Industry Worried California Privacy Law Will Derail National Uniformity
Although the House of Representatives approved permanent reauthorization of the Fair Credit Reporting Act by a 392-30 vote, some in the financial services industry are expressing concerns that the goal of a uniform national system may be sidetracked in the Senate.
The concern relates to a privacy bill recently enacted in California that imposes more severe restrictions on information sharing among affiliates than those in FCRA.
If FCRA is reauthorized as it currently exists, the California restrictions, as well as any other state laws that vary from FCRA, would be preempted.
However, there are concerns that because of the parliamentary rules in the Senate, it may be possible for the states senators to delay consideration of FCRA reauthorization unless the new California law, S.B. 1, is granted an exemption.
Allen Caskie, chief counsel with the American Council of Life Insurers, Washington, notes that since the life insurance industry is state regulated, it is well aware of the problems that arise from a lack of uniformity.
Many policymakers, he says, acknowledge that if they were starting from scratch, they would never establish state-by-state regulation.
However, Caskie says, because the system is already in place, it is difficult to dismantle.