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Federal FCRA Bills May Weaken State Privacy Laws

Bills considered in Congress this session to renew provisions of the Fair Credit Reporting Act may weaken state privacy protections. The bills, which contain provisions that preempt state laws that regulate affiliate sharing and prescreening, may stop state legislatures from passing privacy-friendly laws.

Affiliate sharing is the transfer of confidential consumer information amongst companies with common ownership. Affiliate sharing presents problems because some larger financial institutions, such as Bank of America and Citibank, have well over 1,000 affiliates. Prescreening occurs where credit reporting agencies sell lists of individuals' names to credit card companies for unsolicited offers of credit. This presents significant privacy risks, as organized crime has been known to target these offers in order to engage in credit card fraud.

Many states provide privacy protections that far exceed federal law. For instance, in the context of credit reporting, six states (Massachusetts, New Jersey, Maryland, Vermont, Georgia and Colorado) have laws allow individuals to get free credit reports. Residents of other states have to pay up to $9 a copy.

U.S. Bill Could Weaken State Credit Protections, L.A. Times, August 3, 2003.

EPIC Preemption Page.

EPIC FCRA Page.