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President Trump today signed S. 2155, the so-called Economic Growth, Regulatory Relief, and Consumer Protection Act, more popularly known as the Bank Lobbyist Act. This law rolls back many of the protections of Dodd-Frank, and weakens state credit freeze laws leaving consumers more vulnerable to insurance identity theft. The Washington legislature voted this year to remove the fees on credit freezes in the state.
“Not even ten years after the 2008 financial crash, Congress is rolling back the still-needed financial protections of Dodd-Frank,” said Elise Orlick, WashPIRG Director. “And they are rolling over the toes of states like Washington that have taken real steps to protect consumers from identity theft. This bill is a setback for consumers in Washington and across the country.”
The bill is expected to leave consumers more vulnerable to mortgage fraud, discriminatory lending, and risky banking practices. In addition to those core provisions, it also gives credit bureaus a break only 9 months after news broke of Equifax’s massive data breach. It includes a provision removing the fees for credit freezes in every state, but only applies credit freezes to checks on credit. Many states, including Washington, currently apply credit freezes to other financial interactions, such as insurance checks. The federal law preempts these stronger state laws, reducing the protections of credit freezes and leaving consumers more vulnerable to insurance identity theft. 85 national and state groups sent a letter to Congress outlining the credit bureau-related problems with the bill in April.
"Washington state sent a clear message this year: in an age of data breaches, consumers deserve access to credit freezes,” said State Representative Zack Hudgins, who introduced one of this year’s free credit freeze bills. “That's why we strengthened our state law and made freezes free. It is disappointing that Congress is now making those protections weaker and preventing states from leading the way."
A credit freeze is the only way for a consumer to prevent new account identity theft if their personal information has been stolen. With a freeze in place, creditors must contact the consumer before opening a new line of credit to confirm that it is a legitimate request. This allows consumers to prevent fraudulent uses of their personal data.
State laws currently set the fees for credit freezes, which range from $3-$10 at each bureau for setting up a freeze, and $3-$10 to thaw it in order to access your credit. Over a dozen states, including Washington, have passed laws removing the fees entirely, and more are in the process of passing such laws. Washington’s free freeze law is scheduled to go into effect June 7.
Washington Representatives DelBene, Heck, Jayapal, Kilmer, and Smith, and Senators Cantwell and Murray voted against S. 2155. Representatives Herrera Beutler, Larsen, McMorris Rodgers, Newhouse, and Reichert voted to pass it.
WashPIRG is a non-partisan, non-profit consumer organization that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. On the web at www.washpirg.org.
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