AB 1169, as amended, Daly. Escrow agent rating service: escrow agents.
Existing law, the Consumer Credit Reporting Agencies Act, requires every 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 request and receive a decoded written version 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, as specified.
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. Existing law requires every consumer credit reporting agency to maintain reasonable proceduresbegin delete designatedend deletebegin insert designedend insert to avoid disclosing certain information and to limit the furnishing of consumer credit reports to specified purposes. 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 any 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, as defined, 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:
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:
4
(a) For the purposes of thisbegin delete chapterend deletebegin insert sectionend insert, the
8following definitions shall apply:
9(1) Escrow means any transaction in which one person, for the
10purpose of effecting the sale, transfer, encumbering, or leasing of
11real or personal property to another person, delivers any written
12instrument, money, evidence of title to real or personal property,
13or other thing of value to a third person to be held by that third
14person until the happening of a specified event or the performance
15of a prescribed
condition, when it is then to be delivered by that
16third person to a grantee, grantor,begin delete promiseend deletebegin insert
promiseeend insert, promisor,
17obligee, obligor, bailee, bailor, or any agent or employee of any
18of the latter.
19(2) An escrow agent is any of the following:
20(A) A natural person who performs escrow services for an entity
21licensed pursuant to the Escrow Law contained in Division 6
22(commencing with Section 17000) of the Financial Code.
23(B) A natural person performing escrow services for a title
24insurer admitted pursuant to Article 3 (commencing with Section
25699) of Chapter 1 of Part 2 of Division 1 of the Insurance Code
26or an underwritten title company licensed pursuant to Article 3.7
27(commencing with Section 12389) of Chapter 1 of Part 6 of
28Division 2 of the Insurance Code.
29(C) A natural person performing escrow services for a controlled
30escrow company, as defined in Section 12340.6 of the Insurance
31Code.
32(D) A natural person licensed pursuant to Division 4
33(commencing with Section 10000) of the Business and Professions
34Code, who performs escrow services, in accordance with Section
3517006 of the Financial Code.
36(3) An escrow agent rating service is a person or entity that
37prepares a report, for compensation or in expectation of
38compensation, for use by a creditor in evaluating the capacity of
P4 1an escrow agent to perform escrow services in connection with an
2extension of credit. An escrow agent rating service does not include
3either of the following:
4(A) A creditor or anbegin delete agentend deletebegin insert employeeend insert of a creditor evaluating an
5escrow agent in connection with an extension of credit by that
6creditor.
7(B) An entity described in paragraph (2) for which a natural
8person performs escrow services as an employee or an independent
9contractor.
10(4) An escrow agent rating service shall be considered a reseller
11of credit information within the meaning of Section 1785.22 if it
12assembles and merges information contained in the database or
13databases maintained by a consumer credit reporting agency.
14(5) “Consumer” also means escrow agent.
15(b) An escrow agent rating service shall comply with and be
16subject to the following sections of this title applicable to a
17consumer credit reporting agency:
18(1) Subdivision (a) of Section 1785.10.
19(2) Subdivision (b) of Section 1785.10, limited to the obligation
20to advise a consumer of his or her right to a decoded written version
21of a file.
22(3) Subdivision (d) of Section 1785.10.
23(4) Paragraph (2) of subdivision (a) of Section 1785.11.
24(5) Section 1785.13.
25(6) Section 1785.14.
26(7) Paragraph (1) of subdivision (a) of Section 1785.15, limited
27to the right to request and receive a decoded written version of the
28file.
29(8) Section 1785.16.
30(9) Section 1785.18.
31(c) An escrow agent rating service that acts as a reseller of credit
32information as described in paragraph (4) of subdivision (a) shall
33comply with and be subject to Section 1785.22.
34(d) An escrow agent rating service shall establish policies and
35procedures reasonably intended to safeguard from theft or
misuse
36any personally identifiable information it obtains from an escrow
37agent.
38(e) An escrow agent who suffers damages as a result of the
39failure of an escrow agent rating service to comply with subdivision
P5 1(b), (c), or (d) may bring an action in a court of competent
2jurisdiction pursuant to Section 1785.31 of the Civil Code.
3(f) If an escrow agent rating service is also a consumer credit
4reporting agency as defined in subdivision (d) of Section 1785.3,
5nothing in thisbegin delete chapterend deletebegin insert sectionend insert shall be construed to suggest that
6an escrow agent reporting service that is also a consumer credit
7reporting agency is not
otherwise required to comply with other
8provisions of this title applicable to consumer credit reporting
9agencies.
10(g) Nothing in thisbegin delete chapterend deletebegin insert sectionend insert shall be construed to authorize
11a person, who was not otherwise legally authorized to perform
12escrow services prior to the effective date of this section, to legally
13perform escrow services.
14(h) Nothing in thisbegin delete chapterend deletebegin insert sectionend insert is intended to alter the
15provisions of Section 17420 of the Financial Code,
including the
16legal authority of an escrow agent to compensate an escrow agent
17rating service for a report prepared pursuant to paragraph (3) of
18subdivision (a).
19(i) This chapter shall remain in effect only until January 1, 2017,
20and as of that date is repealed, unless a later enacted statute, that
21is enacted before January 1, 2017, deletes or extends that date.
This chapter shall remain in effect only until
23January 1, 2017, and as of that date is repealed, unless a later
24enacted statute, that is enacted before January 1, 2017, deletes or
25extends that date.
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