(Updates with approval)
WASHINGTON, July 24 (Reuters) - A U.S. House of Representatives panel overwhelmingly approved legislation on Thursday that would give consumers easier access to credit reports in exchange for barring stronger state credit laws.
"I believe we will go out with a certain amount of self-congratulation because I think we will have a product that preserves the essence of the way the system contributes to our economy while making some consumer improvements," said Massachusetts Rep. Barney Frank, the senior Democrat on the House Financial Services Committee.
The committee approved the measure by a vote of 61-3 and it must now go to the full House for a vote.
The bill would grant consumers one free credit report a year from each of the major credit rating agencies. It would also allow people to get an annual look at their credit score for a nominal fee. Committee staff said the provision is modeled on a California law in which consumers typically pay less than $5.
The bill also contains a provision eagerly sought by banks and other providers of credit -- a ban on state passage of stronger credit reporting laws.
Supporters of the bill, including senior Bush administration officials and Federal Reserve Chairman Alan Greenspan, say maintaining a uniform national standard for credit reporting is vital to keeping credit costs low and making credit widely available.
Opponents of the bill, who include consumer advocacy groups, said the system makes it hard for consumers to correct mistakes and states should be allowed to enact protections stronger than those contained in federal law.