WASHINGTON — House and Senate negotiators agreed Friday on legislation to give consumers new protections against identity theft, including free credit reports annually and a national fraud alert system to minimize damage once a theft has occurred.
Republicans and Democrats predicted the measure would be approved before Congress adjourns for the year.
"No one gets all that they want, but we believe this is a good balance," said Sen. Paul Sarbanes, D-Md.
In addition, the legislation would reauthorize the Fair Credit Reporting Act, which set a national credit reporting standard to make it easier for people to get credit cards, loans and mortgages.
Reauthorizing the law, which expires at year’s end, is a congressional priority. Members of both parties agree the current national credit reporting system helps the economy by offering consumers quick credit.
"This is historic legislation that will maintain the credit system in this country that we know and rely on," said House Financial Services Chairman Michael Oxley, R-Ohio.
But critics say the legislation will stop states such as California from setting separate tougher rules on how businesses use, share and report data on consumers.
"The preemption of rights of the states to go forward is not a small thing," said Rep. Bernie Sanders, I-Vt., who voted against the compromise. Rep. Maxine Waters, D-Calif., also opposed it.
Republicans and Democrats defended the move. "The trade-off is most of the people in the rest of the country will have much more in the way of consumer protection than they did before," said Rep. Barney Frank, D-Mass.
Identity theft is a widespread problem. It involves the fraudulent use of another person’s private information, credit cards and such for personal gain. An estimated 9.9 million Americans last year were victims, according to the Federal Trade Commission.
Under the legislation, consumers will be able to e-mail, call or write the three major credit bureaus for a free copy of their credit report and their credit score each year to help them understand why their credit was denied or approved. It also would require businesses to black out Social Security numbers, credit card numbers and debit card numbers on receipts, and require coding of medical information on credit reports.
Under the legislation, consumers also would have one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft.
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