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Americans in realizing the dream of homeownership. Just as importantly, we will also learn how a consumer-reporting agency, commonly known as a credit bureau, facilitates the credit-granting process. The first panel will also include witnesses representing consumer groups. Our second panel will review the credit-granting process in a broader scope. We will hear from representatives of a credit union, smaller banks, a large bank, and a credit card issuer. Each will describe how the FCRA affects their ability to make credit widely available to American consumers. We will hear from other witnesses describing some potential pitfalls of the creditgranting process.

I, for one, am particularly interested in how the national standards established by certain provisions of the FCRA relate to the credit-granting process. For example, I am interested in learning whether FCRA has facilitated a national credit market and whether having a national system is beneficial. More importantly, if the national uniformity in place today were replaced with a patchwork quilt of inconsistent state laws, would consumers face a less convenient, and more expensive, credit-granting process?

I want to thank Chairman Oxley, Ranking Member Frank, and Mr. Sanders for working with me on FCRA reauthorization. I believe the bipartisan cooperation that we have had on this important issue has been helpful to the debate. Today we have accommodated all four of the Minority's witness requests.

I look forward to our witnesses' testimony on how the FCRA facilitates the most advanced credit underwriting process in the world, and how it benefits consumers.

June 12, 2003

Opening Statement by Congressman Paul E. Gillmor

House Financial Services Committee

Subcommittee on Financial Institutions and Consumer Credit Hearing entitled, “The Role of FCRA in the Credit Granting Process."

Thank you, Mr. Chairman, for holding this important hearing as part of this series of subcommittee hearings addressing the Fair Credit Reporting Act (FCRA). I would also like to thank you for your leadership on this issue. Ensuring a uniform national standard for consumer protections governing credit transactions is one of the most important tasks this committee will face in the 108th Congress.

As we are all now aware, on January 1, 2004 these standards as established in the FCRA will expire and states will again have the ability to enact differing regulations. Extending these uniform federal standards has been endorsed by both Treasury Secretary Snow and Chairman Greenspan, who made his support explicit with these remarks before our. committee, "I've been in favor of national standards here for reasons which are technically required. If you have very significant differences state by state, it would be very hard to maintain as viable a system as we currently have."

Today our witnesses will focus on the use of credit reports in the mortgage lending process and other forms of consumer lending. The speed and accessibility of the American mortgage industry has only been able to develop since 1970 and the enactment of the FCRA. The process of prescreening potential customers and extending offers of credit and insurance has also come into existence as a result of the FCRA established uniform national standards. As the Federal Trade Commission (FTC) official, Howard Beales, stated before this subcommittee in our June 4 hearing, "Prescreening, in combination with other direct marketing and advertising, has led to the widespread availability of credit cards with no annual fee and other attractive benefits, and has enhanced competition."

Thank you again, Mr. Chairman, for continuing our dialogue on this issue and I look forward to swift committee action.




JUNE 12, 2004

Chairman Bachus and Ranking Member Sanders,

I want to thank you for holding this third in a series of hearings today to investigate the role of the Fair Credit Reporting Act in the credit granting process. It is necessary that we continue to assess the importance of the national credit reporting system. I look forward to this hearing and the series of hearings this Subcommittee will hold to further clarify the issue.

As I noted at the first hearing, my office has been contacted by numerous individuals and groups about the Fair Credit Reporting Act over the past few months. I personally have heard from industry, consumer groups and several regulators on this issue.

I have said in the past that one of the main decisions we, as a Committee, needed to make is whether to extend all seven exceptions to the Fair Credit Reporting Act that preempt state law, just some of the exceptions, or none of them. They all expire January 1, 2004.

On June 11, 2003, I and several New Democrats cosigned a letter to Chairman Oxley and Ranking Member Frank looking towards their leadership to ensure that legislation extending the seven expiring provisions of the Fair Credit Reporting Act (FCRA) is passed by the House and Senate before their termination on January 1" of next year.

I believe that these seven provisions enhance the efficiency of the nation's credit system, promote access to the financial industry, protect American consumers, and I am firmly committed to extending them.

However, I also believe it is imperative that any such legislation address problems that have developed since the 1996 enactment of the FCRA amendments. Those issues include, but are not necessarily limited to:

Identity theft prevention and mitigation;

The expeditious handling of consumer complaints and disputes;

Greater accuracy in credit reports; and,

Consumers' access to their credit information.

I will continue to work with all interested parties to ensure that the final legislation is balanced and fair.

Testimony of

Independent Community Bankers of America


“The Role of FCRA in the Credit Granting Process” before the

Subcommittee on Financial Institutions
and Consumer Credit

of the

Financial Services Committee

of the

United States House of Representatives

June 12, 2003

C.R. (Rusty) Cloutier

MidSouth National Bank

Lafayette, Louisiana



Independent Community Bankers of America

Washington, DC

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