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Utah mortgage brokers are concerned about the new credit freeze law that just passed. Utah becomes the 1st state to introduce a law that will allow people to freeze their credit and still get access to it within 15 minutes. Consumer Credit Protection Bill, SB 71, passed on Feb. 27, 2006. Utah mortgage brokers point out the law's flaws. The Utah Association of Mortgage Brokers posted a legislative alert stating that this new law “would create a severe disadvantage to mortgage brokers because a client's bank would be allowed to pull credit immediately, while a broker/lender would have to wait up to 10 days. The bank would be able to close a loan before a broker could even get a credit score!” The association urged brokers to review the bill, consider the ramifications of having to wait up to 10 days to pull credit on a client and then contact state legislators to voice their concerns.
The National Association of Mortgage Brokers has been concerned with the ramifications of credit freeze laws for some time now. Having to wait 5 days will significantly slow down the mortgage process. National Ass. Mortgage Brokers reminds us that the Fair Credit Reporting Act already offers fraud protections from identity theft because it allows consumers to place an alert in their credit file that can extend it up to 7 years. Creditors are then required to go an extra step to confirm a person's identity if an account has been flagged before approving any new credit or increasing any existing credit lines. In addition, Military personnel on active deployment, may also place two- year Active Duty alerts in their credit file. This Credit freeze law enables consumers to prevent access to their credit file without written permission. The problem is that people don't know yet that it take up to 5 days to unfreeze a credit file.
Credit Freeze Laws May affect other States as well.
California - Credit Law for all California Consumers.
The credit freeze law was amended to cap fees on non-ID theft victims.
No fee for victims to place the freeze, others pay up to $10 per freeze. Caps fee to lift freeze at $10 for temporary lifting for a time, $12 for temporary lift for one creditor.
Colorado – Credit freeze law applies to all consumers; effective date: July 1, 2006. Fees: No fee for first freeze; $10 to place a second freeze, $10 to lift, $12 for temporarily lift for one creditor.
Connecticut - Credit freeze law applies to all consumers; effective date: Jan. 1, 2006. Fees: $10 to place, lift, or lift temporarily, $12 to life for one creditor.
Louisiana - Credit freeze law applies to all consumers. Fees: $10 to place, $8 to lift, no fees for ID theft victims or persons age 62 or older. Effective date: July 1, 2005
Maine - Credit freeze law applies to all consumers. Fees: No fees on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued, and $12 to lift for a specific creditor. Effective date: Feb. 1, 2006.
Nevada - Credit freeze law applies to all consumers. Fees: No for ID theft victims who submit a police report, for others $15 to place, $18 to lift, $20 to lift for one creditor. Effective date: 10/1/ 2005.
New Jersey - Credit freeze law applies to all consumers. Fees: No fee for initial freeze. Up to $5 to remove, temporarily lift or have PIN reissued. Consumers are also permitted to make such requests directly to consumer reporting agencies via secured electronic mail. Effective date: 1/1/2006.
North Carolina - Credit freeze law applies to all consumers. No fees for ID theft victims with valid report/complaint with law enforcement agency. Up to $10 to place, remove, temporarily suspend. Effective date: 12/1/2005.
Texas - Credit freeze law applies to identity theft victims with a police report. No fees. Placement at one CRA must be honored by all. Effective date: 9/1/2006
Vermont - Credit freeze law applies to identity theft victims with a police report or a complaint to a law enforcement agency. No fees. Effective date: 1/1/2005.
Washington - Credit freeze law applies to identity theft victims, including persons who receive a notice of a security breach of computerized personal information. No fees. Effective date: July 24, 2005.
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