BILL NUMBER: AB 1169 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Daly
FEBRUARY 22, 2013
An act to amend Section 17421 1785.3
of the Financial Civil Code, relating
to escrow agents consumer credit reports
.
LEGISLATIVE COUNSEL'S DIGEST
AB 1169, as amended, Daly. Escrow agents.
Consumer credit reports: escrow agents: real estate.
Existing law defines and regulates consumer credit reporting
agencies and investigative consumer reporting agencies. Existing law
defines a consumer credit report as a written, oral, or other
communication of any information by a consumer credit reporting
agency bearing on a consumer's credit worthiness, credit standing, or
credit capacity, which is used or is expected to be used, or
collected in whole or in part, for the purpose of serving as a factor
in establishing the consumer's eligibility for certain purposes, as
specified.
This bill would revise the definition of a consumer credit report
to include a communication of information by a consumer credit
reporting agency used for the purpose of serving as a factor in
establishing the consumer's eligibility for a proprietary database
and rating evaluation. This bill would define a proprietary database
and rating evaluation as a report prepared for a fee and provided to
a furnisher of credit, for the purpose of evaluating a consumer, for
use or retention in the furnisher's capacity as an escrow agent in
the business of title insurance or in business regulated under the
provisions of the Real Estate Law.
The Escrow Law regulates the activities of escrow agents, as
defined, including, but not limited to, authorizing a disbursal to be
advanced or paid out before the close of an escrow, as specified.
This bill would make nonsubstantive changes to this provision.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1785.3 of the Civil
Code is amended to read:
1785.3. The following terms as used in this title have the
meaning expressed in this section:
(a) "Adverse action" means a denial or revocation of credit, a
change in the terms of an existing credit arrangement which is
adverse to the interests of the consumer, or a refusal to grant
credit in substantially the amount or on substantially the terms
requested. "Adverse action" includes all of the following:
(1) Any denial of, increase in any charge for, or reduction in the
amount of, insurance for personal, family, or household purposes
made in connection with the underwriting of insurance.
(2) Any denial of employment or any other decision made for
employment purposes which adversely affects any current or
prospective employee.
(3) Any action taken, or determination made, with respect to a
consumer (A) for an application for an extension of credit, or an
application for the hiring of a dwelling unit, and (B) that is
adverse to the interests of the consumer.
"Adverse action" does not include (A) a refusal to extend
additional credit to a consumer under an existing credit arrangement
if (i) the applicant is delinquent or otherwise in default under that
credit arrangement or (ii) the additional credit would exceed a
credit limit previously established for the consumer or (B) a refusal
or failure to authorize an account transaction at a point of sale.
(b) "Consumer" means a natural individual.
(c) "Consumer credit report" means any written, oral, or other
communication of any information by a consumer credit reporting
agency bearing on a consumer's credit worthiness, credit standing, or
credit capacity, which is used or is expected to be used, or
collected in whole or in part, for the purpose of serving as a factor
in establishing the consumer's eligibility for: (1) credit to be
used primarily for personal, family, or household purposes, or (2)
employment purposes, or (3) hiring of a dwelling unit, as defined in
subdivision (c) of Section 1940, (4) a proprietary database and
rating evaluation, or (4) (5)
other purposes authorized in Section 1785.11.
The term does not include (1) any report containing information
solely as to transactions or experiences between the consumer and the
person making the report, (2) any communication of that information
or information from a credit application by a consumer that is
internal within the organization that is the person making the report
or that is made to an entity owned by, or affiliated by corporate
control with, that person; provided that the consumer is informed by
means of a clear and conspicuous written disclosure that information
contained in the credit application may be provided to these persons;
however, where a credit application is taken by telephone,
disclosure shall initially be given orally at the time the
application is taken, and a clear and conspicuous written disclosure
shall be made to the consumer in the first written communication to
that consumer after the application is taken, (3) any authorization
or approval of a specific extension of credit directly or indirectly
by the issuer of a credit card or similar device, (4) any report by a
person conveying a decision whether to make a specific extension of
credit directly or indirectly to a consumer in response to a request
by a third party, if the third party advises the consumer of the name
and address of the person to whom the request was made and the
person makes the disclosures to the consumer required under Section
1785.20, (5) any report containing information solely on a consumer's
character, general reputation, personal characteristics, or mode of
living which is obtained through personal interviews with neighbors,
friends, or associates of the consumer reported on, or others with
whom he is acquainted or who may have knowledge concerning those
items of information, (6) any communication about a consumer in
connection with a credit transaction which is not initiated by the
consumer, between persons who are affiliated (as defined in Section
150 of the Corporations Code) by common ownership or common corporate
control (as defined by Section 160 of the Corporations Code), if
either of those persons has complied with paragraph (2) of
subdivision (b) of Section 1785.20.1 with respect to a prequalifying
report from which the information communicated is taken and provided
the consumer has consented to the provision and use of the
prequalifying report in writing, or (7) any consumer credit report
furnished for use in connection with a transaction which consists of
an extension of credit to be used solely for a commercial purpose.
(d) "Consumer credit reporting agency" means any person who, for
monetary fees, dues, or on a cooperative nonprofit basis, regularly
engages in whole or in part in the business of assembling or
evaluating consumer credit information or other information on
consumers for the purpose of furnishing consumer credit reports to
third parties, but does not include any governmental agency whose
records are maintained primarily for traffic safety, law enforcement,
or licensing purposes.
(e) "Credit transaction that is not initiated by the consumer"
does not include the use of a consumer credit report by an assignee
for collection or by a person with which the consumer has an account
for purposes of (1) reviewing the account or (2) collecting the
account. For purposes of this subdivision, "reviewing the account"
includes activities related to account maintenance and monitoring,
credit line increases, and account upgrades and enhancements.
(f) "Employment purposes," when used in connection with a consumer
credit report, means a report used for the purpose of evaluating a
consumer for employment, promotion, reassignment, or retention as an
employee.
(g) "File," when used in connection with information on any
consumer, means all of the information on that consumer recorded and
retained by a consumer credit reporting agency, regardless of how the
information is stored.
(h) "Firm offer of credit" means any offer of credit to a consumer
that will be honored if, based on information in a consumer credit
report on the consumer and other information bearing on the
creditworthiness of the consumer, the consumer is determined to meet
the criteria used to select the consumer for the offer and the
consumer is able to provide any real property collateral specified in
the offer. For purposes of this subdivision, the phrase "other
information bearing on the creditworthiness of the consumer" means
information that the person making the offer is permitted to consider
pursuant to any rule, regulation, or formal written policy statement
relating to the federal Fair Credit Reporting Act, as amended (15
U.S.C. Sec. 1681 et seq.), promulgated by the Federal Trade
Commission or any federal bank regulatory agency.
(i) "Item of information" means any of one or more informative
entries in a credit report which causes a creditor to deny credit to
an applicant or increase the cost of credit to an applicant or deny
an applicant a checking account with a bank or other financial
institution.
(j) "Person" means any individual, partnership, corporation,
trust, estate, cooperative, association, government or governmental
subdivision or agency, or other entity.
(k) "Prequalifying report" means a report containing the limited
information permitted under paragraph (2) of subdivision (b) of
Section 1785.11.
(l) The term "proprietary database and rating evaluation" means a
report prepared for a fee and provided to a furnisher of credit for
the purpose of evaluating a consumer, for use or retention in the
furnisher's capacity as an "escrow agent," as that term is defined in
Section 17004 of the Financial Code, in the "business of title
insurance," as that term is used in Section 12340.3 of the Insurance
Code, or in a business regulated under the Real Estate Law (Part 1
(commencing with Section 10000) of Division 4 of the Business and
Professions Code).
(l)
(m) "State or local child support enforcement agency"
means the Department of Child Support Services or local child support
agency acting pursuant to Division 17 (commencing with Section
17000) of the Family Code to establish, enforce or modify child
support obligations, and any state or local agency or official that
succeeds to these responsibilities under a successor statute.
SECTION 1. Section 17421 of the Financial Code
is amended to read:
17421. Notwithstanding Section 17420, a disbursal, other than for
a fee, commission, or compensation may be advanced or paid out
before the close of an escrow, if the written instructions of all
parties to the transaction so provide.