BILL ANALYSIS SB 909 Page 1 SENATE THIRD READING SB 909 (Wright) As Amended June 30, 2010 Majority vote SENATE VOTE :22-7 JUDICIARY 7-0 ----------------------------------------------------------------- |Ayes:|Feuer, Brownley, Evans, | | | | |Huffman, Jones, Monning, | | | | |Saldana | | | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- SUMMARY : Requires a person (i.e., a prospective employer) who procures an investigative consumer report for employment purposes to disclose to the consumer (i.e., an applicant) the Internet Web site of the investigative consumer reporting agency. Requires the agency to conspicuously post on its Internet Web site its privacy policy, including information on whether reports are prepared or processed outside of the United States or its territories. Specifically, this bill : 1)Requires, as of January 1, 2012, a person who procures or causes to be prepared an investigative consumer report for employment purposes to notify the consumer of the Internet Web site address of the investigative reporting agency's privacy practices, including whether the consumer's personal information will be sent outside of the United States or its territories for preparation. 2)Requires an investigative consumer reporting agency doing business in this state to conspicuously post on its primary Internet Web site a description of its privacy practices with respect to the preparation and processing of investigative consumer reports. Specifies that the privacy statement shall include, but not be limited to, both of the following: a) A statement entitled "Personal Information Disclosure: United States or Overseas," that indicates whether the personal information will be transferred to third parties outside of the United States or its territories; and, SB 909 Page 2 b) A separate section that includes the name, mailing address, e-mail address, and telephone number of the consumer reporting agency representatives who can assist the consumer with additional information about privacy practices and policies in the event of a compromise of the consumer's information. 3)Provides that an investigative consumer reporting agency shall be liable if a consumer is harmed by an unauthorized access of the consumer's personally identifiable information, or act or omission that occurs as a result of the agency negligently preparing or processing a report, or portion thereof, outside of the United States or one of its territories. FISCAL EFFECT : None COMMENTS : Under existing law, an "investigative consumer reporting agency" is defined as any entity that, for a fee, collects information about a person and prepares an "investigative consumer report" relating to a person's general reputation and personal characteristics. For example, such reports may include information on whether the person has recently (usually within the past 7-10 years) filed for bankruptcy, committed a crime, or been subject to an unlawful detainer. Such reports are typically obtained by employers seeking background on a job applicant, landlords seeking information on prospective tenants, or insurance companies attempting to determine eligibility or calculate appropriate rates for prospective subscribers. Because of the sensitive nature of the information contained in such reports - and the profound impact that it can have on a person's ability to obtain employment, housing, or insurance - the state has regulated such agencies since 1975. In general, existing law prescribes the kinds of information that may be contained in such a report, limits the purposes of which such a report can be procured, and subjects both the reporting agency and the person procuring the report to prescribed penalties and liabilities for violations. ("Investigative consumer reports" should not be confused with "consumer credit reports," which generally pertain to a person's credit worthiness and which are regulated under a separate statute.) This bill would amend existing law only as it relates to reports SB 909 Page 3 relating to employment . According to the author, investigative consumer reporting agencies are increasingly subcontracting the actual assembling and preparation of such reports to "offshore" companies - that is, companies located outside of the United States or its territories. Because these other countries might not have the same privacy protections that are available under California and federal law, the author believes that job applicants should know if their personal information will be sent offshore for report preparation and, in the event that the personal information is compromised as a result, then the applicant should have an appropriate remedy. Specifically, this bill would require the person procuring the employment report to provide the consumer with the reporting agency's Internet Web site address so that the consumer can obtain information on the agency's privacy policies, including whether personal information will be sent outside of the United States for processing or preparation. In addition, the reporting agency will be required to conspicuously post on its primary Internet Web site its privacy policy, including information on whether reports are prepared outside of the United States and its policies in the event that personal information is compromised. Finally, the bill would specify that an investigative consumer reporting agency - which is already generally liable to consumers for harms caused by the acts or omissions of the agency that are in violation of existing regulations -- is also liable to a consumer for harms that result from unauthorized access to the consumer's personal data or other acts or omissions that result from the preparation or processing of the report outside of the United States or its territories. Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334 FN: 0005143