BILL NUMBER: AB 2918 ENROLLED BILL TEXT PASSED THE SENATE AUGUST 25, 2008 PASSED THE ASSEMBLY AUGUST 30, 2008 AMENDED IN SENATE AUGUST 18, 2008 AMENDED IN SENATE JUNE 26, 2008 AMENDED IN ASSEMBLY MAY 19, 2008 AMENDED IN ASSEMBLY APRIL 28, 2008 AMENDED IN ASSEMBLY APRIL 7, 2008 INTRODUCED BY Assembly Member Lieber FEBRUARY 22, 2008 An act to amend Section 1785.20.5 of the Civil Code, relating to employment. LEGISLATIVE COUNSEL'S DIGEST AB 2918, Lieber. Employment: usage of consumer credit reports. The federal Fair Credit Reporting Act (FCRA) and the state Consumer Credit Reporting Agencies Act define and regulate consumer credit reports and authorize the use of consumer credit reports for employment purposes, pursuant to specified requirements. The FCRA provides that it does not preempt state law, except as specifically provided or to the extent that state laws are inconsistent with its provisions. Existing federal and state law specify the procedures that a potential user of a consumer credit report in the employment context is required to follow before requesting a report and if adverse action is taken based on the report. Both federal and state law provide an exemption from liability for a violation of the provisions specified in those statutes if the person can show, by a preponderance of the evidence, that he or she maintained reasonable procedures to ensure compliance with those requirements. This bill would prohibit the user of a consumer credit report, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information is (1) substantially job related, meaning that the information in the consumer credit report relates to the position for which the person who is the subject of the report is being evaluated because the position is a highly compensated or managerial one; the position is a city, county, or both city and county position in which the employee holding the position has access to money, other assets, or confidential information; or the report as procured as part of a background check for a sworn peace officer or other law enforcement position in which there is access to cash, assets, or confidential financial information; or (2) required by law to be disclosed to or obtained by the user of the report. The bill also would extend the exemption from liability for the maintenance of reasonable procedures to ensure compliance with the provisions specified in state law to encompass the new prohibition. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1785.20.5 of the Civil Code is amended to read: 1785.20.5. (a) Prior to requesting a consumer credit report for employment purposes, the user of the report shall provide written notice to the person involved. The notice shall inform the person that a report will be used for employment purposes and the source of the report, and shall contain a box that the person may check off to receive a copy of the credit report. If the consumer indicates that he or she wishes to receive a copy of the report, the user shall request that a copy be provided to the person when the user requests its copy from the credit reporting agency. The report to the user and to the person who is the subject of the report shall be provided contemporaneously and at no charge to the person who is the subject of the report. (b) (1) The user of a consumer credit report shall not procure a consumer credit report for employment purposes unless the information in the report is either of the following: (A) Substantially job related, which means that the information in the consumer credit report relates to the position for which the person who is the subject of the report is being evaluated because the position is one in which one or more of the following are applicable: (i) The position is a highly compensated or managerial one. (ii) The position is a city, county, or both city and county position in which the employee holding the position has access to money, other assets, or confidential financial information. (iii) The report is procured as part of a background check for a sworn peace officer or other law enforcement position in which there is access to cash, assets, or confidential financial information. (B) Required by law to be disclosed to or obtained by the user of the report. (2) This subdivision does not apply to a person or business subject to Sections 6801 to 6809, inclusive, of Title 15 of the United States Code and state and federal statutes or regulations implementing those sections, if the person or business is subject to compliance oversight by a state or federal regulatory agency with respect to those sections. (c) Whenever employment involving a consumer is denied either wholly or partly because of information contained in a consumer credit report from a consumer credit reporting agency, the user of the consumer credit report shall so advise the consumer against whom the adverse action has been taken and supply the name and address or addresses of the consumer credit reporting agency making the report. A person shall not be held liable for any violation of this section if he or she shows by a preponderance of the evidence that, at the time of the alleged violation, he or she maintained reasonable procedures to ensure compliance with this section.