A Minnesota law allowing consumer credit freezes goes into effect today. Any Minnesota resident can now lock their credit report data against outside viewing without their express permission.

This makes Minnesota the latest of 20 states to enact file freeze policies to protect consumers against identity theft. But if Congress votes to create a national policy under HR 3997 (the Financial Data Protection Act or the Data Accountability and Trust Act), these state rules could be overturned in favor of weaker protections. And this is where the debate currently rages.

Banks and financial institutions tend to support the proposed national legislation as being a fair solution. New protections would be enacted for consumers but they are weak enough to not impact the financial industry&39;s business significantly. Credit file freezes would only be allowed for people who have already been victims of identity theft and data breach announcement would only have to be sent when "substantial harm" is likely.  Here&39;s what an American Bankers Association representative had to say in a recent news story:

"What we&39;d like to see is a system where people are notified when there&39;s real risk. We don&39;t want to cause consumers undue alarm when there&39;s not a possibility there will be an identity theft."

"Banks already have very strong regulators in place. The banking system is heavily regulated. It&39;s very strong and sound. Because of that we don&39;t need to add another level of regulation to banks."

Consumer advocates tend to oppose the new legislation as not being strong enough to protect consumers. They want credit file freezes available to all consumers and for it to be mandatory for companies that experience a data breach to report it to impacted customers.  Here&39;s what an identity theft victim had to say:

"It&39;s my Social Security number, it&39;s my money, it&39;s my date of birth, it&39;s my place of birth. If it&39;s going to take an extra five minutes when I open a loan or want to open a new credit card that&39;s my problem. I don&39;t understand why the banks get so upset about it."

What do you think about this debate? Who is making a better case: the banks or the consumer advocates? Share your feedback in the comments section below!