Amended in Senate June 25, 2013

Amended in Senate June 10, 2013

Amended in Assembly April 1, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 1169


Introduced by Assembly Member Daly

February 22, 2013


An act to add and repeal Chapter 3.6 (commencing with Section 1785.28) of Title 1.6 of Part 4 of Division 3 of the Civil Code, relating to escrow agent credit.

LEGISLATIVE COUNSEL’S DIGEST

AB 1169, as amended, Daly. Escrow agent rating service: escrow agents.

Existing law, the Consumer Credit Reporting Agencies Act, requires a consumer credit reporting agency, upon request and proper identification of any consumer, to allow the consumer to visually inspect all files maintained regarding that consumer at the time of the request. Existing law requires every consumer reporting agency to advise the consumer of the agency’s obligation to provide a decoded written version of the file. Existing law grants the consumer the right to requestbegin delete aend deletebegin insert andend insert receive a written copy of the file. Existing law requires a consumer credit reporting agency to disclose the recipients of any consumer credit report on the consumer which the consumer credit reporting agency has furnished.

Under existing law, a consumer credit reporting agency is required to furnish a consumer credit report only under certain circumstances, including in accordance with the written instructions of the consumer to whom it relates. Existing law prohibits a consumer credit reporting agency from making any consumer credit report containing specified information.begin insert Existing law requires every consumer credit reporting agency to maintain reasonable procedures designated to avoid disclosing certain information and to limit the furnishing of consumer credit reports only under specified circumstances.end insert If the completeness or accuracy of any item of information in a consumer’s file is disputed by the consumer, existing law requires the consumer credit reporting agency to reinvestigate and record the current status of the disputed information within a specified period of time. Existing law requires each consumer credit reporting agency that compiles and reports items of information that are matters of public record to specify the source from which that information was obtained. Existing law requires a person that procures a consumer credit report for the purpose of reselling the report to take specified actions.

Existing law authorizes a consumer suffering damages as a result of a violation of the Consumer Credit Reporting Agencies Act by any person to bring a court action for damages or injunctive relief, as specified.

This bill would, until January 1, 2017, require an escrow agent rating service, as defined, to comply with the provisions described above. The bill would make an escrow agent rating service subject to the requirements applicable to a reseller of credit information if it acts in that capacity, as specified. The bill would also require an escrow agent rating service to establish policies and procedures to protect the personal information it obtains from escrow agents. The bill would authorize an escrow agent who suffers damages as a result of the failure of an escrow agent rating service to comply with these provisions to bring a court action for specified damages.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Chapter 3.6 (commencing with Section 1785.28)
2is added to Title 1.6 of Part 4 of Division 3 of the Civil Code, to
3read:

 

P3    1Chapter  3.6. Escrow Agent Rating Service
2

 

3

1785.28.  

(a) For the purposes of this chapter, the following
4definitions shall apply:

5(1) An escrow agent is any of the following:

6(A) Abegin insert naturalend insert person described in Section 17004 of the Financial
7Code who performs escrow agent services pursuant to the Escrow
8Law contained in Division 6 (commencing with Section 17000)
9of the Financial Code.

10(B) Abegin insert naturalend insert person performing escrow services for a title
11insurerbegin insert admitted pursuant to Article 3 (commencing with Section
12699) of Chapter 1 of Part 2 of Division 1 of the Insurance Codeend insert

13 orbegin insert an end insert underwritten title company licensed pursuant to Article 3.7
14(commencing with Section 12389) of Chapter 1 of Part 6 of
15Division 2 of the Insurance Code.

16(C) Abegin insert naturalend insert person performing escrow services for a controlled
17escrow company, as defined in Section 12340.6 of the Insurance
18Code.

19(D) Abegin insert naturalend insert person licensed pursuant to Division 4
20(commencing with Section 10000) of the Business and Professions
21Code, who performs escrow services,begin delete as described inend deletebegin insert in accordance
22withend insert
Section 17006 of the Financial Code.

23(2) An escrow agent rating service is a person or entity that
24prepares a report, for compensation or in expectation of
25compensation, for use by a creditor in evaluating the capacity of
26an escrow agent to perform settlement services in connection with
27an extension of credit.begin insert An escrow agent rating service does not
28include a creditor or an employee of a creditor evaluating an
29escrow agent in connection with an extension of credit by that
30creditor.end insert

31(3) An escrow agent rating service shall be considered a reseller
32of credit information within the meaning of Section 1785.22 if it
33assembles and merges information contained in the database or
34databases maintained by a consumer credit reporting agency.

35(4) “Consumer” also means escrow agent.

36(b) An escrow agent rating service shall comply with and be
37subject to the following sections of this title applicable to a
38consumer credit reporting agency:

39(1) Subdivision (a) of Section 1785.10.

P4    1(2) Subdivision (b) of Section 1785.10, limited to the obligation
2to advise a consumer of his or her right to a decoded written version
3of a file.

4(3) Subdivision (d) of Section 1785.10.

5(4) Paragraph (2) of subdivision (a) of Section 1785.11.

6(5) Section 1785.13.

begin insert

7(6) Section 1785.14.

end insert
begin delete

8(6)

end delete

9begin insert(7)end insert Paragraph (1) of subdivision (a) of Section 1785.15, limited
10to the right to request and receive a decoded written version of the
11file.

begin delete

12(7)

end delete

13begin insert(8)end insert Section 1785.16.

begin delete

14(8)

end delete

15begin insert(9)end insert Section 1785.18.

16(c) An escrow agent rating service that acts as a reseller of credit
17information as described in paragraph (3) of subdivision (a) shall
18comply with and be subject to Section 1785.22.

19(d) An escrow agent rating service shall establish policies and
20procedures reasonably intended to safeguard from theft or misuse
21any personally identifiable information it obtains from an escrow
22agent.

23(e) An escrow agent who suffers damages as a result of the
24failure ofbegin delete aend deletebegin insert anend insert escrow agent rating service to comply with
25subdivision (b), (c), or (d) may bring an action in a court of
26competent jurisdiction pursuant to Section 1785.31 of the Civil
27Code.

28(f) If an escrow agent rating service is also a consumer credit
29reporting agency as defined in subdivision (d) of Section 1785.3,
30nothing in this chapter shall be construed to suggest that an escrow
31agent reporting service that is also a consumer credit reporting
32agency is not otherwise required to comply with other provisions
33of this title applicable to consumer credit reporting agencies.

begin insert

34(g) Nothing in this section shall be construed to authorize a
35person, who was not otherwise legally authorized to perform
36escrow services prior to the effective date of this section, to legally
37perform escrow services.

end insert
begin delete

38(g)

end delete

P5    1begin insert(h)end insert This chapter shall remain in effect only until January 1,
22017, and as of that date is repealed, unless a later enacted statute,
3that is enacted before January 1, 2017, deletes or extends that date.



O

    95