BILL NUMBER: AB 2374	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 22, 2012
	PASSED THE ASSEMBLY  AUGUST 27, 2012
	AMENDED IN SENATE  JUNE 18, 2012
	AMENDED IN ASSEMBLY  MAY 14, 2012
	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Roger Hernández

                        FEBRUARY 24, 2012

   An act to amend Sections 1785.11.2 and 1785.15 of the Civil Code,
relating to consumer credit reports.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2374, Roger Hernández. Consumer credit reports: security
freezes.
   Existing state law defines and regulates consumer credit reports
and permits a consumer to place a security freeze on his or her
credit report by making a request in writing by certified mail to a
consumer credit reporting agency. Existing law requires a consumer
credit reporting agency to place the security freeze on the consumer'
s credit report within 3 business days after receiving the consumer's
request. Under existing law, an agency may charge a fee of no more
than $5 to a consumer 65 years of age or older for placing, lifting,
or removing a security freeze.
   This bill would prohibit a consumer credit reporting agency from
charging any fee upon a consumer 65 years of age or older for placing
an initial security freeze. Under the bill, a consumer credit
reporting agency would be authorized to charge a consumer 65 years of
age or older a fee of no more than $5 for lifting, removing, or
replacing a security freeze. The bill would make conforming changes.



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

  SECTION 1.  Section 1785.11.2 of the Civil Code is amended to read:

   1785.11.2.  (a) A consumer may elect to place a security freeze on
his or her credit report by making a request in writing by mail to a
consumer credit reporting agency. "Security freeze" means a notice
placed in a consumer's credit report, at the request of the consumer,
and subject to certain exceptions, that prohibits the consumer
credit reporting agency from releasing the consumer's credit report
or any information from it without the express authorization of the
consumer. If a security freeze is in place, information from a
consumer's credit report may not be released to a third party without
prior express authorization from the consumer. This subdivision does
not prevent a consumer credit reporting agency from advising a third
party that a security freeze is in effect with respect to the
consumer's credit report.
   (b) A consumer credit reporting agency shall place a security
freeze on a consumer's credit report no later than three business
days after receiving a written request from the consumer.
   (c) The consumer credit reporting agency shall send a written
confirmation of the security freeze to the consumer within 10
business days and shall provide the consumer with a unique personal
identification number or password to be used by the consumer when
providing authorization for the release of his or her credit for a
specific party or period of time.
   (d) If the consumer wishes to allow his or her credit report to be
accessed for a specific party or period of time while a freeze is in
place, he or she shall contact the consumer credit reporting agency,
request that the freeze be temporarily lifted, and provide the
following:
   (1) Proper identification, as defined in subdivision (c) of
Section 1785.15.
   (2) The unique personal identification number or password provided
by the credit reporting agency pursuant to subdivision (c).
   (3) The proper information regarding the third party who is to
receive the credit report or the time period for which the report
shall be available to users of the credit report.
   (e) A consumer credit reporting agency that receives a request
from a consumer to temporarily lift a freeze on a credit report
pursuant to subdivision (d) shall comply with the request no later
than three business days after receiving the request.
   (f) A consumer credit reporting agency may develop procedures
involving the use of telephone, fax, the Internet, or other
electronic media to receive and process a request from a consumer to
temporarily lift a freeze on a credit report pursuant to subdivision
(d) in an expedited manner.
   (g) A consumer credit reporting agency shall remove or temporarily
lift a freeze placed on a consumer's credit report only in the
following cases:
   (1) Upon consumer request, pursuant to subdivision (d) or (j).
   (2) If the consumer's credit report was frozen due to a material
misrepresentation of fact by the consumer. If a consumer credit
reporting agency intends to remove a freeze upon a consumer's credit
report pursuant to this paragraph, the consumer credit reporting
agency shall notify the consumer in writing prior to removing the
freeze on the consumer's credit report.
   (h) A third party who requests access to a consumer credit report
in connection with an application for credit or any other use may
treat the application as incomplete if a security freeze is in effect
and the consumer does not allow his or her credit report to be
accessed for that specific party or period of time.
   (i) If a consumer requests a security freeze, the consumer credit
reporting agency shall disclose the process of placing and
temporarily lifting a freeze and the process for allowing access to
information from the consumer's credit report for a specific party or
period of time while the freeze is in place.
   (j) A security freeze shall remain in place until the consumer
requests that the security freeze be removed. A consumer credit
reporting agency shall remove a security freeze within three business
days of receiving a request for removal from the consumer if the
consumer provides both of the following:
   (1) Proper identification, as defined in subdivision (c) of
Section 1785.15.
   (2) The unique personal identification number or password provided
by the credit reporting agency pursuant to subdivision (c).
   (k) A consumer credit reporting agency shall require proper
identification, as defined in subdivision (c) of Section 1785.15, of
the person making a request to place or remove a security freeze.
   (l) The provisions of this section do not apply to the use of a
consumer credit report by any of the following:
   (1) (A) (i) A person or entity with which the consumer has or had,
prior to any assignment, an account or contract, including a demand
deposit account, or to which the consumer issued a negotiable
instrument, for the purpose of reviewing the account or collecting
the financial obligation owing for the account, contract, or
negotiable instrument.
   (ii) A subsidiary, affiliate, or agent of a person or entity
described in clause (i), an assignee of a financial obligation owing
by the consumer to such a person or entity, or a prospective assignee
of a financial obligation owing by the consumer to such a person or
entity in conjunction with the proposed purchase of the financial
obligation, for the purpose of reviewing the account or collecting
the financial obligation owing for the account, contract, or
negotiable instrument.
   (B) For purposes of this paragraph, "reviewing the account"
includes activities related to account maintenance, monitoring,
credit line increases, and account upgrades and enhancements.
   (2) A subsidiary, affiliate, agent, assignee, or prospective
assignee of a person to whom access has been granted under
subdivision (d) for purposes of facilitating the extension of credit
or other permissible use.
   (3) Any state or local agency, law enforcement agency, trial
court, or private collection agency acting pursuant to a court order,
warrant, or subpoena.
   (4) A child support agency acting pursuant to Chapter 2
(commencing with Section 17400) of Division 17 of the Family Code or
Title IV-D of the Social Security Act (42 U.S.C. et seq.).
   (5) The State Department of Health Care Services or its agents or
assigns acting to investigate Medi-Cal fraud.
   (6) The Franchise Tax Board or its agents or assigns acting to
investigate or collect delinquent taxes or unpaid court orders or to
fulfill any of its other statutory responsibilities.
   (7) The use of credit information for the purposes of prescreening
as provided for by the federal Fair Credit Reporting Act.
   (8) Any person or entity administering a credit file monitoring
subscription service to which the consumer has subscribed.
   (9) Any person or entity for the purpose of providing a consumer
with a copy of his or her credit report upon the consumer's request.
   (m) (1) Except as provided in paragraph (2), this title does not
prevent a consumer credit reporting agency from charging a fee of no
more than ten dollars ($10) to a consumer for the placement of each
freeze, the removal of the freeze, the temporary lift of the freeze
for a period of time, or the temporary lift of the freeze for a
specific party, regarding access to a consumer credit report, except
that a consumer credit reporting agency may not charge a fee to a
victim of identity theft who has submitted a valid police report or
valid Department of Motor Vehicles investigative report that alleges
a violation of Section 530.5 of the Penal Code.
   (2) With respect to a consumer who is 65 years of age or older and
who has provided identification confirming his or her age, a
consumer credit reporting agency shall not charge a fee for the
placement of an initial security freeze, but may charge a fee not to
exceed five dollars ($5) for the removal of the freeze, the temporary
lift of the freeze for a period of time, the temporary lift of the
freeze for a specific party, or replacing the freeze.
   (n) Regardless of the existence of a security freeze, a consumer
reporting agency may disclose public record information lawfully
obtained by, or for, the consumer reporting agency from an open
public record to the extent otherwise permitted by law. This
subdivision does not prohibit a consumer reporting agency from
electing to apply a valid security freeze to the entire contents of a
credit report.
  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. 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."