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Credit bill would hurt consumers, officials say


WASHINGTON -- Consumers in Maryland and other states would find it more difficult to obtain their credit histories under TC bill pending in the U.S. House of Representatives, according to Maryland Attorney General J. Joseph Curran Jr.

Mr. Curran, members of Congress and attorneys general from several states held a news conference here yesterday to denounce what they said is an attempt to weaken state laws concerning consumer-credit reporting. A provision in the Consumer Reporting Reform Act, they said, would pre-empt state credit-reporting laws, even if the state laws were more beneficial to consumers.

If the provision, introduced by Rep. Chalmers P. Wylie, an Ohio Republican, after lobbying by the credit industry, stays in the bill, it would eliminate the right of Maryland consumers to obtain free copies of their credit reports.

It also would abolish a requirement that residents receive unabridged copies of the reports, rather than the summaries that are distributed in some states, Mr. Curran said.

Both of those protections are contained in a state bill that is to take effect Oct. 1. But the state bill would be replaced by the less-stringent federal legislation, Mr. Curran said, unless the "poison pill" is taken out.

"Our law is more progressive and more beneficial to consumers," he said. "We'd like to keep that."

The pre-emption provision also could thwart state regulators' plans to make credit-reporting companies offer Maryland consumers a contact person and a fax number to increase access to credit information.

The provision promises to spark a battle in the House, which could vote on the measure within two weeks. Rep. Henry B. Gonzalez, the Texas Democrat who is chairman of the House Banking Committee, said there is a "50-50 chance" that the provision will be taken out of the bill when it is considered.

Attorneys general from all states have joined a bipartisan group of lawmakers seeking to drop the pre-emption provision.

The credit industry, which reportedly has launched a lobbying offensive on Capitol Hill, says that without the federal pre-emption, it would be forced to comply with 50 state laws.

"It will cost more to consumers," said Norm Magnuson, a spokesman for Associated Credit Bureaus Inc., a Washington-based industry group.

Mr. Magnuson said the bill would improve, or at least equal, most state's credit-reform laws, and that warnings that pre-emption will hurt consumers are exaggerated.

But Rep. Kweisi Mfume, D-Md.-7th, and several other members of Maryland's congressional delegation want the pre-emption provision removed. The provision is "punitive" to states such as Maryland that offer consumers stronger credit-reporting protection, Mr. Mfume said.

Rep. Constance A. Morella, R-8th, said that "if a state wants to be progressive, then I don't think the federal government should disallow it."

Reps. Helen Delich Bentley, R-2nd, and Benjamin L. Cardin, D-3rd, also said they oppose pre-empting Maryland's credit-reporting laws.

The Consumer Reporting Reform Act would ensure that investigations of disputed information not exceed 30 days. It also would impose penalties on creditors who knowingly furnish inaccurate or incomplete information to reporting agencies, and would require creditors to correct and update information.

Creditors also would be liable for failing to promptly investigate disputed information or complaints, a provision that consumer advocates say would help end "a nightmare" for unfairly penalized consumers.

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