But the bill also means people would lose the protection of some state financial privacy laws, which would be pre-empted by federal law.
The House on Wednesday voted 392-30 to reauthorize the Fair Credit Reporting Act, and along with the legislation to institute uniform credit-reporting requirements nationwide, lawmakers added what they called some of the toughest anti-identity theft legislation to come out of Congress.
"This bill will give consumers the weapons they need to fight identity thieves and the tools to repair their credit history after an attack," said House Financial Services Chairman Michael Oxley, R-Ohio.
The bill now goes to the Senate, which expects to hold hearings later this month.
But some consumer protection groups said the House legislation takes away from states the ability to set stronger privacy laws than the federal government does. For example, California just passed a law allowing California consumers to block banks, insurance companies, and other institutions from sharing their personal information.
Attempts to carve out protections for state laws failed.
"Sloppy financial industry practices have led to the identity theft epidemic, yet this House bill does little to force industry to clean up," said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group. "We expect the Senate bill to be more balanced and will work to ensure that the final law is a floor, not a ceiling, allowing California and other states to protect privacy and help fight identity theft."
Identity theft cost consumers and businesses $53 billion last year, the Federal Trade Commission said last week, with almost 10 million Americans falling victim to thieves using their name and other personal information, such as a Social Security number or bank and credit-card numbers, to establish credit or buy products.
Under the legislation, all consumers would have the right to a free copy of their credit report annually upon request. Only six states--Colorado, Georgia, Maryland, Massachusetts, New Jersey and Vermont--now require the nation's three major credit bureaus--Equifax Inc., Experian Information Solutions Inc. and Trans Union--to give consumers free credit reports every year.
At the request of Rep. Barney Frank, D-Mass., the House agreed to include regional and national specialized credit bureaus to the list of credit bureaus that would have to provide free credit reports.
The bill also gives consumers "one-call-for-all" protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking.
"This legislation not only empowers consumers with protections, it also demands creditors and credit bureaus do their part to combat fraud," said Rep. Darlene Hooley, D-Ore.
The Bush administration supports the legislation. "I congratulate the House on this prompt action," Treasury Secretary John Snow said. "Americans need these tools and the House has acted without delay."
Congress must address the Fair Credit Reporting Act this year because the 1996 provisions that instituted uniform reporting requirements are due to expire at the end of 2003.
"The national uniform credit reporting system has lowered costs and increased choice and convenience for American consumers," said Rep. Spencer Bachus, R-Ala. "Much like the national interstate highway system allows for quick and easy travel across state lines, a national uniform credit reporting system allows for consumers to receive credit in a cost-effective and timely fashion."
Industry groups cheered the vote. The bill "strikes the right balance to ensure the availability of credit and fighting identity theft while not undermining the credit reporting system," said Edward L. Yingling, executive vice president of the American Banking Association.