Committee Recommends Ditching Identification Provisions on Virginia Credit Reporting Bill

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A report prepared by an ad hoc committee formed to study a Virginia bill that would affect commercial credit reporting in the state suggested removing some of the legislation's most controversial provisions, including a requirement that commercial credit reporting agencies identify the source of so-called "negative information" to the subject of a report.

The committee, formed within the Virginia Small Business Commission to study House Bill 2198, presented the report to the full Commission at its meeting this week. After briefly introducing and submitting the report, the Commission urged proponents and opponents of the bill to continue their work on the legislation with the ad hoc committee's report in mind. State Senator and Commission Chair Frank Ruff, Jr. (R) urged the bill's sponsor, Delegate Michael Watson (R), to be prepared to compromise on any final legislation that emerges from the debate over HB 2198.

Recommendations in the ad hoc committee's report indicated a great degree of trust in the commercial credit reporting world's existing self-regulatory format, wherein subject companies can already view their report should they like to, and errors are rare and inaccuracies are quickly addressed. "We agree that while both sides have their own unique concerns, there are procedures in place within the credit reporting industry to provide an avenue for businesses to contest erroneous information," said the report. "While this system appears to have its own flaws, we must defer to the individual commercial credit reporting agencies (CCRAs) to conduct their operations in a manner appropriate to their industry." The report also suggested that HB 2198 be more closely revised to resemble a California statute that both guarantees commercial credit reporting agencies the right to protect the identity of their sources of trade credit information and codifies a process by which the subject of a report may dispute information contained within their report. "This will insure that CCRAs will not have to face a 'hodge-podge' of state laws, a concern raised by the industry, while providing businesses an opportunity to examine their credit reports for erroneous information and to take appropriate action when discrepancies are found," said the report. "The major substantive change will be to remove from HB 2198 the requirement for the credit report to include information identifying the source and date of the negative information and to replace it with a provision permitting the CCRA to protect the identity of sources of information to be used in a commercial credit report."

NACM has opposed HB 2198 since it was introduced, and will continue to monitor the legislation to ensure that the commercial credit industry's perspective is considered and that no bill that affects the free and open exchange of credit information becomes law. If you have any questions or comments about HB 2198, please contact NACM Government Affairs Liaison Jacob Barron, CICP at

- Jacob Barron, CICP, NACM staff writer

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