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Housing bill and fingerprint registry encounter Senate setback

Vote likely to be postponed until next month. It's unclear whether there's sufficient interest in eliminating the section creating a national fingerprint registry.

A housing bailout bill that would also create a national fingerprint registry is facing some unexpected delays in the U.S. Senate and may not be voted on until next month.

We wrote about the proposed law last month after it had been approved by the Senate Banking Committee. After that, it was supposed to be on the fast track to President Bush's desk, but a fuss over an amendment for renewable-energy tax credits--which, of course, have nothing to do with foreclosures and the bursting of the housing bubble--is creating the delay.

The legislation would require any mortgage "loan originator" to furnish "fingerprints for submission to the Federal Bureau of Investigation" and a wealth of other unnamed government agencies. There are no explicit privacy protections, and a Nationwide Mortgage Licensing System and Registry would be created to provide "increased accountability and tracking of loan originators," implying a permanent database of fingerprints.

An alliance of privacy-minded groups, including the American Conservative Union, the American Civil Liberties Union, the Competitive Enterprise Institute, and the U.S. Bill of Rights Foundation, sent a letter to the Senate on Tuesday. It asks that the fingerprint registry be stripped from the housing bailout bill. (CEI has posted a copy of the letter.)

So far, there's been no response. When I talked to John Berlau of CEI this week, he suggested that senators don't seem willing to defend the fingerprinting plan publicly.

In case you're curious, here's the text of the legislation. (Note that if you're using OS X's Preview, it may not open properly; I had to use Adobe Reader.) Here's another link to the underlying bill.

After the Senate gets back from its Fourth of July vacation, it will have had time to resolve the tax credit issue and is likely to hold a vote pretty quickly. Election year pressures predict that the bill will pass: a vote this week to send the measure back to committee failed by an 11-70 vote. (The political urge to be seen voting for a housing bailout is a bipartisan one: both Sens. John McCain and Barack Obama voted to keep the bill alive. President Bush, however, has threatened a veto.)

Bailing out housing speculators may or may not be a good idea. But it would seem reasonable for the Senate Democrats to permit an up-or-down vote on the section creating the fingerprint registry. We know that Obama has previously supported it in a standalone bill -- and then has ducked questions about it from the press since.

An up-or-down vote would let both the Illinois senator and his Republican rival demonstrate whether they think forced fingerprinting should be routinely mandated by the Feds or not. If such a vote does not take place, the explanation is simple: Our esteemed elected leaders are, once again, trying to avoid being accountable to the American public.