FCRA Pre-emptions Made Permanent

The Federal Reserve Board and the Federal Trade Commission have issued joint interim final rules that permanently extend the federal pre-emptions of state laws contained in the Fair Credit Reporting Act.Congress recently passed a FCRA extension bill (H.R. 2622), but inadvertently left out key effective dates for pre-emptions that were due to expire on Dec. 31. The lawmakers gave the regulators the discretion to prevent any problems, however. The regulators said they issued the interim rules to avoid any confusion about the applicability of the state laws. "Adopting these rules will also have the effect of preserving the current state of law while comment is received," the interim rules say. The comment period ends Jan. 12. "I was relieved that they confirmed the pre-emptions will go into effect Dec. 31," said Melanie Brody, a partner with Kirkpatrick & Lockhart, a Washington law firm. The interim rules also sets March 31 as the effective date for new FCRA provisions that do not require significant changes to business procedures. Major regulatory changes, such as the new adverse-action notices, will take effect on Dec. 1, 2004. "That is not a lot of time" to complete those rules, Ms. Brody said.