Housing bailout includes new fingerprint demand

Mortgage lenders and brokers and even office assistants and secretaries could be subjected to new federal demands to be fingerprinted under a provision of a massive housing bailout plan – with attachments – that is moving through Congress.

An alert about the fingerprinting requirement comes from John Berlau, director of the Center for Entrepreneurship, Competitive Enterprise Institute in Washington.

"We are creating this burden that adds risks of identity theft with really no additional safeguards," he told WND of the plan included in the housing bailout, which was advanced in the U.S. Senate today on an 84-12 vote.

The bill was launched to address the wave of failing loans across the United States that have sent financial markets into a slide. President Bush has expressed a high level of concern over the plan, but is expected to face pressure from members of both parties to endorse it as the 2008 presidential election season advances.

At its heart is a government-backed mortgage insurance fund and new regulations for mortgage-finance companies Fannie Mae and Freddie Mac.

Yet the plan also includes other features that civil libertarians are finding alarming.

WND reported earlier when FreedomWorks chairman Dick Armey said its provisions would require credit card companies, eBay, Amazon, Google and other companies to report what consumers buy to the federal government.

"This is a provision with astonishing reach," he said. "Not only does it affect nearly every credit card transaction in America, such as Visa, MasterCard, Discover and American Express, but the bill specifically targets payment systems like eBay's PayPal, Amazon and Google Checkout."

"What is the federal government's purpose with this kind of detailed data? How will this database be secured, and who will have access? Many small proprietors use their Social Security number as their tax ID. How will their privacy be protected? What compliance costs will this impose on businesses? Why is Sen. Chris Dodd putting this provision in a housing bailout bill?"

The bill's summary, FreedomWorks said, states:

Payment Card and Third Party Network Information Reporting. The proposal requires information reporting on payment card and third party network transactions. Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee. Reportable transactions include any payment card transaction and any third party network transaction.

Now Berlau said representatives from groups as diverse as the American Civil Liberties Union and the American Conservative Union also are objecting to the mandate for continuous fingerprint tracking.

Others joining in expressing their objections to Congress are officials for the American Policy Center, Center for Financial Privacy and Human Rights, Natural Solutions Foundation, International Association of Whistleblowers, Association of American Physicians and Surgeons, Liberty Coalition and others.

Sens. Dianne Feinstein, D-Calif., and Mel Martinez, R-Fla., have defended the requirement, saying their plan "would not violate the privacy rights of anyone."

They said the practice isn't even new.

But Berlau said the bill states fingerprint information will be used for continuous "tracking" rather than a one-time background check.

"The broad scope and lack of justification for the fingerprint mandates are the reason that diverse groups from the American Conservative Union and the American Civil Liberties Union have signed on to a recent letter opposing these very provisions of the bill," he said.

The major thrust of the bill is to provide tax credits to first-time buyers of unoccupied homes and assign $4 billion to help communities buy foreclosed homes. The bill also would authorize local housing authorities to issue billions in tax-exempt bonds to refinance subprime loans and provide low-income rental housing.

Berlau said the fingerprinting would be demanded of "hundreds of thousands of individuals never convicted nor even suspected of committing a crime." They would end up in government databases for "tracking."

Such statements leave the policy groups "troubled by the scope of this requirement and the lack of a justification as to how this would serve the goal of reducing mortgage fraud."

Berlau told WND that it wasn't secretaries in offices across the nation who took advantage of loopholes and made off with millions during the recent bubble in the mortgage industry.

In a commentary in the Wall Street Journal, Berlau said, "Even when a fingerprint registry will likely help fight terrorism or crime, many still fear it will lead to a surveillance state."

"Yet this week a measure creating a federal fingerprint registry totally unrelated to national security or violent crime may clear the Senate with little debate," he said.