House Committee Votes to Limit Use of Social Security Numbers

With a unanimous, bi-partisan voice vote, H.R. 4857 passed out of the House Ways and Means Committee on September 28, 2000. Introduced by Rep Clay Shaw (R-FL) and titled the "Social Security Number Privacy and Identity Theft Prevention Act of 2000," the bill would place new limits on government disclosure and display of social security numbers and give the Federal Trade Commission rule-writing authority to regulate private sector exchange of social security numbers. The legislation will almost certainly be revived when the new Congress convenes next year.

In particular, the bill would prohibit federal, state and local governments from

• Selling SSNs (with limited exceptions to facilitate law enforcement and national security and to ensure accuracy of credit and insurance underwriting)
• Displaying SSNs to the general public and on Internet sites (exceptions again for purposes of law enforcement, national security and credit/insurance underwriting)
• Displaying SSNs on checks issued for payment
• Displaying SSNs on drivers' licenses, motor vehicle registrations, or other ID documents issued by Departments of Motor Vehicles
• Displaying SSNs on employee ID cards or military tags

Led by Associated Credit Bureaus (ACB), the credit reporting industry has expressed alarm over the potential loss of SSNs on public record items such as tax liens, judgments and bankruptcies. Correct matching of a public record notice to the appropriate consumer's credit history would be hampered by the absence of the SSN.

Equally disturbing to many in the financial services industry is the new authority granted to the Federal Trade Commission to regulate private sector use of SSNs. In giving the FTC new regulatory powers, the committee was primarily concerned that unrestricted exchange of SSNs could lead to ID fraud, deception and other criminal activity. Consequently, the bill specifies that the FTC "shall impose restrictions and conditions on the sale and purchase of social security account numbers that are no broader than necessary to A) provide reasonable assurance that social security account numbers will not be used to commit or facilitate fraud, deception or crime; and B) to prevent an undue risk of bodily, emotional or financial harm to individuals."

Nevertheless, Stuart Pratt, VP of Government Affairs for ACB worries that mandatory restrictions on use of SSNs will actually impair many private-sector anti-fraud initiatives under development or already in place. He remarked "The real significance of this legislation is in the message being presented to Congress that legislation must step in to resolve an issue that should rightfully be left to the private sector. . We are vehemently opposed to the creation of broad FTC regulatory powers. The bipartisan unanimous vote out of Ways and Means is precedent-setting. Clearly, we have to reach out to Congress and give them a better understanding of the issue and confidence in our uses of the SSN."