he U.S. Congress is debating whether to renew provisions of the federal Fair Credit Reporting Act (FCRA) that enable the sharing of consumer financial information. The provisions, which prohibit states from passing their own stronger consumer protection laws, are due to expire on January 1, 2004.

The laws as they are currently written set national standards for businesses that share their customers' financial information among themselves, including credit reporting agencies and credit issuers such as retailers or lenders. Only these provisions of the FCRA are being debated by the House Financial Services Panel.

Currently, states are barred from passing their own legislation to deal with issues involved in sharing of consumers' financial information. The FCRA was passed in 1970; the preemption provisions were added in 1996 to address the increasing number of incidents of identity theft and continuing problems with accurate credit reporting.

Proponents of the provisions as they now exist say that they let shoppers easily make purchases on credit. Business representatives and lawmakers who favor renewing the provisions say that a lack of uniform guidelines will raise costs and interest rates and decrease the availability of consumer credit.

Consumer advocates say that states should be free to adopt stricter credit reporting laws that go beyond the FCRA. Opponents of the laws include consumer groups who say the laws don't go far enough to protect individuals' privacy, financial information and Social Security numbers, which leads to identity theft, credit score errors and higher interest rates.

Lenders and businesses, though, believe the nationally uniform laws help prevent thieves from using other people's credit cards or personal information. "You want to have lots of people participating so you can improve the accuracy of credit decisions," Katherine Lugar of the National Retail Federation said in a news wire statement.

On the other hand, "Sloppy information practices lead to consumers paying too much for credit or even being denied car or homeowner's insurance, a job or the right to open a bank account," according to a position paper published by the U.S. Public Interest Research Group, a consumer advocate organization lobbying against the provisions.

The Bush administration has not yet officially endorsed renewing the laws. Wayne Abernathy, the U.S. Treasury's Assistant Secretary for Financial Institutions, spoke to the House Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit and urged thorough examination of the issues involved.

"There could hardly be a more important subject to consider than the information infrastructure of our financial system ... whether considered from the impact on each family in America or on the economy as a whole," he said.

Federal Reserve Chairman Alan Greenspan told Congress in April that he favors a national standard for sharing credit information, rather than allowing states to pass their own laws, in order to keep the flow of information open.

Michael Oxley (R-Ohio), Chairman of the House Financial Services Committee, said updating this law is his panel's top priority. "This is the most important piece of legislation this committee will deal with this legislative session," he said in a wire service story.