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Legislative activity in 1993 proved to be favorable for credit grantors and credit bureaus. Although the federal garnishment bill has been ratified by both Senate and Congress, the outcomes of recent regulations, such as the Fair Credit Reporting Act, the federal Bankruptcy Reform and the Electronic Monitoring Privacy Act are yet to be seen. A status update on different state governments' action on proposed credit bills are outlined. Proposals on issues such as telemarketing, loans bilingual language, interest rates, credit bureau reports, late fees, credit deregulation, collection agencies, promotional offerings, rate take downs, notice requirements and credit reporting are among thos mentioned.

This explanation of the revised Regulation B, designed to enforce the Equal Credit Opportunity Act, is excerpted from an International Credit Conference presentation by Alan Hubbard. It is important that the regulation be understood, as creditors must comply by October 1, 1986. Also discussed are: the Equal Opportunity Act; the new guidelines; the clarification of seven credit concerns; Regulation Z; rules for evaluation applications; and B-ECOA formal actions.

The eleven Atlantic City casinos had gross gaming revenues of $2.138 million in 1985, up only 2.9 percent from 1984. Some attribute this small growth to the high costs of conducting business in New Jersey. The tight regulation by the Casino Control Commission is criticized, especially the detailed regulations on the granting of credit. The regulations require lengthy credit applications, detailed casino records, and comprehensive investigative procedures.

Debtors who are capable of repaying debts out of future earnings are able to escape such indebtedness through the use of bankruptcy, despite the Bankruptcy Amendments Act of 1984, which was heavily lobbied for by the consumer credit industries. An analysis of this law discusses the omission from the act of any future earnings test prior to filing bankruptcy, and the interpretation of the law's 'substantial abuse' clause. Legal aspects of bankruptcy filings under chapters 7, 11 and 13 of the U.S. bankruptcy laws are also discussed.

The use of surcharges applied to purchases made with credit cards (as opposed to surcharge-free cash purchases) is discussed in relation to the Truth in Lending Law. Those in favor of the surcharge, Senator William Proxmire and Chevron Corp.'s George McGregor, cite the excessive use of credit cards (Americans have 600 million credit cards) and the fact that credit is not a free service. The two opposed to such two-tier pricing, Congressman Frank Annunzio and American Express' Meredith Fernstrom, favor cash discounts over credit surcharges. A report by the Federal Reserve System's Board of Governors, issued July 1983, states that credit card transactions are the most costly for retailers, that credit card usage does not increase retail sales, and that, in fact, cash purchasers canbe said to subsidize credit card users.

Credit grantors may be severely affected by revisions made to the Equal Credit Opportunity Act (ECOA) and Regulation B. Perhaps the most significant of these changes is the one suggested for Regulation B by the Federal Reserve Board. The proposal would allow credit grantors to ask for data on race and ethnic origin, gender, marital status and age in relation to all loans. Criticis fear that this might only result in unequal approval rates for different racial or ethnic groups or for different gender. Another statement by the Federal Reserve Board is problematic. It argues that a credit scoring system could be in violation of ECOA and Reg. B if a disparate impact on a prohibited basis is present, unless seen as a business necessity. Critics argue that it ignores many pertinent, unsettled issues, such as the definition of 'disparate impact.' All parties should cooperate with one another to find ways to solve these brewing controversies.

Recent developments related to the International Credit Assn. (ICA) are noted. The first of these concerns the development of presentation materials by the ICA Legislative Committee. The group has prepared these materials using a user-friendly format in the hope of clarifying the legislative process for all ICA members. It is also reported that the Legislative Committee is helping to update the 'Credit and Financial Issues' booklet of the Dept. of Commerce. In another development, a seminar regarding federal and state credit laws is being offered to businesses, particularly small and medium-sized entities. The half-day program, entitled 'Credit and Financial Issues: Responsive Business Approaches to Consumer Needs,' makes use of slides and scripts and features lectures, panel discussions, a quiz and a classroom exercise.

The failure of Congress to enact the Fair Credit Reporting Act (FCRA) despite the testimony of Associated Credit Bureaus' (ACB) representatives that they will support and implement its decree compelled the ACB to formulate its own set of initiatives based on the legislation. The ACB has decided to adopt a series of provisions on consumer benefits included in the FCRA as mandatory member policies. Their main focus is geared toward the implementation of three basic principles: accuracy, privacy and consumer relations. The ACB seeks to improve in these consumer service areas by instilling their own modifications of the FCRA. These ACB initiatives further prove the credit reporting industry is firm in its decision to implement relevant consumer reforms despite the absence of FCRA amendments.

Legislation for additional control of the credit-reporting industry and the supply of information to consumers has been proposed in several states. Legislators appear to have forgotten the states' mandate for education for its citizens, and place the costly responsibility on industry. The most prominent proposals concern free file disclosures under a number of conditions. Attention is also being given to notification of adverse action by either consumer reporting agencies or credit grantors and the availability of credit risk scores to consumers.

In a position paper, the Legislative Committee of the International Credit Association addresses the elements of computer crime legislation, including the offenses, criminal law, civil penalties and venue. Intended for distribution to states without computer crime legislation an outline is given detailing: definitions, data or computer data, and access; five specific offence categories ranging from unauthorized access and altering, to falsifying data, breach of security, and willful interference; the criminal penalties; and the actual venue.

Issues of concern to the credit industry are to be found in both Federal and state legislatures, and five of the most important are examined in this legislative update. These five issues are: revenue; collection practices; credit reporting; credit card reporting; and general consumer protection. Under the category of general consumer protection is the popular legislative effort aimed at unsolicited telephone calls, and the approaches to this problem range from prohibition to intensive regulation.

Creditors are required to disclose certain information to rejected credit applicants under two acts: the Fair Credit Reporting Act and the Equal Credit Opportunity Act. Disclosure must be made whenever outside sources affect the credit decision. The credit applicant is entitled to know that a credit report was used and the name of the agency from which it was obtained; that information was obtained from another source; and that the applicant has the right to learn the type of information through a written request. Through the Equal Credit Opportunity Act, the reason for rejecting a credit applicant must be disclosed. A checklist includes items to remind creditors of actions to be taken and credit reporting requirements.