My first substantive blog post on Credit Slips was about security freezes. I had become interested in the topic because I thought a "security freeze" was something I could buy at Dairy Queen. When it turned out that a security freeze was actually an alert one could place on one’s credit report, I was very disappointed. Basically, a security freeze allows a consumer to tell a credit reporting agency not to release the consumer’s credit report without prior authorization using a secret personal identification number (PIN). A security freeze can be useful to mitigate the effects of an identity theft. Nevertheless, security freezes are not for everyone. They come with their own costs and hassle as they will tie up a lot of consumer transactions that otherwise come off without a hitch.

According to Consumers Union,
thirty-nine states have laws authorizing consumers to place security
freezes on their credit reports. If you don’t live in a state with a
security freeze law, the credit reporting agency is not required to
honor your request for one. A year ago, a bill was pending in Congress
that would have provided a weak federally authorized security freeze
and preempted all state laws. Now, three bills are pending in Congress
that would provide federal authority for a security freeze and would
leave state laws in place. What a difference a year makes.

These
three bills are S. 806, the Identity Theft Prevention Act; S.
1178, the Consumer ID Protection and Security Act; and the recently
introduced H.R. 3316, Identity Theft Prevention Act of 2007. One
obvious difference between this year and a year ago is that a different
political party is in control of the U.S. Congress. At the same time,
nothing prevents any member from introducing a bill on the topic. As I have blogged about previously,
there has been a tremendous change in the political climate surrounding
consumer credit. There is a strong desire for regulatory change when it
comes to consumer credit, and the differences between these three bills
and the bill from a year ago illustrate that desire.