Bill Text: CA SB1384 | 2011-2012 | Regular Session | Amended
Bill Title: Consumer information privacy.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-06-07 - Ordered to inactive file on request of Senator Simitian. [SB1384 Detail]
Download: California-2011-SB1384-Amended.html
BILL NUMBER: SB 1384 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 15, 2012
INTRODUCED BY Senator Simitian
FEBRUARY 24, 2012
An act to amend Sections 1785.2, 1785.3, 1785.11.2, and 1785.11.3
of, and to amend the heading of Title 1.6 (commencing with Section
1785.1) of Part 4 of Division 3 of, the Civil Code, relating to
consumer information privacy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1384, as amended, Simitian. Consumer information privacy.
Existing state and federal law define and regulate consumer credit
reports. Existing federal law regulates consumer file information
that is compiled and maintained by a nationwide specialty consumer
reporting agency, which is defined as a consumer reporting agency
that compiles and maintains files on consumers on a nationwide basis
relating to medical records or payments, residential or tenant
history, check writing history, employment history, or insurance
claims. Existing state law permits a consumer to place and to remove
a security on his or her credit report by following a specified
procedure.
This bill would define a nationwide specialty consumer reporting
agency and consumer file for purposes of California law and would
authorize a consumer to place a freeze on his or her consumer file
that is compiled and maintained by a nationwide specialty consumer
reporting agency. The bill would also make conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The heading of Title 1.6 (commencing with Section
1785.1) of Part 4 of Division 3 of the Civil Code is amended to read:
TITLE 1.6. CONSUMER REPORTING AGENCIES ACT
SEC. 2. Section 1785.2 of the Civil Code is amended to read:
1785.2. This act may be referred to as the Consumer Reporting
Agencies Act.
SEC. 3. Section 1785.3 of the Civil Code is amended to read:
1785.3. The following terms as used in this title have the
meaning expressed in this section:
(a) "Adverse action" means a denial or revocation of credit, a
change in the terms of an existing credit arrangement which is
adverse to the interests of the consumer, or a refusal to grant
credit in substantially the amount or on substantially the terms
requested. "Adverse action" includes all of the following:
(1) Any denial of, increase in any charge for, or reduction in the
amount of, insurance for personal, family, or household purposes
made in connection with the underwriting of insurance.
(2) Any denial of employment or any other decision made for
employment purposes which adversely affects any current or
prospective employee.
(3) Any action taken, or determination made, with respect to a
consumer (A) for an application for an extension of credit, or an
application for the hiring of a dwelling unit, and (B) that is
adverse to the interests of the consumer.
"Adverse action" does not include (A) a refusal to extend
additional credit to a consumer under an existing credit arrangement
if (i) the applicant is delinquent or otherwise in default under that
credit arrangement or (ii) the additional credit would exceed a
credit limit previously established for the consumer or (B) a refusal
or failure to authorize an account transaction at a point of sale.
(b) "Consumer" means a natural individual.
(c) "Consumer credit report" means any written, oral, or other
communication of any information by a consumer credit reporting
agency bearing on a consumer's creditworthiness, credit standing, or
credit capacity, which is used or is expected to be used, or
collected in whole or in part, for the purpose of serving as a factor
in establishing the consumer's eligibility for: (1) credit to be
used primarily for personal, family, or household purposes, or (2)
employment purposes, or (3) hiring of a dwelling unit, as defined in
subdivision (c) of Section 1940, or (4) other purposes authorized in
Section 1785.11.
The term does not include (1) any report containing information
solely as to transactions or experiences between the consumer and the
person making the report, (2) any communication of that information
or information from a credit application by a consumer that is
internal within the organization that is the person making the report
or that is made to an entity owned by, or affiliated by corporate
control with, that person; provided that the consumer is informed by
means of a clear and conspicuous written disclosure that information
contained in the credit application may be provided to these persons;
however, where a credit application is taken by telephone,
disclosure shall initially be given orally at the time the
application is taken, and a clear and conspicuous written disclosure
shall be made to the consumer in the first written communication to
that consumer after the application is taken, (3) any authorization
or approval of a specific extension of credit directly or indirectly
by the issuer of a credit card or similar device, (4) any report by a
person conveying a decision whether to make a specific extension of
credit directly or indirectly to a consumer in response to a request
by a third party, if the third party advises the consumer of the name
and address of the person to whom the request was made and the
person makes the disclosures to the consumer required under Section
1785.20, (5) any report containing information solely on a consumer's
character, general reputation, personal characteristics, or mode of
living which is obtained through personal interviews with neighbors,
friends, or associates of the consumer reported on, or others with
whom he or she is acquainted or who may have knowledge
concerning those items of information, (6) any communication about a
consumer in connection with a credit transaction which is not
initiated by the consumer, between persons who are affiliated (as
defined in Section 150 of the Corporations Code) by common ownership
or common corporate control (as defined by Section 160 of the
Corporations Code), if either of those persons has complied with
paragraph (2) of subdivision (b) of Section 1785.20.1 with respect to
a prequalifying report from which the information communicated is
taken and provided the consumer has consented to the provision and
use of the prequalifying report in writing, or (7) any consumer
credit report furnished for use in connection with a transaction
which consists of an extension of credit to be used solely for a
commercial purpose.
(d) "Consumer credit reporting agency" means any person who, for
monetary fees, dues, or on a cooperative nonprofit basis, regularly
engages in whole or in part in the business of assembling or
evaluating consumer credit information or other information on
consumers for the purpose of furnishing consumer credit reports to
third parties, but does not include any governmental agency whose
records are maintained primarily for traffic safety, law enforcement,
or licensing purposes.
(e) "Consumer file" means a file compiled and maintained on
consumers by a nationwide specialty consumer reporting agency.
(f) "Credit transaction that is not initiated by the consumer"
does not include the use of a consumer credit report by an assignee
for collection or by a person with which the consumer has an account
for purposes of (1) reviewing the account or (2) collecting the
account. For purposes of this subdivision, "reviewing the account"
includes activities related to account maintenance and monitoring,
credit line increases, and account upgrades and enhancements.
(g) "Employment purposes," when used in connection with a consumer
credit report, means a report used for the purpose of evaluating a
consumer for employment, promotion, reassignment, or retention as an
employee.
(h) "File," when used in connection with information on any
consumer, means all of the information on that consumer recorded and
retained by a consumer credit reporting agency, regardless of how the
information is stored.
(i) "Firm offer of credit" means any offer of credit to a consumer
that will be honored if, based on information in a consumer credit
report on the consumer and other information bearing on the
creditworthiness of the consumer, the consumer is determined to meet
the criteria used to select the consumer for the offer and the
consumer is able to provide any real property collateral specified in
the offer. For purposes of this subdivision, the phrase "other
information bearing on the creditworthiness of the consumer" means
information that the person making the offer is permitted to consider
pursuant to any rule, regulation, or formal written policy statement
relating to the federal Fair Credit Reporting Act, as amended (15
U.S.C. Sec. 1681 et seq.), promulgated by the Federal Trade
Commission or any federal bank regulatory agency.
(j) "Item of information" means any of one or more informative
entries in a credit report which causes a creditor to deny credit to
an applicant or increase the cost of credit to an applicant or deny
an applicant a checking account with a bank or other financial
institution.
(k) "Nationwide specialty consumer reporting agency" means a
consumer reporting agency that compiles and maintains files on
consumers on a nationwide basis relating to any of the following:
(1) Medical records or payments.
(2) Residential or tenant history.
(3) Check writing history.
(4)
(3) Employment history.
(5)
(4) Insurance claims.
(l) "Person" means any individual, partnership, corporation,
trust, estate, cooperative, association, government or governmental
subdivision or agency, or other entity.
(m) "Prequalifying report" means a report containing the limited
information permitted under paragraph (2) of subdivision (b) of
Section 1785.11.
(n) "State or local child support enforcement agency" means the
Department of Child Support Services or local child support agency
acting pursuant to Division 17 (commencing with Section 17000) of the
Family Code to establish, enforce , or modify child
support obligations, and any state or local agency or official that
succeeds to these responsibilities under a successor statute.
SEC. 4. Section 1785.11.2 of the Civil Code is amended to read:
1785.11.2. (a) A consumer may elect to place a security freeze on
his or her credit report or consumer file by making a request in
writing by mail to a consumer credit reporting agency or nationwide
specialty consumer reporting agency. "Security freeze" means a notice
placed in a consumer's credit report or consumer file, at the
request of the consumer, and subject to certain exceptions, that
prohibits the consumer credit reporting agency or nationwide
specialty consumer reporting agency from releasing the consumer's
credit report or consumer file or any information from it without the
express authorization of the consumer. If a security freeze is in
place, information from a consumer's credit report or consumer file
may not be released to a third party without prior express
authorization from the consumer. This subdivision does not prevent a
consumer credit reporting agency or nationwide specialty consumer
reporting agency from advising a third party that a security freeze
is in effect with respect to the consumer's credit report or consumer
file.
(b) A consumer credit reporting agency or nationwide specialty
consumer reporting agency shall place a security freeze on a consumer'
s credit report or consumer file no later than three business days
after receiving a written request from the consumer.
(c) The consumer credit reporting agency or nationwide specialty
consumer reporting agency shall send a written confirmation of the
security freeze to the consumer within 10 business days and shall
provide the consumer with a unique personal identification number or
password to be used by the consumer when providing authorization for
the release of his or her credit or consumer file information for a
specific party or period of time.
(d) If the consumer wishes to allow his or her credit report or
consumer file to be accessed for a specific party or period of time
while a freeze is in place, he or she shall contact the consumer
credit reporting agency or nationwide specialty consumer reporting
agency, request that the freeze be temporarily lifted, and provide
the following:
(1) Proper identification, as defined in subdivision (c) of
Section 1785.15.
(2) The unique personal identification number or password provided
by the credit reporting agency or nationwide specialty consumer
reporting agency pursuant to subdivision (c).
(3) The proper information regarding the third party who is to
receive the credit report or consumer file or the time period for
which the report shall be available to users of the credit report or
consumer file.
(e) A consumer credit reporting agency or nationwide specialty
consumer reporting agency that receives a request from a consumer to
temporarily lift a freeze on a credit report or consumer file
pursuant to subdivision (d) shall comply with the request no later
than three business days after receiving the request.
(f) A consumer credit reporting agency or nationwide specialty
consumer reporting agency may develop procedures involving the use of
telephone, fax facsimile , the
Internet, or other electronic media to receive and process a request
from a consumer to temporarily lift a freeze on a credit report or
consumer file pursuant to subdivision (d) in an expedited manner.
(g) A consumer credit reporting agency or nationwide specialty
consumer reporting agency shall remove or temporarily lift a freeze
placed on a consumer's credit report or consumer file only in the
following cases:
(1) Upon consumer request, pursuant to subdivision (d) or (j).
(2) If the consumer's credit report or consumer file was frozen
due to a material misrepresentation of fact by the consumer. If a
consumer credit reporting agency or nationwide specialty consumer
reporting agency intends to remove a freeze upon a consumer's credit
report or consumer file pursuant to this paragraph, the consumer
credit reporting agency or nationwide specialty consumer reporting
agency shall notify the consumer in writing prior to removing the
freeze on the consumer's credit report or consumer file.
(h) A third party who requests access to a consumer credit report
or consumer file in connection with an application for credit or any
other use may treat the application as incomplete if a security
freeze is in effect and the consumer does not allow his or her credit
report or consumer file to be accessed for that specific party or
period of time.
(i) If a consumer requests a security freeze, the consumer credit
reporting agency or nationwide specialty consumer reporting agency
shall disclose the process of placing and temporarily lifting a
freeze and the process for allowing access to information from the
consumer's credit report or consumer file for a specific party or
period of time while the freeze is in place.
(j) A security freeze shall remain in place until the consumer
requests that the security freeze be removed. A consumer credit
reporting agency or nationwide specialty consumer reporting agency
shall remove a security freeze within three business days of
receiving a request for removal from the consumer if the consumer
provides both of the following:
(1) Proper identification, as defined in subdivision (c) of
Section 1785.15.
(2) The unique personal identification number or password provided
by the credit reporting agency or nationwide specialty consumer
reporting agency pursuant to subdivision (c).
(k) A consumer credit reporting agency or nationwide specialty
consumer reporting agency shall require proper identification, as
defined in subdivision (c) of Section 1785.15, of the person making a
request to place or remove a security freeze.
(l) The provisions of this section do not apply to the use of a
consumer credit report or consumer file by any of the following:
(1) (A) (i) A person or entity with which the consumer has or had,
prior to any assignment, an account or contract, including a demand
deposit account, or to which the consumer issued a negotiable
instrument, for the purpose of reviewing the account or collecting
the financial obligation owing for the account, contract, or
negotiable instrument.
(ii) A subsidiary, affiliate, or agent of a person or entity
described in clause (i), an assignee of a financial obligation owing
by the consumer to such a person or entity, or a prospective assignee
of a financial obligation owing by the consumer to such a person or
entity in conjunction with the proposed purchase of the financial
obligation, for the purpose of reviewing the account or collecting
the financial obligation owing for the account, contract, or
negotiable instrument.
(B) For purposes of this paragraph, "reviewing the account"
includes activities related to account maintenance, monitoring,
credit line increases, and account upgrades and enhancements.
(2) A subsidiary, affiliate, agent, assignee, or prospective
assignee of a person to whom access has been granted under
subdivision (d) for purposes of facilitating the extension of credit
or other permissible use.
(3) Any state or local agency, law enforcement agency, trial
court, or private collection agency acting pursuant to a court order,
warrant, or subpoena.
(4) A child support agency acting pursuant to Chapter 2
(commencing with Section 17400) of Division 17 of the Family Code or
Title IV-D of the Social Security Act (42 U.S.C. et seq.).
(5) The State Department of Health Care Services or its agents or
assigns acting to investigate Medi-Cal fraud.
(6) The Franchise Tax Board or its agents or assigns acting to
investigate or collect delinquent taxes or unpaid court orders or to
fulfill any of its other statutory responsibilities.
(7) The use of credit information for the purposes of prescreening
as provided for by the federal Fair Credit Reporting Act.
(8) Any person or entity administering a credit file monitoring
subscription service to which the consumer has subscribed.
(9) Any person or entity for the purpose of providing a consumer
with a copy of his or her credit report or consumer file upon the
consumer's request.
(m) (1) Except as provided in paragraph (2), this title does not
prevent a consumer credit reporting agency or nationwide specialty
consumer reporting agency from charging a fee of no more than ten
dollars ($10) to a consumer for the placement of each freeze, the
removal of the freeze, the temporary lift of the freeze for a period
of time, or the temporary lift of the freeze for a specific party,
regarding access to a consumer credit report, except that a consumer
credit reporting agency or nationwide specialty consumer reporting
agency may not charge a fee to a victim of identity theft who has
submitted a valid police report or valid Department of Motor Vehicles
investigative report that alleges a violation of Section 530.5 of
the Penal Code.
(2) With respect to a consumer who is 65 years of age or older and
who has provided identification confirming his or her age, a
consumer credit reporting agency or nationwide specialty consumer
reporting agency may charge a fee not to exceed five dollars ($5) for
the placement of each freeze, the removal of the freeze, the
temporary lift of the freeze for a period of time, or the temporary
lift of the freeze for a specific party.
(n) Regardless of the existence of a security freeze, a consumer
reporting agency or nationwide specialty consumer reporting agency
may disclose public record information lawfully obtained by, or for,
the consumer reporting agency or nationwide specialty consumer
reporting agency from an open public record to the extent otherwise
permitted by law. This subdivision does not prohibit a consumer
reporting agency or nationwide specialty consumer reporting agency
from electing to apply a valid security freeze to the entire contents
of a credit report or consumer file.
SEC. 5. Section 1785.11.3 of the Civil Code is amended to read:
1785.11.3. (a) If a security freeze is in place, a consumer
credit reporting agency or nationwide specialty consumer reporting
agency shall not change any of the following official information in
a consumer credit report or consumer file without sending a written
confirmation of the change to the consumer within 30 days of the
change being posted to the consumer's file: name, date of birth,
social security number, and address. Written confirmation is not
required for technical modifications of a consumer's official
information, including name and street abbreviations, complete
spellings, or transposition of numbers or letters. In the case of an
address change, the written confirmation shall be sent to both the
new address and to the former address.
(b) If a consumer has placed a security alert, a consumer credit
reporting agency or nationwide specialty consumer reporting
agency shall provide the consumer, upon request, with a
free copy of his or her credit report or consumer file
at the time the 90-day security alert period expires.
