Credit-card safety measures advance

By Jesse J. Holland
Associated Press

WASHINGTON — Consumers moved a step closer to new identity-theft protections, including e-mailed annual credit reports and blacked-out credit card numbers on receipts, under legislation approved yesterday by the Senate.

But opponents still can derail a bill that pre-empts tougher state privacy laws preventing businesses from sharing customers' financial information with other companies.

The Senate, by a 95-2 vote, approved reauthorization of the Fair Credit Reporting Act, which created a national credit-reporting standard to make it easier for people to get credit cards, loans and mortgages. House passage came by a 392-30 margin last month.

"The end product strikes a careful balance between ensuring the efficient operation of our markets and protecting the rights of consumers," said Sen. Richard Shelby, R-Ala., chairman of the Senate Banking, Housing and Urban Affairs Committee.

Congressional negotiators must reconcile differences between the two versions. That gives critics the chance to get lawmakers to change a provision that would stop states from setting separate rules on how businesses use, share and report data on consumers. The ban came amid much consternation in states such as California, which just passed a tougher consumer privacy law. The state's Democratic senators, Dianne Feinstein and Barbara Boxer, voted against reauthorization after the Senate rejected their attempts to amend the bill.

"I think time will show that this was the wrong vote, and I have no doubt that this issue will resurface as consumers learn more about the misuse of their most sensitive personal information," Feinstein said.

Most lawmakers seemed happy with the final version of the legislation. The Bush administration has announced its support.

"The bill strengthens the national credit-reporting system that has proven critical to the resilience of consumer spending and the overall economy," the White House said in a statement.

Democrats praised the bill as well.

"It is going to make a big difference in the financial marketplace for consumers," said Sen. Jon Corzine, D-N.J.

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.

Lawmakers also are pushing stronger protections against identity theft — the fraudulent use of another person's private information, credit cards and such for personal gain.

The law also would give all Americans free credit reports annually from credit bureaus to help them understand their credit scores and reasons for denial or approval of credit.