Bill would stop Equifax and other credit reporting firms from using Social Security numbers

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In the wake of the massive Equifax data breach, a top Republican congressman wants credit reporting companies to stop using Social Security numbers to verify Americans’ identities.

Rep. Patrick McHenry (R-N.C.) introduced legislation Thursday that would crack down on credit reporting companies. It would require Equifax, Experian and TransUnion to phase out the use of Social Security numbers by 2020.

The legislation also would create a national framework for consumers to freeze their credit to prevent identity theft as well as mandating the federal government to create uniform cybersecurity standards for credit reporting companies and conduct onsite examinations.

“The bill I’ve introduced today takes an important first step in providing meaningful reforms to help Americans who have been impacted by this breach,” McHenry said. “It is focused on prevention, protection and prohibition.”

Equifax revealed last month that a data breach exposed the Social Security numbers and birthdates of as many as 145.5 million Americans. The hack took place after Equifax failed for several months to fix a software flaw that federal officials had warned about in March.

The breach, and Equifax’s bungled handling of its aftermath, led to bipartisan outrage. The company’s former chief executive, Richard Smith — who stepped down after the breach was disclosed — was slammed by lawmakers in four hearings last week.

In response to criticism of its efforts to help consumers deal with the breach, Equifax said it would stop charging people to freeze access to their credit records so that no data would be released to scammers. Smith told lawmakers that such free credit freezes should be the industry standard and that the nation should consider replacing Social Security numbers “as the touchstone for identity verification.”

The Trump administration also is looking at reducing the importance of Social Security numbers. Rob Joyce, the White House cybersecurity coordinator, said at a conference last week that the Social Security number “has outlived its usefulness” and that he wanted to find a “modern cryptographic identifier” that would be more secure.

McHenry’s legislation is at least the third introduced to impose tougher standards on credit reporting companies. But as a member of the House Republican leadership, McHenry may have the clout to push his bill through.

The Promoting Responsible Oversight of Transactions and Examinations of Credit Technology, or PROTECT, Act would subject large credit reporting companies to the same federal cybersecurity standards and oversight as banks and other financial institutions, McHenry said.

Shifting away from reliance on Social Security numbers is a key part of the bill. McHenry said he wanted to stop credit reporting companies from relying on the numbers, which he called “the most sensitive of Americans’ personal information.”

jim.puzzanghera@latimes.com

Twitter: @JimPuzzanghera

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