up for a vote as early as this week. "Wisconsin's law would be wiped out if that bill passes," said Susanna Montezemolo, a policy analyst for the Consumers Union, which publishes Consumer Reports magazine. U.S. Rep. Steven LaTourette (R-Ohio), who sponsored the federal legislation, said the country needs a uniform standard for freezing credit rather than a "patchwork" of state-by-state laws. "Consumer groups didn't want a national standard," LaTourette said in an interview. "I find that wholly unreasonable when we have a national system of credit." He said that although Wisconsin and other states might argue that the national law wouldn't be as good as existing state laws, under his bill, all states would have some protections for credit and ID theft that they don't have now. State Rep. Jeff Fitzgerald (R-Horicon), who authored Wisconsin's credit freeze legislation, said letting consumers freeze and unfreeze their credit is a "proactive" method for preventing ID theft. He said the federal legislation is "reactive," taking place only if damage already is done. Are freezes an overreaction? Letting people who haven't been victims of identity theft freeze their credit is an over-reaction to the problem and will have unintended consequences, said Laura Fisher, a spokeswoman for the American Bankers Association. "People don't realize how often your credit report is pulled," Fisher said. "If you freeze your credit report, it may be harder for you to rent an apartment, to apply for a new job, get quick cash if you have an emergency or just take advantage of a good deal." In signing the Wisconsin legislation in March, Doyle said it would "give consumers some peace of mind and another tool to protect their personal information." It's an issue of common ground with U.S. Rep. Mark Green, a Republican from Green Bay who is challenging Doyle for governor. "Wisconsin has taken some promising steps in the fight to protect personal credit information, and it's important that new federal laws preserve, not unravel, our progress on this front," Green said in a statement. "Allowing folks to proactively freeze their credit will prove a valuable safeguard against the growing problem of identity theft." U.S. Rep. Gwen Moore, a Milwaukee Democrat who is a member of the House Committee on Financial Services, said she opposes the pre-emption power over state laws that is included in LaTourette's bill. "The data security legislation under consideration in Congress should increase consumer protections, not remove them," Moore said. "A person's credit files should be treated as his or her own personal, private information. If an individual wants to keep their credit score confidential by placing a freeze on it, they should have the right to do so." Another Wisconsin delegation member, however, U.S. Rep. Tammy Baldwin, a Democrat from Madison, is advocating for alternative data security legislation that is in the House Committee on Energy and Commerce. That version wouldn't pre-empt Wisconsin's law on credit freezes. "Part of what's in our piece of legislation is an obligation on the data brokers, if they learn of a breach where there's a substantial risk . . . to the people whose data they possess, that they have to warn them," Baldwin said. "How empty would it be if you warned people and then told them there was nothing proactively they could do to protect themselves?" Other steps possible The American Bankers Association's Fisher said there already is a step people can take short of freezing their credit if they are concerned they might become an ID theft victim. Consumers can call credit reporting agencies and have a "fraud alert" placed on their credit file if they are worried someone has gained access to their personal information. The alert, which lasts for 90 days, flags the file so potential creditors have to contact the consumer to verify whether he or she is indeed applying for credit somewhere. An extended alert can be placed on credit files if a person's identity actually has been stolen. "A lot of people don't know about it," Fisher said of fraud alerts. LaTourette said that while he is committed to having national standards for credit freezes, security breach notification and other identity theft issues, he still is open to discussion on what those standards should be. "I try not to be an ostrich. I have heard the criticisms," LaTourette said. "The problem with this discussion always is that everybody says, 'We're OK with one standard, but let's make it ours.' " |