Illinois, Connecticut, Hawaii ban credit freeze fees ahead of nationwide law in September

Legislators in Illinois, Connecticut and Hawaii recently took steps to bar fees for both freezing and thawing credit files with Equifax, Experian and TransUnion, while a federal law is set to ban such charges across America in the coming months.

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Hawaii’s credit freeze law took effect on Sunday, eliminating what was previously a $5 charge. The move came on the heels of Connecticut, whose governor signed a similar law on June 4, and Illinois, where the governor approved a similar measure on June 8.

The federal government took steps to bar fees for credit freezes with the Economic Growth, Regulatory Relief and Consumer Protection Act. That was signed by President Trump on May 24, but it will take 120 days for the new consumer credit rules to take effect. The nationwide ban on fees is expected to become the law of the land in September.

Equifax has offered free credit freezes for all consumers since the company suffered a major breach in 2017 that exposed highly sensitive personal data, including Social Security numbers, of more than 145 million people.

Following the breach, states around the U.S. have sought to take matters into their own hands, such as in Massachusetts, where the attorney general is suing Equifax. The unprecedented breach affected some 60 percent of adults in America, and inspired a wave of consumers to initiate credit freezes at major bureaus to protect themselves.

OWI Insight: States are taking steps to protect and empower their citizens, working to fix a flawed system that has become a treasure trove for identity thieves. Making credit freezes free is a good move, but much more will need to be done to fix America’s broken identity institutions, which remain heavily and unnecessarily reliant on the Social Security number.