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Thirty-two years? experience with the FCRA has demonstrated it to be a remarkable success for individuals, businesses, and the economy as a whole. Since 1996, an important part of the Act?s carefully crafted balance has been federal preemption. This recognizes the national (and, in fact, increasingly global) nature of our economy, the inherently national character of credit reporting, and the significant impediments and costs that state or local regulation could impose. By providing that preemption would sunset on January 1, 2004, Congress signaled an intent that the amended operation of FCRA be reviewed and evaluated to determine whether the balance struck in 1996 yielded the intended benefits.
                      
In this paper, Fred Cate, Robert Litan, Michael Staten and Peter Wallison argue that all of the available evidence indicates that the answer to this question is ?yes.? The balance struck by Congress has generated an extraordinary range of benefits for the public?including greater and faster access to more credit at a lower price, a more sound and efficient financial services sector, and enhanced competition. Moreover, it has protected individuals? privacy and provided tools for individuals to exercise additional control over the use of information about them should they so desire. 
                      
The benefits?including protection for personal privacy?that the FCRA has fostered would be significantly undermined by abandoning preemption in favor of state-by-state or city-by-city regulation of credit reporting. Moreover, those benefits would be seriously threatened by adopting new restrictions on the composition of credit files, their use for prescreening, or the sharing of information among affiliates. Conditioning these or other uses of information on opt-in consent are tantamount to prohibiting them outright, simply because of the practical impediments, costs, and consumer inconvenience of obtaining a response from consumers individually. 
                     
In the face of such considerable and widely shared benefits that result from the U.S. credit reporting system, and the significant impediments to those benefits and other costs that abandoning preemption or requiring opt-in would impose, Congress should reenact preemption and avoid adopting new restrictions on credit reporting unless presented with clear evidence of a demonstrated need.

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