On Friday, December 1, Pennsylvania Governor Edward Rendell signed the Credit Reporting Agency Law (SB 180) into legislation. This law, which will go into effect on January 1, 2007, provides consumers with the ability to freeze access into their credit reports. Pennsylvania will join more than 25 states to enact security/credit freeze legislation.<br /><br />The PAMB has been aware of this issue, which passed overwhelmingly through both the State House and Senate and was signed by the Governor. While this is certainly a significant issue, upon careful review of the legislation, it definitely could have been worse. PAMB has been on top of this issue and will continue to do so.<br /><br />While there are some changes that we would like to see, the reality is that this law takes effect January 1, and that said, we would suggest that the best course of action for our members to take is to inform your borrowers at application what freezing their credit means to them when applying for a mortgage, i.e. that the process will likely be delayed which may expose them to increased rates and a longer time to sell and purchase homes. We also recommend that you inform your borrowers that if they have already frozen their credit, it needs to be unfrozen in order to proceed with the transaction.<br /><br />There have been statistics quoted that in California while there are over 16,000,000 people with credit profiles only 6,000 signed up for credit freeze. It is also worth noting that car dealers and credit card companies that rely on “instant” delivery have a lot more to lose than those of us whose transactions require a longer process. Since this is an opt-in policy, it is possible that there will be less likelihood that mass freezing will occur.<br /><br />In addition we are going to monitor the statistics as to whether or not this reduces the incidence of consumers freezing their credit. The lawmakers used instances of identity theft to rationalize the landslide passage of this law and if it doesn’t curb identity theft, we will bring those statistics to the legislature to for their review and consideration.