President Bush signed the new Identity Theft legislation today , which means that the US now has a single, nation-wide response to the growing identity theft problem.

On the one hand, it’s nice to have a single, national law. On the other hand, this legislation preempts some states that had legislation that prevented states from sharing personal information without the premission of the data subjects.

The main thing that this law does, apparently, is to re-authorize the Fair Credit Reporting Act, which was set to expire at the end of this year. (That would have been a disaster for consumers.) Joy! The legislation also mandates one free credit report each year (something many consumers already had because of state legislation), and it requires businesses to black out social security numbers, credit card numbers, and debit card numbers on receipts (something that many businesses were already doing).

Unfortunately, this law doesn’t really do what needs to be done to stem the tide of identity theft. The key thing that needs to be done is that banks need to be financially liable when they file a false report with a credit report. That is, if the bank doesn’t properly validate the identity of a person to whom they issue a credit card, and then the person doesn’t pay, the bank should be liable for damages when the incorrect credit card report is filed.