House Subcommittee Unanimously Approves Landmark FCRA Legislation

July 16, 2003

By a vote of 41-0, the House Financial Services Subcommittee on Financial Institutions today passed H.R. 2622, the Fair and Accurate Credit Transactions Act (FACT Act).

The legislation is the result of six hearings, nearly 100 witnesses and months of deliberations by lawmakers. In those hearings, testimony indicated that an expiration of the uniform national consumer protection standards in the Fair Credit Reporting Act would negatively affect consumer access to credit and the economy as a whole. Many witnesses also noted the need for increased protection for consumers against identity theft and other inaccuracies in the credit reporting system. H.R. 2622 specifically addresses concerns arising from those hearings.

Included in the legislation are provisions to:

  • Empower consumers to guard against identity theft by increasing the effectiveness of consumer initiated fraud alerts and enabling consumers to block fraudulent information in their personal credit records after filing a police report;
  • Increase consumer awareness of their rights if they believe they may be victims of fraud or identity theft;
  • Improve the accuracy of consumer credit information by discouraging the reintroduction of fraudulent information into the credit reporting system;
  • Expand consumer access to credit information to ensure accuracy by giving consumers the right to request a free credit report annually;
  • Simplify consumers' ability to limit unsolicited offers of credit;
  • Enlist financial institutions' support in fighting identity theft by requiring them to develop procedures to "red flag"identity theft, investigate certain changes in customer addresses, and truncate credit and debit card information; and
  • Direct regulators to determine how to increase the prompt investigation and correction of disputed information in a consumer's credit file.

The Subcommittee accepted four amendments to the legislation by voice votes:

  • An amendment offered by Rep. Brad Sherman (CA) would require the disclosure on consumer credit reports the name, address, and telephone number of businesses that supply information to credit bureaus.
  • An amendment offered by Rep. Gary Ackerman (NY) would require financial institutions to notify the consumer if they will be supplying negative information, such as late payments or defaults, to credit reporting agencies.
  • An amendment offered by Rep. Bernie Sanders (VT) would require credit reporting agencies and mortgage lenders to provide consumers with credit scores and an explanation of the key factors that were used to determine that score.
  • An amendment offered by Rep. Luis Gutierrez (IL) would commission a study by the Federal Trade Commission, in consultation with the Department of Housing and Urban Development on the effects of credit scores and insurance scoring on the availability of consumer credit.

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