Magazine article American Banker

Getting FACT Act Rules on Faster Track

Magazine article American Banker

Getting FACT Act Rules on Faster Track

Article excerpt

WASHINGTON -- Federal bank regulators have stepped up efforts to finish rules under the Fair and Accurate Transactions Act to avert action by lawmakers frustrated over implementation delays.

Congress enacted the law in 2003 to improve the security and accuracy of credit reports. But the complexity of the rule-writing process and the abundance of regulators involved has left many of the key provisions unfinished.

To speed up the process, House Financial Services Committee Chairman Barney Frank introduced legislation last month that would give the Federal Trade Commission lead authority - with consultation from the banking regulators - to craft regulations on how companies that provide data to credit bureaus improve accuracy and to allow consumers to dispute credit information directly with the providers.

The bill has drawn opposition from the banking agencies, which say they are well positioned to finish the process. At a Sept. 18 meeting in which the panel had planned to vote on the bill, the Massachusetts Democrat said that he had spoken with Comptroller of the Currency John Dugan about the bill, and that the agencies appear ready to burn the midnight oil.

"They can beat us to the punch. If they do this right, ... they can get a reg passed quicker than it would take us to pass a bill," Rep. Frank said.

Last week he said again that legislation may not be needed if regulators act quickly enough.

A source close to the rule-writing process said the regulators given authority under the FACT Act - including the bank, thrift, and credit union agencies and the FTC - expect to issue a proposal this year on the accuracy of credit reports and how consumers should resolve disputes. The proposal would be open for comment for 30 to 60 days, the source said, and regulators hope to finalize it about three months after that comment period.

"The best way to put it is" that Rep. Frank "has gotten our attention," said the source, who spoke on the condition of anonymity. "People are forging ahead quickly. We were all working on this already, but we have sort of redoubled our efforts to get this out. If the proposed rule goes out this fall, that would probably be quicker than passing a bill that would then change the whole rulemaking scheme."

The agencies put out an advanced notice of proposed rulemaking in March of last year asking the industry for comment on 20 questions in areas such as the common causes of errors in credit reports and the processes for handling disputes with consumers who claim their information is inaccurate. But that notice was the last major public action on implementing the law.

"We stupidly gave [several] agencies the responsibility of doing that," Rep. …

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