ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release June 12, 2003 #03-24
E-mail: [email protected]

ACB URGES CONGRESS TO MAKE FCRA PREEMPTIONS PERMANENT

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WASHINGTON, D.C. — America’s Community Bankers today urged Congress to reauthorize the Fair Credit Reporting Act preemptions. Testifying before the House Financial Institutions Subcommittee, community banker George Loban said, “The FCRA’s uniform national standards allow community banks and others to make prudent credit decisions quickly and inexpensively wherever a customer may reside.”

Loban, co-chairman and president of First Federal fsb, a $560 million stock institution based in Hutchinson, Minn., added that “the role of the Fair Credit Reporting Act in the credit granting process ensures that credit-reporting information is consistent from state to state facilitating a national market for credit and risk management.” Loban is a member of ACB’s board of directors and chairman of the Privacy Issues Subcommittee.

Loban cautioned strongly against congressional inaction stating that, “Failure to act could result in a patchwork of conflicting state laws and substantially erode the quality and integrity of our credit reporting system.”

Loban used his own mid-size, Midwest institution as an example, noting that First Federal serves consumer mortgage customers in over 40 states. Loban stated, “If we were forced to comply with 40 different state laws, we would be forced to either hire a team of compliance specialists or else turn away out-of-state customers. The FCRA’s uniform national standards allow First Federal to service mortgage customers effectively nationwide, and at a lower cost.”

Loban also emphasized ACB’s concern that laws regulating information sharing practices not discriminate against financial institutions based on size or corporate structure. Loban said that community banks often work with third parties – affiliated and nonaffiliated — to offer our customers new financial products. Where no affiliation exists, there is a contract dictating how and what information may be shared.

“The disclosure and opt-out requirements of the Gramm-Leach-Bliley Act treat certain disclosures of information between a financial institution and a third party identically, regardless of whether the two institutions are affiliated,” said Loban. “ACB urges that any prospective laws follow suit.”

Loban urged Congress to pass legislation to increase sentences for identity theft crimes and make it easier for prosecutors to prove identity theft. Loban noted ACB has been at the forefront in educating consumers on this heinous crime and said that these efforts, combined with stiff penalties for perpetrators, would go a long way toward combating the growing identity theft problem.

Loban said the federal credit reporting system demands that credit reports be as accurate as possible. “ACB supports empowering consumers by providing them access to a free annual credit report and enhancing their ability to correct errors on their credit reports.”

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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