BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 550| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 550 Author: Speier (D) Amended: 5/2/05 Vote: 21 SENATE JUDICIARY COMMITTEE : 4-2, 5/3/05 AYES: Dunn, Cedillo, Figueroa, Kuehl NOES: Morrow, Ackerman NO VOTE RECORDED: Escutia SUBJECT : Personal information: data brokers SOURCE : Author DIGEST : This bill declares the intent of the Legislature to enact legislation allowing consumers access to their personal information held by data brokers and the ability to request corrections in that information from the source of the error. ANALYSIS : Existing law, the California Constitution, provides that, among other rights, all people have an inalienable right to pursue and obtain privacy. [Article I, Section 1 of the California Constitution] Existing federal law, the Fair Credit Reporting Act (FCRA) [15 U.S.C. 1681 et seq.], as amended by the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) [Public Law 108-159], provides consumers, upon their request, with one free credit report from each consumer reporting agency CONTINUED SB 550 Page 2 in every 12-month period. Consumers are entitled to all information in the consumer's file at the time of the request, except as specified, and the companies are responsible for correcting inaccuracies. The FCRA covers credit bureaus and other issuers of consumer reports such as tenant screening services and employment screening services. Use of consumer credit reports is limited under FCRA to "permissible purposes" which include employment, credit, insurance, rental housing, child support enforcement and collection purposes. Existing law requires that a business must either (1) disclose to customers, upon request, what categories of personal information the business shares with third parties for marketing purposes, or (2) provide customers with the ability to opt-out of having their information shared for marketing purposes. [Section 1798.83 of the Civil Code] This bill expresses the intent of the Legislature to enact legislation allowing consumers access to their personal information held by data brokers and the ability to request corrections in that information from the source of the error. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 5/5/05) Consumer Federation of California Privacy Rights Clearinghouse World Privacy Forum OPPOSITION : (Verified 5/9/05) California Chamber of Commerce ARGUMENTS IN SUPPORT : The author states: "Consumers in California place a premium on the security and privacy of their personal information, and overwhelmingly they expect to have control over access CONTINUED SB 550 Page 3 to their information by individuals and businesses. ...Over the past several years, an industry specializing in the collection, manipulation, and sale of consumers' personal information has developed such that some leaders of the industry maintain billions of records on virtually every citizen in the nation. Paradoxically, this 'data broker' industry has remained in virtual obscurity, so that most consumers are unaware of its existence. "The information collected and sold by data brokers may be used by any number of individuals or entities for use in employment screening, private investigations, collections, law enforcement, etc. without the consumer knowing about the data transaction. Moreover, when the consumer does discover that his or her information is held by a data broker, he or she may not have the ability to review all of the information or to correct errors. Strong anecdotal reports and surveys suggest that many consumer records owned by data brokers contain inaccurate information." Supporters of the bill, Privacy Rights Clearinghouse and World Privacy Forum, argue that the bill is needed to give consumers more control over their personal information that is collected, compiled and sold by commercial data brokers. ARGUMENTS IN OPPOSITION : The California Chamber of Commerce opposes this bill, as amended May 2, 2005, "which intends to impose a wide range of restrictions on businesses that collect, assembly, or maintain personally identifiable information about a California resident for sale, transmission or access by a 3rd party." They state that, "The author has stripped all but intent language from the bill in order to move it along. We would have preferred that the bill remain in the policy committee until language was rewritten. We do appreciate the author's and her staff's willingness to work with the business community on the bill, but must remain opposed at this time." RJG:mel 5/9/05 Senate Floor Analyses CONTINUED SB 550 Page 4 SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED