BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 550|
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                                 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  
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          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  

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            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 

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                         SUPPORT/OPPOSITION:  SEE ABOVE

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