Bill Text: CA AB1220 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Consumer credit reporting: adverse action.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2013-09-30 - Chaptered by Secretary of State - Chapter 433, Statutes of 2013. [AB1220 Detail]

Download: California-2013-AB1220-Amended.html

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BILL NUMBER: AB 1220	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 22, 2013
	AMENDED IN ASSEMBLY  MARCH 21, 2013

INTRODUCED BY   Assembly Member Skinner

                        FEBRUARY 22, 2013

   An act to amend Section 1785.15 of  , and to add Sections
1785.10.1 and 1785.20.4 to,  the Civil Code, relating to
consumer credit.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1220, as amended, Skinner. Consumer credit reporting: files:
inspections.
   Existing law requires a consumer credit reporting agency, upon
request and proper identification of any consumer, to allow the
consumer to visually inspect all files maintained regarding that
consumer at the time of the request. Existing law additionally grants
a consumer the right to request and receive a written copy of the
file.  Existing federal law prohibits a consumer credit reporting
agency from prohibiting a user of a consumer credit report furnished
by the agency from disclosing the contents of the report to the
consumer if adverse action has been taken against the consumer by the
user based on the report. 
   This bill would require, if a consumer requests a written copy of
his or her file, that the consumer receive the same information that
is provided to a user of a consumer credit report, unless otherwise
specified. 
   The bill would make it unlawful for a consumer credit reporting
agency to prohibit, or to dissuade or attempt to dissuade, a user of
a consumer credit report furnished by the credit reporting agency
from providing a copy of the consumer's credit report to the
consumer, upon the consumer's request, if the user has taken adverse
action against the consumer based upon the report. The bill would
require that a contract between a credit reporting agency and a user
of a consumer credit report include a statement that federal law
prohibits a consumer credit reporting agency from prohibiting a user
of consumer credit reports from disclosing the contents of the report
to the user, as specified. The bill would provide that a contract
that violates these provisions is void and that the Attorney General
or the district attorney of the county in which a violation of this
section occurs may bring a civil action, or intervene in any civil
action, to enjoin the enforcement of the contract.  
   The bill would provide a consumer the right to request and to
receive a copy of his or her consumer credit report that is used in
an adverse action against the consumer from a user of the report who
takes the adverse action. The bill would require that, if a consumer
authorizes a consumer credit reporting agency to furnish a consumer
credit report for an extension of credit or any other lawful purpose,
the user of the consumer credit report provide the consumer a
specified notice in this regard. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1785.10.1 is added to the 
 Civil Code   , to read:  
   1785.10.1.  (a) It is unlawful for a consumer credit reporting
agency to prohibit in any manner, including, but not limited to, in
the terms of a contract enforceable in the state, or to dissuade or
attempt to dissuade, a user of a consumer credit report furnished by
the credit reporting agency from providing a copy of the consumer's
credit report to the consumer, upon the consumer's request, if the
user has taken adverse action against the consumer based in whole or
in part upon information in the report. A contract between a credit
reporting agency and a user of a consumer credit report for the
provision of consumer credit reports shall include a statement that
federal law prohibits a consumer credit reporting agency from
prohibiting a user of consumer credit reports from disclosing the
contents of the report to the user if adverse action has been taken
by the user based in whole or in part on the report.
   (b) A contract in violation of this section is void as contrary to
public policy. The Attorney General or the district attorney of the
county in which a violation of this section occurs may bring a civil
action, or intervene in any civil action, to enjoin the enforcement
of a contract that violates this section. 
   SECTION 1.   SEC. 2.   Section 1785.15
of the Civil Code is amended to read:
   1785.15.  (a) A consumer credit reporting agency shall supply
files and information required under Section 1785.10 during normal
business hours and on reasonable notice. If a consumer requests a
written copy of his or her file, the consumer shall receive the same
information that is provided to a user of a consumer credit report
unless the consumer specifies otherwise. In addition to the
disclosure provided by this chapter and any disclosures received by
the consumer, the consumer has the right to request and receive all
of the following:
   (1) Either a decoded written version of the file or a written copy
of the file, including all information in the file at the time of
the request, with an explanation of any code used.
   (2) A credit score for the consumer, the key factors, and the
related information, as defined in and required by Section 1785.15.1.

   (3) A record of all inquiries, by recipient, that result in the
provision of information concerning the consumer in connection with a
credit transaction not initiated by the consumer and that were
received by the consumer credit reporting agency in the 12-month
period immediately preceding the request for disclosure under this
section.
   (4) The recipients, including end users specified in Section
1785.22, of any consumer credit report on the consumer which the
consumer credit reporting agency has furnished:
   (A) For employment purposes within the two-year period preceding
the request.
   (B) For any other purpose within the 12-month period preceding the
request.
   Identification for purposes of this paragraph shall include the
name of the recipient or, if applicable, the fictitious business name
under which the recipient does business disclosed in full. If
requested by the consumer, the identification shall also include the
address of the recipient.
   (b) Files maintained on a consumer shall be disclosed promptly as
follows:
   (1) In person, at the location where the consumer credit reporting
agency maintains the trained personnel required by subdivision (d),
if he or she appears in person and furnishes proper identification.
   (2) By mail, if the consumer makes a written request with proper
identification for a copy of the file or a decoded written version of
that file to be sent to the consumer at a specified address. A
disclosure pursuant to this paragraph shall be deposited in the
United States mail, postage prepaid, within five business days after
the consumer's written request for the disclosure is received by the
consumer credit reporting agency. Consumer credit reporting agencies
complying with requests for mailings under this section shall not be
liable for disclosures to third parties caused by mishandling of mail
after the mailings leave the consumer credit reporting agencies.
   (3) A summary of all information contained in files on a consumer
and required to be provided by Section 1785.10 shall be provided by
telephone, if the consumer has made a written request, with proper
identification for telephone disclosure.
   (4) Information in a consumer's file required to be provided in
writing under this section may also be disclosed in another form if
authorized by the consumer and if available from the consumer credit
reporting agency. For this purpose, a consumer may request disclosure
in person pursuant to Section 1785.10, by telephone upon disclosure
of proper identification by the consumer, by electronic means if
available from the consumer credit reporting agency, or by any other
reasonable means that is available from the consumer credit reporting
agency.
   (c) "Proper identification," as used in subdivision (b) means that
information generally deemed sufficient to identify a person. Only
if the consumer is unable to reasonably identify himself or herself
with the information described above may a consumer credit reporting
agency require additional information concerning the consumer's
employment and personal or family history in order to verify his or
her identity.
   (d) The consumer credit reporting agency shall provide trained
personnel to explain to the consumer any information furnished him or
her pursuant to Section 1785.10.
   (e) The consumer shall be permitted to be accompanied by one other
person of his or her choosing, who shall furnish reasonable
identification. A consumer credit reporting agency may require the
consumer to furnish a written statement granting permission to the
consumer credit reporting agency to discuss the consumer's file in
that person's presence.
   (f) Any written disclosure by a consumer credit reporting agency
to any consumer pursuant to this section shall include a written
summary of all rights the consumer has under this title and, in the
case of a consumer credit reporting agency that compiles and
maintains consumer credit reports on a nationwide basis, a toll-free
telephone number that the consumer can use to communicate with the
consumer credit reporting agency. The written summary of rights
required under this subdivision is sufficient if in substantially the
following form:
   "You have a right to obtain a copy of your credit file from a
consumer credit reporting agency. You may be charged a reasonable fee
not exceeding eight dollars ($8). There is no fee, however, if you
have been turned down for credit, employment, insurance, or a rental
dwelling because of information in your credit report within the
preceding 60 days. The consumer credit reporting agency must provide
someone to help you interpret the information in your credit file.
   You have a right to dispute inaccurate information by contacting
the consumer credit reporting agency directly. However, neither you
nor any credit repair company or credit service organization has the
right to have accurate, current, and verifiable information removed
from your credit report. Under the Federal Fair Credit Reporting Act,
the consumer credit reporting agency must remove accurate, negative
information from your report only if it is over seven years old.
Bankruptcy information can be reported for 10 years.
   If you have notified a consumer credit reporting agency in writing
that you dispute the accuracy of information in your file, the
consumer credit reporting agency must then, within 30 business days,
reinvestigate and modify or remove inaccurate information. The
consumer credit reporting agency may not charge a fee for this
service. Any pertinent information and copies of all documents you
have concerning an error should be given to the consumer credit
reporting agency.
   If reinvestigation does not resolve the dispute to your
satisfaction, you may send a brief statement to the consumer credit
reporting agency to keep in your file, explaining why you think the
record is inaccurate. The consumer credit reporting agency must
include your statement about disputed information in a report it
issues about you.
   You have a right to receive a record of all inquiries relating to
a credit transaction initiated in 12 months preceding your request.
This record shall include the recipients of any consumer credit
report.
   You may request in writing that the information contained in your
file not be provided to a third party for marketing purposes.
   You have a right to place a "security alert" in your credit
report, which will warn anyone who receives information in your
credit report that your identity may have been used without your
consent. Recipients of your credit report are required to take
reasonable steps, including contacting you at the telephone number
you may provide with your security alert, to verify your identity
prior to lending money, extending credit, or completing the purchase,
lease, or rental of goods or services. The security alert may
prevent credit, loans, and services from being approved in your name
without your consent. However, you should be aware that taking
advantage of this right may delay or interfere with the timely
approval of any subsequent request or application you make regarding
a new loan, credit, mortgage, or cellular phone or other new account,
including an extension of credit at point of sale. If you place a
security alert on your credit report, you have a right to obtain a
free copy of your credit report at the time the 90-day security alert
period expires. A security alert may be requested by calling the
following toll-free telephone number: (Insert applicable toll-free
telephone number). California consumers also have the right to obtain
a "security freeze."
   You have a right to place a "security freeze" on your credit
report, which will prohibit a consumer credit reporting agency from
releasing any information in your credit report without your express
authorization. A security freeze must be requested in writing by
mail. The security freeze is designed to prevent credit, loans, and
services from being approved in your name without your consent.
However, you should be aware that using a security freeze to take
control over who gets access to the personal and financial
information in your credit report may delay, interfere with, or
prohibit the timely approval of any subsequent request or application
you make regarding a new loan, credit, mortgage, or cellular phone
or other new account, including an extension of credit at point of
sale. When you place a security freeze on your credit report, you
will be provided a personal identification number or password to use
if you choose to remove the freeze on your credit report or authorize
the release of your credit report for a specific party or period of
time after the freeze is in place. To provide that authorization you
must contact the consumer credit reporting agency and provide all of
the following:
   (1) The personal identification number or password.
   (2) Proper identification to verify your identity.
   (3) The proper information regarding the third party who is to
receive the credit report or the period of time for which the report
shall be available to users of the credit report.
   A consumer credit reporting agency must authorize the release of
your credit report no later than three business days after receiving
the above information.
   A security freeze does not apply when you have an existing account
and a copy of your report is requested by your existing creditor or
its agents or affiliates for certain types of account review,
collection, fraud control, or similar activities.
   If you are actively seeking credit, you should understand that the
procedures involved in lifting a security freeze may slow your
application for credit. You should plan ahead and lift a freeze,
either completely if you are shopping around, or specifically for a
certain creditor, before applying for new credit.
   A consumer credit reporting agency may not charge a fee to a
consumer for placing or removing a security freeze if the consumer is
a victim of identity theft and submits a copy of a valid police
report or valid Department of Motor Vehicles investigative report. A
person 65 years of age or older with proper identification shall not
be charged a fee for placing an initial security freeze, but may be
charged a fee of no more than five dollars ($5) for lifting,
removing, or replacing a security freeze. All other consumers may be
charged a fee of no more than ten dollars ($10) for each of these
steps.
   You have a right to bring civil action against anyone, including a
consumer credit reporting agency, who improperly obtains access to a
file, knowingly or willfully misuses file data, or fails to correct
inaccurate file data.
   If you are a victim of identity theft and provide to a consumer
credit reporting agency a copy of a valid police report or a valid
investigative report made by a Department of Motor Vehicles
investigator with peace officer status describing your circumstances,
the following shall apply:
   (1) You have a right to have any information you list on the
report as allegedly fraudulent promptly blocked so that the
information cannot be reported. The information will be unblocked
only if (A) the information you provide is a material
misrepresentation of the facts, (B) you agree that the information is
blocked in error, or (C) you knowingly obtained possession of goods,
services, or moneys as a result of the blocked transactions. If
blocked information is unblocked, you will be promptly notified.
   (2) You have a right to receive, free of charge and upon request,
one copy of your credit report each month for up to 12 consecutive
months."
   SEC. 3.   Section 1785.20.4 is added to the 
 Civil Code   , to read:  
   1785.20.4.  (a) The federal Fair Credit Reporting Act (15 U.S.C.
Sec. 1681 et seq.) prohibits a credit reporting agency from stopping
a user of a consumer report from disclosing the contents of the
report to the consumer whom it concerns if adverse action is taken
based on the report. A consumer has the right to request and to
receive a copy of his or her consumer credit report that is used in
an adverse action against the consumer from a user of the report who
takes the adverse action against the consumer.
   (b) If a consumer authorizes a consumer credit reporting agency to
furnish a consumer credit report for an extension of credit or any
other lawful purpose, the user of the consumer credit report shall
notify the consumer orally and in writing, in substantially the form
provided below, of the following:

   "You have authorized us to obtain a copy of your credit report as
part of an application for credit or for some other lawful purpose.
If we take adverse action on your application and our decision is
based in whole or in part upon your credit report, you have a right
to obtain a copy of the report from us that we receive from the
consumer credit reporting agency. Neither state nor federal law
prevents you from obtaining a copy of your credit report from us
under those circumstances."